The Influence of ICT in the Media Industry

ICT underwent a revolution in the 20th century. Our society has been going through deep transformations within the ICT sector for many years. ICT innovations are both a driver and a supporter for these transformations. New enabling technologies and applications are emerging rapidly. Growth of the media sector has been heavily influenced by the development of broadband and ICT’s. The impact of ICT on media, social behaviours and on creativity will continue to grow. The leading global management consulting and market research firm Lucintel have estimated that the global broadcast media will reach approximately US $597 billion in 2017 with a CAGR of 4.

5% between 2012 and 2017. (Parker: 2012) According to the study, the media industry is fragmented, with the top five and top 10 players accounting for approximately 21% and 32% respectively. They also estimate that the global newspaper industry is expected to reach US $171.6 billion with a CAGR of 1.6% by 2017(Parker: 2012).

The industry faces some challenges due to the growing importance of new media, driven by dynamic media consumption patterns, resulting in a large shift of readers to the online news sources.

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(Parker, 2012) According to PWC digital spending will increase at a 12.1% CAGR compared with just 2.8% for non-digital. (Marketing Charts Staff, 2012) This report will look at how ‘old’ media will try and bridge this gap and move into a more ICT related industry. The assignment will look at the strong influence ICT has had on the media sector. Furthermore this report will describe the evolution of ICT in media. Additionally it will examine two different types of media and their development in the last decade.

The paper will then review the future role of ICT in the media sector before concluding.

Evolution of ICT in Media

It took radio broadcasters 38 years to reach an audience of 50 million, television 13 years, and it only took the Internet 4 years. (United Nations Cyberschoolbus:2002). There was only 50 million pages on the World Wide Web in 1998; today there are more than 15 billion pages (Worldwideweb Size:2013) People’s lives are becoming increasingly more hectic and fast paced. The type of information people want is changing and easily accessed visual media is becoming increasingly popular. Young readers do not want to go flicking through numerous pages of broadsheets to look at the latest sports results. With online services people can just click on a tab relating to the topic that interests them. Radio is an old traditional media broadcasting method but has moved towards instant information. The early 90s saw radio and television only being received via antennas. Sky first introduced satellite television to households in Ireland and the UK in 1998. (Cameron: 2007). Sky Digital formally known as BSkyB’s, offered an analogue service, but have now moved to new digital service.

Many benefits and improvements have developed over the past fifteen years, with nonstop movies, sport and entertainment channels. In recent years the introduction of Sky HD and Sky+ allows for higher picture and sound quality along with the capability of pausing live television. Sky has introduced various news channels which can be watched anywhere. Channels such as Sky News, Bloomberg, BBC News, RTE News CNBC can be accessed anywhere around the world and also online via laptops. The internet has made a major change as all media broadcasting companies now have websites which can be viewed to hear all the latest news and sport. People can make subscriptions to particular topics of news for examples stock shares, sport and entertainment.

This news can be automatically updated on their smartphones or internet. The internet has been blamed for promoting immorality in some areas of society but overall it has being a positive force in media innovation (Salman: 2010). All news programs can be watched repeatedly online. If people want to view previous articles they can be retrieved online. YouTube allows viewers to watch multiple documentaries or clips through a simple search engine. Apple, Samsung and other mobile phone brands have brought about a new era of smart phones.

These have taken the industry by storm with the ability of constant monitoring of news and weather. A very popular app today is Twitter, where politicians and different broadcasters offer their views and opinions on controversial issues. These views can be seen by all subscribers where they can offer their own comments and opinions. RTE news, BBC and Met Éireann have all launched mobile apps to give users 24 hour coverage of current affairs. With the increased availability of Wi-Fi in areas, people can stream the live news whenever or wherever they wish. Other apps include the latest news on currency exchange, stock share news, death notices, celebrity gossip and more popular social media sites such as facebook and linkdin.

Media Companies

Radio and Newspapers — The BBC & The New York Times

The BBC is an example of an organisation that has been a leader in media broadcasting over the last 20 years. ICT has played a key role in developing the BBC’s radio and television industry. In 1995 the BBC was one of the first organisations to launch Digital Audio Broadcasting (DAB) radio, and it now offers eleven UK-wide digital radio stations, including five that are only available nationally on digital, and the World Service. These advancements are all ICT related.

BBC online now accounts for up to a quarter of UK internet traffic. (Acklam & Chang, 2009) This is proof that there is a demand for a high quality ICT enabled media hub. Turning the entire UK media sector into a global competitive hub of content delivery and production capability enabled via ICT has put the BBC in a world leading position. This is similarly seen with their domination of the iPlayer in the UK online TV market.

The application of ICT in radio broadcasting has enabled a cost-effective way of producing media programmes. By using sophisticated technology, the BBC has benefited from both cheaper production and editing systems, and also from cheaper broadcasting. The audience in the new digital era benefits from 24 hour news channels. People can also access all kinds of media — sound, pictures, text —on all kinds of different devices, at any time. All sources of media are now searchable, movable and shareable. By investing in an ICT-enabled global media hub, the UK has built on the success of the UK media industry, mainly the BBC, in a worldwide context. (Acklam & Chang, 2009)

With the advancement of smart phones, you can now view news sources at any time. The Internet has transformed the newsroom to greater heights. It has created news that is instantly available through either smart phone apps or social media websites like twitter. ICT has also made it easier for reporters, editors and other news contributors to contact each other. It has created a ‘network ’that has enabled them to be in constant interaction through e mail. (Searvaes & Malikhao, 2005) The editor can at any one time call their reporter who may be situated in any place in the world, as long as there is telephone network there. This creates an effective news network that is instant. Likewise, reporters can file stories at any given time via the Internet.

