Polynomics study shows opportunities of digitization for media diversity
A new study by the consulting firm Polynomics, commissioned by the Swiss Media Association, explores a future scenario: a fully digital Swiss media landscape. This approach not only allows for a reimagining of the media world without regard to existing interests, but also bypasses the transition phase from print to digital. The outlook is encouraging: Massively lower costs will ease the financial burden on existing media companies and enable new journalistic offerings—which will strengthen competition and diversity of opinion.
Private media companies are losing advertising revenue and are focusing on increased cooperation. SRG has benefited from a sharp rise in fee income and stable advertising revenue in recent years, but is facing radical criticism. At the same time, new online, radio and TV offerings are emerging. Against this backdrop, the discussion about a new media law is beginning in Bern.
A new study conducted by the consulting firm Polynomics on behalf of the Swiss Media Association is now examining a completely digital scenario: a fully digital Swiss media landscape in which media is produced, consumed and paid for exclusively digitally. The scientists at Polynomics have developed an economically sound scenario for this and examined it in discussions with leading global media experts from business and academia.
This approach not only makes it possible to rethink the media world regardless of existing interests, but also skips the difficult transformation phase. Today, printing and distribution account for around half of the costs of a daily newspaper subscription. During the ongoing transformation to fully digital use, which is likely to take at least another ten to twenty years, traditional media will have to maintain their existing distribution structures while investing in new offerings - with no guarantee of success. During this transformation period in particular, it is important that private media are not additionally burdened by the expansion of state providers or excessive distribution costs.
The study is encouraging for media professionals and readers alike, the association wrote in a press release on Tuesday. There are no indications of a declining interest in information. However, due to the massively lower production and distribution costs of journalistic media compared to today, the barriers to market entry are falling and competitive pressure is increasing. New competitors are responding to this with new business models and increasingly differentiated products. As a result, the media market is increasingly geared towards the different needs of customers and media diversity is growing. Newly announced offerings such as the online magazine Republik, CNN Money Switzerland and Virgin Radio can already be interpreted as harbingers of this development. However, digitalization also opens up new opportunities for the direct financing of media professionals by the audience, thanks to the acceptance of digital payment systems and micropayments.
Future market developments are subject to great uncertainty. However, risks should only be addressed through regulation when they materialize in a stable manner. The Polynomics study therefore clearly recommends removing any existing hurdles and reducing the burden on private media so that digital business models and digital sources of financing are easier to implement. At the same time, the study rejects the idea of regulation. This would unnecessarily delay the transformation.
The summary of the study can be found here, the whole study here.
