USA vs. RUSSIA: Information digital age, opportunities and challenges in the new socio-cultural world for media stakeholders

By:   Bernarda Vasquez   |   Said El Marda   |   Yara Hasan   |   Papiya Mondal

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Media has received the status of being the 4th pillar of democracy. Any government needs the judiciary, executive and legislative powers to run side by side with the media. However in some cases the media can get a lot of power and influence the population since they control the information. Both the US and Russian media have been accused of this action, but from different perspectives. Below will be an overview of the operation of the media industry and its stakeholders in each country, as well as its challenges and opportunities in the new digital era.

USA Media Overview and Stakeholders: 

The media in the United States is decentralized, most media are privately owned and only a few states have some regional public media. Content is mostly presented in English and in some cases and unfortunately, in lower quality in Spanish despite the fact that 13% of its population are Spanish-speakers (Thompson, 2021). Media companies earn their revenue through advertising, subscriptions and through copyrighted material especially in music and movies. The income received by American companies is high as they reach 100% of US households and also have a great global distribution.

The US media industry is mainly dominated by 5 conglomerates, owning 90% of the media market (Second Thought 2020). They are: Disney, Comcast, News Corporation, AT&T and National Amusement, where Disney is actually the largest media company in the world. They own almost all the news and entertainment channels, film studios, magazines, etc. Therefore the great variety of options are only an illusion of choice, as behind the scenes they are managed by the same leaders who shape the narrative and push media as a business more than objective information dissemination (Lutz, 2017). It should be noted that legally they are an oligopoly, but in practice each of these stakeholders have shares in their competitors’ companies and work together, so in practice it’s a kind of monopoly.

The US first amendment protects freedom of the press and expression, so there is no regulation by the government. However there is censorship on the part of stakeholders, board of directors and also by advertisers, so the regulations favor the monetary interests of the business itself. For this reason, according to the World Press Freedom Index (WPFI) by Reporters without borders, on 2021, the USA ranked 44th out of 180 countries (Reporters Without Borders, 2021).

Russia Media Overview and Stakeholders: 

Unlike the American media industry, in Russia the media is public and private. Due to the diversity of cultures and nationalities in the vast Russian territory, content is produced in many languages with the idea of reaching a wider audience which includes CIS countries. Media stakeholders in Russia earn their revenues through advertising, subscriptions and sales-related operations.

There are 3 main media agencies in Russia: ITAR-TASS, RIA Novosti, Interfax, where the two first ones are state-owned (Wikipedia contributors, 2021). For this reason the Russian media has been criticized for lacking neutrality in their coverage, and being biased towards the United Russian Party. It should also be noted that the government also owns other sections of the business concerning advertising, print and distribution, therefore channels shy away from political topics so as not to endanger their businesses.

Like its counterpart, freedom of the press is guaranteed by the constitution of Russia, however, in practice there are government pressures and self-censorship (Medusa, n.d.), this to avoid any kind of problems with authorities and also due to cultural behaviors derived from the Soviet era. As a result, Russia has positioned itself in 150th place out of 180 countries in the 2021 WPFI (Reporters Without Borders, 2021).

Digital Media Statistics:

Globally, several industries and human interactions have moved to the online environment. In particular, the rise of technology and social media has reshaped the media industry. There is a big difference on how content is created and consumed these days. There is also a new generation of digital natives that have replaced traditional media and look for versatile and interactive options. Changes like these, have influenced human behavior, changing passive audiences to active ones. This has reduced the power and narrative of media holdings, which have to come up with new strategies which will be reviewed in more detail in the following section. However, in order to make a comparative analysis of the opportunities and challenges of both countries, it is necessary to know what their current digital situation is. The following table compares key elements relevant for the industry:

Source: 2021 Digital reports by We are Social and Hoostsuite 

(Kemp, S., 2021a and 2021b)

Russia’s and the US’ online characteristics are very similar. Both are developed countries with large populations and territories, and yet they have achieved great internet penetration and connectivity. As a result they represent big and attractive online media markets with good numbers for online activity. Since the majority of the audience has moved to digital over traditional media and spend so much time on their smartphones, it is imperative that the media industry in these countries focus their growth on digital, mobile and social and be aware that competition is not only between media companies, but in general for users attention and that depends a lot on content quality.

The online features of Russia and the United States are very similar. Both are developed countries with large populations and territories, and yet they have achieved great Internet penetration and connectivity. As a result, they represent large and attractive online media markets with good numbers for online activity that could attract not only domestic but international media as well. Given that the majority of the audience has moved to digital media over the traditional and spends so much time on their smartphones, it is imperative that the media industry in these countries focus its growth in digital, mobile and social, and be aware that the competition is not only among media companies, but in general for users’ attention, which depends on the quality, timeliness and presentation of content.

