Surviving the Disruptive Change

in Media Industry
The Impact of Digital Transformation on Media and Broadcasting

Whitepaper by
Chait Mudunuri, CEO
Ray Business Technologies Pvt Ltd
www.raybiztech.com

Surviving the Disruptive Change in Media Industry

Digital technology is no longer the disruptive force in mediait is the driving force that
shapes content creation and distribution. The distinction between traditional and digital
is not relevant anymore: publishers have become, with varying degrees of success,
digital media companies. But the industry continues to evolve, pushed by changing
consumer behavior and business innovation.

Consumer Behavior and Technology are disrupting the Media

Industry
For a very long time, an average person used to wake up and see a newspaper or watch
a news bulletin to get a glimpse of the local and world news. With the proliferation of
the social and mobile media, the news is available to you round the clock and on
demand. You dont wait for a newspaper or a television channel to give you the news.
You get news when you want it or in the case of push/alerts news, when you need it.
The business of newspaper and television is to create an audience based on great
content and brand loyalty and the commercial operation monetized that audience by
selling advertising. Advertisers were attracted to these media because they offered
large, homogenous and profiled audiences based on the positioning and reach of the
medium in question.
The internet has changed everything, almost. Audience became fragmented and the
competition for the news industry has changed beyond recognition. Now anyone with a
smartphone and an Internet connection can report news. So did the news consumption,
it moved to social and mobile channels that did not exist a decade ago. Based on the
survey conducted by the Pew Research Center in Feb 2016, Facebook led the pack of
social networks where most of the US adults get their news followed by Twitter and
YouTube9.

(Source: Moving with The Times: How News UK survived digital transformation10)

Surviving the Disruptive Change in Media Industry

The digital transformation has changed the consumer behavior forever. We open news
apps on our devices than buying a newspaper, stream our favorite programs than
watching television and expect our smartphones to notify us of breaking news and
other interesting facts. This behavior will become pervasive as the global middle class
grows from 1.8 billion people in 2009 to an estimated 4.9 billion in 20304. The demand
for new media services focusing on convenience, education, premium content and
video-on-demand will grow.
Users appreciate having someone to curate content for
them, similar to what an editor would do with a
newspaper or a bulletin. Innovative reading experiences
and native advertising platforms are reaching new and
savvy audiences, enhancing the user experience and
allowing publishers to charge a premium to advertisers.

Global middle class grows from 1.8

billion people in 2009 to an
estimated 4.9 billion in 20304.

Technology now allows access to content anywhere, anytime. The increase in mobile
and Internet penetration has made being connected a way of life. Information collection
and data analytics enable companies to get customer insights across many channels and
devices, allowing them to deliver relevant and meaningful experiences. The power of
mobile and social is transforming how media is consumed and perceived. Technology is
changing how media is created, distributed and monetized. Traditionally, the media
industry focused on creating content and optimizing distribution, but today many
companies are automating this and finding new ways to monetize.
The changing consumer behavior and evolution of technology at an unprecedented
pace has left the media industry in an unenviable state. They are left with no choice but
to rethink and reevaluate their business models and transform themselves in this state
of flux. Established media companies are facing competition for viewership from new
content sites and social media services and the advertisers are offered new ways of
effectively targeting, reaching and measuring their audiences.

Surviving the Disruptive Change in Media Industry

What is the Impact?

As the media consumption on all traditional
channels go down, it is imperative that the
business models have to be reimagined and
innovation is not optional anymore. The
newspaper industry is trending the wrong
way with both circulation and total ad spend
going down. Newspapers in 2015 had perhaps
their worst year since the Great Recession.
Daily circulation fell by 7 percent, the most
since 2010, while print ad revenues declined
another 8 percent20. Traditional brands have the advantage of credibility and heritage
but new brands have a vibrancy and responsiveness that is often leading the way in
innovation and new formats.
Three billion people are currently online, with another billion be added by 2020, most of
those in the developing world and almost exclusively on mobile devices. The new age
of interaction on social media platforms and more recently the surge of messaging
applications keeps adding to that growth while at the same time presenting very real
risks too. Broadcasters with websites used to have two separate newsrooms in the past,
driving costs, ensuring inefficiencies, guaranteeing duplication. Now most of them have
already merged into one combined newsroom, although other processes commissioning, news gathering and post-production - are still done very much
separately.
With proliferation of news sources, with the rise of social network-powered
aggregators, its clear that most news providers will find it harder and harder to get the
majority of their digital audience go directly to their platform. Users are more likely to
consume the provided content off platform, selecting from dozens of competing
sources.
Kevin Kelly, who is a co-founder and former executive editor of Wired magazine, says
we will have an ecosystem of filters, human and algorithmic, where personalization will
increasingly be part of the process of how we produce and consume news. Text and
images will come together to form a new kind of media. Technology is less about the
new than about recombining in new ways. The value in remixing is to create more
possibilities. With virtual reality, were moving from having information at any time to
the sharing of experiences.
There is some good news: news readers, whether in print, online or on tablet, are highly
engaged. They are engaged with the content longer up to 40 minutes a session in the

