“What’s Up With the Economy?” is a podcast by the Centre for Economic Strategy in cooperation with Hromadske Radio, supported by PrivatBank.
Every week, hosts Anheina Zazadex and Maksym Samoiliuk talk with experts, entrepreneurs, analysts, and government officials about what is happening with Ukraine’s economy.
While the podcast is held in Ukrainian, we decided to summarise each issue with the most important insights.
The new episode features Andriy BoborykinExecutive Director of Ukrainska Pravda, one of Ukraine’s leading media outlets and an experienced media manager.
The discussion focused on whether traditional media will still exist in their current form in ten years, why Telegram is not the main threat to online outlets but Google, and who actually earns the most — bloggers, television channels, or online media.
Read below to find out what Andriy shared:
- Traditional media remain profitable, but margins are shrinking due to growing competition.
“In developed economies, media are profitable, but it is a low-margin business. It’s not the kind of industry where an investor or owner can earn huge money or maintain large budgets for R&D and growth.”
However, before the 21st century, major media companies had near-monopoly control over audience attention and could sell it to advertisers on their terms. Now, however, platforms have taken over this role in the attention economy, and profitability declines every year.
In Ukraine, the situation is even more difficult: the economy is less developed, which also affects the earnings of media:
“It is much more difficult to build a profitable media business in Ukraine than in Western Europe, the US, or Canada, but it is possible. Ukrainska Pravda, for example, was, for all these years, at minimum, a self-sustaining business. That is, one just needs to accept the fact that the media business cannot be like oil or the sale of construction materials.”
- Why, in Boborykin’s opinion, it is not Telegram but Google that is the main threat to media:
The only advantage of Telegram over online media is radar data on the movement of missiles and drones. And someone with the corresponding capabilities provides this information to Telegram admins.
“When we sit in shelters, we check where the missile is flying from. And this information is received by Telegram channel admins, who were given access by people with the relevant capabilities. And this, in essence, is the only unique selling proposition of Telegram compared to traditional media. When (hopefully sooner rather than later) the alerts and shelling disappear, then we will see how Telegram consumption changes.”
The influence of Telegram is often exaggerated. According to surveys, people respond that they take news from Telegram, but it is unclear what exactly they consider news — journalistic materials or, for example, the same alerts about air raids.
The advertising market on Telegram is almost unregulated, and creating a strong independent media there is extremely difficult. It is easier to launch a “covert advertising” channel with rumours than a real journalistic project.
But the real threat to the media is dependence on Google.
“Google itself chooses what to show. Many people simply search ‘news’, and Ukrainska Pravda is first or second there. Or they search ‘Ukrainska Pravda’ in words on Google, because they don’t know how to type pravda.com.ua. That is, we depend on how Google shows us, even for those who want to directly read our brand.”
He adds that the significant difference between Ukraine and other countries is that here among strong content aggregators there is only Google and a bit UKR.NET.
In Britain, Yahoo, MSN, and NewsNow operate, in the US — MSN and Apple News. There is a certain mix there, and dependence on one platform is not so strong. In Ukraine, it is almost total, in particular due to the large share of Android smartphones. Therefore, the consumption of media brands is largely determined by platforms.
- If even national media feel pressure due to Google, then for regional outlets, it is even more difficult:
“It is difficult for them [regional media]and they survive on grants. Most have almost no volume to earn on banners, or they bring insignificant income. Secondly, the advertising market in most regions has significantly shrunk, and even before the war, it was not large. And also, USAID left Ukraine, so now the situation there is tense.”
Another big problem is salaries. In many regional media, journalists receive less than cashiers in supermarkets and people who do not need higher education for their profession.
At the same time, independent regional media have opportunities for development through direct connection with readers:
“The big positive in the model of reader support is that regional media do not need very many people in order to reach reasonable monetisation figures,” adds Andriy Boborykin.
- Who earns the most among bloggers, television channels, and online media:
According to Andrii, media in Ukraine still earn a lot. There are strong television companies, but their business is being destroyed by another platform—YouTube. The share of Smart TV has greatly increased in recent years: practically everyone who has a TV has YouTube buttons, so the future of television is also in question.
Bloggers in Ukraine are also beginning to earn, although the market is still at a very early stage of development:
“For example, there is Serhii Sternenko, who probably monetises attention on his channel quite well, but there are still not a large number of entertainment projects on YouTube now. Direct advertising with influencers is also very little. That is, it is gradually developing, but we are still very far from how it looks on the Western market,” Boborykin emphasises.
- Why has the era of free information ended, and paid access is almost the only chance for media?
Once, people bought a newspaper as a physical object and paid money for it, which equalled or was even greater than what we now take for paywalls or what the New York Times wants for its subscription. Therefore, this is, in a certain sense, a return to paid content and the only clear path for media to get out of the general crisis.
But today, the media have one more financial path besides simple payment for access to content:
“This is the element of creating a community, that is, bringing together people with similar identity, similar views around media brands (…). In the medium term, this, it seems to me, is the only working strategy for any media,” notes Boborykin.
Advertising still exists and will probably gradually recover with the end of active hostilities. However, the advertising market also flows into platforms, so even large image projects will not be able to sustain an average or large media company.
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“What’s Up With the Economy?” is a podcast by the Centre for Economic Strategy in cooperation with Hromadske Radio, supported by PrivatBank.
The podcast is available in Ukrainian on different platforms by the link.
