I. Development scenarios

The experts polled by our research group defined two main possible tendencies which, through their rapid development, could significantly modify the contours of media system.

The first trend is defined by the dynamics of media consumption. Within the 10 years horizon, a radical, or, at least strong modification of the structure of media consumption is probable due to the change of generations: the ‘digital’ generation becomes older and replaces people who started to consume media production in the pre-digital era. Advertising agency Havas Media states that about 50 per cent of Russians (18–44 years old) consume news online whereas only 30 per cent of the ‘45–64’ group follow the same pattern.¹

This means a retreat from traditional practices such as watching linear TV broadcasting and reading print media. ‘Undoubtedly, the audience will migrate online. There is an audience born online and it will remain there’, says a representative of a major publishing house. ‘Upon 10 years we’ll see the change of generations – the coming of the people who lived the whole live with the internet; for them a linked to media consumption and changing business models mobile device and content search are a new reality, not just a TV screen or a button,’ assures a respondent from a major production studio.

The alternative practice is a partial preservation of traditional media consumption patterns (at least, for some kinds of conventional media). ‘I don’t think our audience will conceptually age, for as the practice shows, even the youth, so to say, written off, is listening to the radio. Of course, the youth is listening to specific stations, but it has got a habit to listen’, explains a head of major radio company. ‘It is evident that the audience is changing, because a new generation is rising which works more actively on the internet. But I have a sense that something unexpected happens – that people are maturing and leave the internet again for the TV,’ recounts a general producer of a major TV content production company.

The second trend is determined by a shift from an advertising-driven business model, which now prevails in the scale of national media system,² to a content sale-based model. ‘The future is surely in favour of the paid subscriptions, but for the time being, the audience, moreover, the Russian one, is not ready for that’, argues the editor-in-chief of one major content aggregator. Nevertheless, the income share from advertising (at least, its standard forms) is going to diminish in the media industries. ‘If previously we were worried only about how much money would the content bring to us when in the air and of possibility to repeat it in the air, nowadays we are interested in all ways of earning money from our product, including paid watching,’ affirms the head of a broadcasting TV-channel. The pay-for-content model will be implemented in an especially active way by niche media. ‘Sooner or later, the quality niche media will be the first in need to collect some cash from its users, which would lead to decrease of their overall number but also to the revenue growth,’ says the editor-in-chief of a major online media company in Russia.

Thus, on the basis of interviews we propose the outlines of four basic scenarios for the development of the Russian media industry in forthcoming years (see Figure 1).

1. ‘Inertial’. Those following it suppose continuation of now existing practices of media consumption and retaining the advertising model as vital to their media business. The principal traits of this scenario are:

   • – dominance of broadcasting TV both in media consumption and in generating income;

   • – gradual stagnation of press;

   • – slow growth of the online segment of the media system;

   • – existence of ‘digital divide’ between major industrial cities and the rest of the country.

2. ‘Nonlinear television-based’. This emphasizes the importance of revenue growth from content sales together with the preservation of the old media consumption model based on watching TV content. Principal traits of this scenario are:

   • – rapid growth of Smart TV stock;

   • – development of nonlinear Smart TV watching practices;

   • – the stable position of online media and appearance of a settled mass media pool on the internet;

   • – development of specialized media – especially online;

   • – fast decline of the advertising-driven segment of the print press.

3. ‘Revolutionary’. In this scenario, a mass refusal of old media consumption practices and simultaneous rapid content sales growth is envisaged. The scenario has the following features:

   • – sharp increase of broadband access (BBA) penetration in the country, overcoming the ‘digital divide’ between the regions;

   • – increase of the number of mobile devices and development of mobile TV;

   • – fall of a major part of the traditional press;

   • – active growth of the mobile applications market;

   • – blossoming of digital cinema and other ‘over the top’ (OTT) services.

4. ‘Customization-oriented’. This might be described as implementing the spread of a new media consumption model retaining the advertising-driven model. Its features are:

   • – the explosive growth of media consumption through social networks and their revenues;

   • – strong drop in the share of broadcast TV both in revenues and in volume of audiences;

   • – maximum customization of media content and advertising;

   • – massive penetration of Big Data processing methodologies;

   • – increase of the role of online information aggregators;

   • – development of native advertising, special projects and so on.

