By Cassidy Morgan
The media landscape continues to be extremely fragmented. User-generated content and the continuous ascent of mobile platforms, social sharing and consumption of information is driving an overflow of content that is readily accessible to anyone—often for free—in an unprecedented challenge to business models. Throughout this period of fragmentation and digital disruption the big media companies have failed to leverage their brand as a tool to extract incremental value from their customers. In 2013, the smart media companies will start to address this oversight with new models, fresh thinking and investment in digital innovation.
The challenges are enormous, as we are beginning to see the impact of this fragmentation and the pressure on traditional business models really take its toll. Be it companies like Newsweek abandoning their print edition after almost 80 years, newspapers shutting down completely—especially in the U.S. and Europe—or assets being put up for sale and downsizing to reduce a company's cost base, the media sector is in a crisis.
Brands not only provide ways for people to navigate this world of fragmentation as they seek sources of trust— they can also help media companies command a price premium and allow for extensions of their offerings to offset the revenue, technology and consumer behavioral pressures they face.
"In 2013, consumers will increasingly look for trusted media brands that offer them simplified packages with easy universal access across platforms and channels with relevant content."
In the race to the bottom and the desperate drive to keep subscribers, almost all media and publishing companies (focused on consumers, professionals or businesses) have played with their pricing model and, in some cases, decreased their prices—to their peril. Fewer people buying their product at a lower price means less revenue, resulting in cost-cutting to stem margin erosion—which in turn results in a lack of investment for the future, which ultimately dooms their business. Somewhere in this downward spiral, companies forgot that one of their most valuable assets, their brand, can help them drive premiums—but only if managed well.
In addition, this overall lack of focus on their brands, some in existence for decades, has caused organizations to think about opportunities only within their traditional models. Instead, they should be thinking how, by using their brand, they can extend to new offerings that are outside of their sweet spot as a way to diversify their revenue base and to further strengthen and differentiate their offering.
In 2013, consumers will increasingly look for trusted media brands that offer them simplified packages with easy universal access across platforms and channels with relevant content. Those media companies who take a brand- and customer-centric view; who offer bundled services and new content pricing models; who innovate by stretching their brands; and who realize that 'in-with-the-new and out-with-the-old' is the way forward will be successful.
Publishing companies such as Springer are introducing cross-platform subscriptions. Media companies with news outlets are trying to better leverage their brands across digital touchpoints in a time when consumers are seeking—if not demanding— trusted sources, context and analysis that follows them where they are. Within the multitude of platforms, demand for personalization and customer preference, a brand-driven strategy to deliver media and information in new ways is presenting a significant and sustainable growth opportunity.
The challenge is to take these steps without devaluing the brand.
Brands drive premiums. Brands can help drive margin performance or create incremental revenues from adjacent markets and offerings extending to new places. But investment, in terms of resources and time, and most importantly the management's commitment to the brand, is needed to help capture that upside. Content is no longer king because content is everywhere, free of charge—legally or illegally. Brands, if managed well, can take advantage of new technology and delivery models, and become the successors to content that will shape the future of media companies everywhere. The smart media players in 2013 will recognize that their brands can be the saviors of their business in this time of evolution, and start to take significant steps to leverage them.