A perfect storm

– We must prevent NRK from becoming a major competitor challenging commercial media businesses’ need for user payment, Terje Seljeseth said at the open meeting about NRK held by the Norwegian Media Authority.

The Norwegian Media Authority have invited media businesses, organizations and scientists to comment on the process of making a report on how NRK, the Norwegian government-owned broadcasting company, affects media pluralism and diversity. An open meeting was held in Oslo on November 20th to give all stakeholders an opportunity to present their views. Terje Seljeseth, chief analyst at the Tinius Trust, participated to shield light on what trends the Media Authority must take into consideration when analyzing how NRK affects commercial media businesses, especially in the digital sphere.

Here is a summary of Seljeseth’s presentation:

The situation of the media could be called a perfect storm: Media businesses are both affected by revenue loss from the advertising market and the demand for new technological solutions. In order to renew their income sources, the media experiments with subscriptions and user payment. User payment may be, if the advertising market don’t stabilize, the most important survival tactics for media businesses. Therefore, it is crucial that the NRK is not positioned as a main competitor to commercial media businesses.

Before we can conclude on how the NRK affects commercial media businesses who depends their existence on user payment, and further if the NRK reduces media pluralism and diversity, we need an analysis with a future-oriented perspective. There are many aspects to take into consideration, but I want to highlight three key issues:

  • One trend is that the media businesses key competitors, takes content from the media without giving significant value in return. Facebook and Instant articles in one example, although the product has not yet become successful in Norway.
  • Another trend is that digital advertising is more and more bought through programmatic interfaces, where precise targeting is an advantage. Google is becoming the dominant provider of this service and manages to make it profitable.
  • The third trend is that it is extremely difficult it is to predict development of the media sector in the next 2-3 years. The media businesses will be pushed towards placing more content behind paywalls and introduce user payment as a standard much earlier than previously expected. Change interrupts media businesses at a high rate.

Seljeseth’s presentation is published here, and the streaming of the entire meeting is published here.

The Tinius Trust will together with Schibsteds Einar Hålien define further trends and share insight with the Norwegian Media Authority by December 15th, 2017.