Media Summit special: Consultancy says new media is growing as the Middle East turns increasingly to the internet for their daily news fix.
Internet news presses its advantages
Newspaper readers in the Middle East are turning increasingly to the internet for their daily news as the region's media industry struggles to keep up with growing demands for more content in increasingly sophisticated formats.
While newspaper readership is still strong in the region, with publishers in Qatar, Saudi Arabia, and the UAE having sold a total of 3.23 billion copies last year, digital media is expected to overtake traditional media in the near future, a survey by the consultancy Booz & Company shows.
"Nearly 76 per cent of respondents with broadband access had either decreased or stopped their consumption of print news already, or planned to in the next two years," Booz says in "The Advent of Digital News in the GCC".
"As a result, maintaining the status quo is no longer an option for publishers."
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The analyst Jayant Bhargava, a principal at Booz, says the point at which print newspapers begin to lose significant share to digital media is imminent.
"The tipping point where we will see a shift towards more consumers of digital news is close. Whether it's a year or two years, it's near," said Mr Bhargava.
The news comes as global print publishers struggle to make digital media pay.
With digital advertising revenues still not covering the costs of content production for many large media companies, some have chosen to launch "paywalls" to charge users for access to online content.
In the UK, The Times and The Sunday Times newspapers, which are part of Rupert Murdoch's News Corp, last year introduced a subscription barrier to their websites.
No mainstream GCC newspapers have taken such a step, and Mr Bhargava says it is "too early to tell" whether such a move would be accepted by consumers in the region.
But the Booz survey cited the "ominous" finding that 74 per cent of GCC internet users are not willing to pay for digital content.
"Just a small sliver, roughly 10 per cent, said they were willing to accept pay-as-you-go charges based on the amount of content they accessed, and a similar proportion of respondents said they would pay for exclusive content in categories such as breaking news and sports," the report says.
Only 26 per cent of GCC media consumers seem prepared to pay for content online. But Mr Bhargava says this does not represent any more of a challenge when it comes to paywalls than elsewhere in the world.
"I think that's a sizeable community given that there have been very few attempts in the region to put content on pay," he says. "It does suggest that it will be challenging to build paywalls, just as it is in every other part of the world."
Booz says GCC print publishers vary in their preparedness for the shift to more consumption of digital media.
"There are definitely companies that have come up with a strong digital strategy, and there are those that are yet to do so," says Mr Bhargava.
Traditional print media, meanwhile, continues to decline, with 58 per cent of GCC internet users saying they have stopped reading newspapers or read them less.
A further 18 per cent of respondents say they plan to reduce or stop reading print news in the next two years.
Booz surveyed 523 news readers in the urban markets of Dubai, Abu Dhabi, Damman, Riyadh and Jeddah. Most respondents were aged between 18 and 35, and all were internet users.
The consultancy's advice to media companies in the short term is to optimise the costs of its print operations with digital in mind. Long-term digital strategies include pursuing alternative sources of revenue.
"A lot of publishers in the developed world are getting into database marketing," says Mr Bhargava.