Key Case Studies, Ideas & Implica4ons Effec4ve Strategies for Media Companies Summarized notes compiled by Billy D. AldeaMar4nez Head of Digital Mone4za4on GrupoCopesa Sunday, 30 June 13
Jan 15, 2015
Key Case Studies, Ideas & Implica4ons
Effec4ve Strategies for Media Companies
Summarized notes compiled by Billy D. Aldea-‐Mar4nezHead of Digital Mone4za4onGrupoCopesa
Sunday, 30 June 13
2
Value add
Media Revenue Models
Sense of community CustomizationTangibility Filtering
Reputation ValidationTimeliness
FormatAnalysisVisualization
Ease of useDesign SynthesisRelevance
www.futureexploration.netCreated by Ross Dawson
www.rossdawsonblog.com
AdvertisingBrand creative
Pay per clickPay per action / sale
List rentalProduct placement
ContentSubscriptionPay per view
Pay for formatCustomised content
DistributionSyndication
LicensingCustom feeds
API fees
CommunityMembership
Pay for votingPay for messaging / SMS
Sales of communityresearch
AffiliatePay per sale
Pay per registrationPay per download
ClassifiedsListing fees
Transaction feesContextual advertising
LeadsLead generation
Registration for contentO!ers
Enquiry matching
EventsConferencesRoundtablesShowcases
Access to buyers
MerchandisingBooks / research
Music / videoClothing
Other
PartnershipsRevenue share
Pro"t shareShare of revenue
increase
PlatformSell distribution platform
License platformDistribution feesServe advertising
BrandBrand licensing
Sponsor feesBranded productsBranded content
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Three Tech Giants
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Shares: US$34.61Market Cap: US$289.37B
Shares: US$397.19Market Cap: US$372.82B
Shares: US$880.55Market Cap: US$292.29B
Sunday, 30 June 13
Three Tech Giants
4
Shares: US$34.61Market Cap: US$289.37B
Shares: US$397.19Market Cap: US$372.82B
Shares: US$880.55Market Cap: US$292.29B
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Law of Nemesis:• All purchase decisions are based on value. Commodity markets
emerge when purchasers view suppliers as iden4cal on all factors but price.
• There is only one winner in a commodity market—the lowest cost supplier—except in periods of high demand when supply falls short of demand. In periods of high demand, companies may be fooled into thinking, “We are differen4ated.” Downturns reestablish commodity buying.
• To stave off the Nemesis, you must find sustainable advantages. The strategist must slow the erosion of advantages, and con4nually seek new high ground represen4ng future compe44ve advantage. Moreover, the strategist must erect “barriers to entry” to protect
Law of Nemesis:• All purchase decisions are based on value. Commodity markets
emerge when purchasers view suppliers as iden4cal on all factors but price.
• There is only one winner in a commodity market—the lowest cost supplier—except in periods of high demand when supply falls short of demand. In periods of high demand, companies may be fooled into thinking, “We are differen4ated.” Downturns reestablish commodity buying.
• To stave off the Nemesis, you must find sustainable advantages. The strategist must slow the erosion of advantages, and con4nually seek new high ground represen4ng future compe44ve advantage. Moreover, the strategist must erect “barriers to entry” to protect
Sunday, 30 June 13
Disrup4ve Clayton Christensen
Sunday, 30 June 13
Metcalfe Law
• In 1993, Robert Metcalfe no4ced that the value of a telecommunica4ons network is propor4onal to the square of the number of users of the system. For example, two people with telephones can only make one connec4on. Five telephones can make 10 connec4ons, and twelve telephones can make 66 connec4ons. This is now famously known as "Metcalfe's Law" or network effect: The value of a network is propor4onal to n2, where
Sunday, 30 June 13
Network EffectA network effect (also called network externality or demand-‐side economies of scale) is the effect that one user of a good or service has on the value of that product to other people.
Network Compliments– iTunes and Macs/iPods
– “Piracy” and Silicon Valley
Two Sided Markets– Economic plajorms having two dis4nct user groups that provide each other with
network benefits
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Network Externali4es & Complements
OS + Office Suite
MSDOS Architecture
Applica4on Developers
CROSS SIDE NETWORK EFFECTSAME SIDE NETWORK EFFECT
SAME SIDE NETWORK EFFECT
MONETIZATION
SUBSIDY
DIRECT FEED BACK LOOP INDIRECT FEED BACK LOOP
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Strategic Network Considera4on
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How to Disrupt
USERS USERS
ALL MEDIA ARE SOCIALOWN THE STANDARD
CREATE A NEW ISLAND OF A UNDER SERVED NEED
USERS USERS
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iPOD
iPod iTunes Music
10 billion Songs Available321,168,000 iPods Sold45 Paid songs Avg ipod
CROSS SIDE NETWORK EFFECTSAME SIDE NETWORK EFFECT
SAME SIDE NETWORK EFFECT
Supply SideMone4za4on Side
MONETIZATION
SUBSIDY
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Two Sided Markets have a Subsidy & a Mone4za4on side
Mul4-‐sided plajorm Subsidy Side Mone4za4on Side
Bars/Discos Women Men
Da4ng Women Men
Magazines Readers Adver4sers
Visa/Master Card Consumers Merchants
Video game consoles Consumers Game Developers
Personal computers Applica4on Developers Hardware Makers
Consumers
Mobile Internet Portals Content Providers, Handset makers
Content providers Consumers
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Music Industry in Crisis?