However, bearing in mind these four possible scenarios, our experts suggest I – ‘inertial’ – scenario as the most probable. To analyze the predications from interviews further we summarize the results in respect to the major topics of our research – media and economy focused on conventional and emerging business models; media and society understood through concepts of audience behaviour in media consumption; media and technology; media and newsroom professionals and media and distribution.

II. Media and economics: Business models

According to the majority of experts, the basic business model for the largest part of the media industry within the next 10 years will remain the advertising-driven model (media immanently preparing to sell content, for example from former paid TV channels, are not taken into consideration). Distinct market segments, mainly print press media, focused primarily on mass distribution of inexpensive products, or conversely, B2B-content, remain exceptions. Nevertheless, the revenue share from content sale for mass media will increase. The delivery of high-quality content to the user may become a special market segment. ‘There will be two different media systems dividing into paid and free sectors. A paid sector will be, where everything will be cool, powerful and modern, with the content especially selected and verified by professionals. On the other hand, might be a basic mass market, which will force its way through endless advertisers’ curtains, predicts one of the media experts. ‘The consumption of paid content will significantly increase. The user will pay precisely for premium content, by which I mean, first, novelties in new standards’, affirms the CEO of a content aggregator. It seems to be clear that, at least by definition, a sales model utilising individually selected information will be implemented. ‘A model arises which provides that a user may manage the channels, or projects he is interested in. This, as a fact, would require some additional payment to the provider of this content’, argues a president of a large advertising agency.

The revenue share from different paid services and sales of specific types of content (as a rule, provided online) is expected to increase several times, especially for TV. ‘For example, it’s possible to earn on our projects, brands, heroes, images in the sphere of computer games. There are different services, for example dating. Something of that would survive and have an impact to develop. We need to constantly, let it be a per cent or two a year, increase the revenue share which are not traditional proceeds from direct advertising, but that are from all the other accompanying services’, says a CEO of a major broadcast TV channel.

From the perspective of ten years, a major part of Russian media would increase revenue share from special projects, a form of content created at the order of third-party organisations and or in partnership with them. ‘One of the trends will be in complication of deals between an advertiser and an editor, when an advertising page is sold not only as itself, but together with some other collaborative partners in the newsroom’, believes a president of a major publishing house.

The revenue share that the media retain from an independently organized accompanying business, like event holding, non-media production and sales etc., will increase. ‘We are trying to develop products not only directly connected with the media, but also with accompanying projects. For example, we held an online shop. Some of its items are made under our brand. It is quite possible that we’ll establish marketplaces of our own resources, which will allow us get an additional revenue in our niche, the one directly associated with our brand’, argues a CEO of a publishing house.

Among the peculiarities of the Russian media system, is the fact that a prominent part of income, directly or indirectly comes to the media from contractors – the state, corporations, investors within the envelope of a specific kind of sponsorship, the provision of information services. Our experts consider that it will continue from perspective the next ten years. ‘A share of commodity advertising will drop. While that of information services is to rise. For there would be more sponsors wanting to promote themselves’, says a CEO of a content aggregator.

The growth of production of ‘ordered’ contents will lead to a wider dissemination of an agent-driven funding model. ‘The media might become a voice of interests for social groups, structures etc. Thus, they are to transform into a communicative device for a relatively small group, via a targeted audience, while having failed as an independent self-standing business’, proposes one of media experts.

The sales of data of an actual audience might be a peculiar, though not so widespread, earnings model for the mass media. ‘The media will start to make money on big data. When you are able to process information, you can sell it to the business. It is a different task, different marketing paradigm, nevertheless, it will change the world,’ considers a manager of a leading information agency.

In terms of increasing financial pressures, cost reduction will become an important task. Among the prevailing means, the following ones are expected to be applied:

• – spreading of a freelance model of cooperation with authors. ‘You don’t maintain journalists, but collaborate with people on a fee basis, that is always cheaper than to keep a person on a permanent labor contract,’ states a manager of a leading information agency;

• – searching for synergetic models by integration with a generic kind of business. ‘Now each communication network operator is seeking for some synergy in the accompanying business. For example, communication operators begin to form a line of the most expensive channels,’ says a top manager of a paid TV operator.