In recent years podcasts have come to prominence as a form of digital media consisting of an episodic series of audio radio, video, PDF, or ePub files that can be subscribed and is downloadable through web syndication or streamed online to a computer or mobile device. Podcasting is a converged medium bringing together audio, the web and portable media players. The BBC has been prominent in this sector too as its World Service is one of the world’s leading international broadcaster providing programmes and content in English and 27 other languages.(BBC: 2013)

Declining profit margins within the newspaper industry is the main reason for newspapers to take on a new strategy and develop using ICT’s. With the expansion of media such as the internet, television, mobile and cable television, advertisements have switched from the old hard copy image of newspapers to online adverts. Revenues keep plummeting as readers move online as it is more convenient. Internet access is now available at the touch of a button and with the growth of tablets and mobile applications people can download news on the go rather than queuing at their local newsagent.

It is a serious challenge to newspapers that people now search news online in blogs and live ‘tweets’ rather than buying a hard copy of a newspaper. This is especially the case when news can be uploaded every second, not just by papers themselves but by amateur reporters. Studies have shown that individuals have become increasingly interested in reporting news online. Around 37% of internet users said that they have had experience in online news creation. (Kristen, 2010) Newspapers faced the threat of becoming ‘old news’ as they could not print copies fast enough to keep up with online uploading.

This was clearly evident in the revenue count of newspapers in America where according to The Economist (2012) revenues dropped to $ 34 billion during 2011. This figure is only half of what revenue appeared to be in the year 2000. The good news is that these figures are starting to stabilise and the New York Times were forecasting for 2012 to alleviate the decreasing revenues produced from advertising for the first time in five years. Not only has the newspaper company managed to combat the decrease in revenues, it has also increased their share prices by 37% (The Economist 2012) The question remains how has this leading newspaper company made changes in order to move in conjunction with the development of ICT’s.

Instead of using the strategy of raising prices on newsstands which other companies decided to do, The Times used the internet and allowed users to download articles and newspapers online. The New York Times began the revolution of the newspaper world into digital in 1994 when it developed the ‘times’ service. A service where individuals had access to daily news, discussion forums and other material.(Brett 2010) Later the newspaper company developed an iPad application which enabled its readers from around the world easy access. The application contains daily papers and archives dating back to 1980 with interactive features such as word searches and Sudoku’s. (Brett 2012) Access to archives is limited depending on your subscription. A subscription fee will be for annual use of the application and subscribers have the option to buy a ‘dual’ subscription option, where subscribers can buy hard copies as well as having the option to download daily papers on their iPad ( Brett 2010).

In 2011 a ‘paywall ’ system was designed and implemented to prevent internet users from accessing unlimited content on the web page without having a previously paid subscription. However The New York Times’ paywall system is a ‘soft’ system as it allows more flexibility for users who can view a certain amount of articles before needing to pay for a full subscription, this was introduced in March 2011.(The Economist 2012) There are many advantages for this as The New York Times can have articles showing in search engines and in social media sites allowing access to users without subscription. This allows the paper to capture a fresh new market of subscribers. This attracts people to advertise again on these online articles helping revenue for the company. Unfortunately not every newspaper has adapted to the rapid changes within the ICT sector and has had to close down to poor sales and drops in revenue due to the depletion of advertising. Examples include The Financial Times Deutschland and The Irish Daily Star in September 2012.

Technology and the Future

A great shift from online platforms to mobile news sources has emerged in the last few years. Last November, the 4G LTE network was introduced into Irish market, which meant a significant increase in the speed of network. This opens the opportunities for more effective services in video and online gaming in mobile (O’Brien:2012). 2013 will see the introduction of the 4K high definition television. This is a new generation of high definition among the television sector and offers four times a higher resolution. Deloitte believes that this new development will be a ‘landmark for 2013’. This new high definition television will try and be combined with powerful pc’s that are sufficiently fast with graphic processing that will eventually be able to work in collaboration with 4K television sets. There is a challenge that in order to download movies onto the television, large mega bites and a large broadband connection will be needed. Otherwise steaming and download could take the majority of a day to download.

This new development in media is working as a link between various types of media. This television will have internet access and will be working in collaboration with powerful pc’s.(Deloitte: 2012) With this new development predictions can be made, that more and more media is collaborating with the internet and with regards to the newspaper and radio industry we foresee that there co-operation with the internet will have to increase in order to sustain competitive advantage. We believe that 3-D will become more popular in regards to online broadcasting for both newspapers and radio. This will give the readers a sense of live reports at the scene of the news or even broadcasting station. The growth of the internet and developments is always hard to predict due to the fact that ICT’s are forever changing and because some new technologies or revolution do not ‘take off’ like prediction foresee.

The ICT industry has brought about a major change in the media industry even in the last five years. Newspaper deliveries have suffered due to the economic crisis but also because online news is free and mobile phones with wi-fi make it possible for people to scan through the latest news on the go. Advancement in ICT’s has seen this major overhaul. Radio is the most historical idol in the media industry. Most people still have a preference towards this type of media.

However, with some smart phones such as the iphone, the only way to listen to the radio is through a website. That means if the network development becomes further efficient, you’ll be able to listen to the local radio around the world through the internet. People’s lifestyles have changed from ICT. Facebook, for example, is the largest social network platform. People’s experience of news has become a shared social experience. Tedious news reports are not the first choice for young people anymore. Most media company will inevitably switch to becoming predominantly an internet company and will focus particularly on online sales. As mentioned above forecasts believe that digital spending will increase at a 12.1% compound annual growth rate compared with just 2.8% for non-digital. ICT has had a major impact on the Media sector in such a short time and will only continue to have a major influence in future years to come.