Middle Eastern digital media crisis exposed by Mediaquest takeover of AME Info

Posted on 06 June 2013 with 1 comment from readers

At first sight the acquisition of the business news and information website AME Info by Paris-based Mediaquest ought to be a cause for celebration of a necessary consolidation in the digital media space with a local industry pioneer returning to a more entrepreneurially driven home.

Now admittedly this is not in the same league as the consolidation of Dubal and Emal into a $15 billion company announced earier in the week. We are talking millions of dirhams rather than billions of dollars. Then again the Dubal website is not read by 2.4 million readers like AME Info, which is still probably the region’s most widely read English-language website after Al Jazeera and Gulf News.

Crisis acquisition

However, Mediaquest has bought the trading name and digital property only, there have been 18 redundancies as a part of the takeover. A crisis in the business of digital media is also exposed. What has gone wrong?

Basically digital advertising was turned into a commodity by Google a few years back and rates tumbled. That gave advertisers a great deal but it has slowly bankrupted digital publishers. Local rivals to Google like Adzouk have managed to raise advertising rates a bit but not enough to make it profitable to be a digital publisher. You can only make money if you don’t employ anybody.

In the process advertisers get their advertising cheap but they lose the very content required to attract the quality reader who presumably is the one with money to spend. And at the same time, for good measure, digital advertising is undercutting all the other media on price so they are also left struggling too.

It’s a vicious downward spiral and nobody has come up with an answer to it yet. Maybe it does require a number of websites to fail commercially and be consolidated. Once the supply of website pages with decent content is reduced then its commercial value to advertisers ought to rise over time.

Profit free media

Still for the timebeing there is a crisis in the digital media space this summer in the Middle East because it remains impossible to make a profit, while at the same time digital advertising is gradually taking over from traditional media for two very good reasons: it is much cheaper and reaches many more eyeballs.

It has always been tough in the digital space with every page view carefully monitored and counted whereas the other media can tell advertisers whatever numbers they think they can get away with, and many of them have quietly dropped their audits since the global financial crisis.

In the digital platform all our actions are recorded whether we consent to it or not. All the entries on a digital ledger once confirmed become the so called digital asset or crypto currencies. These records cannot be tampered or stolen. This is the unique feature of this virtual asset. Bitcoin code is a tool that deals with the trade of crypto currencies. Bitcoin Code is not a scam rather it is a legit system of trading.

Still the world is going digital. Free newspapers and magazines are left in heaps as readers surf their iPads. That is where the advertisers now want to be seen. But if they want a media on which to display their adverts then somebody is going to have to pay for it or there will only be tabloid-style websites and press releases. Perhaps that is the digital future.