Content is not a seam: there is no free content – you have to pay in cash or with your time



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Photo: "Reuters", F64, "Shutterstock", DELFI

As society's values ​​change and Latvian people's income grows, understanding of "free" goods and services is also changing. More and more people can and do want to pay for a product as unheard of as content, especially when it is of high quality. It's about movies, music and also journalism. At the same time, in a changing world, where the media is, both the media and social networks, and the flu, etc. c., there is a constant struggle between companies of different sectors about people's time. "Delfi" assesses the challenges of the media industry in the context of global market trends and changes in people's habits.

Speaking of content and payment, unfortunately, in Latvia, long after the collapse of the Soviet Union, the desire to receive things and services for free has been preserved, the word "hawk" illustrates well, says Ivonna Plaude, chairman of the Association Council of Latvian Journalists. She believes that we, as a society, must grow out of this period and understand values. Nowadays, the perception that getting something for free is unacceptable is only normal when you can subscribe to a service, a newspaper. "It's about status in society and the desire to get information – it's popular to be informed, to have knowledge and to be competent. Ethical scales will also weigh in favor of quality content, "says Plaude.

At the same time, from the advertising market and from the commercial point of view, money is where the public is, it is a constant axiom, and companies from different sectors are engaged in a fierce battle for human time. Thus, Latvia's advertising market accounted for most of the television segment (41%), followed by Internet advertising (23%) and radio (13%). Data compiled by the Advertising Association of Latvia show that in 2018 the market grew 6%, reaching 85.2 million euros. Growth was in all segments. The head of the Latvian Advertising Association, Baiba Liepiņa, believes that the development of the local advertising market is predictable and trends across the region are quite similar. Although the association's data show lower growth, Latvia's advertising market is growing at around 8-10% (Google and Facebook data are not available in full). This means that Internet advertising is bigger.

"The industry is now known as the entertainment and media industry, because entertainment blends with media, distribution and content creation. This is an important difference driven by the growth in the use of mobile devices, as people are increasingly online and want to have fun, "says Liepina. In addition, the migration from the publisher to the platform, such as Facebook, is underway. And the question here is how small markets will survive and what the consequences will be. Latvia is one such market. As a result, large platforms become stronger and buy broadcasting rights, such as certain sports broadcasts. To attract the public, these platforms need content and invest in that business.

Media value is reliable and can not be trusted with entertainment alonesays Plaude.

Photo: LETA.

Plaude, on the other hand, says that reliability is a very important factor, for example in the case of social networks, there is a growing demand for written media in the UK. People no longer trust "world noise," sometimes people want to exclude themselves from the process of getting information or looking for reliable sources. The value of the media is reliable and one can not rely solely on entertainment.

It's no secret that these shifts to small markets are a big challenge, especially considering that many people manage English. Liepiņa confirms that the biggest challenge is the ability to deliver unique content in the native language, but it is expensive and complicated enough. Yes, people have a tendency to entertain, platforms and media have managed to catch it, and of course this trend should be used. People work hard and want to get off work when they return home. Of course, at the same time, it is also important to consume quality and "serious" content.

At the moment, a pop culture attack is taking place on all possible fronts, but Plaude does not look at the current situation as values ​​will remain. "Of course, in terms of mass, demand will be cheap, quick and light. I do not want to mix this store with quality journalism. Yes, there may be different hooks in the form of headlines, photographs to take the entertainment-oriented audience to more serious and valuable information. In addition to the development of technologies, different forms of education are available to the media – with video, portals, listening, social networks, study discussions, newspapers, etc. etc., "Plaude says.

Liepiņa also agrees that the media does not work in just one field, for example, media portals have their own television programs and so on. etc. This trend will certainly expand. So there is pressure on the competition, not just about Latvia, the same happens on bigger markets, Germany, France, Scandinavia and other places. All local media have to fight against these global giants, whose market share is huge.

Photo: LETA.

"Citizens need to understand that there is no free content – whether it is in cash or in their time, for example, when you look at advertising.It's a fair deal, and these are the rules of the game now.But here's the other side of the medal , consumers do not like ads, they try to avoid them, for example by using ad blockers. "Many media did this and made the content unavailable while there is no way to advertise," says Liepina. because advertising is money directly, but its overpowering consumer is expelled. It must be able to find a successful balance. It is also important that Latvian residents use local media instead of spending time on foreign platforms. on public and private media.

