Immediate started out as a specialist print business but you have been working for some time to take advantage of new platforms. How is the strategic direction of the business changing?
A good place to start is how we’re positioning the business and how we’re communicating internally and externally. We position the business as the special interest content and platform company. We’re transforming our business on the basis of that strategic approach.
If we take the first part of that proposition, we are clearly focused exclusively on special-interest markets – the stuff people spend their time and money on, and the passions they build their lives around. That’s important because it provides very deep engagement. In this media landscape, there is a challenge for businesses that have come from a more traditional background to be relevant amid the continued rise of digital media and social platforms. So the first thing we really wanted to focus on was making sure we remain absolutely relevant. We’re focused on scaled special interest markets that people have enormous passion for – for instance we reach six million passionate cyclists every month, and half of all the brides-to-be in the UK. And that deep engagement allows us a platform to think about sustainable growth.
If we move on from there, to the second part of our proposition – content. Well, we have some of the most well-loved and respected brands in UK media – from Radio Times to BBC Top Gear Magazine, BBC History to Gardeners’ World. The assets we have and the brands we’ve brought together under the Immediate banner mean we’ve always been world class at creating content – albeit predominantly through words and pictures. We are fantastic at creating content brands, understanding audiences and delivering to those audiences.
However, strategically, when you look at the next five or ten years, I don’t think that’s enough. So we are now focusing on the third part of the proposition – becoming a platforms business. What that means is that we have to have world-class expertise that goes beyond creating content in a magazine format. To be clear – and this is a very important point – we see magazines and print as one of our key platforms. You have got to be very careful in a traditional print business like ours that you don’t throw the baby out with the bath water.
Actually, magazines are a key part of our platform strategy. We continue to think there is a big opportunity in magazines and we continue to launch, create, deliver and invest in print magazines. In fact, we have a number of our markets where we are growing margins, revenues and profits from a magazine model perspective – for instance in our Youth & Children portfolio. But we know we have to go beyond that and we have to be world-class at free-to-air web, at digital editions and newsstands, at video, at transactions and ecommerce, and at data – including how to monetise and leverage it.
How does that help you really take advantage of the special interest sector and what are the broader benefits of this strategic move?
If we can get to a place where we are becoming a platform business that is fantastic at the deployment and development of technology solutions, it gets really interesting. Because what you end up with from a strategic perspective is a very exciting array of different ways to approach different markets; and different business models to exploit those markets. Strategically, you can then look at a market where you have a strong audience and look for the centre of gravity in that market. What’s the overall centre of the economy in, say, TV or crafts or cycling? Because then you can work out the best way to exploit that market – sometimes by selling content to consumers, but sometimes by selling services or using data cleverly. And we already have some really good examples where we are developing hugely beyond what a traditional content company would be able to do.
The starting point is the excitement of having great, engaged and deep relationships with a lot of consumers across different vibrant markets. From a marketer’s point of view, having those relationships is enormously valuable. So then you have to consider how you actually extend your brands and extend your business model to be able to actually move beyond being just a content business – transitioning instead into one that offers all manner of services, from transactions to marketplaces and ecommerce.
So for instance in the weddings market, we are developing a fantastic and scalable services marketplace around our hitched digital planning tool. And we are building a significant data and transactions opportunity – initially around the Radio Times, but with many other opportunities – selling services from travel to financial products.
You have an advantage around audience engagement because you focus on special interest markets. But does that also increase the demand and expectation from audiences for much more than ‘just’ a publishing experience?
I think it’s defensive and offensive all wrapped up into one. The game has changed and the bar is set higher than it used to be. If you don’t change rapidly with what’s going on in the world – because audiences have higher and higher expectations because of what they can see in other parts of their digital world – then you will be in trouble. So techniques and services like geo-targeting and recommendations and the chance to buy are all things you have to be able to consider and address.
Audiences are increasingly looking to access their content through social, and the likes of Snapchat, Instagram and Facebook are looking to provide solutions. That takes control away from publishers but it’s where the audiences are – so how do you respond?
We’re very mindful of the fact that the large digital platforms are trying to own a 360-degree relationship with their consumers and I think we take a measured approach to that. We’re absolutely working with Apple News around that initiative, we’re partnering with Facebook around Instant Articles.
In terms of platforms like Snapchat, I can understand why media businesses who are targeting millennials need to be focused on the opportunities here. But just like anyone else, we have finite resource and need to focus our energy on our audiences and the opportunities they offer us. Most of our audiences are older and affluent. We call them ‘Generation Wealth’. And we need to focus on the platforms and social tools which they use and which we can leverage most easily, quickly and profitably.
If you take it back strategically, we are very, very focused on creating a significant, non-print revenue and EBITDA business. So we have to understand the trends in terms of platforms that consumers want, but we also have to think about the best way to deploy resources to get where we want to be. My job, in many ways, is to look at how we deploy finite resources. We’re almost like a corporate VC in terms of either the deployment of capital through mergers and acquisitions or the deployment of resources through organic growth. So there are many opportunities that these platforms bring; but I think we are taking a measured view. We have plenty of stuff to be getting on with that I know will generate profitability from non-print channels – so that is where we will start.
You’ve talked a lot in the past about the need to develop the talent to continually create and deliver world-class content – so how do you make sure you have the people to do that on new platforms?
In November we will be four years old. In the first 18 months or so, we did a lot of change management, thinking about what kind of skills we needed in the organisation but also what kind of attitudinal competencies we needed – and we made a lot of changes. We probably took 300-400 heads out of the business we started with because they didn’t want to be a part of our vision or they weren’t right for it, and we’ve hired in probably 400-500 heads. So we take talent and the development of talent incredibly seriously.
We have also focused a lot on change management. We think about that in two ways. The first way is to acquire the skillsets, particularly from a senior and leadership perspective, that we think we lack – and there are lots of examples of us bringing talent into the business that historically we probably wouldn’t have. For instance our most recent hires to the leadership team from Tesco (CIO Toby Hoon) and eBay (Francois-Regis Coumau). Secondly, we are very focused on developing the talent we already have in the organisation and thinking about how we move people into new roles. You have to get the right balance, and you have to be careful you don’t break the machine by changing too many of the parts at once. But if you don’t change it enough, then you don’t change the central gravity of the business and, while it’s always a work in progress, we are pretty committed to that.