Social externalities will increase their influence on the mass media economy. For example, a model of a ‘gratifying’ payment for a content item will spread, which delivered post factum in order to ‘honour’ the author. In the future, the spread of social media projects is probable, which will occur at the expense of soliciting fees from consumers who want to support them. ‘Media are a socially important business. That is, the primary motivation for the people is an influence on social processes, a desire to participate in social life, to contribute, to gain recognition, glory’, says one of the media experts.

III. Media and society: Audience and media consumption

The forecasts given by the experts we have polled in concerning the structure of Russian mass media audience, as well as of its media consumption dynamics, have testified to a high level of uncertainty – the industry has no strong understanding of which direction its users would move and how their media consumption model might alter or not.

A generational transition in regard to media consumption may take place on many levels, particularly as follows:

• – structural and productional: traditional media will adapt to new media consumption practices. ‘The new generation, grown up with the internet, will stimulate consumption via the TV screen of new services, because it is natural and habitual to them. Many talk about the merging of internet technologies and TV business’, affirms a manager of a paid TV operator. The possibilities for adaptation are not the same for all mass media. In implementing this scenario, the segment set to suffer most appear to be the print media, especially newspapers. ‘There are no chances for newspapers, alas. The users will go away, while the practice won’t resume’, recounts a media expert;

• – cultural and axiological: the ‘digital generation will be more active in consumption of the text forms habitual to them, in particular, visual and audiovisual. ‘The visual will prevail over the verbal’, says a top manager of a big publishing house. ‘Modern people even start to think differently – it’s closer to comics rather than to fully-fledged texts. They began to read less and watch more and more. A man trusts much more to what he sees, than to what he hears’, reckons one media expert. The length of time taken for consumption of an item of media content unit will evidently shorten. ‘Consumption times will get shorter. Today’s audience is no longer able to watch formats established by traditional media. A generation of short video perception has developed, and individuals, while looking at the TV screen, need to take a pause after 6–7 minutes. We have assessed that we need to cut the timing’, says a CEO of a major TV channel.

The second scenario, conservative, presupposes a partial transition of the new generation to new digital delivery channels, but, at the same time, retaining adherence to the content type and to the mass media brand. ‘Only people interested in our topics will read our media. That’s why nothing will principally change. However, these people will certainly use the information consumption channels they are more accustomed to’, says a CEO of a big publishing house. The probability of the stated scenario supports the existence of user groups with rigid habits determined by special psychotypes. Such groups will continue to self sustain themselves over the next 10 years or more. ‘The choice of a magazine is a decision the man takes for himself as part of his lifestyle. And that is largely dictated by a man’s psychotype, and it is through this that his preferences take shape. That means, the people of a certain profile will use the press’, reckons a head of a publishing house.

Either way, both scenarios predict the oncoming segmentation of the mass media audience by interests. ‘The segmentation will grow. Firstly people migrated from the First Channel to the ‘Discovery’. But now it’s a question where to move to after ‘Discovery’? It follows that new media will arise,’ reckons a manager of an advertising agency.

IV. Media and technologies: Digital media ecosystem

The experts we have interviewed, as a whole, consider two scenarios for a technological development ‘frame’ for the Russian media system. The first one is an inertial movement on the basis of already existing technologies, their deep adoption and modification. ‘To my mind, the development of technologies as it is will have no further influence on the media industry itself, but influential will be adoption of these technologies by a greater number of people,’ declares one of the media managers. The second scenario suggests a radical change, in development and direction due to the effects of disruptive technologies. Not surprisingly, the inertial scenario has more support from the experts.

In respect of the basic directions of the inertial adoption and development of existing technologies the experts reckon we shall see:

• – technological support for the personalization of selection and content delivery, as well as related advertising solutions. ‘You start up a resource and there you’ll find everything that is needed. Absolutely everything. Yes, it’s an issue of information collection, but you leave these trails yourself, when visiting this or that product. It will not further be limited by just a media personalization, it also may be a personalization of private finances, travel preferences, absolutely all spheres’, says an editor-in-chief of a major content aggregator;

• – this will evidently require the creation of a complicated system of collection and analysis of information on users’ behaviour and the preferences of the audience, such as editorial metrics, web action tracking mechanisms etc. ‘At the side of advertisers, the main technical innovation is and will be deeper study of algorithms through all the digital media industry, by which the bots would be able to correctly find their customer’, says a CEO of a major advertising agency;

