There was a moment during Mark Zuckerberg's by turn torturous (for him) and frustrating (for everybody else) April testimony to Congress when one US politician asked him how Facebook can sustain a business model in which users don't pay for the service.
“Senator, we run ads,” replied the Facebook chief executive. And then he cracked a smile.
Facebook and Google running ads is the defining feature of the media market this decade, with the "duopoly" entering 2019 more or less intact.
This is the underlying structural shift that publishers and broadcasters have had to contend with in 2018, a year also marked by advertiser caution prompted by Brexit: the fallout from its related political faffing was the insult adding to the tech-inflicted injury.
It hasn’t been the greatest of timing, then, for a media company to be tied up in a corporate mess such as the one at play within Independent News & Media (INM).
The newspaper group, which counts Denis O'Brien as its largest shareholder, began 2018 under the shadow of an investigation by the State's corporate watchdog, the Office of the Director of Corporate Enforcement (ODCE). It arose from a whistleblower complaint by former chief executive Robert Pitt about O'Brien associate Leslie Buckley, INM's chairman, and concentrates on a "potential data breach" at the company. Who had paid for it? How deep had it gone? What did this mean for the reputation – and future – of INM?
January saw Buckley signal that he was to step down from the company and he has said he intends to “robustly defend” himself against “each and every allegation”. March brought the big drama, with the ODCE making an application to the High Court to have inspectors appointed to the company – a rarely invoked power.
Legal battles
After months of legal wrangling, the inspectors were appointed in September and INM has ended 2018 still very much in the midst of the process, while facing an array of questions from its staff about unauthorised access to its journalists' emails.
In the meantime, new chief executive Michael Doorly suggested in March that it would take "two to three years" to implement a strategic plan prepared with the assistance of consultants EY. "We don't have any longer," he said bluntly.
The predicament is simple to describe, but not so simple to escape from: the digital advertising market is growing, but not fast enough to offset the decline of print and indeed not at all for INM, going by its half-year trading statement. So it has to find a way of charging for digital content and services.
Elsewhere in the newspaper market, it was a year of consolidation. The Irish Times completed its purchase of the Irish Examiner, the Evening Echo, seven weekly regional titles and interests in three radio stations from Cork's Landmark Media.
Officials at the Department of Communications had concluded that the takeover of the Irish Examiner was a better outcome for media plurality than blocking the deal, as that would risk the demise of the newspaper.
The other newspaper to change hands, after five years with Key Capital, was the Sunday Business Post. The title had been on the market for some time by the time it finally became the property of Galway businessman Enda O'Coineen – who bravely called his memoir The Unsinkable Entrepreneur – of Kilcullen Kapital Partners. Editor Ian Kehoe left before the deal, his effective successor Tom Lyons shortly after.
It was a case of “as you were” for newspaper circulation trends, with the daily market down 9 per cent in the first half of the year compared to the first half of 2017, and the Sunday market down 7 per cent. Print advertising revenues were forecast to decline by double digits at the start of the year and duly obliged.
The magazine sector, meanwhile, isn't too far away from its own malaise. In 2018, the bundling of lifestyle content under a single masthead just makes much less sense for today's consumers who can pick-and-mix from a smorgasbord of digital content, while big brand advertisers can now go straight to Instagram.
That it was the end of the print road for Condé Nast's US Glamour, edited by Irishwoman Samantha Barry, was no surprise, given 2017 saw the demise of the UK version. Irish Studio, the owner of web brand Irish Central that bought six titles from Norah Casey's Harmonia in late 2017, stopped printing U magazine and the shorter-lived Irish Tatler Man, with Irish Studio director Ciaran Casey saying U's print edition had "ceased to be a commercial proposition".
Algorithm woes
For digital-native brands and those that have transitioned to digital-only status, the challenge is to fight to be seen and heard above the noise: Facebook’s decision to change its algorithm to give lesser weight to publishers’ content won’t have helped.
Some media outlets were coy about the impact, but the BBC's deputy social news editor, Irishwoman Ciara Riordan, was unequivocal. "We don't get the same video hits anymore," she said. "Anything above one million is a good video, but we used to get more than 10 million."
It was another tricky year for radio. In February, the heads of three Irish media agencies told radio executives and marketers – to their faces – that the industry needed to take “radical” steps, “turn everything inside out” and overhaul how it sells advertising if it wanted to escape the shadow cast by the tech giants.
The radio market declined again in 2018 – the third consecutive year of retreat. In November, the Broadcasting Authority of Ireland (BAI) annoyed some would-be applicants by saying it wouldn't issue a licence for a new niche service outside the Dublin area as it had hinted it might, until the market improves. O'Brien's Communicorp and Rupert Murdoch's Wireless Group had opposed the plan.
With RTÉ 2fm settling into a modest groove and perhaps the most significant development at Radio 1 being Miriam O'Callaghan's much-praised summer stint in Sean O'Rourke's mid-morning slot, national station schedule changes were mostly to be found at Communicorp's Newstalk. A post-controversy George Hook returned from suspension into its Saturday morning slot but was out of the station by the end of the year, while Paul Williams, the crime journalist turned Newstalk Breakfast co-presenter, also found the exit door.
For deficit-laden RTÉ, the year could have gone worse, but it also could have gone a lot, lot better. Director-general Dee Forbes continued to press the case for licence fee reform, though with broadcasting something of an orphan child at the Department of Communications and the Government understandably prioritising other calls on its resources, it was hardly a shock when progress failed to materialise.
RTÉ wobbles
Before he was forced to resign over his handling of the National Broadband Plan bid process, then minister for communications Denis Naughten used Budget 2019 to boost RTÉ's annual public funding by about €8.6 million, but this was some way short of the "immediate increase" of €30 million the BAI had recommended.
In 2019, another round of redundancies and perhaps more fundamental changes could be coming at the public service broadcaster even as the reforms it seeks remain elusive.
By contrast, TV3 Group ended 2018 in unrecognisable shape – and happily so. The Ballymount operation rebranded to Virgin Media Television and launched Virgin Media Sport in the autumn, just ahead of TV3's 20th anniversary.
A year that began with its screening of the first of four Six Nations tournaments – capped by the rousing Grand Slam success of the Irish team – ended with the bonus of resurgent viewer interest in the imported reality series I'm A Celebrity, Get Me Out of Here!, which did so well it hurt RTÉ's figures at what is a key time of the year.
In between, executives from Virgin Media Ireland's parent company Liberty Global were in town declaring there was "no limit" to its ambition for the broadcaster, widely regarded as a guinea pig for future acquisitions.
It was the end of an era for Virgin's rival Sky, no longer 39 per cent owned by Murdoch's 21st Century Fox after it was comprehensively outbid for Sky's shares by US cable giant Comcast in a rare blind auction held by the UK's Takeover Panel, while French billionaire Xavier Niel completed his takeover of telecoms group and newish sports rights player, Eir.
The Irish media might have its fair share of factions and rivalries, but its constituents have one thing in common: they are facing into a new year in which advertisers and consumers alike can sense the whiff of an imminent global economic slowdown. Many are still recovering from the last one.
WPP-owned GroupM finished by publishing a subdued set of forecasts for the 2019 advertising market and warning over the potential impact of Brexit. "Technology is moving faster than the human mind can cope with," wrote chief executive Bill Kinlay. Certainly, it is moving too fast for many in the media.
“Senator, we run ads,” said Zuckerberg. And doesn’t everybody know it.
