The imposed quarantine (social isolation) and the lockdown respectively in most of the world’s economies led many companies to the decision to withdraw their advertisements from the media.
The result of these actions led to the bankruptcy of a significant number of companies active in the media industry with the main receiver of this situation to be radio stations and websites on the internet that offered specialized reportage/information e.g. sports and artistic reporting.
by T. C.
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Photo by Charles Ransom Miller (1849-1922), Source: New York Times, Licensed Public Domain
The forced adaptation of media to the new data
The direct adjustment of media to the sharp fall in their revenues was the drastic reduction in their costs, in particular their labour costs, either by applying the measure of the suspension of employment contracts to a significant proportion of their employees or by dismissal part of their administrative and technical employees.
Employment from home is now the working rule for most journalists. And only the highly needed employees who usually perform the task of receiving, by e-mail, the work of journalists working from home are worked in the offices of companies.
Economic crises always create opportunities to adapt to the new data they create, and it is a rule that succeed only those who work most effectively at the lowest possible cost over time.
Big media were also forced to give access to their product-only to their subscription digital readers and not to the whole world. Those who were able to pay were immediately able to access reliable information and briefing.
This choice-policy of traditional media created an important source of revenue completely new in relation to the traditional sources of revenue of media, which were usually advertising revenue.
Other media have not chosen this route but are seeking financial support from their readers, recognizing with this option that reliable information is a public and social good by allowing all citizens access to their digital websites.
The Covid-19 pandemic that also caused the upcoming lockdown has created a deep drop in Media advertising revenues, laying the groundwork for new future mergers between media to create stronger economies of scale in order to be less and less reliant on advertising revenue.
A significant proportion of the media industry will be wiped out due to the tougher new framework which is shaped as to their survival, with smaller media to become the main recipient, and of course due to a lack of sustainability resources that will be increasingly evident in small media.
The lack of resources will force all media to move forward with the creation of a new productive-business model with fewer and fewer workers in their offices, basing their function more on artificial intelligence and less on the human factor.
Since journalists will be able to work from home rather than from their office, it will create new data on the lower labour and administrative costs but also the forced outsourcing of most media activities including journalism.
The only employees in media offices will be the ones who will be checking whether the texts and data have been properly entered into the computer that will make use of artificial intelligence, while promoting them on the online web page of the media that will be working.
Photo by Fox Corporation, Licensed Public Domain
The new production model and sources of revenue for media
However, any new production model that qualifies in the media should ensure that information/briefing remains a public good, but which should also be offered as a private asset, always serving the values of pluralism and democracy.
The media will now have to move to a more complex revenue source policy. This model requires a great deal of and persistent work in networking with long-term donors that will include mainly charitable foundations, without excluding other type of institutions to be media donors.
In addition, due to the complex nature of the source of media revenue, state governments should establish generous sponsorships to charitable foundations and in general those who operate transparently as sponsors of media and as the media will generate demonstrably reliable information/journalism.
If media tax exemptions are introduced, they should be accompanied by established qualitative criteria, so that there is always an incentive for quality journalism.
Traditional media will continue to be viable because they have acquired a large brand name. This sustainability will be achieved by reducing their costs which will now be adapted to the new reality that will now be shaped by the economic difficulties of the Covid-19 pandemic.
On the other hand, small media (local newspapers, radio and television stations equally, websites, etc.) in order to pass through as far as possible with the least losses from this economic crisis will have to innovate in order to attract new alternative sources of revenue to them.
Only in this way will they be able to continue to produce reliable information that in the long run will make them viable.
Media ‘customers’ and advertising revenue
Readers, listeners and viewers are the customers of the media. It is all those population groups that, through their personal choices, will choose from which media will be informed and/or entertained, but also which media will gain the top or no position in information/reporting.
It is therefore these population groups that act “as news and information receivers” that will determine the size of the position that the media will hold in the daily traffic journal, viewership, clicks, etc.
Advertising, whether state or private, has so far served as the main foundation for the sustainability of traditional and new media. In the new era created by the economic crisis since the Covid-19 pandemic, the media should base their sustainability less and less on advertising.
Only in this way will they be able to compensate for the risk of bankruptcy and annihilation of any type of future economic crisis. For all the media, reliable and quality journalism along with regaining public trust is the bet of the new era.
