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Failure to innovate a ‘greater threat’ to media firms than Google and Facebook

A failure to innovate has been identified as an even graver threat to media companies than the powerhouses of Google and Facebook who are continuing to dominate the ad market, a conference heard.

The World Association of Newspapers and News Publishers (WIN-IFRA) said media firms, asked to name their biggest threat, admitted they were more concerned at being unable to shake off their legacy issues than the growth of the tech duopoly.

In more encouraging news for publishers, WIN-IFRA chief operating officer Thomas Jacob insisted readers are becoming more willing to pay for trusted content. He also described a belief that the young resist paying for content as a “myth”.

Jacob, addressing the Digital Media Asia conference in Singapore, said the well-documented threat from Google and Facebook remained all-too acute.

“As you will know, 64% of digital advertising revenue is going to Google and Facebook and for every new dollar of advertising spend, 89% is going to this duopoly,” he said. “In some markets it’s up to 99%.

“But when media firms were asked what was the number one threat, it was not this duopoly. The number was threat was a reluctance to innovate.”

Thomas Jacob

Jacob acknowledged that changing a legacy business was “not easy” but said those who do are four times more likely to report higher earnings than competitors.

“For our survival it is extremely important to innovate,” he said.

Earlier in the presentation, Jacob told the room that in a world where fake news has become rife, and is amplified by social media, people are more willing to pay for content they trust.

“People are looking for trusted news sources,” he told delegates. “If you can be that trusted source there is a great future for you because people will be willing to pay.”

The executive also rejected the notion that younger consumers are reluctant to pay for content, arguing that in today’s subscription economy they are familiar and well-used to paying.

“People pay for Spotify and Netflix, so they value content and are willing to pay for it,” he said.

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