• – development of online content creation tools. ‘The professionals skilled in creating good stories will get tools to tell these stories – while having no need to be perfectly skilled in programming. As a result, we will receive more developed web content’, assesses a top manager of a major content aggregator;

• – web penetration close to maximum in big cities – including mobile, increases in the number of Wi-Fi access points, increase in network bandwidth capacity, decrease or slight increase in the cost of traffic. ‘The technological driver is an increase of a bandwidth capacity of lines and connection channels. The speed of access and data transition augments and leads to traffic cost reduction. We use a phone less and less for its intended purpose, and watch movies on it, use the internet, instant messengers,’ says a media expert. Accordingly, it will lead to dissemination of technological innovations in previously unreached regions or among other social strata. ‘Here comes an era of the other norm, the digital becomes the norm. What is already the norm in Moscow, should be spread everywhere’, says another media expert;

• – dissemination and development of new digital devices, especially those mobile, that, accordingly, will complicate the media consumption system. ‘The Apple Watch compels those disseminating the information to start seriously regard the ‘one look journalism’ – when you look on the screen for two seconds and understand what they tried to deliver to you’, suggests a director of an information agency;

• – increase of the share of Smart TV for the overall number of TV sets;

• – mass dissemination of new high quality formats of video content presentation. ‘If you have just once watched the ‘Sport’ channel in a (High Definition) HD format, you’ll then be ill at ease to watch it in a Standard Definition (SD) format, due just to the fact that you will not see the ball any more,’ says a top manager of a paid TV operator;

• – mass development of diverse technological solutions for non-linear watching of TV content (video content);

• – dissemination of smart digital solutions for mobile applications;

• – creating a technological base for hybridizing previously incompatible types of content. ‘The combination of a TV show and a computer game is a new challenge of [our] time’, says a head of a production studio.

In respect of the disruptive technologies, mentioned by the experts and their chances of being implemented within 10 years, one can suggest the following:

• – creation of a digital media ecosystem, unifying diverse devices in the human environment. ‘The talk will be about creating the technologies which will surround man in his media environment. Now everybody is speaking about hand portable devices – there will be three-dimensional projections, and they are working on stimulating the five human senses’, observes a media expert;

• – a qualitative modification of the possibilities of cloud technologies. ‘It is spoken not only of that in the “cloud” a specific audio and video content can be placed, but also of that the things which are now in a zone of “unthinkable” – smells, virtual reality etc. – are going to penetrate there. The cloud technologies are really going in that direction’, argues a media expert;

• – a fundamental leap in the use of the Big Data. ‘We will not search for the content we need, but describe our mood, identify our requirements in some way – and the “cloud” would give us what we can be sure to like, affirms a head of advertising agency;

• – digital multilingual solutions. ‘A browser will be offered for mass consumption with a built-in audio translator, and it would be a task for engineers to make the translation comprehensible. That means, a mediator will be eliminated, the last defensive barrier of national cultures. It will break down the culture’, suggests a media expert;

• – a set of high technological visual solutions: the ‘effect of presence’, holographic television and communication, a media wall that is a hybrid of window with TV set accessed to the internet.

V. Media professionals: Journalists in newsrooms

The activity of mass media professionals companies is nowadays based on work of large corps of professionals, mostly journalists. The simplification of access for non-professional producers to current content distribution channels might shape a different authorship and information broadcast system.

According to the experts we have polled, in spite of pressures from the side of the producers of ‘user content’, the key competence of an editorial employee – the ability to work with text, intended for distribution to a mass audience – will be in demand, which will sustain the professional identity of newsroom staff. A head of a big publishing house says: ‘All the new technologies don’t amplify and don’t lessen the influence of journalists.… Who works with the content, should just the same be a professional journalist’.

Nevertheless, within a 10 year period, the profession of journalists is expected to experience if not a crisis, then stagnation. ‘It seems to be harder. I believe, the attractiveness of such profession as journalism is being diminished’, says a CEO of publishing house. The depression will be felt first on a financial level, but it will also entail structural consequences. ‘Media activity is transmigrating from a basic profession into an additional one. The journalism becomes a second or third earning, that is, a man cannot earn his living while working even as a professional journalist’, says a media analyst. He supposes the media organization might only be able to ensure professional activity only for a small number of people. In addition to the transition of journalism to the ranks of the ‘extra’, there is a probability of the migration of professionals into the staff of non-media corporations to serve their information needs. ‘The need for journalists would be higher, but they will be part of these other companies’, says a media expert.