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Newspapers Readership
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Newspapers Readership
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Newspapers Ad Revenue
Classifieds:40% Revenue50% Profit
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Funded in 1950 witht he first print run of our newspaper: “La Hora”
2000
Grupo Saieh becomes the mayor shareholder,gaining board control
2007 Laborum.com is 100% acquired
In 1990, Copesa is acquired by a private equity group, inncluding Grupo Saieh
2008
Divestment of prin4ng press business, PROSA
2003 Buys 50% of Paula Ediciones
2006 Grupo Dial is officialy launched
2002 Transformación Proyecto La Tercera
2005 Launches Diario 7
2003 Relaunches Newspaper La Hora into a free daily paper
2005 Inaugura4on of the Planta Prosa
2007 Papelera FPC is divested
2005 Grupo Dial is created with the aquis4on of the first radio sta4on, Radio Duna
2006 radio Sta4ons, Carolina y radio Beethoven are aquired
2007 Purchase of radio Disney y Radio Paula
2008
Aquis4on of Zoom Inmobiliario
2010 Aquisi4on of Canal 22
2010
First Equity Sale of Seminarium
2011 Investment in Betazeta
2011
Que Pasa Mineria is launched
2011 Business Newspaper Pulso is launched
Our History
2012 Launch of HOLA Chile
2012 Luanch of QP Energía
2007 Radio Nina & Radio Sintonía are aquired
2008
Investment in events business, Seminarium
2009
Launch of Zoom Automotriz
2011 Daily Coupons Agrupemonos is launched
2012 Launch of Now Producciones
2012 New Digitales brand
2011 Final equity divestment of Seminarium
2012 Interna4onal
Development
Created a Regional Permium Ad Network
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Show me the money
Revenue 2012US$2.44B27 countriesNorway Sweeden Switzerland Ireland Europe Latin America South East AsiaPropertiesnewspapers televisionfilmpublishing multimedia and mobile services. Formatspaper, the Internet, television, cinema, video, DVD and wireless terminals (mobile telephones, PDAs
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Where is the money?
20
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Schibsted Case Study
00 Trajectory MarketValue
2040The last Newspaper
V
T
Don’t Look at the P&L => Look at the strategic implica4ons and react before it’s reflected on the P&L
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Schibsted Org Chart Evolu4on
Corporate
Print Online
News Classifieds Online
Best People of Print Reproduce
The big change was culture
1 2
3
Threat of Cannibaliza4on
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Digital vs Tradi4onal Publishing
Publish Publish Publish Edit
Gather Gather Edit Publish
Digital Publishing
Tradi4onal Publishing
Rapid and frequent news updates as the story develops
Delayed yet well researched analysis, slow yet highly reliable
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Demand Media
One•Search Data Query from
Two•Cross reference with CPC Data
Three•Outsource to Freelancers
Four•MoneFze with Google
One•Editorial Guidline
Two•Current Events
Three•Produce News
Four•MoneFze with Brands
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Platform Mix (Scalability)
Market Growth
Relative Market Share
Stars Question Marks
DogsCash Cows
ClassifiedsStrong Network effects
Events/Webinars/BooksWeak Networks Effects
Publishing/DisplayStrong Network effects
Professional ServicesWeak Network effects
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USA (English) + Spanish + Chile• When looking at paid downloads a totally different global distribu4on can be observed. The US is the largest market and covers roughly 40%
of the daily paid downloads worldwide in June. The UK and Germany rank second and third respec4vely and are followed by Japan.
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Media Consump4on (Newspaper Associa4on of America)
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Adver4sing??
Sunday, 30 June 13
The 10 Power Laws of Innova4on
Power Law 1: Don't think "new product" -‐ think social value.
Power Law 2: Think social value before "tech".Power Law 3: Enable human agency. Design people into
situa4ons, not out of them.Power Law 4: Use, not own. Possession is old paradigm.Power Law 5: Think P2P, not point-‐to-‐mass.Power Law 6: Don't think faster, think closer.Power Law 7: Don't start from zero. Re-‐mix what's
already out there.Power Law 8: Connect the big and the small.Power Law 9: Think whole systems (and new business
models, too).Power Law 10: Think open systems, not closed ones.
John Thackara
Sunday, 30 June 13
Tech Media vs Content MediaPremiumAdver4sers
Performance Adver4sers
Tech Content
UGC Tabloid EditorialCollatedSocialAlgorithmLow
High
Low
High
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Mone4zing App ModelsProduc4vity
Entertainment Evergreen Content
Current Affairs Content
Tech Content
Recurring
Spot Buy
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Current Brand Device Mone4za4on Framework
KniPng/Cooking/Deco/Beauty/Others
Content Aggregator
Magazine M
ast HeadsAds PFD
IAP
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Content/Func4onality Mone4za4on Framework
Content
FuncFonalityLow
High
High
Free
Free/Paid
Paid
Free/Paid Paid
Free/Paid
Paid
Paid
IAP
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Resources & Corporate Culture
Value Created Value CapturedValue CapturedValue Created
Yes No
Yes DisneyGE
Apple
Xerox PARCNew Media
Apple
No Microso|Oil & Gas Mergers
American AirlinesIBM (Circa 1990)Intel (DRAMS)
Sunday, 30 June 13
The Brandsphere
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1. To increase the number of people potentially exposed to your ideas, you must increase your reach. Get more followers, email subscribers or Facebook likes.
2. You have to learn to be heard over the noise of social media. By being more attention grabbing or using contra-competitive timing.
3. Your content must include m o t i v a t i o n - r a i s i n g f e a t u r e s . Combined relevance, calls-to-action and us vs them are examples of contagious “hooks.”
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Quotes
• Best Performing companies have very different answers.
• Opportunity should match company resources.
• Synergy is another word for Conflict of Interests, the sum is greater than the parts.
• Aim to Create value and Capture or the very least Captures someone else’s value crea4on.
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Ques4ons and Answers
Thank you
Billy D. Aldea-MartinezHead of Digital Monetization
@aldeamartinez
Sunday, 30 June 13