Comcast, NBC, Universal McCann Embrace New Business Models, say Leaders - JackMyers Think Tank

Traditional media and advertising business models are quotdoomedquot social media have little economic future Google will become less relevant as vertical highly targeted and branded search tools become more available and quotmedia platformsquot are now quotkingquot replacing content and distribution These were just some of the controversial topics introduced by Media Metrics CEO and founder Laura Martin at a panel moderated by Jack Myers at last week39s PricewaterhouseCoopers Outlook 2012 event in New YorkSharing the stage with Martin were Nick Brien Worldwide CEO of Universal McCann John Eck President of NBC TV Network and Media Works Julie Richardson Managing Director of Providence Equity Partners and Robert S Victor SVP of Strategic and Financial Planning for Comcast CorporationVictor who joined Comcast six months ago from Boston Consulting Group acknowledged Comcast is not moving quickly enough to adopt new business models and address changing marketplace realities quotMore people are going online for entertainment and watching more video onlinequot Victor said in a separate interview with JackMyers Media Business Report quotWe need to make the online experience integral and additive to the experience on TV as opposed to a substitute The multichannel video industry needs to think through with programmers the best models for enhancing the consumer experience and sharing in the revenuesquot quotOne of the things the new landscape demands is you must have a customer relationshipquot insists Martin quotIt is no longer enough to have a passive relationship with audiences Digital media know who their customers and audiences are Butquot she warned quotone of the most disruptive implications of the digital space is the pricing toward free modelquot Using Craig39s List as an example Martin explained quotdigital media are giving away for free services that used to generate billions This is destroying economics in the old media world It39s no longer enough to just offer audiences You have to know who they are and have a relationship with themquotJulie Richardson reported that Providence has shifted its investment focus from domestic US media companies to international markets quotwhere there is more growth aheadquot and to quotunique situations where growth is being fueled by underserved demographicsquot such as Univision Providence also invested 100 million for a ten percent stake in Hulu the online video service launched by NBC and News Corp quotOur concerns are obviousquot shared Richardson quotfragmentation of the media market and very tough sector trendsquot She points out newspapers have serious top line degradation and other media categories have top line multiples that don39t make sense Brien who in addition to his responsibilities at Universal McCann is leading media development for parent company Interpublic Group IPG agrees quotwe have to challenge our own beliefs and experiences which are encumbrances to introducing new modelsquot In an interview with JackMyers Media Business Report Brien commented quotIt is not subject to debate that the economics of the media industry are more complex Our traditional models are broken There is an appetite for change although there is concern about how we move to new models The debate is about how we make money and what we make money on What is the business modelquotMartin warned of the Innovators Dilemma quotCash flow prevents companies from doing the right thing There is margin compression for 18 to 24 months after companies find out they have to restructure They strategically disadvantage themselves because their price umbrella allows competitors to enter their marketsquotBrien agreed quotthere will be new opportunities for those who introduce new models and if we don39t do it new players will Let39s land the planequot he urges quotWe need to look for new opportunities institutionalize new models and make serious investmentsquotquotNo one has an opportunity to sit stillquot NBC39s Eck commented In an interview with JackMyers Media Business Report Eck acknowledged NBC quotneeds to program differently and sell differently We have to work together with the cable and satellite companies to change the interface to consumers so we can capitalize as change happens We39re in a period of transition right now and we can39t always see how digital pennies scale but they willquot Commenting on NBC39s Infront outreach to advertisers Eck suggested NBC views itself as both a content and as a marketing services company quotWe need to help our clients achieve their objectives We have great opportunities for partnerships to help companies and this effort will become more explicitquotTwo primary themes of PwC39s new Outlook 2012 report are innovation and collaboration and both Eck and Victor agreed cable operators and programmers will work more collaboratively to identify and develop business models that enable them to enhance their interface with audiences offer more detailed consumer insights and provide enhanced opportunities for marketers Victor mentioned the recently launched Canoe Ventures as an example But Brien warned that companies cannot depend solely on advanced technologies quotThe brands we are representing rely on our brilliant strategies to drive creative breakthrough Our real challenge is whether there is enough innovation at the top of the industry I meet a lot of leaders amp8211 many of whom are very good managers of the status quo All elements of the value chain amp8211 from beginning to end are focused on accountability and all have to be reevaluated Today business models are based on efficiencies and business processes Enhanced technologies attack the legacy business models but don39t build new ones For new clients we need to establish new models of compensation and for existing clients we need to demonstrate the value of our services and extend our business to take ownerships of ideas we generate Intellectual property is a source of revenue generationquotIPG has taken equity stakes in Facebook and SpotRunner and has launched an Emerging Media Lab quotWe need to be far smarter about the investments we make and be more entrepreneurialquot says Brien quotEvery advertising agency holding company needs to make smart strategic acquisitionsquot He adds that innovation in emerging areas like mobile and social networking is originating in India Korea Japan China and other countries and suggests it is important quotto be more open minded and receptive that breakthroughs won39t necessarily be from the USquotPwC39s Outlook 2012 forecasts only 39 percent annual growth in domestic US ad spending compared to 66 percent globally

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Comcast, NBC, Universal McCann Embrace New Business Models, say Leaders - JackMyers Think Tank

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