Smith, who joined Bloomberg in September 2013, is hailed as the media industry’s digital rainmaker. He is credited with turning Atlantic Media from a sinking, largely print-centric magazine to a profitable digitally led enterprise.
Gary Scattergood: How has the change in the consumption of media affected the media industry?
Justin Smith: From the media owner’s perspective, the business is in a very serious state. You see articles talking about media entering the winter of discontent. Doom and gloom in 2016. It’s a horror movie, of sorts.
If you track the media industry and the disruptions they face, mobile turned everything on its head. Programmatic was another wave of change. But the third wave of attack, the most violent and dangerous, is the development of these massive social media platforms. They’re doing media better than media across many different fronts. We need a lot of transformation and the clock is ticking.
What has been the advantage social platforms have over media owners and how are you tackling this at Bloomberg?
The platform-advantage is very simple on one level. They’ve figured out how to produce better media experiences on the smartphone. Better UI, better technology. These platforms have also figured out dramatically superior monetisation models and data and analytics. This has enabled them to build hugely powerful near monopolistic business models based on an asymmetrical advantage. Their success provides them the resources to reinvest in doing something they’re already doing better than anyone else is doing now. It’s nearly a checkmate situation.
Bloomberg is protected in a sense from these harsh winds. Bloomberg Media was originated to amplify the core business model of terminals and data. We have the resources to attack these head winds with investments.
Journalism does cling to traditions. Is it possible for traditional media companies to evolve to survive?
I think that, it’s fair to say that given the choice between hiring a native digital journalist and transforming a traditional journalist into a native one, the former is easier. It’s not impossible to do the latter but there is a failure rate.
Have any traditional media companies managed this digital transformation?
Media owners have a terrible record of doing this...Right now Facebook and Google are saying, ‘Let us host and monetise your content. You’ll keep all the ad revenue.’ The terms are incredible generous but it’s a very perilous position to take. When so much of visitors come from these platforms.
Jeff Bezos has bought the Washington Post. He’s doing amazing things. Gone completely all in with social media distributions. Bezos wants all 1200 articles a day on Facebook instant articles. He’s the only one that’s gone so far out. The big question we’re discussing is: is he a genius that he sees around the corner and this will pay off? Or is he just a guy who is worth 60 billion dollars who can take an easy risk and just wants the influence.
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What about brands, are they doing a better job at keeping up?
It really depends. There are companies doing amazing stuff. GE is one that’sright out on the frontier. But overall, I’m seeing more following than leadership. If the publishers themselves aren’t innovating as quickly as they should, the brands are one step behind that.
How do you see the trends differing in media consumption out on Asia?
Asia is exciting because despite the current economic situation, one of the great growth markets of the world for media and every other industry. Bloomberg is leaning forward into Asia. Bloomberg is now the top business site in Asia, we overtook WSJ. The challenges are similar. While the platforms are not identical to the ones in the States, it’s still about capturing the mobile mindshare and the ad spend. The difference lies in different sets of platforms based on different realities. Fundamentally, we’re bullish. However, we do regard the platform threat in Asia as significant as it’s different market by market.
You’ve called it a ‘horror show’. What’s the body count going to be?
I believe the body count will be significant. But it’s in these moments of difficulty and crisis that great opportunities exist and there are companies being built for it. I’m optimistic.
This Q&A has been edited for online. For the full version look out for the March issue of Campaign Asia-Pacific