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10TH OCTOBER 2017
FIPP Congress 2017
Next Gen Operating Models for Tomorrow’s Media
Antonella Mei-Pochtler
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Multiple 'Evolutionary Trends' are at play
Source: eMarketer, Reuters Digital News Report 2017, PQ Media Research, Forbes
Online top source of news & info (2x print)
Mobile screen time will be 6+ hours/ day by 2018
Time spent doubled in 4
years (2012-16)
Monetization unclear
Google FB, Instagram,
Blogs, Aggregators
+ Amazon, Telcos, ISPs
Changing revenue mix (ad vs. sub)
Divestiture, dismantling traditional partnerships
Changing
customer
habits
Digital
video
boom
Rise of oldand new platforms
Supply side is changing
Major shift of profit pools (within and from) publishers to platforms and tech enablers
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Across markets, online is now the dominant source of news & info
Source: Reuters Digital News Report 2017
34
Population using for news (%)
Online 60
25
71
41
74
26
85
29
86
26
95
Germany France UK Denmark GreeceSlovakia
50:50 60:40 30:70
Two consumption shifts taking place – from print online and within online mobile
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Platforms have data but do not (yet) offer reliable context
~2Bn
Users
~2 Tn
annual
searches
Billions of data points captured every day… Leading to some hits..
• 60% of global digital ad revenue pool captured by
Google and Facebook
• Ability to serve personalized content/ ads based
on user behavior
And misses…
• User fragmentation
• Ability to control 'fake news'
• 'Editorial authority'
• Meaningful relationship with readers/ subscribers
Source: Enders, BCG Analysis
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Threat of extinction is real for many physical titles/ genres
Note: Number of magazines different in each (taken for all magazines provided by IVW), Women's – 59 (monthly +weekly), current
events – 16, children – 39, TV Channels – 29, Home & Garden – 28, Economic & finance – 21, Food -14, Cars & Bikes – 24, Sports - 31
Source: IVW Germany
Endangered Threatened Survivors
0
5
10
15
20
-15%-15%
-16%
Tota
l cir
cula
tion (
Mn)
ChildrenCurrent
Events
Women’s
-19%
-15%
Home &
Garden
Economics
& Finance
Food
-6%
TV
Channels
-1%
SportsCars &
Bikes
-23%
-23%
2016
2012
Germany
More niche products/ genres, linking with offline e.g. club memberships
Revenue decline for some titles even more steep
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Magazines need to 're-invent' their role/relevance and become 'MagNets'
Passage of Time
Engagem
ent
and R
each
Interest-based
community
Advertising platform
with sharp targeting
Rise of horizontal
communities/
social networks
Resurgence as
MagNet System
Magazine decline
From … Storehouse of “information” To … System of 'individualized engagement'
Can publishers drive reach & individual
engagement with high trust but at lower cost?
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Burning questions on every magazine publisher’s mind
What are the attractive opportunities to
pursue — size of revenue & profit pools?
What are my strengths — community,
content, brand, scale?
How do I prepare for the transition?
What capabilities will I need to build to
profitably pursue these opportunities?
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We identified five potential “evolutionary” pathways…
Global Market size
(2016)
Physi
cal Engagem
ent
Distance from the core
2
3
Digital Engagement
4Agency Services
(Insights, Strategy, Creative, Execution)
Online Branded
Content
5
Brand Activation
(Events, radio, out-of-home, Clubs)
Commerce
(E-comm,
Lead Gen,eClubs)
$2.5+T
$15-20B
$80-100B
$80-100B
0 $60-70 B
Digital
Publishing
1
$15-20 B
Magazine
Note – Branded Content – Premium Branded content market in 2017 for top 5000 publishers, Core – digital Circulation and digital ad (2015),
Brand Activation– Revenue for advertising excluding tv, print, digital , Content creation – Ad agency market size
Source: eMarketer, Polar, Zenith, Ovum, Magna, HIS, IBIS world
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…with dramatically different capability requirements
Print DigitalAgency
Services
Branded
ContentCommerce
On Ground
Activation
Organizational
Capabilities
Monetization
Models
• Subscription
• Ad sales
• Subscription
• Ad Sales
Retainership
Project fees
Production fee
Space selling
Performance
based fees
Conversion -
transactions,
ATV
Lead gen
Sponsorships
Ticketing
revenue
Rental/
listings fee
New selling capabilities
Editorial and Content Creation
Customer Insights and Data Analytics
Brand Solutions/ Next Generation Sales
Multi-Media Content Production
Logistics
Digital Marketing (Social Media, SEO, Customer Acquisition...)
Product Development & Tech
Event ExecutionCustomer Service
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Several publishers making inroads across these pathways
Physi
cal Engagem
ent
Distance from the core
Digital Engagement
Online Branded
Content
3 Brand Activation
(Events, radio, out-of-home)
2Agency Services
(Insights, Strategy, Creative, Execution)
0
Digital
Publishing
1
Magazine
4
Commerce
(E-comm,
Lead Gen)
5
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All r
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rese
rved.Key watch outs
for operating model transformation
'Clinical brand review' to have a sustainable
core product is the starting point
Focus on opportunities relevant 'for
you' —don’t go after everything
Source content from bloggers, readers
Technology enabled editorial
Find ways to co-exist with large
distribution platforms—Google, FB
Creating a single view of
consumer across use cases
Invest in new talent
Visible change via top leadership
Strengthen the Core
Sharp Shoot Adjacencies
Open Source Editorial
Platform 'co-existence'
Data Powerhouse
Managing Change
'Watch-outs' as you embrace evolution
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11
Looking ahead…
what the
MagNet
looks like 3 years from now
360o
Brand
Management
Slim
Print Offer
Established
E-comm
Attribution
FunnelOn Ground Events
to amplify
Marketing spends
Branded
Content
Capability
Integrated
Digital + Platform
Presence
(FB, Insta,
Messaging apps)
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