One of America’s most celebrated media companies, Time Inc, is leaving the stage. Time Inc has struck a deal to sell itself to Meredith. The New York-based Time publishes People, Time, Fortune, Sports Illustrated, etc catering to affluent audiences; Meredith publishes Better Homes and Garden, Family Circle, and Allrecipes, among others. The latter is based in Des Moines, Iowa and focuses on largely Middle American women.
If you look at the brands that Time Inc controls, you would expect it to be in a position of strength to compete in this extremely difficult time for media companies. Time Inc has understood that its competitors are not Economist, Forbes or any of the global media brands. All these firms compete against new species of companies: the social media aggregators. Yes, Google and Facebook are the real competitors to the global media.
Under the aggregation construct, the companies that control the value are not usually the ones that created them. Google News and Facebook control news distribution in Nigeria than Guardian, ThisDay and others. Because the MNCs tech firms “own” the audience and the customers, the advertisers focus on them, hoping to reach the readers through them. Just like that, the news creators have been systematically sidelined as they earn lesser and lesser from their works. But the aggregators like Facebook and Google smile to the bank. The reason why this happens is because of the abundance which Internet makes possible. Everyone has access to more users but that does not correlate to more revenue because the money goes to people that can help simplify the experiences to the users who will not prefer to be visiting all the news site to get any information they want. They go to Google and search and then Google takes them to the website in Nigeria with the information. Advertisers understand the value created is now with Google which simplifies that process.
The trajectory to what happened to Time is global. Meredith will likely close some properties and move some fully digital, firing hundreds of staff in the process. US News & World Report has since become a website after it exited print journalism many years ago. We have all forgotten that print US News.
That brings me to the Nigerian media business: By 2025, the Nigerian Guardian Newspaper, the best brand in the sector, will go all-digital. As Internet penetration in Nigeria deepens, value will move from Guardian to companies like Facebook, and Guardian will fold in. (I do agree that some companies will keep moving, despite the evidence that markets have moved. So, you can see Guardian printing post-2025. But under the scenarios today, I do not think they will make money doing so. Already, most newspapers in Nigeria do not make money, but their patrons use them for political positioning, and that is why they keep printing even when losing money doing so. This piece has focused on Guardian as it is the best; others are even in more challenging territories. But note that brands like BusinessDay which focus on business could actually blossom if they redesign contents to attract startups, entrepreneurs, businesses etc readers.)
The following factors will shape the 2025 Nigerian media business:
- Losing Gatekeeping Role: Guardian has since lost the gatekeeping role as the platform where anyone can read the best insights about the Nigerian nation. Most of its columnists and contributors can be read online, across different channels. That quality that defined Guardian has essentially been disintermediated. Guardian premium brand has been abstracted away by Google Search and its contents commoditized. Search for “marginal cost” in Nigeria, and this blog will do better than Guardian on the search engine. That tells you how Google has broken the hearts of media moguls: they are put to compete with “nobodies”. By 2025, this will only get uglier.
- Localization of Aggregators: By 2025, localized strengths of Facebook and Google to attract ads in Nigeria and make them far easier for anyone to put adverts in their platforms will deepen. Today, the minor friction on putting adverts in Facebook will be fixed. The implication is that people will choose these platforms more often.
- Strengthening of Local Startups: Local startups executing freemium models with advertising as core revenue base will get stronger. That further challenges media companies as they compete for ad money.
- Digital Consumption: With deeper Internet consumption, I expect more people to be receiving their news digitally. That puts pressure on print journalism
- Advertisers Move Digital: Most advertisers will go digital, putting pressure on print.
- Global Competition: It may not be obvious but that is the reality: Guardian competes against leading global brands like New York Times, Washington Post, etc. The unbounded and unconstrained nature of the Internet has made coverage global. The foreign media do break major Boko Haram attacks before local Nigerian media. When they have the right information they want to covey to the world, they are always first. Largely, Guardian does not expect to be the gateway to the world when big news happens in Nigeria.
In a perfect Internet market, the marginal cost is zero. Interestingly, companies like Google have attained that near perfect market position as their products are completely free. As contents increase, their positions as aggregators will get stronger, putting pressure on original content providers. The end result: expect mass media contents to be priced at zero.
The following are the options for mass-market media companies like Guardian in Nigeria.
- Freemium Model: In this case, they offer everything free online. That is the most possible model because their contents are not specialized to command anyone to pay for them. Except the columns, there is nothing that is on Guardian that you cannot find in Punch and Vanguard. Interestingly, within minutes of publication on Guardian, the contents are in Facebook and personal blogs. The end game is junk display advertising everywhere as companies work to get revenue from Google.
- Subscription Model: This is a scenario where Guardian asks readers to pay for access to contents. This will not work as I had noted above. The contents are not so exclusive to command people to pay. In other words, if you pay subscription to Wall Street Journal, that makes sense as you are reading business news which can be monetized. But paying subscription for Washington Post may not be that necessary when you have other outlets that can give you whatever they have in the Post free. But WSJ contents are exclusive and time-sensitive. Guardian is more of Washington Post than WSJ.
- Others: There are media websites that ask for donations and all kinds of solicitations from users. None of those options can build a real media brand because the revenue cannot support top-grade journalism. So, at the end, it is all click-bait journalism that does not elevate the game.
In this Tekedia, we generate now good revenue for the rants and contents we put across here. It tells me something: you can actually make people to pay, if you have decent locally-relevant contents. Yes, Nigerians can pay for media but it must align to the capacity to help them improve their lives or businesses. I see a future where the best media brand in Nigeria will be like Bloomberg Intelligence (without the terminal), producing market and business data, at city and state levels, which people will subscribe to consume.
Bloomberg Intelligence delivers an independent perspective providing in-depth analysis and data sets on industries and companies, as well as the government, credit, litigation and economic factors that can impact decision-making.
It goes beyond having the data: you must break them and make it easy for people to consume them. That is a business that will drive media in Nigeria by 2025. You can take a specialty that is of mass interest, collect the relevant data, and then break that data, relating all on how people can use them to improve their lives and businesses. That localization becomes the differentiation. The political news has been taken over by Twitter and Facebook, and competing there is waste of time. The future will be won by exclusive time-relevant contents, geared largely to commerce.
1. Advance your career with Tekedia Mini-MBA (Sept 13 – Dec 6, 2021): 140 global faculty, online, self-paced, $140 (or N50,000 naira). Click and register here.
2. Click to join Tekedia Capital Syndicate and own a piece of Africa’s finest startups with a minimum of $10,000 investment.