There is no free content – it is paid in cash or with your time watching the ad. It's a fair deal, and these are the rules of the game now. says Liepina

In terms of business, Plaude believes that the media need to seek different forms of financing, since traditional media business models provide revenue from advertising, signatures, direct sales, events, conferences and public purchases in the form of public money .

In Latvia, the share of the media consumer population has remained stable over the last three years. For example, the proportion of Internet users aged 15-74 increased, especially as older people are more likely to start using the Internet. By 2016, 71.5% of Latvia's population used the Internet every day, but by 2018 it was already 79.8%, according to statistics compiled by Kantar.

When assessing the financial indicators of the Internet's largest media, it can be seen that the revenues of JSC Delfi in 2017 was 3.97 million euros, profit – 199.89 thousand euros. In turn, TV Net's turnover was 2.04 million euros in 2017 and losses of 731.22 million euros, according to data collected in the study Baltic Media Health Check.

The share of daily viewers declined slightly – on average in 2016, 70.1% of Latvia's population aged four years were watching TV, while in 2018 – 66.8%. Television audiences have not dropped significantly, but some, especially younger ones, spend less time on television every day. On average, 67.9 per cent of the Latvian population between 16 and 74 heard the radio in 2018, while most of the time listening to the radio in the workplace, the situation is commented by Oskars Rumpēters, director of media clients of Kantar.

The public media – Latvian television and Latvian radio – play an important role in this segment. Its turnover is EUR 18.32 (loss of EUR 233.06 thousand) and EUR 9.17 million in 2017 (loss of EUR 174,30 thousand). The largest turnover of private equity companies was All Media Latvia (TV3, 3+ and TV6) – € 18.47 million (€ 1.33 million), the Baltic Media Alliance (First Baltic Channel), Ren TV, NTV Mir etc., as well as MK Latvia and MK Estonia, EUR 14.57 million (profit of EUR 73.93 thousand), Latvia Independent Television – EUR 6.30 million, EUR 1.54 million).

"Radio in Latvia is in a very good position, but television has a large market share, although it has a smaller share in the world. It should be noted that television has a relatively expensive "entrance fee" because it is necessary to create a video and a radio – basically the text. So radio is a good channel for small and medium businesses that are not as big as theirs, "says Liepina, adding that it will be interesting to see how the habits of listeners will change – in the past the radio listened in the car because nothing else was available. Now, with scanning and good internet coverage, there will be new competitors as people use their smartphones and screens. Here's the question of how the radio will change and it's already clear that, for example, video streams are being created.

At the same time, there has been a positive trend in the number of print media subscriptions in recent years. The information collected by Latvijas Pasts shows that in 2019 the company received 430 823 press signatures or 18 139 signatures for over a year. In addition, the share of signatures for the total number of signatures increases for a longer period of 10 to 12 months. This is a growing trend in recent years, which may indicate a strengthening of public solvency. The share of long-term subscriptions reached 66% of total subscriptions, increasing by 4.4% over the same period of the previous year. It should be noted that the press prize of Latvijas Pasts in the nomination "Publisher with the Greatest Number of Numbers 2019" was received by the publishing house "Žurnāls Santa". The weekly magazine "Rīgas Viļņi +" won, but in the nomination "2018." The most popular edition of the year was the daily newspaper "Latvijas Avīze" in the name "The largest increase in signatures for 2019".

The article uses the 2017 financial statements to illustrate the financial results of companies as their performance data for 2018 is not yet available to most companies in the industry at the time of writing. Thus, the comparison between companies in one sector is more objective in an equivalent period of time.

To create quality, enjoyable and useful content for a wide range of people, it is necessary to have talented and dedicated authors. Your work is of value. Be it music, movies, books or journalism. In May 2019, "DELFI Plus" – a chance to sign some content and promise it will be worth it! The Internet has changed the business models of different industries, but what does this mean for consumers? The article in the series "Content is not a semicircle".

Dace Skreija

Journalist DELFI

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