1 The Impact of the Internet on Mass Media (the press)

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3 5 most often used Lithuanian Web sites, SIC Gallup Media, Spring 2002 (%)

4 Trends observed … Media-morphosis (Roger Fidler) Media convergence ( Nicholas Negroponte, 1980) Broadcasting Computers and telecommunications The Press

5 The Internet means change for the media (the press) in … According to Colin Sparks, University of Westminster (Sparks, 2002):

A common delivery technology (… because of media convergence) Reduced distribution costs Altered patterns of consumption Erosion of advantages of place Removal of advantages of time Competition for revenue streams Separation of editorial and advertising Direct relations between advertisers and consumers

7 Offline media have clear and distinct delivery technologies: In material (e.g. broadcast or printed: two most common formats for the online media) In time (e.g. daily newspaper v. monthly magazine) In function (e.g. radio while driving v. TV while relaxing) In place (e.g. newspaper at work, television at homes: morning- evening hours) Online technology all comes through one delivery mechanism, at any time, and potentially to any place (infra-red access technology?) 1: A common delivery technology

8 2: Reduced distribution costs The symbolic material of the offline media is expensive to distribute: Newspapers and magazines must be printed and shipped TV and radio must pay for spectrum and build and run transmitter networks Online media have no need for these mechanisms: The company needs to rent server space But the audience buys the PC and pays the telecom’s costs (which are becoming less and less expensive).

9 3: Shifts in news consumption patterns Existing patterns of consumption are embedded in patterns of life: TV is a primary leisure activity, often in a family setting (the most typical mass medium) Radio is more a background to other activities The periodicity of publications fits rhythms of life (morning-evening newspapers)

10 Online media have as yet no well-established consumption patterns: Usually consumed alone !!! (that’s why television looks different on the Internet) (if archived) Available at any time of the day or night (if archived)

11 4: Erosion of the importance of place Offline media are tied to particular places: Newspapers bounded by the distribution area (bringing the community together) Broadcasters depend on the configuration of the transmitter mechanism (restrictions in transmission)

12 Online media operate on a global scale: Consumption is not determined by distance or by geopolitics ( as a ‘virtual meeting place’ or a new channel for participation) Media are no longer sheltered by location (new models of tele-working, distance working, e-learning)

13 5: Erosion of temporal advantages Offline media are produced and distributed at definite times: Morning and evening newspapers have different agendas (In Lithuania: mostly morning newspapers, no Sunday press) The time of major TV and radio programmes is carefully calculated (who will watch these? Prime-time television programs: soap-operas, reality TV shows)

14 Seasonal differences in TV viewing, Spring 2002 Source: SIC Gallup Media.

15 TV viewing by time zones, Spring 2002 Source: SIC Gallup Media.

16 Online media are available all the time: News can be updated regularly ( All material can be accessed at any time ( although there may be restrictions: (5 days)

17 6: Competition for revenue streams Offline media traditionally have three main sources of revenue: Subsidy (e.g. licence fee for broadcasters ??? (an ongoing discussion for/against “subscription-fee”); exempt from taxation in press) Subscription (particularly for the printed material) Advertising (the most dominant form): display advertising and classifieds

18 Online media challenge some of these: Subscription (some claim that it is not yet feasible as there is no relevant content on the Internet; while others see this as the only valuable model for the ‘quality-Web’: Subsidy (or sponsorship): (‘Omni Laikas’), or all conventional newspaperswww.omni.lt Advertising (classifieds are well suited to the online world, banners, pop-up windows, background advertizing, intermercials): (however, this may end in “cannibalization”)

19 7: The disaggregating of editorial and advertising Most offline media package a range of both advertising and editorial content together: Advertising between television programmes, display advertising next to editorial material in printed media, etc. The two depend upon each other (the media messages are sold both to audiences and advertizers).

20 The searchable nature of the online world allows the two to be separated: Audiences can bypass advertising material??? ? (less and less , because online media employs new more ‘aggressive advertising strategies’: Audiences can seek those kinds of advertising they are interested in at a particular moment

21 8: Direct relations between providers and consumers Offline, the media are necessary: The only way that the audience can access editorial content is through the media package: news, classifieds, display ads, editorial content. The only way the advertiser can access consumers is through the media package … thus, newspapers operate in two markets – for audiences and advertizers

22 With Online, there are other routes: The audience can go directly to news sources (as in verticals) Advertisers can go directly to consumers (employ different marketing strategies: ask questions, collect information from what countries and at what times per day users access the Web)

23 Summary of the effect of online media Taken together, these developments pose major challenges to the offline media (provoke the media- morphosis): They challenge their self-identities They challenge their market niches They challenge their revenues

24 … but the online media face major challenges, too: They lack independent credibility They have no record of delivery in commercial terms … … as a consequence, they find it hard to make money ( 2mln.)

