You may be surprised that I voted for cost and operational efficiency as an emerging priority for the media industry. For many organisations, the obligation to unearth efficiencies has faded while others are still in the thick of salami slicing. Despite a generally held acceptance that economic recovery is underway, I expect that the pressure to streamline cost and operational structures will be back on the boardroom agenda in years to come.
Gone is the steady state. Megatrends such as globalisation, digitalisation and sustainability are pushing through significant structural shifts; the effects of which are particularly evident in the media industry. Most notably, technology is reshaping the boundaries between content and consumers and the reality of ‘everything everywhere’ is challenging the status quo. As established business conventions slip, so too do the steadfast cash flows of better days.
Digital disruption has created an invidious scenario; margins and profits are under pressure, print circulations are falling, advertising rates are being squeezed and competition for audience share is fierce. I believe that a more radical approach to cost and operational efficiency will be required if organisations are to survive the turbulence ahead.
Some would suggest that the media industry fared well during the downturn, in comparison to other sectors where operational budgets were slashed by more than ten percent. For many, trimming the fat was a preening exercise with little impact on the front-line. In my view, the recession prompted an austerity drive that was somewhat overdue and only time will tell if the media industry went far enough. Now faced with the challenge to overhaul analogue business models and catapult operations into the digital future, I expect that more holistic and deeper strategies will need to be adopted.
We are working with clients to manage the transition and implement structures that are fit for purpose, forward thinking and responsive to changes in consumer demand. Crucially, it is only with a detailed analysis of cost and operational efficiency that potential routes back to growth can be followed.