By that, the pressure of technologies on journalism will lead to the arising of a high but partially satisfied demand for certain quasi-specialities. In particular, the following will be in demand:

• – ‘technical’ specialists (in particular, those dealing with online products), as well as journalists with technical/technological competencies. ‘The professional journalists should be more ‘technological’, more mobile. Maybe, more erudite in terms of the technology and achievements, which a digital platform provides’, says a head of a publishing house. ‘In the part of branch concerning technologies no staff redundancy is probably expected, only a deficit [of people],’ confirms a CEO of a content aggregator;

• – specialists in creating and promoting an integrated editorial content (productologists, marketers, content managers, project managers, producers, legal managers, etc.). ‘First of all, people will be required who are able to devise projects and bring them to a full realization. So-called creative producers’, believes a head of a broadcast TV channel. Professionals of such a kind should have cross-media and economic competencies. ‘It would be a lack of not just ‘content makers’, but those of the kind having a very strong technological and marketing competency. To comprehend how to package the content, one needs to have a very good understanding of the means of delivery. This profession is being called content manager,’ supposes a CEO of a publishing house. A TV channel top manager argues: ‘Producers of non-property assets will be required. No specialists in content economics graduate today from Russian universities or business schools’.

Such requests of the market should be accordingly answered from professional education. As a whole, the media industry estimates the quality of training of young specialists for the new realities as rather low – while the situation seems to further worsen. ‘In many cases there come people completely unprepared for the reality of media functioning’, recounts a top manager of an online media company. There are three scenarios expected to develop in parallel:

• – the convergence of higher professional education and the industry, the creation of joint programs, the adaptation of those currently existing;

• – the shift of the focus of training from high school to industrial training programs, the creation of adaptation systems to industry requirements for graduates;

• – recruitment of specialist professionals from niche areas into journalism.

VI. Media content: Change of formats

The immediate driver of modifications, in the experts’ view, will be overproduction of content due to the simplification of producers’ access to the end user, which will influence the majority of features within a ‘content’ environment. A CEO of a content aggregator says: ‘Content is being produced more and more, and the cost of its production falls – under the reduced barriers to entry in the ‘market’’.

The rapid increase of the content offer alongside a comparatively stable (or, at least, sufficiently less dynamic) level of consumption will lead in the nearest 10 years to the following consequences important for the media industry:

• – high level of personalization (customization) of content, its maximum adaptation to the needs of a concrete user. Online technological solutions will in a short period permit the shaping of a user’s personal profile, to which the things he is interested in can be delivered. ‘The aggregators and even some mass media are much aware of the reader. They will know more and more. The access to such data and their processing are becoming easier’, says a representative of a news aggregator. Finally, users will get an individual information solution on the basis of their previous interests revealed online. Higher levels of customization are also probable. ‘The soft will start to decide which way the information will be provided for the audience. Coherent texts will appear, ‘customized’ for concrete personalities’, says a representative of an aggregator.

Such customization will not require mandatory individual technological solutions – an oncoming flourishing of niche products is in prospect, being based on the the aggregation of even small audience groups’ interests. Of great importance will be the fact of decline in importance of content delivery channels – the coverage of limited size audience will be achieved in many different ways: by the Smart TV, mobile TV, PC and so on. ‘The subscriber purchases a possibility to watch a concrete channel, while having paid once for it, and he is provided with the possibility to watch this channel in every accessible way. The personalization will be the main trend. The diffusion environment is not of such importance as the content’, argues a representative of a cable TV operator.

‘Content is the king. He will be successful, who’ll manage to organize and focus around himself the production of the most competitive content. Nothing else matters: neither deliverance environment, nor sphere of access’, considers a CEO of a broadcast TV channel. In the terms of content redundancy, another important factor of success for a media will be its ability to form a habit of its consumption for the audience – that is, to create an involving content which establishes brand loyalty.

