Digital has fundamentally and forever altered the print publishing business. Publishers who did not adapt their business models, products and processes to the emerging demands of their consumers are struggling—some even have vanished. Ten years ago or even less, these publishers were certain that, despite the signs on the horizon, their successful businesses of the past would flourish for another one or two decades--or at least until they retired.
As we know by now, that turned out to be wrong. Some publishing executives could not define how fast and all-encompassing the digital disruption would change their businesses as a whole. So, is this history repeating? Are broadcasters and studios headed to a similar fate? How will over-the-top (OTT), the fraying of the cable bundle and a changing ad market, affect content producers? While a definitive time and end state for the industry is hard to predict, one thing is clear: legacy content producers must fundamentally change the ways they do business. Winners in this new paradigm must personalize, monetize and innovate to stay ahead of the impending disruption—or else.
As media and entertainment companies adjust their businesses to the new digital first paradigm, three key themes have emerged:
Personalize: A DMP-Plus Strategy – Data Management Platforms (DMP) and ad targeting have been the key drivers for content producers looking to drive traffic around their products and releases. DMPs haven’t just been at the functional center of targeting the right ads for the right consumers, they have also been where many media companies have put the bulk of their financial and technical resources as well. Today, more progressive media organizations are architecting their businesses for a world where advertising is one lever of an arsenal of tactics to move consumers from anonymous to advocate. Ad blocking and efficacy are certainly headwinds that won’t be going away anytime soon—and content companies need to have tools in place that will allow them to engage consumers beyond paid media. In a world where a mass distribution approach to content has been replaced by the need to drive 1-to-1 journeys around content to meet consumers’ growing expectations, media companies must take a considered approach to understanding who is on the other side of their content. They must ultimately deliver what every single consumer demands and use these consumer insights to foster new, tailor-made businesses beyond advertising and paid content.
Monetize: Everything as a Strategy – The embrace of a “one size fits none” model has media executives thinking very differently around their content monetization strategies. While in the past this strategy was rather simple—focusing on paid content through various channels and monetizing the consumer base through non-targeted or smart advertising—the landscape of monetization has become more complex in terms of models and partners. In a recent interview at the Needham Emerging Technology Conference, CBS Chairman, President and CEO, Les Moonves said that while Netflix produces its own content and competes with CBS for eyeballs, they view new entrants as “more friend than enemy.” CBS is not alone in taking a once enemy, now friend approach to monetizing its content—and the distribution mechanism for content producers now requires more strategic dexterity than ever before. Growing the legacy business while enabling newer revenue channels like direct-to-consumer, partners as a channel, merchandising and leveraging super fans as a sales channel are all conversations that media executives are having in terms of focus areas for revenue growth. Data is now a proven opportunity not only to drive direct incremental revenues from paid content through audience analysis and ad-funded businesses. It is also a powerful accelerator to discover and execute on new business models, leveraging audience insights and reach. Those that are strategically nimble will be able to capture on these new monetization opportunities.
Innovate: MVP Rules – Being nimble strategically requires a new model on how companies execute their digital product strategy. In the new world order where content companies need to do many things well, digital media organizations are more focused on testing the waters with a minimal viable product rather than boiling the ocean with a heavy approach to product development. Admittedly, this is a 180-degree shift from how editors, writers and content producers in media companies used to work. But the new reality is that your strategy a year from now might largely be different than it is today—and this requires the ability to launch quickly and cost effectively. Because companies need to be more agile in their executions, the risk of having technology platforms that inhibit this speed is significant. Cloud has been a powerful enabler of getting technology organizations out of the infrastructure business, allowing media technology executives to better align to the needs of their business stakeholders. While cloud is the enabling technology to help build things faster, its clear that the consumer imperative for 1-to-1 relationships and the business driver of needing to make every channel a content channel are forces of change within the industry.
So, what’s a media executive to do to stem the tide at this time of increasing velocity for change? There are already winners and losers in this marketplace and winning is predicated on embracing these tactics:
1-to-1 – Media companies must first personalize their engagement, delivering 1-to-1 consumer journeys everywhere. While everyone focused on Netflix as driving an exceptional user experience, it’s for good reason: while they have great access to content, it’s certainly not endless. What they do well, however, is recommend content that is targeted specifically to a customer based on past consumption behavior. This 1-to-1 approach to content must be built into any new product to keep ahead of consumer expectations.
Simple – The signup, billing and retention journey for a consumer must be easy and frictionless. While Amazon pioneered one-click shopping in retail, consumers expect the same of their OTT, news and other content apps. Content companies must think hard and long about a mobile user experience that surprises, delights and is seamless from beginning to end.
Fast – 1-to-1 and simple seems somewhat obvious for consumer expectations, but these demands can only be enabled when IT is focused on agility rather than keeping the lights on. Media companies need a future proofed platform that allows IT to stay ahead of the changing demands of businesses and drive innovation in the form of new engagement models.
The ability to personalize, monetize and innovate are all part of the foundation from which media companies need to build their digital futures. In this world of transformation, media and entertainment companies need to focus on their core business: driving a best in breed practice around content and experience. But they also need to focus on creating a personalized experience for consumers that maximizes revenue potential across all channels with an agile delivery methodology. Publishers are still reeling from not proactively addressing consumer, industry and technology demands as the early signs were appearing with the advent of the web in the late 1990s—and they provide a cautionary tale for studios and broadcasters fortunate enough to have these learning’s as a case to transform their businesses now.
About the Author
Steve Sobel is the Global Director of Media Industry Solutions for Salesforce, where he is charged with solution development and account support for some of the world's most prominent media organizations spanning broadcasting, publishing, business information, entertainment and new media. Steve joined Salesforce in 2013 after serving as a Senior Vice President at an Omnicom agency in the entertainment space where he was responsible for product and marketing strategy.