How Traditional Media Companies Should Reshape for the Digital Age
White paper: traditional media lags in product development, IT proficiency.
In a white paper titled “The Media Company of the Future: The Revolution Goes On”, consulting firm AMR International Consulting Inc. outlines the steps it says traditional companies must take to incorporate technological advances into their business model and stay competitive against “New world” digital media companies.
Focuses include: targeting specific markets to lower costs; creating a host of options for marketers to interact/reach audiences; provide users with the best experience possible and use gathered data/metrics to grant marketers a more targeted service as well as to understand user behavior.
The white paper calls for the unbundling of content released by traditional media publishers, as more and more digital venues arrive which are hyper focused on a specific niche.
In a chart comparing “Old world” and “New world” media, the Old world figure shows that The Hollywood Reporter and Variety owned the digital distribution of user time focused on film and industry sources by roughly 80 percent. In the New World figure, the previously dominant Hollywood Reporter and Variety occupy about 40 percent of users time, with the remaining 60 percent being spent at more targeted sources like Baseline, Rotten Tomatoes and Futon Critic.
The need to transition from print to digital is made even clearer when “The Revolution Goes On” says that b-to-b publishers have decreased their share of print revenue from almost 50 percent to less than 25 percent between 2005 and 2009; online, data and events comprised more than 60 percent of b-to-b revenue.
Technological Integration into Traditional Models
AMR’s paper notes that in order to keep up with the New world media companies, “New products should not be developed on a project by project basis; rather, product development will be constant as in a software company.”
According to AMR, cost spent on product development represents almost 19 percent of digital revenue for Yahoo!. Meanwhile, 12 percent of Google’s search engine digital revenue is put towards its product development efforts.
Technology expertise in the senior management level is lacking in print media, with only 40 percent of print media companies having technology roles filled by members of senior management teams.
60 percent of retails companies have technology roles in their respective senior management teams, and 50 percent of travel companies have technology roles filled in their senior management sector.
As far as creating technical expertise within publishing companies, AMR concedes that there is no set model. Size of the company is important to take into account when considering model of IT departments. Some companies may be able to create one IT department that runs the of all company needs; others might have to have individual IT teams assigned to individual brand’s under a company’s umbrella.
Outside of the IT department, AMR suggest managers may “institutionalize technical literacy” for all of a company’s staff. This way, IT workers and other staff members may collaborate successfully on what technology is needed to best serve consumers.
While no definitive statement is shared by AMR, the paper says, “The long term trend may be towards media companies operating fewer brand, but more business models.”