What's Wrong With the Current Media & Digital Business Model, and How to Fix It - Steve Blacker - MediaBizBlogger

The emergence of unlimited web site choices coupled with text messaging over 30000 magazines and hundreds of cable channels can overwhelm both the consumer and advertiser Advertising and promotion budgets have been reduced while the placement options for these budgets have multiplied beyond the point where the business exists to support themSites that have attracted major traffic such as Facebook Twitter etc are not yet profitable Most major magazine publishers with the exception of Time Inc and Meredith have yet to figure out how to make money from DigitalSo what39s the answerThere needs to be a major consolidation of bigger media and digital companies either through acquisitions or by forming partnerships with other media and digital companies that are compatible or offer new growth opportunities For example WebMD might be a perfect fit for Hearst to combine with Good Housekeeping Rather than having two separate editorial staffs providing content one content director could supervise both operations One brand director could be in charge of both companies39 ad sales Unless operating costs are reduced or consolidated it will become almost impossible for many media and digital companies to achieve profitability Imagine Yahoo acquiring Hachette Filipacchi Media US This would give them access to significant content for women Elle Elle Decor Woman39s Day Met Home and automotive Car and Driver Road ampamp Track JumpStart Again content and marketing could be consolidated and operating costs loweredHearst under Cathie Black39s leadership has made a smart decision by not featuring content on their web sites from their magazines Still the challenge remains how to get people to pay for digital content One solution could be selling a combo subscription to a Hearst title whereby the consumer gets both the magazine and digital access for a better price than if he or she were to purchase each separately Of course this means Hearst or any other publisher would have to start charging for online content now Maybe Hearst can even include other benefits and make the subscription akin to a club membership For instance it could offer tickets to quotOprahquot tours of the Good Housekeeping Lab etc Unfortunately without being able to charge for content the business model is flawed So now is the time to start testing outsidethebox ideasAnn Moore changed Sports Illustrated39s corporate structure to have one sales staff that sells both print and digital This approach has become very successful and has increased profitability Yet companies like Hearst and Conde Nast still have separate sales staffs for the most part Hearst and Conde Nast do over 70 of their business through corporate packages sold by their corporate sales groups These corporate groups have about 25 of the operating costs but generate 70 of the business Why don39t Hearst and Conde Nast trim the individual magazine sales and sales support staffs The savings in head count could either drop to the bottom line or be invested in digitalThe world has both expanded and consolidated Consumers have onlyso much time and advertisers limited budgets It no longer matters if you are a newspaper magazine cable channel or web site Regardless you are in the media entertainment and technology business This convergence provides great opportunity The sooner everyone realizes this the better it will beSteve can be reached at blackersolutionsaolcom

Become a Thought Leader. Share your thought leadership article with industry professionals & have them archived in Thought Leadership

What's Wrong With the Current Media & Digital Business Model, and How to Fix It - Steve Blacker - MediaBizBlogger

Author

Publish date

Channel

Steve Blacker

Hispanic Leadership Roundtable: Inclusion, Mentorship, and Building the Next Generation (Video) - By Juan Ayala

More Videos:

Become a Thought Leader. Share your thought leadership article with industry professionals & have them archived in Thought Leadership

What's Wrong With the Current Media & Digital Business Model, and How to Fix It - Steve Blacker - MediaBizBlogger

Enjoying This Commentary? There's More to Love

Steve Blacker

Hispanic Leadership Roundtable: Inclusion, Mentorship, and Building the Next Generation (Video) - By Juan Ayala

The payment was successful

Cookies