A new report has suggested that the news industry will feel the pinch of losing out to social media platforms in around 10 years’ time.
According to the report, which was compiled by strategy consultancy OC&C, newspapers and other like-minded publishers have not yet experienced the full impact of the shift of young people turning towards social media for news.
However, it does predict that this will not last forever and that these publishers will feel the pinch in a decade’s time. The forecast OC&C used suggests that the news industry will lose out on as much as £450m in revenue to social media platforms such as Facebook and Twitter.
OC&C’s report suggests that the likes of Facebook, Twitter and Apple already take between £200m and £250m from the digital revenue of media markets, with around 30% of mature markets such as music already going to these platforms. This figure is anticipated to rise to around £450m by 2026.
The strategy consultants have said that the impact will be felt in two areas of the news industry – digital advertising and subscriptions. Social media sites are already making their presence felt in terms of digital advertising, with these companies offering to publish content on their own platforms such as Apple News and Facebook’s Instant Articles for a percentage of the sales.
One of the reasons why OC&C anticipates that these publishers will take another 10 years to feel the full effect of social media is because many of them have already gained a large and successful subscriber base and, as a result, do not need to go through the likes of Facebook Instant Articles. The New York Times and the Financial Times are perfect examples of this as neither company sells through other platforms, and their prominent brand names name they do not need to. The report also highlights that this is something it expects to become more common in the future.
On the other hand, one of the main reasons why the figure will increase to such a hefty sum is because of the shift from print to digital. Many publishers who have made the change in the last decade have failed to make up the number of print subscriptions when they turned into a digital platform, with many turning to social media platforms for similar news and content. The OC&C report has explained that this shift has already cost the UK industry half of the total revenue it generates over the past decade, which totals up to a figure of £3.5bn.
In terms of consumers, the report shows that more than 60% of those aged over 55 will still go straight to their trusted news brands, whereas up to 40% of people under the age of 34 will head straight to social media platforms for news.
These generational differences will help to delay the impact, but it is one that is inevitable as social media becomes so influential in the daily lives of the public.