The mobile phone industry is in trouble. Nokia’s profits tumbled 90% in the first quarter after handset sales slumped by a third. And Nokia is doing better than many of its rivals. What does that say about the future of media?
The decline of newspapers in Amercia and Europe is often glibly ascribed to changing news consumption patterns, when it is in fact in large measure due to the economic climate. When consumers stop spending, newspapers are among the first to feel the pinch as advertising revenues slump. Now the economy is also catching up with the cell phone industry. When times are tough, people stop spending on desirables such as cell phones, and the services that come with them, such as data services. I haven’t seen the latest figures, but I’ll wager that web-based media are also losing out. When the economy starts picking up – and who knows when that will be – spending patterns will return to normal. And newspapers will be among the first to benefit as retailers start targeting consumers’ disposable income. You can’t put four-page retail advertising spreads on a cell phone.
That is not to say that I’m writing off digital media. Surely, mobile and web-based media are the way off the future, though that future could be more distant than many people think. I’m just saying that we shouldn’t be too quick to dig a grave for traditional media, which still attracted R23 billion in advertising revenue in South Africa last year, compared with the miniscule R319 million for internet media.