It goes without saying that the naysayers and disbelievers of the late 20th Century who shrugged off the quirky little invention called the ‘World Wide Web’ as a passing fad that wouldn’t last, have been forced to change their thinking. Yet, even in this day and age, when it has become so blatantly obvious that humankind and digital innovation are likely to be indefinitely intertwined, there remain some companies, though few and far between, which appear reluctant to fully embrace this change. The aforementioned legacy business models have been rapidly overwhelmed by intensifying competition from digital media content coming in the form of everything from blogs to social networking sites to online audio/video providers. In fact, the new Internet age allows consumers to experience and enjoy content for free, if not at a much lower cost than traditional platforms. Moreover, as providers constantly come up with new ways to deliver content, there is no denying that time will come when traditional media/communications tools, as we know them, will cease to exist.
Nonetheless, many media outlets are holding fast to what generates profits. And at present, although the revenue streams from digital products and services are growing at a rate that far exceeds the much more mature traditional forms, media entities can profit more from the established format, which generates fairly consistent, trusted advertising revenue. Indeed, a page of advertising in The Wall Street Journal has a more marked impact on News Corp.’s (NWS) bottom line than any of its digital forays. In times of economic distress, when employment is fragile and patience thin, it makes sense to stick to the script and hold fast to what is known.
However, this nearsightedness only acts to delay the inevitable. As Generation Y has largely done away with land-lines, opting for the cellular phone and digital mail as their primary forms of communication, it is gradually shunning cable/network television and print publishing for entertainment and news as well. In addition, the ongoing trend into the blogosphere, social networking, and sharing of online audio/video is spreading exponentially. This has prompted companies, such as News Corp. to take notice and even acquire the MySpaces and TMZs of the world. However, many media corporations believe these revenue streams are unsustainable and that the cost of investment in expanding into these mostly uncharted waters could put margins at risk. Hence, many have retreated in recent months and are clinging to the old order, content to stay with what works to augment profits in the short term.
All in all, the argument for media/communications companies breathing life into traditional outlets is sound in a period of global risk aversion. Still, it will only act to hinder the inescapable process of completely assimilating with the digital era. Furthermore, it will enable scrappy up and comers like the Facebooks and YouTubes of the world to continue to win over the progressive hearts and minds of the younger generations that have already developed a disdain for the conformity of corporate culture. All the while, this is making it that much harder for these corporate behemoths to keep up in the future. It stands to reason that the longer the executive boards of the media/communications sector keep these companies shackled to their bottom lines, the less likely they are to survive the next technologically renascent revolution.