Win with advertisers and subscribers

Winning in media is ultimately about capturing a unique audience and providing a compelling proposition to both subscribers and advertisers. Getting ratings, readership, and advertising dollars requires an understanding of your core strengths and where you see competitive advantage in the market. Content, revenue model, and even M&A strategy should all be tied to a clear audience strategy. Instead of chasing every new fad, a clear top-down strategy should be driven by a singular vision for audience development linked to a coherent value proposition.

If your strength is access to regional and local audiences, enhance and monetize that knowledge by expanding to new channels to better compete (and collaborate) with the likes of Facebook and other new competitors. Similarly, a strong base of national or international reporting can be leveraged to engage a well-heeled national audience and advertiser base. There are many ways to develop an audience, but capturing and retaining them requires a cohesive approach that articulates the value to both subscribers and advertisers.

Define an intentional portfolio thesis

In the face of ongoing pressure from technology players, incoming deregulation, and growing private equity activity, a deliberate portfolio strategy is a must as the market moves toward consolidation. Most companies still have legacy assets, many of which are losing money or facing unsustainable futures. Despite many spin-offs in the past decade, most organizations lack a coherent, long-term portfolio thesis.

A winning portfolio strategy must link to your audience strategy and connect your pool of assets to the external market. It’s impossible to be all things to all people, so tough decisions must be made in terms of retained assets, new growth vehicles, or even mergers with peers for scale or synergy. Without a clear portfolio strategy, companies risk rapid obsolescence.

Clean-slate centralize while improving local impact

Traditional media companies were built in a fundamentally different market environment in which local power was the foremost concern and costs were secondary. Today, addressing legacy costs and ways of working is one of the industry’s main challenges, so resetting your operating and cost structure is table stakes. But don’t think of it as cutting the fat or doing more with less. Instead, set out to cast aside the legacy notions of how to run your business, and approach your operations as a clean slate.

To get the house in order, your organizational model and cost structure need to walk a balance between centralization that yields efficiencies on cost and technology, better culture, and governance while retaining a local touch where it matters: content. This enables cost discipline while also allowing a governance model that creates new ways of working and in-market audience engagement.

Six pillars for success

Optimize existing and build new revenue models

The first step in driving topline growth is to squeeze every drop of revenue out of existing revenue models by optimizing sales and revenue management efforts. To transform, however, leaders also need to identify new streams of income in areas such as digital and shared revenue.

Creativity is required: you’re mapping new distribution channels and content mediums to your strengths and the needs of your audience and advertisers. That may mean creating native advertising, introducing vertical-specific multichannel offerings, or monetizing your subscriber data. Today, launching a new revenue stream requires thinking more holistically about the interactions among content, audience, medium, distribution, marketing, and ease of use. Success in today’s marketplace requires omnichannel content synchronization and seamless monetization across channels.

Redefine data-driven content and channel strategy

In any industry, a company thrives when it knows customers well enough to create compelling offerings. Most traditional media companies still have unique access to a local or regional customer base, which remains a source of strength. Winning in content and ratings means owning a unique audience across channels, which requires a deep understanding of consumer preferences and consumption habits. This requires a fundamental shift of your content strategy—away from gut instincts and toward data-backed, analytics-driven segmentation, clustering, and audience targeting.

Review the asset mix and optimize the portfolio

Many media portfolios today are a cobbled-together mix of legacy assets and opportunistic acquisitions. To free up capital for reinvestment and improve margins, conduct a disciplined internal diligence on your portfolio based on performance and your desired asset mix, which enables clear-headed decisions about what to divest and what to fix. Assets that could be viable for someone else may not work for your desired model, so spinning them off sooner rather than later will allow you to invest where you need to.

Scale capabilities with M&A

In recent media industry consolidation, some companies have pursued growth potential using outdated models of “good value” that place too much trust in past performance. The wiser approach is to pursue a potential-focused approach that links to a broader thesis around audience and asset mix. Growth potential and asset synergy (cross-advertising, cross-subscriber monetization) are the keys—not past performance.

Beyond a clear thesis for acquisition, a strong integration playbook is fundamental. When a new asset comes on board, rapid integration of talent, systems, and governance is essential to realizing full synergy potential.

Fix legacy operating models

Since the advent of mass media, media companies have operated in near-monopoly conditions within a market or geography. As a result, high-profile local leaders have always exerted power in a decentralized structure to shape the company’s role in a community. Today’s technologies have not only disintermediated content creation and consumption channels, but also changed how people perceive their communities. The old model is no longer strategically valid or cost effective. Media companies must shift to a matrix model that balances some local sense of ownership with greater accountability to a centralized organization.

Reset the cost structure

Cost-cutting is always painful—but more so when it’s indiscriminate. To cut costs wisely, fix the operating model first, and then build capability against your model. Typically, the best approaches take advantage of three factors:

Standardization to remove redundancy and complexity, for example by creating uniform newspaper sizes and layouts for design efficiency
Centralization to improve productivity and efficiency, for example by consolidating technical functions in a center of excellence or an inside sales center
Variabilization to improve flexibility and agility, for example by generating more freelance content

At the same time, you cannot cut your way to growth. Cutting content might save the second quarter’s bottom line at the expense of fourth-quarter subscriber revenues. The goal should be to cut with purpose to enable reinvestment and improve organizational effectiveness.

The road ahead

A media transformation is not easy. The print media disruptions that occurred in the first decade of the 21st century are looming for broadcast, and the shifting focus of FAANG toward content and subscription services poses an unprecedented threat. There will be both winners and losers in the coming consolidation, and the landscape will look very different in five years.

A sustainable path forward must incorporate transformational change across audience strategy, portfolio, and operating and cost models. Without getting these three imperatives right, media companies will continue to face the now-familiar narrative of dwindling subscribers and eroding advertising profits.