Interview with the Wire Service executive

For privacy reasons, I'am concealing the name of the executive and the company that he works for. RA (initials of the indivdual) is a online video executive with experience in SEO and advertising. I only had 10 minutes of his time, but we will continue this discussion next week.

I wanted to find out from RA what are his thoughts on the future of traditional media. Here are some of the questions I posed to him:

1. What are the key industry challenges as you see them? ( audience fragmentation, advertising competition due to cable and online, rise of online usage and etc)
RA: Audience fragmentation due to Internet and cable TV. Until about 25 years ago, three networks (ABC, CBS and NBC) owned the entire US TV audience. The widespread distribution of cable TV networks changed the industy landscape. The big advantage that broadcast networks still retain is "reach." For advertisers that want to reach the entire public, vs. concentrated effort broadcast networks are still the best.
Internet revealed the Achilles heel of TV-based advertising in general: its loose correlation to driving sales.

2. What will help traditional media with the challenges they are facing?
RA: News is becoming a commodity. What will help traditional media is finding the business models that are right for them, and understanding that they will no longer get 20% margins on their products. News is more like milk now than like oil (years ago), you take the cost and add a percentage to it. So media companies, are becoming supermarkets, and they should not expect to make 20-30% margins on their product, but 2 0r 3%. I forsee that news companies will need to use hybrid business models, like NYT did with NYT select.

3. How will online video help TV networks and wire service handle the industry challenges?
RA: Online video helps engage the viewer with the website, but the people that watch online videos are not the ones that come to newspaper websites. So newspapers will struggle with video viewership.

4. What should the online video business model look like? ( ad supported (brightcove model, cash, or combo)
RA: They should be hybrid models