Shape matters more than size

Due to fundamental long-term changes in consumer (media consumption & purchase) behavior, media companies are no longer content providers...they are in the conversation business.

Media companies - staffed and structured to be content providers in a classical Media Value Chain - need to come to terms with what they are becoming. In order to succeed:

1. Doing nothing is not an option
Media companies need to find a new Smart (a new mash-up of capabilities and business model innovation across their network) & Sustainable Sweet Spot within the unfolding Marketing Eco System.

2. Resizing is not enough, shape matters more than size
The cost reduction initiatives to keep traditional media companies commercially viable will remain important (shareholders focus on stripping out cost to maintain earnings per share), but will not suffice. Slimmed-down media companies will have to evolve further than they have done to date and need to change shape (long-term focus) as well as size (short-term focus). Key will be the ability to reshape traditional business models and organisational structures to best exploit the opportunities that ongoing technological development and digital transformation offers. A strategic approach, taking account of structure, governance and culture, identifies a more sustainable model for operating in the unfolding Marketing Eco System.

Deeply embedded ways of working need to be changed. Data analytics and real-time consumer insight have not traditionally been core competencies of media companies, while data analytics will become fundamental to any content-based organisation.

Conclusion: Traditional media companies need a very different kind of skill set to generate the new revenue streams that are going to be very important going forward. The most succesfull status-quo-challenger, the most agile skill-set-winner of tomorrow, takes it all.

Do you want to know more about Sanoma's beliefs on the future playing field of media companies? Watch this!

David de Boer, Manager Marketing Intelligence Sales, Sanoma

(source: Deloitte/Spencer Stuart, Ed Shedd & Grant Duncan, "Why agility must follow austerity in the new digital age", june 2010)