How is Digital Like Origami? When you look at the intricate simplicity of a beautifully-crafted piece of origami, your first thought is probably not to look for the ever-so-obvious parallels to digital. But if you’ve set the right expectations for…
Media Companies Transforming Business Models in Digital
Are you seeing your revenue shift?
Are you seeing your traditional revenue sources decline?
Are you finding the dynamic marketplace and digital disruption upending what has historically worked well for you?
I am sure you answered yes to most if not all of the questions.
You are not alone.
One simply needs to look around to see retail, publishing, transportation and other sectors thrown, willingly and unwillingly, into a period of transformative change and drastic uncertainty as digital and data penetrate every element of a business.
Digital and data are not only impacting your operations and positioning, they are also fundamentally altering consumer behaviors and decision making regardless of your focus (B2B, B2C or B2P).
We have entered a period in history where, because of digital and enabling technology, data is exponentially growing, can be curated and leveraged and where data is becoming a precious commodity demanding a high price.
Data: The New Currency
Like content, data is currency and technology is now the enabler and source of both.
Media companies who exist as a subscription or advertising based business (or a hybrid including both) have long ago become the experts in the specialized or niche markets they service.
The expertise includes deep knowledge of the specialty or niche subject matter (construction, residential housing, financial investment, bankruptcy and medical devices as examples) and the opportunity as the experts to bring together the relevant data sources and types that can produce intelligence for others.
The opportunity requires applying that expertise, along with some exercising of data science to manage and surface the elements of the data to produce insightful and impactful intelligence.
The applied expertise and available data can lead to new industry research content and/or new data products that represent data that only the media company has or is able to accumulate because of their unique role and an ability to bring an audience together. A role of a neutral island in a sea of those with specific interests.
As the experts providing content in a specialty or niche marketplace, a media company has the ability to collect, track, curate, manage and ultimately share in various ways the consumption, interaction, demographical and behavioral data (physical and digital consumption and behaviors).
The audience has naturally many implicit and explicit attributes that when brought together in segments and in mass become highly valuable to others who require knowledge and understanding of market trends, consumption trends or behavioral, demographical make-up or shifting of targeted customers or industries.
There are many different opportunities that previously may have seemed out of reach, overly complex or could not be monetized.
Supply and Demand
Simple concepts of supply and demand can be applied to understand if the media company can:
- Collect, curate and manage its data to produce data products or specialized research
- Package interaction or behavioral data in ways that reveal market intelligence
- Increase depth and authority of content, using data and technology to become an intelligence leader
If one or all of those is possible, then determine if demand exist in the marketplace at a price that produces profit.
The process of identification and consideration must happen quickly, in this new economy and digital environment, you must make quick informed decisions, plan, innovate and iterate to capture or recapture market position.
Technology as an enabler (not a solution) becomes critically important to allowing the collection, curation and management of data. The platforms, tools or applications bring together the infrastructure a media company needs to make the shift to a new business model that represents a data and technology company.
Those that consider themselves information companies made this transition some time ago. Lexis Nexus created and curated information and data repositories for legal and related markets, Reed Elsevier, via its Reed Construction Data business transitioned from a content and publishing company to continuously creating or collecting data that resulted in highly sought after products in the design, engineering and construction marketplace. ComScore, born as a digital company, collects, curates and packages consumption and use data now critical to a digital marketplace. Source Media’s transformation is underway, focused strongly in the banking and finance marketplace.
Data is in many ways the new currency.
Content is still king but the definition of content is evolving to include data.
In that regard, transitioning from a media to a data and technology company may not seem all that radical. In many ways, perhaps it is not. It is a significant shift that must accommodate a change in business model, changes in operational processes and most often changes in company culture and expertise of staff.
You cannot simply paint a pretty picture as your digital storefront and expect the revenue to roll in. The model, processes, culture and expertise must reflect a clear understanding of digital, of technology, of customer management, new or repackaged content products and provide for iterative and innovative adaptations along the way.
The Benefits of Data and Transformation
The benefits include the following:
- Builds an internal capability to match the dynamically changing digital driven marketplace. The internal capability can enable strong innovation to bring new data or other products to market matching intelligence gained from monitoring interaction and behavioral data from its audiences.
- Creates products and offerings recognizing data is indeed the new currency and matches demand.
- Promotes market and audience respect of the media company maintaining and growing credibility and authority in the subject matter and industry it represents.
- Solidifies the media company’s value proposition and place in the marketplace by deepening its offerings.
- Offers new sources of growth revenue to balance lost revenue from print or digital publications, decreased value delivery expense and agility to adapt in a changing marketplace.
- Provides competitive advantage to counter moves by young upstart born digital companies or established businesses who have yet to find their new revenue or operational model.
The next post in this series brings forward the top 3 ways niche publishers and media companies can transform their digital revenue model.
As always, 2040 Digital is here to help you through your evolution and transformation leveraging digital to increase revenue and relevance. Contact us today to learn how we can help!