USA’s Challenges: 

The general challenges faced by media stakeholders in the new media industry are:

The early adoption of cloud storage poses infrastructure management issues.

To keep pace with the unprecedented growth of digital content, the USA Media industry has been forced to seek out better storage solutions by moving their data to the cloud.  Enterprises often battle with "runaway costs, security problems and the inability to ensure compliance of their cloud operations at scale".  US media players can establish protections against these pitfalls by employing automation software (similar to Divvy Cloud) that offer cost savings and quick remediation of non-compliance in their cloud databases.

Compliance with laws/regulations

It is very difficult for the new media industry to comply with all the rules and regulations. From managing the finances to filing of return, complying with labor laws, from employment laws to IP laws, etc. Legal compliance is very important as it prevents the organizations from lawsuits and damages, while detecting violations. However, it is not easy to identify them since the laws are evolving and an organization needs a sound team to put off this challenge

Threat to new media channels

With people shifting to digitization, it is not only the transmission of news, facts, and information that has become faster and easier but so have the attacks such as hacking of social media accounts, phishing, frauds, etc. Social media accounts are one of the most important assets of the media industry in the current scenarios, and hackers can easily hack into them and spread false information, which may result in hurting the sentiments of lots of people and attracting bad names to the media house.

Concern relating to Data Privacy

Regulations have been implemented for businesses to handle personal data and for organizations that transmit user data to such companies, yet data leak has been the headlines quite very often. Big data challenges can pose trouble when it comes to accumulating adequate user data, without which exact scrutiny cannot be carried on. According to a report from S&P Global Ratings, "new data protection frameworks and regulatory regimes will increase compliance costs, information security needs, and operational complexity", resulting in complicated marketing protocol that could hinder personalized user experience.  This global sentiment is reflected in the United States’ very own "National Data Privacy Day".  Enacted by Congress in 2009, it serves to promote consumer control over personal data and start "dialogues among stakeholders interested in advancing data protection and privacy”.

Copyright and piracy issues

These challenges have been in the industry for a very long time, now with the rise of digitalization, more big data problems have emerged such as sharing of account information through which multiple users can view content from the same account, using the password. Many people have started using the content available on online platforms for their own use; pirate and spoof this data to make it look like their own new creation and upload it to generate revenue. This is another major issue faced by, in particular, the entertainment industry.

The US media industry is facing challenges and controversy in data privacy and personalization, as well as competition among global players.   Additionally, US media companies are challenged by the need to monetize content on third-party platforms, address piracy and free streaming concerns, and cultivate a loyal fan base.

Some of the biggest names on the digital journalism landscape have seen social traffic begin to slow down, NBC Universal laid off a few dozen staffers, earlier this year - but, its pattern of job postings is a little more optimistic than many other media outlets. NBC Universal is hiring 1,000+ people - that is because properties underneath its corporate umbrella include CNBC; regional stations; NBC News; MSNBC; sports broadcasting networks and a handful of entertainment assets, to boot.

USA’s Opportunities: 

It is hard for new agencies to enter the media industry in the United States, and also the 5 conglomerates have already merged or acquired most of the related companies reaching 100% of households. Therefore, the market is already covered and saturated. In order for media stakeholders to keep in business and grow they have to contemplate the digital world and new generations, where they won't only compete with media businesses, but with everything to gain more time and users’ attention. The following are some opportunities for USA media stakeholders:

Internal technology for innovation

Holdings must use their current diverse technology and human talents to exchange ideas between internal companies, which would lead to innovation and attractiveness for consumers. New technologies like virtual reality, augmented reality, artificial intelligence, big data, blockchain and interactive advertising are some of the new things that could be applied in different media sectors or offered as services to other industries, like fashion, automobiles, education, etc.

On-demand principles

Thanks to the great success of Netflix and other subscription media, the audiences now prefers services to adapt to their new fast and variable way of living, where things are customized and allow an active participation of its users. Media stakeholders should have this into account and try to apply it to their different endeavors, in particular apply these principles to the press. Nowadays there is a lot of free information and clickbait headers. News have lost quality as journalists are trying to get a story as fast as possible to reach a number of clicks and advertisers and stay in business. However there is some interest, especially in the USA and developed countries, to subscribe to news channels in order to receive more quality and in-depth content. In addition to the freemium and subscription model, other characteristics that should be adopted are the customized experiences through data analytics, provide mobility by cross platform availability and saved content, and provide versions with limited advertising to make a better user experience.

