The media company of the future – the revolution goes on
Media organisations are in too many cases placing the emphasis on “defending the print castle” rather than fundamentally re-evaluating where investment is made. This is the message of a new white paper published by AMR International.
The white paper, called ‘The media company of the future – the revolution goes on ’ and published on the same week as NewsCorp and Apple launches its iPad only newspaper, The Daily, examines the impact digital revolution is having on media organisations, the challenges they face and how they are should respond.
Denzil Rankine, Chief Executive, AMR International says: “Everyone now has access to a broader, deeper and more targeted array of content. This proliferation of choices has driven a step change in user expectations and the model of the traditional media company is being undermined.
“A wholesale re-invention of how traditional media companies do business is needed. A deep understanding of customers, new business models, new skills, new structures and, fundamentally, a change in culture is required if media organisations are to compete in the digital age.”
The iPad-only The Daily which was launched this week, collaboration between Apple and NewsCorp, is an example of the type of new product development media organisations need to roll out regularly to maintain relevance with their audience.
However, the ability of companies to rise to this challenge solely via organic growth is questioned in AMR’s white paper. Acquisitions of specialised technology firms, such as Hearst Corporation’s acquisition of iCrossing in 2010, is likely to become more of a priority, as are joint ventures between media companies, such as the Next Issue Media JV between five consumer publishers (Condé Nast, Hearst, Meredith, News Corporation and Time Inc.), that is exploring ways to ‘create a universal digital platform for the distribution, sale and consumption of paid-for digital content’.
“As organisations expand into areas that go beyond their traditional comfort zones they will need to consider ‘missing link’ acquisitions in new media that bring new skills and capabilities,” adds Denzil.
The ‘The media company of the future’ report also raises concerns over the skill sets of the staff employed by traditional media companies. Editors will no longer simply create content, they will become curators of user-generated content and managers of communities. Sales staff must sell a range of products and solutions. The circulation function will become audience development. Leading-edge technology skills must become endemic to the organisation.
Denzil says: “This transition for editorial and sales staff will not be easy. They must be adept in print, digital and other non-traditional offerings. New hires must be digitally literate and be capable of collaborating across disciplines. In the short term, the average age of employees may drop; we can already see that pure digital businesses have a higher average revenue per employee and fewer, better qualified and better paid people. To succeed, traditional media companies must learn from this. ”
He adds: “In a sample of major organisations, we found that media companies are less likely to have a devoted technology role at a senior management level, when compared against other industries such as retail and travel that have faced technology-led disruption. This implies that media is behind the curve and this obviously needs to change to keep pace with the digital revolution.”
The white paper argues that successful media will have to embed deep customer understanding, collaboration and technology into their culture. The collaboration will be between brands, within brands and between the centre and brands. Traditional silos will have to be broken down as technology is piloted, ideas are shared and new products are tested.
Denzil concludes: “Media companies must ask themselves if they can change fast enough and far enough to meet the changing expectations of their traditional users. Otherwise, organisations like Google herald a new breed of competitors that will happily eat their breakfast, lunch and dinner.”
Click below and download free white paper. For more information please email Jim Easton.