The media market is in a transition stage and this stage that will not be brief. In this transition the media market (Movies, Books, Newspapers, Magazines) is migrating from the business of “physical” to the business of “content”. A key factor that media companies tend to ignore is that the shift from “physical” to “content” is demand-led, that is, consumer and their consumption habits are pushing the industry to adapt. Unfortunately, the media industry has been fighting this market trend and has had trouble adapting. As in any other industry, fighting a trend is the worst business strategy. Instead, the media industry should play to win in the new market context.
For perspective, today, most newspapers keep their printed publication, additionally have an online version, most likely with less quality content that the printed version. Today, most of their distribution efforts are still behind the printed version. This strategy is totally against the market trend, and it is usually driven by the fear of cannibalizing print with online. Obviously, newspapers stakeholders don’t what their current cash-cow, print, to die.
The big challenge comes when the business’ cash-cow is not longer relevant for the market. Then, new strategies should arise. Media companies need to think of new bold strategies. Playing in the middle ground is not efficient, the organization has not focus on where to play, cost structure is not efficient, consumers start disengaging, etc. At the end, as in any economic model, inefficient players are eventually kicked out of the market.
The strategy is simple: Listen, listen, listen… to the market trends and play to win with the trend.
This article is inspired by Kathy Gill’s blog post “The Case for Digital Subscriptions”
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