Today's post is dedicated to an industry that we are actively pursuing with one of our own ventures - media. For all the evidence that your own demise should create a sense of urgency to innovate, this industry has been surprisingly slow to change at the business model level. Which is the key area for innovation if media is going to thrive and prosper, but it seems most current executives still want to squeeze as much as possible out of the old advertising funded model - even trying to fight the likes of Google and Facebook for a share of the pie. This takes their eyes off the major assets they could leverage in a time when high-quality content and "fake news" are king - and people will pay for this ever scarcer commodity.
The first big shift that enabled the tech companies to play in their space was the shift towards digital media interfaces - which also created a weird rift inside many major media outlets as the "leaked" New York Times Innovation Report shows. Instead of using this change as an opportunity to move beyond the advertising funded business model, it created a situation where the new digital units stayed the always unprofitable family members that never get a proper seat at the table of "real" journalism. Slowly this is shifting and there are some rather interesting partnerships developing between tech companies and media houses like "Upday" between Samsung and Axel Springer that pre-loads smartphones with aggregated, daily news content. Axel Springer has put some of their top journalistic talent into this venture and it seems t be going well.
There are some key requirements to thrive in this new era for media - one being a radical focus on media audiences and their needs - and this is where we believe design thinking can prove to be helpful. IDEO and others been used by different media houses over the last few years to stimulate a more user-centric innovation conversation and we have even had some attempts at creating Personas based on ethnographic research - instead of the typical low fidelity audience profiles created by the banner sales department. But to start creating content value propositions around deeper audience insights also requires that we liberate content from any pre-defined platforms or formats. This allows media houses to then start content distribution partnerships with anyone that has access to large audience e.g. mobile phone companies - with a revenue sharing business model. Another interesting experiment is Blendle which allows you to create your own media bouquet with a pay-per view business model.
The other innovation opportunity is to leverage the power of storytelling and disrupt the creative agency space. This is starting to happen with some positive commercial impact in most major players like the New York Times or the Guardian - with separate teams and structures to not compromise the journalistic integrity of the "mothership" but transfer brand equity in subtle ways. In learning from the music industry another avenue for growth will be "Live Events" space - with all the thought leadership, high profile networking, content creation & distribution benefits associated with it. And also going into Education can prove to be very successful as the recent forays by Bertelsmann and other show.
As we can see there are ways to win outside of the advertising business model and we hope to see more media companies make the jump this year.