It’s no longer the same business Contemporary media trends and strategic decision making Robert G. Picard Reuters Institute, University of Oxford

Screens are now the primary technologies for media content and communication Copyright © 2015 Robert G. Picard All rights reserved.

Mobile is now the dominant means for interpersonal and media communication Copyright © 2015 Robert G. Picard All rights reserved.

Social networking is changing some media activities into interpersonal communication Copyright © 2015 Robert G. Picard All rights reserved.

Media consumption and use has become more individualized and active Copyright © 2015 Robert G. Picard All rights reserved.

Established media platforms are being supplanted by Internet-based connections Copyright © 2015 Robert G. Picard All rights reserved.

Supply of media content far exceeds ability of the public to consume what is offered Copyright © 2015 Robert G. Picard All rights reserved.

Ability of firms to profitably connect audiences with content is diminishing Copyright © 2015 Robert G. Picard All rights reserved.

News organizations headed for stormy digital times digital news consumption is up, but PAID consumption is slowing in most countries 70-80% of people never intend to pay for news paid revenue is primarily growing through increased product offerings to existing customers digital/mobile advertising is growing, but news organizations are not benefiting much

Media firms are struggling to find strategies for operating in VUCA environments volatile V uncertain U complex C ambiguous A Copyright © 2015 Robert G. Picard All rights reserved.

Characteristics of VUCA environments Indistinct industry boundaries Unclear who the competitors are Overlapping products/services Challenges in defining the industry Corporate structures in flux Organizational boundaries changing New work arrangements increasing flexibility Increasing cooperation with competitors, suppliers, and distributors Rapid changes in sources of competitive advantage Evolving technologies Shift to service orientation; assets becoming liabilities Much imitation and adaptation by competitors Copyright © 2015 Robert G. Picard All rights reserved.

Traditional strategy methods are less useful today The market maze changes constantly and rapidly Copyright © 2015 Robert G. Picard All rights reserved. You can’t plan your route, only how you will try to find it

Continual innovation, learning, and adaptation How does a media company get to a sustainable competitive position? Copyright © 2015 Robert G. Picard All rights reserved.

The value creation perspective of media firms has to change to be successful Traditional media product and advertising activities Goods logic Company-centric approach Sell products and audiences Sales- and exposure-based performance Business-to-consumer and business-to- business media activities Service logic Customer-centric approach Co-production of service Sales, customer interaction orientation Copyright © 2015 Robert G. Picard All rights reserved.

Stabilizing consumption and revenues are the primary strategic objectives

Strategic tipping points for print media enterprises in the digital era 1 content income exceeds advertising income digital income exceeds print income mobile use exceeds desktop use print income no longer pays print costs Copyright © 2015 Robert G. Picard All rights reserved. already the case for many news orgs some magazines and papers nearing a few magazines have reached this poiht already the case for some papers and magazines

Strategic tipping points in the digital era for broadcast/cable media enterprises 1 revenue from consumers exceeds revenue from advertising cost of serving network affiliates surpasses revenues received non-linear income exceeds linear stream income revenue of online firms exceeds broadcasters already the case for cable channels some networks are close to this Copyright © 2015 Robert G. Picard All rights reserved.

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