The media have been playing a role in the digital transformation for some time. Even though the term used to refer to this process seems outdated, the transformation itself continues. One of the Hay Festival conferences held in Segovia featured Juan Luis Cebrián, president of the PRISA Group, and John Ridding, CEO of the Financial Times Group, who debated the role of the media in a digital world, where the risks to business can often turn into opportunities.
The conversation was chaired by Diego del Alcázar, the founding president of IE and someone very familiar with the media due to his former position as president of the Vocento Group. The first question touched on one of the basic principles of journalism: freedom of expression. Is there a risk of losing it? Ridding responded from his own experience. “When we launched in China it was clear in our minds that if there was censorship, we would close business operations,” he said.
Cebrián pointed out that freedom is indivisible and that there is only freedom of information where there is freedom, although he added that, in the digital world, the fact that everyone can say what they want –without the need to resort to the media, which provides analysis– has created much confusion. There is only one small step from there to the social media. Ridding was keen to highlight how important these networks are, but pointed out that the press needs to filter what appears on the Internet so as not to be dragged down by inaccurate information.
Given this scenario, one thing that the media can offer as a differential value is quality. When the Volkswagen scandal broke, analyzing it was difficult and involved. “That is precisely our organization’s role,” commented Ridding. “The world of business finance is ever more complex, but it is part of our job to understand it. I think the fact that the issues are complex cannot be a reason not to cover these stories.”
However, quality comes with a price tag. Ever since they first appeared, newspapers have used funds raised from advertising. Cebrián noted that the problem is that this advertising is disappearing from the newspapers. There were once adverts which promoted direct sales –they announced that you could buy something– but now they act to create brand awareness. “In the Spanish press we have lost 70% of advertising over the last seven or eight years, but also 60% of paper circulation.” The conclusion is that quality is expensive and currently the media’s business model is in crisis.
Ridding agreed about the existence of this crisis in the industry, “but I think it is healthy, because I think the media are making an effort to build a closer relationship with readers, which is the most important relationship they have,” he said, referring to the move from advertising to reader subscription.
Both the Financial Times and PRISA have gone through ownership changes. “How does that affect things?” asked del Alcázar. Cebrián replied that such developments within PRISA have not brought alterations in terms of overall control since the main shareholder is still the same, although the Polanco family, which in 2009 owned 71% of PRISA, now has a 19.5% share. Ridding’s opinion was that there has been no change in editorial commitment. The Financial Times’ former owner, Pearson, opted to focus on education, but the new one, the Japanese group Nikkei, has had no reason to take away the publication’s editorial independence. The Financial Times CEO stated that there had always been pressure to stay profitable, and he went on to say that they had always been very careful in this regard. In fact, the paper’s reader subscription model has been held up as an example of this digital transformation.
In the digital era, competition is fierce. As Cebrián reminded those present, now radio stations and television channels also publish articles on the Internet. Ridding felt that all this movement means that the opportunities are even greater, pointing out that if you have users who pay to read your publication, this means you have a close relationship with them, something that means a lot to advertisers. Cebrián finished by saying that if media activity was once regulated by law, now it is regulated by software, which is in the hands of the major technology companies. His comment gave much food for thought.