Business leaders have long be preoccupied with competitiveness and until recently, many accepted the zero-sum game nature of business. The game seems to be changing however, as new approaches have taken a hold of strategist’s view and approaches to competition.
Businesses have mostly used Michael Porter’s Five Forces Model to remain competitive in their field of business and persevere in the face of competitive threats. In essence, businesses competed to win and tried to do so by applying Porter’s strategy. Any new product or service, or indeed existing ones, were scrutinised in relation to the five forces and strategic decisions taken on the basis of the answers that emerged from the application of the model.
Over the last fifteen years, we’ve seen a significant shift in how businesses view competition and this view change was initiated by the Blue Ocean Strategy. Suddenly, the zero-sum business concept no longer applied and competition lost its central position in the wide range of strategic areas businesses need to tackle. Christensen further eroded old competition thinking with his disruptive innovation theory and businesses realised that an entirely new approach could be taken.
The change in the way businesses carry out their activities was also greatly enhanced by the global connectivity the internet produced and this new found global connectivity opened new markets and greatly facilitated global trade. The new kid on the block was innovation and competition-thinking gradually gave way to creative innovation.
The internet produced completely new markets and allowed smaller players to get a piece of the action. Chris Anderson identified how the internet became the new marketplace and with his long tail model explained how smaller businesses could obtain market shares by operating at lower costs than the traditionally dominant companies. Products that would never have made it onto shop shelves were now readily and frequently being bought online much to the detriment of large corporations. Furthermore, Andersen illustrated that in these new markets, products and services could be exchanged for free.
The Dawn of Platforms
While the Blue Ocean Strategy, disruptive innovation and long tail interactions in essence turned traditional competition thinking on its head, the most transformative shift may only just have started. The emergence of platforms has meant the creation of new markets as well as the establishment of order in what appear to be chaotic markets. Platforms have been eroding traditional competition thinking further. Platforms shift the focus from mere supply access to access to the entire ecosystem around the supply source and the collection of data thereof. The platform that uses the ecosystem and related data most efficiently will perform best. It is no longer sufficient to just have exclusive access to a supply source. Now only businesses with a strong ecosystem are in a position to provide the best products and services.
Platforms also introduce the concept of collaboration rather than mere competition as businesses jointly create new markets and collaborate in the provision of innovative services and products. Companies no longer simply compete for market shares, but instead collaborate in providing entirely new products and services. Ford, for instance, participates in Google’s ecosystem and both businesses are collaborating in the creation of new markets and making new innovative products available to customers all over the world. Businesses are now recognising each other’s innovative strengths and strategies and participating and collaborating in mutual innovation.
Traditional print media has been severely shaken by the digital revolution that has pushed the industry into a downward spiral. Most media voices have lamented the loss of power and prowess and the entire industry is being catapulted into unfamiliar territory. Publications with golden traditions have had to re-imagine and redevelop their trade and embrace the digital revolution.
Apart from The New York Times’ quite successful digital media experiment in Latin America, most traditional news agencies have been reluctant to play the digital game.
Thus there is room for hope and one would like to think traditionally high profile news agencies will seize the opportunities provided by the digital revolution.
But how can an industry that is fed by print advertising revenue survive in the digital world? How will traditional media businesses actively participate in the digital revolution and monetize their print content in a digital world?
The Challenges and Opportunities of the Digital Era
Traditional publishers and broadcasters have seen their power wane relentlessly. Before the digital evolution, broadcasters and publishers held all the power. Viewers and readers were restricted in their choice of print media and TV channels and bigger newspapers and the best known broadcasters enjoyed higher distribution and revenue and greater power to monetize through the sale of advertising. All of these advantages have all but vanished as viewers and readers are now in a position to access media online from an enormous number of sources, all just a click away.
Social Media have further eroded the power structures of traditional media empires by allowing audiences to access and distribute news content. The way consumers access news content has changed entirely and publishers and broadcasters must now provide different content for a completely new type of reader or viewer.
To find some way of catering for the new consumer, publishers and broadcaster have been furiously creating bite-sized, easily digestible, compelling and shareable news items including some sensationalist content in an attempt to lure readers back and ultimately sell advertising.
While bite-sized, essentially sensationalist news items may work to engage in the short-term, there is also a growing awareness, that people still hunger for the top quality content provided in traditional newspapers.
In that sense, there is reason for hope and optimism and however much traditional publishers and broadcasters may be dragging their feet in embracing the digital revolution, the new age has brought a plethora of advantages and opportunities that would never have otherwise emerged.
The distribution cost of media content has been reduced to practically nothing and the global nature of the internet has produced a global audience for anyone who has content to share.
The importance and impact of quality content is however not to be underestimated. Clickbait type news have failed to capture in the long run and providing quality content is once again becoming key, much to the delight of traditional media businesses.
How Digital Content will be Monetised
Particularly young people seem to have embraced the concept of consuming digital media news, and publishers have started to adapt their content accordingly. Media research has however also indicated that in-depth content of 3’000 words or more is more likely to be shared and provide advertising revenue and serious journalists and broadcasters will take much comfort from such findings. Advertisers will take note too and return to supporting strong, detailed and informative content.
The digital revolution need not spell the end of subscription revenue either. Publishers can provide some content free of charge on their website and apply traditional subscription fees for the rest. Both will bring advertising sales opportunities and publishers only need to smartly choose which content suits which platform. A loyal readership will always be willing to pay for good quality content.
What Does the Future Hold?
The next wave of major change will come when Google, FaceBook and Amazon start to muscle in on the news market and vye for a share thereof. Of late, users are allow to monetize their Facebook news feed with videos, leaving a large proportion of the profits with advertisers. Google and Amazon are set to follow suit and render the exclusive news provider even more powerful when it comes to selling advertising space and gaining revenue.
The world of media news may have changed, but the hunger for quality journalism remains, and the enormous savings in distribution costs will allow traditional publishers and broadcasters to confidently remain a strong force in the provision of news to a now global audience.
And when monetizing social media content really goes in full flight, we will witness a return to exclusive media and a boost in advertising revenue.
Publishers and broadcaster only need to harness the change and grow with it.