Show Diversity

An important topic and very much in vogue today is diversity, which is not present in the U.S. media industry. Stakeholders must ensure to include diversity not only in their staff, but also in the topics to be addressed. News, movies, music, books, magazines, etc should give space to subjects and problems related to ethnicity, race, religion, to reflect and connect with the american audience that is a mixture of cultures and backgrounds. Additionally it should broaden its views and perspectives investigating globally, adding new languages and showing different political views. This will help to give more objective information, instead of showing only one perspective carved from a single vision.

Regain Trust

American media has lost its credibility because the population has realized that it follows its own agenda and that it does not cover stories that could affect the interests of stakeholders or political issues. Therefore, companies must pay attention and see the great opportunity they have in regaining the trust of their audience and as a consequence achieve a high performance and revenue. To do so, the recommendation is to focus on deep analysis rather than ads and income, to provide objective journalism over fast news and ads and to cover facts and different perspectives instead of giving opinions or trying to influence people’s thinking and actions.

Strengthen International Position

Due to the fact that US stakeholders have already covered the entire country, they have expanded internationally, so it is convenient that they continue to strengthen their presence globally. They can use their brand reputation and industry knowledge to expand the market, reach new audiences and to merge with other companies worldwide. Another recommendation is to create alliances with social media companies, to provide content through those apps like Disney with Youtube TV, since that is where people is spending a lot of their time online

Vertical Integration

American stakeholders have already grown horizontally within the industry and mergers, therefore they should now consider vertical integration and business diversification with related services. Some recommendations are to develop data protection services to avoid cyber attacks, they could also provide advertising services or product delivery in order to cover the complete chain of distribution with their advertisers.

Russia’s Challenges: 

The term stakeholder media refers to information media that are used by stakeholder groups to advance their agendas. Such a group is defined by a shared practice or interest, involving an organization or a sector (a firm, a product category, an industry, a government agency, or even a state) whose actions can affect its members. The group’s media serve to recruit, bind, and defend members and to influence other stakeholder groups, such as management, employees, regulators, customers, shareholders, or news media.

So, what are the effects of stakeholders in the new world?

More media organizations are being created and controlled by the people who are invested in the issues their organizations are covering. This form of journalism, called “stakeholder-driven media,” is changing our media landscape and offers lessons for traditional news organizations in building community. We see a double trend. There’s a certain kind of stakeholder driven media, which puts out poorly sourced, contrarian information for an audience that isn’t critical about how news is sourced. Then we see increasingly expert media that are very focused on high value, high impact information. Media are giving highly partisan, manipulative information to people who don’t have the means to verify it and who can’t see the direct effects.

Following are the challenges for media stakeholders in the perspective of Russia:

Adaptation To The New Legislative Requirements

This issue had to be addressed mainly by media enterprises with a foreign capital share of more than 20%, which was prohibited by legislation amendments. Some of these media ceased their activities in Russia. Those that wished to continue their work in the country had to introduce changes in their ownership and correct their management systems. For example, owners of the RBK corporate group removed some divisions from their immediate subordination: the RBK-TV channel and BusinessPress publishing house (in a reverse situation they would continue to be controlled by Pragla Ltd, a Cyprus company, which is now prohibited by law). These efforts proved to be sufficient to retain their positions in the market. The Vedomosti newspaper had to change their owner. It resulted in a formal transfer of Russian holdings to Russian owners. As an outcome of such transformations, new conditions, which appear in the media market, reflect the interests of national business and political elites. In the television market, the Russian legislature mitigated the restrictions for subscription channels, mostly cable and satellite, that were not allowed to place advertisements in 2014. In February 2015 they got this permission back on conditions that they distribute 75 or more percent of national production.

Search For New Business Models For Media Enterprises

The traditional approaches towards media classification are also changing. Such classifications as the type of distribution and means of media production are gradually becoming irrelevant

It’s is another trend on the market. An array of factors, related to the new political and economic reality, as well as technology development and information technologies force media owners to search for new approaches to media business. The reaction of the market to the changes of political nature in legislation. Among these are, for example, changes in the culture of consumption of traditional printed media. In the age of digitalization and establishment of new platforms of information distribution the consumer is not tied to just the paper version, but can receive the journalists’ material by alternative means (phone, tablet etc.) in an electronic format. The attitude towards the perception of the media production changes, too. Before, the consumer visualized media as the product of a TV studio, or a printed version of a newspaper, magazine, etc. At present the audience sees an informational product which is produced by some media company (or editorial office) and is distributed via different platforms. 

Reduction Of Advertising Budgets

Reduction of Advertising Budgets became a serious problem for the media market, especially for the TV and radio broadcast press sector. According to the data of the Russian Association of Communication Agencies (RACA), in 2015 the media advertising market lost about 10% as compared to the previous year; its volume was over 307 billion rubles. During this year, the advertisement inflow decreased by 29% in printed media, 16% in radio and up to 14% on TV. And only the Internet sector showed no noticeable decline: it is steadily winning positions and attracting new advertisers. The advertising share in the total media budget remains rather high: the radio advertising income reaches approximately 60%.