• – hybridization of content. It is possible to distinguish at least several levels of this process:

  • – blurring genre borders, degradation of the genre system in verbal media. ‘The consumer will have no distinction by content types: here comes the news and there comes the everyday info. The information on that there are some discounts, traffic jam and re-election of a MP – all this will be things of one sort, of the flow’, says a media expert;

  • – rejection of editorial content supremacy as a basis of mass media. ‘The modern media cannot consist of 100 per cent journalism. It consists of something else too: Aggregation, rewrites, user content’, notes a CEO of a content aggregator;

  • – maximum use of multimedia content in media products. ‘Within the next ten years, the majority of media will become complex audiovisual- and text-oriented – with a very different degree of text presence’, says a media expert.

• – ‘facilitation’ and diminution in size of the content units. The volume of content units proposed to the users will be radically shortened, the complicated concepts being transmitted via visual means. ‘There will be a demand for something very compact, sharpened and strongly visualized. With photos, graphics, pictures’, affirms a top manager of a publishing house. Alongside that, brevity will characterize both verbal and audiovisual texts. ‘It might be 3–5 seconds long video, but of maximum importance and interest’, assumes a media expert.

As a separate group of transformations, those determined immediately by technological innovations might be highlighted. For example, the explosive development of any form of interactive content is clear. ‘The spectator wants not just to watch TV, he has a wish to participate in the process, to vote online, to see how the other people do this, to be integrated into the process’, says a representative of a paid TV operator.

User content will be one of the most demanded type of media production, ‘A UGC content segment is to appear, which they may begin to consider premium content. Now the equipment for content production is becoming more and more accessible,’ reckons a head of content aggregator. One of the media experts supposes that after 10 years the media will become a ground for creation and distribution of content while establishing different formats for free authorship.

Directly or indirectly, technological innovations will become a driver of rapid development of separate topic niches – for example, game content. Moreover, the elements of online game support will become standard in the process of making a traditional media product. ‘We see arising a new type of production, where they aren’t able to create TV content, but are able to produce games connected to the universe of TV content’, says a top manager of a production company.

Also the use of innovations will lead to inevitable attempts to exploit the possibilities of 3D reality in the mass media.

There are also a number of changes dictated more by economic and cultural factors. For example, there will be more content created on the direct or indirect order of non-media structures. One of the media experts says: ‘There becomes more and more corporate content and its quality grows’. Also the domination of entertainment content within media seems clearly strengthened. ‘Show-business begins to oust the classical news model – entertainment becomes prevailing’, believes one media expert.

VII. Media and distribution: Mobile platforms and social networks

In accordance with opinions of the experts we have polled, from the perspective of the ten years horizon, a fundamental growth in the number of distribution channels of media content will take place, as well as a diversification of the user’s media menu in respect of channels, content supply and increase of a bandwidth capacity of channels. This will relate to both product and platform (searching systems, social networks, media sites etc.) and technical channels (devices, communication systems). The largest content translators, TV companies, in the opinion of one of the media experts, ‘will transform into fabrics of the content which is to be spread not only in the air, but also via relayed watch and web technologies.’ ‘The future is on the side of media companies that will be present in all areas of the media – television, radio, internet. There’ll be practically no media on a single carrier’, assumes a media analyst.

The volume of content delivered to the users via social networks will increase. ‘Now the social networks are trying to retain the content within themselves. They have instruments which permit typesetting materials in a very sophisticated way. The centre of content production will shift from media to social networks. This will result in the user being no longer able to orient himself through media brand power, but spends his time in the social network. For him the content is a flow of sites from which only fragments are left. The people who used to move from social networks to third-party resources have the only intention to read the material they have come for and return back into the social network’, says a representative of a content aggregator.

As a technical delivery channel, the role of mobile devices is forecast to sharply increase. ‘We’ve got a 40 per cent mobile traffic. And it rises from month to month. The last year it was 36–37 per cent, now already 40, while in the three-year range we see 50–55 per cent’, affirms an editor-in-chief of a major online media organisation. Thus, massive creation of mobile versions and applications is predestined. ‘The only thing I believe in are applications. And we are investing in these’, says a head of a major broadcast TV channel. The share of content consumption via Smart TV looks set to stall (though is not expected to become critical). ‘Offline as it is will cease to exist in households. The meaning and use of Smart TV as a class and perhaps the very class of Smart TV will be slightly modified’, says a CEO of an advertising agency.