Internet-induced business changes

The internet continues to reshape the media and communications landscapes.

Traditional media—print, radio and television—have ceased to be the go-to sources of information for millennials or those born at the advent of the digital age.

The worldwide web has made it possible for news, stories and commentaries to be read and heard, free of charge, through tablets, laptops and mobile phones. Stiff pricing and marketing competition have made these gizmos affordable to the public.

As a result, newspapers all over the world, except India, are suffering from diminished circulation and advertisement revenue, forcing them to close shop and lay off their staff.

In the wake of this development, print media have put up news websites that carry their editorial and commercial content to keep their audience.

Even then, these websites have to compete with Twitter and other platforms that give the news in capsule forms, and often accompanied by videos, sourced from various news outlets.

The TV industry in the Philippines has not been immune from the internet phenomenon. Because news reports and TV shows can be watched through internet streaming, surveys have shown a marked decline in TV viewership. The dip in audience has, in the process, adversely affected their advertisement load.

In past elections, TV stations had the lion share in campaign advertisements because of their extensive household reach.

Not anymore. The 2016 and 2019 elections showed a big shift in campaign ads from TV to internet-based platforms, such as Facebook, Google and other social media platforms.

The skillful use of social media is widely believed to have played a significant role in the election of President Duterte in 2016.

Indeed, why pay millions of pesos for TV ads that can be seen only on certain times or programs when the same material can be viewed on social media 24/7 at much reduced costs?

The entertainment value of free and cable TV is also being challenged by internet streaming that allows people to watch movies and TV programs through their gadgets at their chosen time and place at the cost of an internet subscription or, where there is public Wi-Fi, free of charge.

These developments may have been a factor on the decision of the country’s top radio and TV networks—ABS-CBN and GMA 7—to explore other business activities outside of news and entertainment.

ABS-CBN has reportedly made plans to diversify by engaging in the businesses of food and beverage, merchant e-mail wallet services, and cosmetic production. A similar move was announced recently by GMA Chair and CEO Felipe Gozon without giving details.

The two media giants may have seen the writing on the wall: The internet is the wave of the future and ignoring its growth could result in serious financial consequences.

Thus, it makes good business sense for them to review their business strategies while they have the resources to fund diversification plans and leverage their good standing in the media industry.

Soon to become potential “victims” of the internet are mobile voice and text messaging and fixed telephone services, with the latter practically rendered obsolescent by mobile phones.

With good Wi-Fi connection, clear and secure calls and text messages can be made through Viber, Messenger and other apps without worrying about prepaid or postpaid charges.

What’s more, these apps have enhanced features that, among others, allow the creation of chat groups where a text message can be sent simultaneously to the group members.

The business activities adversely affected by the internet remain financially viable. But for how long, remains a big question mark.

The tale of telex machines, pagers, fax machines, public pay telephones and other similar gadgets (remember them?) that once rode high but later fell victim to advances in technology may be replicated in the businesses already feeling the pinch of the internet.

They have to adapt to the times or risk being left at the wayside.