The Use Of Content-Generating Robots

To produce texts is another unusual area of media industry development at present. For example, Associated Press uses a robot to highlight sports events, baseball games, in particular. This information appeared only recently, and, based on the experience of the above media, a special program algorithm and information from the Major League Baseball Advanced Media (MLBAM) portal are used to generate texts. Journalists continue to double check these texts before publishing, in order to edit them in accordance with the standards of the company. Earlier, since 2015, AP has used a robot to write texts on economic issues: over 3500 articles on the quarterly financial reports of companies are published every quarter. Still earlier, in 2012, Forbes magazine and Narrative Science service concluded an agreement to provide automatically generated news on corporate reports for the forbes.com website. In Russia, Yandex started using these technologies. Since October 2015, the company announced the launch of an information agency in which the messages are prepared not by journalists but by special generating programs “based on data monitoring and analysis”.

Russia’s Opportunities: 

Journalism on a global scale is undergoing significant changes. Social networks, 24-hour news feeds and ever-increasing competition are changing the way media is consumed.  More and more people are reading and spreading the news on their phones;  the line between the media companies and the casual observers becomes almost imperceptible;  and the globalization of journalism is becoming the norm. In the conditions of informational noise, especially in Russia, because here every normal citizen is really interested in politics, culture, art, sport etc… and they are active mostly on Twitter and VK, the role of a qualified and impartial media agencies or companies becomes more important than ever. This is when the media companies get their opportunity to be more efficient and trusted. 

Online tools such as new or social media provide new opportunities for citizens to be informed and stakeholder groups to inform, and even to control the business by identifying common interests, expressing and sharing opinions and demands, organizing, and coordinating interventions. Therefore, the Internet could be expected to be a powerful tool for corporations’ stakeholder engagement efforts.

(N.V. Tkacheva 2017) Technological support for personalization of the selection and delivery of content, as well as related advertising solutions (“You open a resource, and everything you need is there. Absolutely everything. Yes, this is a matter of collecting information, but you yourself leave these traces when you enter this or that product. In the future, this will not be limited to media personalization, it can also be personalization, for example, of finances, travel preferences, in absolutely all areas,” (P. 33) 

• Creation of complex systems for collecting and analyzing information about the behavior and consumer preferences of the audience - editorial metrics, mechanisms for tracking actions on the Web, etc. (“On the part of advertisers, the main technical innovation is (and will be) a deeper study of algorithms  in the entire digital industry, with the help of which robots will be able to correctly find their consumer,” – CEO of an advertising agency);

•  Development of online content creation tools (“Professionals who know how to write good stories will have the tools to tell those stories.” and without the need to have deep knowledge in programming.  As a result, we will get more developed content on the Internet”, – top manager of the content aggregator);

• Near-maximum penetration of the Internet in large cities, primarily mobile, an increase in the number of access points to wi-fi, an increase in network bandwidth, a decrease or a slight increase in the cost of traffic ("Technological driver - increase in the bandwidth of a line, communication channels. Speed  access and data transmission is growing and leads to cheaper traffic. We use the phone for its intended purpose less and less and watch movies on it, use the Internet, instant messengers.  Moscow is already the norm, it should spread everywhere, ”- media expert); (P. 51)

• The proliferation and development of new digital devices, in particular mobile devices, which, accordingly, will complicate the system of media consumption (“Apple Watch forces those who distribute information to start taking “journalism at a glance” seriously – when you  you look at the screen for a second and understand what they tried to convey to you, ”- the director of the news agency)

The impact of SM on the workplace is indisputable. This is a new reality in the world of work and it leads to the following features and trends constituting specific challenges for organizations and project managers (Jędrych, 2015): for example; barriers that separate the professional sphere from the private one disappear. People are more and more often in a state of readiness to constantly communicate work-related matters through new technologies;

And communication tools, such as Linked-in, Facebook allow the monitoring of the labour market in search of new development opportunities;

Plus information on the organizational culture of companies is easily available, potential employees can easily get knowledge concerning a particular organization;

Conclusion: 

The United States and Russia have the necessary media tools and big online active audiences to emerge in this new digital era. However, each has its own challenges to face, whether it’s about technology, budget, internal policies, piracy threats or growing global holdings. Throughout this article, several opportunities have been described that stakeholders should develop in an effort to continue their business effectively and to reach improvement and growth, both at a national and international level. Some proposals could be interchangeable between countries, but at different periods of time, since they depend on their present challenges, as well as the resources and human capital they have, the budget and the government and/or cultural restrictions.

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