Ten years of unprecedented change has left media companies facing a number of challenges to their key business operations, most notably the need to drive inefficiencies from their business models.
I therefore believe that media companies must start to look at, and learn from, other non-media organizations who have consolidated and streamlined operations. Some have already begun to do this but others are further behind the curve, particularly in the publishing and advertising sectors.
This is unsurprising as recent years have been spent, almost exclusively, on coping with dramatically shifting business models. There simply hasn’t been the time to consider this.
Adopting a “factory mindset” to combine and streamline key processes and activities will prove anathema to industries where creativity is everything - yet now it is something that they must consider. I believe a huge number of processes remain in any media organisation which can be consolidated and streamlined. Only the real value-creating activities at the front end need remain unique.
To understand why this problem exists requires that you understand the nature of the ‘editor kingdoms’ which historically have ruled most media companies as standalone entities with relatively independent teams structured around individual publications. However, most media companies are part of larger groups – and there must be value in being part of that group or shareholders will be left short-changed.
At the same time, media companies have to come to terms with the evolution of content development. I believe that to stay competitive, they will have to move towards more globally developed and distributed content which is channel agnostic and involves more user generated content. This requires a move away from a one-way content flow to something more debate-driven.
In turn, this requires a shift in the role of the editor in terms of managing that content flow, protecting the integrity of the debate it creates and mitigating the new risks which more collaboratively produced content can bring.
On top of this, a major unknown is how the revenue model for the industry will evolve – a question to which many don’t have a clear answer. It is not obvious how new media will impact existing revenue streams and how digital media content can be best monetised.
Although some industry players are bolder than others and have been more aggressive in putting in place new revenue models, it is likely that even the currently most advanced models are not fully future-proof. Further change will be required as consumers continue to evolve their habits.
One thing that is becoming more apparent is that as geographical boundaries are coming down and individual products are combined into more integrated solutions, a key success factor will be around successfully engaging with online user communities. Merely focusing on exploiting a simple one-dimensional, physical media product is a thing of the past.
In the absence of a definitive answer to this issue, I believe that success will depend on an organisation’s ability to trial and assess new experimental methods and how quickly those trials can either be terminated or assimilated.
I think there is a somewhat surprising link through these three challenges – in that the answer may lie in the back office.
Quite simply, my view is that back office stability enables front office thinking. Within media, the easy wins for adopting more of a group-wide factory mindset are in the back office. Other industries, like FMCG, have already provided a template here for aggressively and systematically expunging waste and inefficiency through standardisation and outsourcing.
Linking and standardising the back office of team or company A with team or company B is not easy but the process requires an absolute understanding of front office operations and can provide a platform for tackling issues in that space – such as content development and monetisation.
I believe that the organisational commonality created by bringing together different parts of the back office will leave media companies feeling far more comfortable about tackling the complex revenue and editorial issues which will have a fundamental impact on their future business model.
Along the way, the anxiety typically experienced in facing down those issues should be reduced. Plus, the organisation will be forced to define its value-adding and commoditised services, leading to a far more informed debate about investment decisions.
I’m not suggesting that back office transformation will provide all the answers per se to the front end issues; simply that it can provide the platform for unearthing those answers more rapidly and more efficiently.