Surviving the Disruptive Change in Media Industry

case of The Times and they have a longer term, more meaningful relationship with a
news brand in terms of trust and credibility than with other publishers.
In most countries, media companies continue to have commanding brands and strong
consumer relationships. In developing economies, they are still growing, as incomes
and education levels rise.

Surviving the Disruptive Change in Media Industry

Survival of the Fittest, Be Digital Ready

According to Forrester, only 27% of todays businesses have a coherent digital strategy
that sets out how the firm will create customer value as a digital business. IDC expects
that the percentage of enterprises creating advanced digital transformation initiatives
will more than double by 2020, from todays 22% to almost 50%. Successful digital
transformation will be based on establishing data streams in and out of the enterprise
and finding new ways to monetize them25.
News organizations that are currently undergoing the transition from a legacy news
media model to a digital online reality face tremendous challenges. The speed of
information dissemination has changed the way that newsrooms have to operate in a
connected world and new multiplatform modes of news production.
The organizations that can evolve and implement integrated newsrooms will end up
winning the battle for consumer attention. Leveraging digital technologies is crucial to
staying relevant and profitable. Companies lagging in this area risk losing ground to
newer entrants and business models that are poised to disrupt markets with innovative
products and services.
One editorial production line, one digital newsroom,
IDC expects that the percentage
where editors, reporters and producers can access a single
of enterprises creating advanced
system to coordinate, approve and edit content for
digital transformation initiatives
multiple platforms will be the key to success in the new
will more than double by 2020,
reality. Reporters only knew a story had done well if a
from todays 22% to almost 50%.
colleague patted them on the shoulder, or if they got a
letter from a reader. The social engagement now provides
instant gratification. Reporters get real-time feedback to their stories together with
relevant metrics.
Transformation for media companies means a complete overhaul in how they think,
plan, operate, and define success in virtually every aspect of their business.
Organizations that are ready for digital transformation will be able to seize new
opportunities, while organizations that lag could become obsolete.
Critical capabilities for the transformation will be a) Transform business models, b)
Create new experiences for customers, employees, partners and other stakeholders and
c) Innovation and flexibility at core.

Surviving the Disruptive Change in Media Industry

To get your organization digital ready, start by identifying the business goals, build the
culture to be digital first, capture the data and analyze the same to feedback into the
whole process. For an organization to be ready to face the challenges of the current
marketplace, it is important to undertake a digital transformation initiative.
The organization will have a centralized, data-driven infrastructure and management
(cloud services, digitized catalog of content). Around this core, there will be
independent units that can move fast to create new products across different platforms
or apps.
Robust, cloud-based technologies are getting cheaper by the year, making content
creation, distribution, and presentation far easier. Brands can be created with far less
capital, as the social sphere rewards work that captures imaginations at marginal cost.
Its social, mobile, infographic-loving, and sponsorship-friendly for starters.
Ecosystems are increasingly important in the digital economy. They are becoming
essential to creating new relationships and capabilities, leveraging new technologies,
and accelerating innovation. By collaborating across the ecosystem of partners and
institutions, companies can create new opportunities to address consumer needs in the
B2B and B2C spaces. Technical platforms that allow devices, applications, data,
products, and services to work together in new ways become a core part of the overall
business strategy.
El Pas, the highest-circulation daily newspaper in Spain, has also completely revamped its newsroom
structure and placed digital distribution at its core, literally. Editors have created a digital distribution
desk focused on audience measurement, social engagement and SEO and placed it in the physical
center of its newsroom, surrounded by the companys other verticals and departments.

