Few industries have been disrupted to the extent of the publishing industry the recent decade or two. Even businesses that had existed for hundred years have had to adapt their strategies, overhaul their business models, change their services – or face going to the wall.
Meanwhile, reams of start-up and high growth businesses, driven by tech developments and the ability to reach global audiences from the touch of a button, have entered markets and created huge disruption.
Embracing the change
Of course, for most businesses in the publishing industry, transformation in recent years has meant moving into digital. But for others, it has been more of a change to business model and monetisation.
So how have some of the leading publishing businesses adapted their strategies and what are industry leaders’ tips for transforming a publishing business and its culture to survive in the future?
James Wildman, UK CEO at Hearst, says its imperative that businesses constantly look for ways to evolve – as Hearst has done.
“Our industry is continuing to undergo significant change, and any successful business needs to get ahead of that change,” he told FIPP recently. “At Hearst we have a clear focus on diversifying our revenues into areas like events and licensing. Our events business for example has doubled in size over the last 12 months and reaches over a million consumers a year through events such as the Elle Style Awards and Esquire Townhouse. Brand extensions are also key, and include a Country Living range of sofas with DFS and Men’s Health vitamins. We’ve also got a growing B2B operation offering accreditation via the Good Housekeeping Institution.
“Ultimately, it’s our job to make sure that our content is reaching and engaging audiences everywhere. We go where they are, and so whatever platform they are on, our content is on.”
US-based publishing giant Meredith has been one of the publishers leading successful transformation, and amongst others overhauled its approach to licensing in order to make it a bigger revenue stream.
Mike Lovell, who manages the international brand licensing business, explains: “If you go back to 2009 and 2010, and you think about the impact that the recession had on Meredith’s business, the effect on advertising was pretty dramatic – as it was for every other traditional media company. What was interesting though was that over time we realised that the consumer revenue line item was really unchanged and we still had the same demand for subscriptions and for our brands from the consumer. When we realised that was a solid revenue line, we started to build more initiatives around selling more products to consumers. Brand licensing was the very first of those iterations beyond selling traditional magazines.”
“As in many business ventures, timing is key,” adds Larry Sommers, vice president of Meredith Content Licensing. “Our EatingWell brand was leading the healthy eating revolution as the vertical was heating up. From the rapid growth of Wholefoods market to almost daily media attention on the relationship between diet and health and wellness, we were positioned to ride the market trends from fringe to mainstream.”
Mike Lovell, left, and Larry Sommers
“Digital advertising and content licensing revenues combined to surpass print revenues and powered the single-title, privately held company to profitability,” he adds. “We chose to work with larger, well established media partners for distribution and sales so we could focus on content and audience development.”
Getting that change right: culture first
Of course, transformation can be far from easy, often requiring a cultural shift as well as bringing in completely new skills.
“Digital business disruption is everywhere – and it forces people to look deeper into transformation. But transformation for us does not only concern digital,” explains Philipp Schmidt, chief transformation officer at France’s Prisma Media. “Transformation is basically the acceptance that nothing will ever be definite anymore. So once you’ve accepted that, you’ll be constantly able to adapt to the context of the circumstances.
“Transformation first of all aims towards culture – company culture, corporate culture – and gives people the keys to master that transformation in three different fields,” he continues. “The first is the intellectual – the rational comprehension, why people should be agile and move and adapt. The second part, which is almost the most important, is the emotional engagement in it – not only that you know something is good but also that you really feel it in your guts and your heart. You get emotional and you want to become a hero in a story of transformation. The third is the operational – the action plan that gives you the keys to do the job.”
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Underpinning all of this, Schmidt says, is a combination of attitudinal approaches required to ensure a successful transformation.
“The first thing is enthusiasm. Why do you need enthusiasm? Because on the way you will hit so many roadblocks and obstacles that the enthusiasm helps you to keep moving,” he says. “The second thing is humility, because when a transformation starts to work well you might be tempted to say, wow, I figured it out, we got it. And ego is such a strong, evil enemy that can draw you into traps. Humility helps you to really stay on track. And the third thing I learned a lot in our transformational process is timing. Timing is so important because you can be advanced on a lot of things, especially in an advertising market where you are depending on advertisers and on media agencies. I always compare it to dancing with three parties involved. If you miss the rhythm you step on each other’s toes and so timing is very important.”
Four key dimensions to successful transformation
Lucy Küng is advisor, professor, and author focused on strategy, innovation, and mastering digitalisation. She adds that for publishers to be successful in their transformations, they need to first take a step back from their core offering:
“Being excellent organisationally has never been a high priority in the media – their focus has always been on the content,” she says. “There can often be an anti-managerial element to the organisational culture. This is understandable but dangerous right now because the organisational transformation piece is probably more critical than the content transformation one. As someone said to me recently, ‘the content challenge cannot be addressed without the organisational reinvention.
“My research indicates that successful digital transformation has four key dimensions…
- Agility: established media companies are complex entities with divided attention spans and stretched resources. They must arbitrage resources and attention between old and new media businesses. Shifting resources is time consuming and often painful for them but vital if they are to take advantage of opportunities and exit fields that aren’t working.
- Strategic strategy: the velocity and pace of change in recent years has meant that in many companies deep strategic thinking has been usurped by a series of shorter-term innovation projects. These were highly strategic, but not a strategy. In contrast, the new disruptive competitors are playing a long game. They may pivot frequently, but they are looking forward, piecing together a picture of the emerging media ecosystem and seeking a strong position in it.
- Active culture management: there’s an intriguing discrepancy between digital-born and legacy, with respect to corporate culture. Established organisations tend to view culture as a barrier, a problem. Pure plays view culture proactively and much more optimistically.
- The insertion of technology, digital and data, deep into the organisational DNA: the big, fundamental shift in the media over the past decade has been the ascendancy of technology inside the organisation, and this is playing out most noticeably in a gradual blurring of technology, editorial and commercial activities. This has many dimensions – new C-level roles in product development, the integration of data analytics into content creation, a focus on UX, the development of smart metrics, and changes to organisation structure.
These and a number of other high-profile business leaders will discuss transformation in its various guises at the FIPP World Congress in London from 9-11 October 2018. See the agenda here. Find out more, or book your place, at fippcongress.com.
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