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26 Most newspapers are “bundles” of different kinds of content (in Lithuania: drifting towards the ‘middle’ – a little bit of everything) Newspapers have a definite periodicity and circulation area Newspapers are overwhelmingly commercial enterprises They get the majority of their revenues from advertising (display advertising, classified advertising) The example of the newspaper

27 The newspaper News Features Weather Sport Leisure Classified Advertisements Display Advertisements

28 From offline to online Gather news Edit news Print news Sell news Distribute news Read news Gather news Edit news Upload news Download news ‹ Limited by distance › ‹------No geographical limits ›

29 Offline news source Offline advertising Offline readership The Virtuous Offline Circle Editorial Department Advertising Department Offline Newspaper Purchase

30 The Vicious Online Circle Online newspaper Online alternative Online news source Online advertiser Online readership Logon

31 The online newspaper bundle? News Features Weather Sport Leisure Services Classified Advertisements Transactions Registration

32 Is a complement rather than a substitute for offline media Is a complement rather than a substitute for offline media Consequently increases rather than decreases costs Has similar but not identical contents Has similar but not identical contents Consequently needs additional staff Major business issues Major business issues Cannot (yet?) attract subscription revenues Is a vehicle for similar forms of advertising to the offline media Faces competition particularly for classified advertising The Online Newspaper

33 Consequences for costs Impossible to abandon offline presence for the foreseeable future Therefore there will be additional costs A successful online presence needs specialised material and design Therefore these costs will be substantial A `sticky’ site needs a great variety of material Therefore there will be a premium on those sites that aggregate content from different sources

34 Attracting and keeping visitors A strong brand offline supports a strong brand online (BBC, CNN, WSJ, NYT etc.) Not true in all cases There are some examples of pure online brands A big and dynamic site is more attractive Frequent updates mean frequent repeat visits Rich content means different people visit Rich content means the same people visit often The Internet is on the side of the big battalions

35 Making money from visitors Basic news content is very hard to sell Many competing free outlets Low intrinsic value of news (and falling?) Premium services can be sold Not necessarily the ones that have high status (e.g. cartoons, crosswords) Specialised, high value-added material can be sold Visitors can be sold Those who visit frequently, do a lot and spend time on a site are valuable sources of customer data Advertising can be sold (but not for much) Uncertain effectivity Many competitors

36 Social implications Critics of the traditional media have often said they are limited because: They are controlled either by the state or a few large corporations The are dominated by professional communicators They are primarily one-way communication Only a limited range of views are ever present

37 Proponents of the democratising function of the internet often say: It is impossible for either state or large corporations to control it It gives everyone an equal voice It is necessarily dialogical communication It opens the way to the representation of all views

38 The likely outcomes The technological potential for new entrants and increased diversity is unlikely to be realised in commercial practice The technological potential for new entrants and increased diversity is unlikely to be realised in commercial practice  Strong offline brands produce strong online brands  Rich offline content translates into rich online content  High offline production values translate into high online production values  Powerful offline marketing complements powerful online marketing (Almost) anyone can have a web presence, just as anyone can spout at Speakers’ Corner, but effective control of social communication will remains in few hands (Almost) anyone can have a web presence, just as anyone can spout at Speakers’ Corner, but effective control of social communication will remains in few hands

39 Online media are widely present They operate according to a different logics than offline media Nevertheless, the offline/online link is extremely important (helps to increase traffic in both versions) There are major questions about the long-term commercial viability of online media Online media are unlikely to transcend the limitations of offline media from the point of view of public life Therefore …

40 Kam reikia interneto Lietuvoje? ALF tyrimas, 2001http://politika.osf.lthttp://politika.osf.lt

41 Pusė mokančiųjų naudojasi juo ir darbo, ir asmeniniais reikalais; Kas trečias – tik asmeniniais reikalais; Kiek mažiau nei kas penktas – tik darbo reikalais. Asmeniniais reikalais: Spaudai, publikacijoms, elektroninėms knygoms susirasti ir skaityti – 50,4%; Elektroniniam paštui – 49,8% ir darbo paieškai – 42,5%. Paieškai duomenų bazėse – 29,5%, nuotoliniam mokymuisi 29,2% ir medicininėms konsultacijoms – 29,2%.

42 20,8% naudoja ir norėtų naudoti internetą prekėms pirkti ir parduoti; 17,7% – kompiuterių programoms ieškoti ir parsisiųsti; 16,9% – atostogoms planuoti; 15,7% – ekonominio pobūdžio informacijai ieškoti (kainoms, biržų indeksams ir pan.); 15,5% – komunalinėms ir administracinėms paslaugoms; 15,1% – informacijai apie vartotojų teises ir jų gynimą gauti; 14,2% – banko sąskaitoms tvarkyti. Ieškotų informacijos apie Europos muziejus ir kultūrinį palikimą – 10%, apie politiką – 9,5%, ir tam, kad galėtų dalyvauti politiniuose debatuose – 3,7%.

43 Koks šiuo metu yra aktyviausias IT vartotojas? Internetu naudojasi bent du kartus per savaitę -- 8,5% (iš viso apie piliečių). Amžiaus ribos – m. ir tai sudaro 87,6% visų, besinaudojančių internetu. Amžiaus vidurkis – 32 metai.

44 Informacinės visuomenės piliečio išsilavinimas aukštasis (53,4%), rečiau vidurinis ar specialusis vidurinis (34,6%). Didelė tikimybė, kad jis gyvena Vilniuje ar Kaune (šiuose dviejuose miestuose gyvena daugiau kaip pusė visų interneto naršytojų, 56,9%). Šis pilietis dažniau yra vyras (54,4%) nei moteris (45,6%). Jis gauna didesnes nei 500 Lt/mėn. pajamas (41,9%). Interneto vartotojai yra turtingesni nei vidutinis lietuvis. Internetu jie naudojasi dažniau darbo ar mokymosi vietoje (82,4%) nei namuose.

45 Kada iš tikrųjų gyvensime įtinklintame pasaulyje? Aktyviausia informacinės visuomenės grupė – metų. 86,5% šios amžiaus grupė respondentų moka naudotis kompiuteriu, 62,7% moka naudotis internetu. Dauguma – 97% – nemokančiųjų nori išmokti dirbti kompiuteriu.