Vivendi CEO on lessons for publishers from the music industry, and what else they can do to thrive
He will be one of more than 70 speakers at Digital Innovators’ Summit 2017, taking place in Berlin from 19-21 March – a little more than a week from now. The main Summit is on 20-21 March.
We spoke to him ahead of DIS 2017 for some of the insights he will share there.
Do you see parallels between the state of the music of a few years ago and publishing today in the way that they were/are contending with issues of digital transformation?
Like music, publishing is part of the cultural and creative industry. Both deal with products that are intangible, that enjoy mainstream, global appeal, and which are largely unregulated.
Since 2000, music has been at the forefront of the digital revolution and has experienced a number of economic models, both legal and otherwise: piracy, peer-to-peer, downloading, streaming, live-streaming. Music has undergone a transition from a product model based on property to a service model based on access.
Above: Music artists from the UMG portfolio. Photos: vivendi.com
The key thing is that the music industry, after some difficult years, has survived and has now returned to growth, thanks to the popularity of streaming – and, of course, consumers’ lasting love of music.
Publishing industry, which hasn’t the same degree of digital maturity than music, is contending with the same issues but at the end of the day, it will experience the same evolution and rediscover business models that could generate growth.
What lessons then can publishers learn about protecting and growing revenues from the way the music industry has revitalised itself?
Be open to change and new business models, because change is going to happen whether you like it or not.
The most successful companies will be those able to adapt to the new ecosystem in which GAFA (Google, Apple, Facebook, and Amazon) have positioned themselves to provide massive access to cultural products and services that were previously fairly inaccessible or expensive.
Personalisation, and the use of social media, will be essential to adapt publishing content to consumers’ tastes and expectations. Publishers need to be available on all media, at any time and in any place, whether in the home, on the move, online, offline, on demand, by subscription, on one or more screens, etc.
To thrive, publishers need to play with these rules.
One way that the music industry has grown revenues is through a renewed focus on experiences and live performances. Do you think publishers have grasped how this might work for them in the digital world?
Social media changed the rules of publisher engagement. At Hearst we understood that and we were running experiments.
For example, in 2014, Hearst UK successfully launched The Good Housekeeping Institute, the brand’s product-testing department. The Institute moved to a new space in Soho, to conduct product-testing at the open-plan, glass-fronted venue in addition to cookery classes and other events. So that’s one experiment with live.
Another example of innovation at Hearst: Cosmopolitan launched a Snapchat Discover channel in the UK in 2015. The results were impressive. Engagement was high. Such an initiative allows Cosmopolitan to use Snapchat to engage with people who are 14, 15, 16. Their first interaction with Cosmopolitan will be on Snapchat.
Is the vinyl revival, and the way that some consumers want to hold actual product, good news for publishers of print magazines? Do you think there are parallels?
Vinyl revival is a very particular phenomenon. As of today, vinyl is a soaring but remains a niche market.
The trend emerged six years ago, initiated by independent labels willing to promote the unmatched quality of sound that delivers analogical record versus digital one.
Above: Music artists from the UMG portfolio. Photos: vivendi.com
As the success of vinyl records is strongly related to a technical feature, I doubt there is a parallel to draw with publishing.
It’s worth mentioning that 35 per cent of vinyl’s are never played but just bought for their design. This trend reveals the consumers appetence for physical objects. Parallels could be drawn with publishing there, but I assume it would remain anecdotal.
Looking back on your time at Hearst do you think that you got your digital transformation strategy right? Or are there things you wish that you had done differently?
With the benefit of hindsight, one could always have done better. But that’s not the true test. I am pleased we tried to innovate at Hearst. Now, I wish we could have done more. We should never think differently.
The CEO has an essential role to play to disseminate a “try and fail” culture within his company. To succeed, you have to innovate; to innovate, you have to try; to try, you must not be afraid of failing. As one of my mentors, Kevin Hand, former CEO of Emap, used to say: “If you don’t fall off, you’re not trying hard enough”. Fear of failure is the source of failure.
You were involved in many acquisitions in your media career. What advice would you give to legacy publishers now going to buy new media brands?
Brands and people are the key criteria for successful M&A.
Never lose sight of the fact that brands are the core assets of any media. In my career, I managed a portfolio including HB, Cosmo, Good, Esquire – all fantastic brands on which we built to create new experience.
As I used to say, content is king but brand is queen.
People are the other main asset of a media company. And it’s not just about people’s skills but their willingness and ability to innovate.
Which of the new technologies that both the music and publishing industry are now focusing on do you think will be most transformative? Artificial intelligence, VR/AR or anything else?
AR/VR is a compelling technology but we still need to understand and master its full potential. UMG is developing projects around 360° technology to offer fully immersive VR music video experience: music fans will become fully immersed in the music they love, whether that’s walking around a stage during a concert by their favourite artist or becoming part of the story in a music video.
Publishers are already experimenting successfully with AR/VR content. This cutting edge technology is opening up thrilling new opportunities for artistic expression that we have only begun to realise.
What advice would you give now to key execs in the publishing industry?
Never forget that it is all about innovation. Disruption is a state of mind. It is the ability to challenge oneself, to be open to change, to be willing to innovate, to take risks and even to fail.
To thrive, companies need strong brands underpinned by the best talent, empowered by low-friction digital processes that enable them to collect and use deep consumer insight from data.
Those with the clearest vision, the strongest talent, and the greatest willingness to experiment will achieve more voice, brand engagement, and returns in a media world that grows both more crowded and more complex every second of every day around the globe.
In a nutshell, I would say the publishing industry needs a BHAG (Big Hairy Audacious Goal) to define visionary goals that are more strategic and emotionally compelling.
Hear more from Arnaud at the 10th Digital Innovators’ Summit in Berlin – visit innovators-summit.com for more.
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