Press-business ties should foster common good: journalist association chairman

Current circumstances require press agencies and businesses to work better with each other for both mutual benefit and the common good, says Le Quoc Minh, a Party Central Committee member and Chairman of the Vietnam Journalist Association.

His remarks were made Wednesday, June 21 - which is observed as the Vietnam Revolutionary Press Day.

What is your opinion on the current relationship between the press and businesses?

The press has always had close links with businesses because its most popular and traditional business model depends on advertising. Advertisements from businesses help media agencies operate and develop. Businesses, meanwhile, consider the press an important channel to disseminate accurate information on their production, business, import and export activities; and to promote their products and services.

With press agencies developing several other forms of paid content to promote business activities, this reciprocal, two-way relationship has been maintained until now, even though businesses have many channels to deliver their information to users, including websites, mobile applications or their own social network channels, programs and events with the participation of celebrities.

The press has also diversified its revenue sources, but advertisement remains a crucial source of income.

Therefore, one cannot think that only one side needs the other. In today’s circumstances, it is important that they continue to work together for their own benefit as well as the benefits of society. But today's relationship requires more flexible coordination and diverse ways than in the past.

Covid-19 impacts and geopolitical instabilities have greatly affected production and business activities of enterprises. The press is also facing difficulties. Can they act together to overcome challenges? If so, how?

At the beginning of 2022, no one would have imagined that the world would be stuck in a military conflict as large-scale and protracted as the one between Russia and Ukraine, leading to an energy crisis and skyrocketing inflation in many countries. The instabilities caused by the war and accompanying economic uncertainties made financial resources scarcer for media companies.

As households tightened their spending, businesses reduced advertising costs and this happened at a time when press agencies faced high production costs. Media companies that rely heavily on printed newspapers were particularly affected by doubling paper prices. Late last year, this led to several news agencies laying off employees, reducing budgets and implementing many other cost-cutting measures.

Compared to this time last year, press agencies don't have much confidence in the business outlook. Their biggest concern is that when costs are increasing, businesses will pay less attention to advertising and they, the press agencies, cannot increase their charges. Even leaders with an optimistic view think that they will have to cut staff and take other cost-cutting measures in 2023. Less than half (44%) the number of editors, CEOs and leaders of digital media agencies surveyed by the Reuters Institute for the Study of Journalism expressed strong confidence in their business prospects this year, about 37% said they were uncertain and nearly a fifth (19%) were very low on confidence.

In such a difficult period, cooperation and understanding are more important than ever. Press agencies need to support and energize businesses with honest and fair content, even if their income falls.

For their part, businesses should maintain a sustainable and long-term relationship instead of shifting to other platforms and abandoning the press. In fact, many businesses have already moved their advertising budget to social networking platforms and in many cases, their ads have become a source of revenue for channels that provide false information and distort the truth. Some terrorist forces also benefit from advertising.

Since the existence of the press is very important for society, so businesses should show their social responsibility by spending a steady budget to support the press.

How can the media economy develop in the digital era?

Ad revenues for global print media are forecast to fall 7.7% this year to $47.2 billion, out of the worldwide ad marketplace value of $993 billion, according to a recent report from intelligence provider WARC. Media companies are competing with corporations like Amazon, which recorded $37.7 billion in ad revenues last year - equivalent to 80% of what the print media is forecast this year. It’s expected Amazon’s global ad revenue will exceed all of print media sometime this year.

How things have changed in the last couple of years can be seen from the fact that in 2021, 82% of media leaders said they were optimistic about the year ahead. In 2022, less than half (45%) had that view.

Also, the rate of media leaders showing optimism about the next three years fell from 79% last year to more than half (54%) this year. There is no survey data on the situation in Vietnam, but difficulties persist for media agencies here, especially in the context of the global economic slowdown.

While their charges, accounting for 80%, remains the top priority, followed by display advertising (75%), most press agencies acknowledge that diversifying revenue sources will be important this year. For example, the UK’s Guardian combines charges on newsreader apps with sponsorship, digital advertising, tech platforms, and even event organization.

The Financial Times, which has been successful with a subscription model, also applies display and native advertising, in addition to providing media consultancy and organizing events such as the annual FT Weekend Festival.

It is expected that many news agencies will follow in the footsteps of Bloomberg News, which said “goodbye” to all automated advertising from January 2023 and is focused on direct advertising sales.

The press also have to account for the fact that excessive advertising and bad user experiences have caused trouble by making users uncomfortable and undermining their trust.

Another sign of the shift to premium advertising is U.S-based General Electric’s (GE) historic move to buy out New York Times advertisements with a high-cost multi-channel and multimedia campaign.

Some press agencies in Vietnam have also tried to diversify their revenue sources by organizing events including sports tournaments. This has achieved some results, but many newsrooms, radio and television stations still rely heavily on advertising, despite the limited scope and likelihood this source is very limited and unlikely to grow strongly even when the economy recovers. Some others are experimenting with charging for online news but this is not strong enough to be sustained for long.

Several studies show that whatever the situation, a press agency needs to apply at least 3-4 business models for survival and sustainable development.

* Le Quoc Minh is also deputy head of the Party Central Committee's Commission for Information and Education and Editor-in-Chief of the Nhan dan (People) Newspaper.