INFLATION ONE THAT HITS MEDIA INDUSTRY
TARIQ AHMED SAEEDI - email@example.com
Jan 19 - 25, 2009
What is the one biggest disadvantage of intangibility of a product, if one would ask; the answer could be many but its asynchrony incidentally developed in consumer's mind for one reason or another. It is natural that perhaps the effects of five senses outweigh single, albeit powerful aftermaths of thing being felt and buffeted by external factors strong feeling hobbles or comes to impasse most of time giving occupants freedom to take rule. Presumed fallibility or unsuitability of intangible product being delivered and its vulnerability to pressures are noticeable in the relationship between the wave of global economic paradigm shift and its feeble victim the services sector, importantly commercial aspect of media industry.
Saying that product with a combined recognition of five human senses has variable sources to make money is out of question. Manufacturing goods can be citied as an example. Without or with vital complementary support of physical evidences service product undergoes comparatively demanding financial plan attached with selected sources of return on investment. Consumers pay directly against recreational activities and take out money to use various utilities, thereby getting services providers monetized their efforts through intermediating channels or personally. There are services which are not as much dependent on earning from consumers for whom they are deigned to run financial wheeling and dealing as on companies which have set of customers catered by such services. In fact, these companies known as advertisers meet perpetual expenditures and engender avenues of earning for service providers. The assertion fits to service like news dissemination and entertainment industry revenue choices of which are not at one's fingertips. Downfall in monetary position of advertisers directly implies financial strains for media industry therefore.
The discussion about financial weakness of organizations providing media and entertainment services has caught fire in the wake of economic crisis that is whisking off industrial liquid, making industries grip their purse tightly. The turbulence in several economies worldwide has triggered attempts to secure financial holdings and restore liquidity position by states. With no exception, range of industries hobbles open budgets and limits media spends on print media while resorting to fallback position globally.
The advent of internet and mobile communication has brought about revolutionary additions in the list of vehicles carrying advertising messages and diversified the media horizon across the world. While online advertising has trimmed ad revenue collected by traditional media, it becomes instrumental in compensating loss of revenue by the same. Increase in subscription of online publication, webcast, blogs benefits media simultaneously providing services via new technology. Interestingly, global economic downturn has spurred numbers of hits on information websites according to an international media analysis. Global research reveals rather an interesting and contrast picture of trend of adverting revenue in the world and projects that global media and entertainment revenue would grow by average 6.6 percent annually to $2.2 trillion by 2012 and in which online and mobile advertising have important role to play. Advert revenue of media grew substantially during time when crisis started.
Nielsen's global AdView Pulse report underscoring media trends in numbers of countries reveals that TV succeeded in outfoxing the economic crisis and 'was not hurt by weakened economic situations'. It says global advertising market recorded 2.9 percent growth during July-Sep, 2008. In this quarter, proliferation in internet usage pulled ad growth by 19.8 percent. It further reports amongst traditional media TV held dominating rank in terms of mobilizing ad revenue.
According to the report, despite the fact that television and radio benefited from the growth print media lost two percentage points with newspapers plummeted by 3.8 percent and magazine down by six percent. The report further noticed decline in growth of revenue for magazines and newspapers in markets like USA and Europe. No deceleration was recorded in Asia Pacific region however. Halted gait in commercial progress of different publications in USA is a result of country wrestling with recession in financial sector and besieged with cash-strapped consumers and crouching consumers' buying power. In one of the rarely sighted, historical instances NewYork Times known for being US's widely circulated daily opened front page for advertising. This is unprecedented as the page is dubbed holy, sacred and remained purified of commercial content.
Difficulties in generating advertising revenue have also caused disappointing decisions within media industry of Pakistan. The sacrilege has no analogy in nature for every space is for commercial content generally in print and electronic media here in the country. The disappointment was because of society was affected due to such negative developments. Like layoffs in some of media outlets in particular TV to meet overarching costs worsened unemployment situation. Although, it is not a kind of mass attrition it is adding insult to injury. It is also not making sense that when cost cutback is needed why garrulous, chatterbox types of talkers are hired on bulky salaries in TV channels. In certain cases, the remuneration goes to Rs. 4 million per month, an insider told.
On the other hand, print media are bending over backward to accommodate fall in ad revenue by either trimming content or mowing down editorial pages. And this has been common fate of dailies, weeklies, fortnightlies, and monthlies. Newspapers with weekly pages are now detaching them to envelop expenditures. Internet usage has not reached to the point to overpower or replace traditional media in Pakistan. Consequently, it has not become an effective tool to accumulate ad revenue. Basically, ad revenue of traditional media has been parted after the emergence of other channels of mass and regional communications in print as well as electronic media. Advertisers are not increasing at a rate with which contenders vying for ads are. To get stable and liquid positions back media companies are left with options either to diversify business in the industry what famous dailies have done or to sale space or slots for advert irrespective of editorial policy.