Surviving the Disruptive Change in Media Industry

To thrive in the digital era, media companies will need to be leaner, nimbler and more
open to working with ecosystem partners. To engage new audiences, media businesses
will need to partner with consumers to co-create and crowdsource material. With
improved connectivity, data collection and analytics, content creators are now able to
take advantage of this to harness their audiences ideas when creating shows. The
ubiquity of social media and smartphones now gives content creators far greater power
to create new storylines almost in real time. Enabling audiences to interact with content
creators has the potential to build more loyalty and engagement with the content,
particularly if seamless second-screen support for an interactive, community-based
experience can be designed.

The Process

Create
Digital
Strategy

Test at
small scale

Disrupt your
core
business

Track and
Improve

Surviving the Disruptive Change in Media Industry

The Solution, Integrated Newsroom

Overall media consumption is on the rise driven by a rising amount of time spent on
digital consumption. With increased digital usage, more media companies will offer
digital alternatives, further propelling the overall shift to digital-media consumption.
To effectively serve the audience and keep them engaged, an integrated newsroom is
necessary.

In the traditional model (Newsroom 1.0), there were multiple media newsrooms with
dedicated editorial resources for each platform that is serviced by the publishing
houses. There were separate editorial units for the print edition and for the online site
and the content generation, editing and production is by and large divided between the
print and the online world. With the online revolution, there was need for a new model
for the newsroom (Newsroom 2.0), the content gatherers generate the content for all
channels served by the editorial department.
The pervasiveness of mobile and social made it necessary to change the model for the
newsroom to a more integrated once with integrations across various channels. An
Integrated Newsroom (Newsroom 3.0), provide content on multiple channels by
integrating the complete news flow across print and digital media from the planning to
the production.

Surviving the Disruptive Change in Media Industry

The newsrooms that adapt and evolve have seen the greatest payoff, growth in
audience and engagement and in some cases growth in subscription revenue.

Digital Transformation Approach

RBT Digital Transformation approach starts
with identifying the digital transformation
strategy for the organization. We will partner
with you to define the strategy, implement
the strategy and assist you in monetizing the
same. We will be the partner throughout the
entire process to help you increase revenues
and enhance customer engagement.

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Strategize

Execute

Monetize

Surviving the Disruptive Change in Media Industry

Implementing an Integrated Newsroom

The following figure shows the various components of an integrated newsroom. RBT
can assist with implementing all or parts of the integrated newsroom.

Transformations are ultimately about establishing new sources of growth and profit, so
media companies need to demonstrate new digitally aligned business models that are
sustainable. RBT can help with establishing that.

Opportunities Ahead
Legacy media companies often lack the technology and the marketing capabilities, and
in some cases the digital audiences, to develop new businesses themselves. And they
can struggle to create effective new digital channels that will attract new customers.
Whether digital operations are acquired or built, they do best when they are grown and
managed outside the core business. Emerging businesses need dedicated resources and,
more often than not, new kinds of talent.
The potential growth opportunities for media companies can be found with the
following.
a. Branded content has emerged as an important growth engine not only for the
near term but for the longer term as well. Publishers such as The New York
Times and Cond Nast have aggressively entered the branded-content business.
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Surviving the Disruptive Change in Media Industry

And companies such as Unilever, GE, and Red Bull are actively building inhouse media capabilities, pulling editors and journalists from publishing
companies and working with agencies and publishers to develop content.
b. Events have become a big hit for advertisers, too. In addition to profitable events
for consumers, many publishers organize events for advertisers that make
money and contribute to brand building
c. Traditional print is far from deadprofitable business opportunities can still be
found. Publishers are offering new print products to drive incremental revenue,
especially in the premium segment.
d. Collecting and analyzing data have become the key to determining how to
acquire audiences and make money from them, but data and analytics have also
become critical to producing the insights that publishers need in order to
develop content.

Case Study - Telegraph to use digital content as backbone of paper

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One integrated print/digital newsroom.

Two shifts worked each day, one from 6am and one ending at midnight.
Three speeds to work at, from fast for breaking news to slower for a feature.
Four key skills for each journalist: social, video, analytics and search engine optimization.
Five deliverable ideas required from each desk each day: including one video, one shareable
and one interactive.

Surviving the Disruptive Change in Media Industry

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Surviving the Disruptive Change in Media Industry

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