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Transforming Print Media

There’s no question that newspaper and magazine publishers are facing major disruption. That’s largely due to four major trends that are rapidly changing how people consume media:

Consumers are spending more time online. From 2005 to 2010, US consumers spent 74% more time reading online media. But they also spent 21% less time reading newspapers and 11% less time reading magazines.
New devices are growing exponentially. The mobile Internet has taken off everywhere, sparking a revolution in customer behavior. Tablet and e-reader shipments continue to be robust, and an increasing percentage of device owners prefer to read digital versions of their favorite newspapers and magazines.
The audience is increasingly fragmented. Newspapers are being challenged by online aggregators and television networks, as well as by standalone vertical alternatives. Magazines are losing readership to customizable social magazines and digital-only interactive sites.
New voices are being heard. The Internet has a low cost of entry, and many consumers increasingly have more trust in amateur blogs, social media, and other user-generated content. They also want to read new, alternative online outlets for hyperlocal news and content.

In parallel to these consumption changes, new modes of advertising have emerged. Many companies have reacted to these trends by cutting costs. Others have begun taking simple steps to adapt their businesses for the digital age. These tactics are understandable and appropriate, but they are not enough.

To achieve long-term, sustained, transformational growth, media companies must balance two goals: maintain or improve margins and invest for the future.

Transformation means committing to long-term change. For print media companies, that requires a complete overhaul in how they think, plan, operate, and define success in virtually every aspect of their business. Businesses must ask:

Where is the media industry headed—and how quickly?
How far along the digital curve is the market?
On which assets can the company build winning positions and create competitive advantage in a digital world?
How aware is the organization of the need for change? Where are the potential roadblocks?
Do we have the right skill set, culture, and organization in place to sustain a long-term transformation?

There are three steps to success when it comes to transformation:

Fund the journey. Funds can be obtained by restructuring the cost base, increasing revenues through price hikes and digital initiatives, strengthening advertiser relationships, and maintaining near-term shareholder value. By unlocking cash, media companies can capitalize their transformation, as well as buy time with investors.
Win in the medium term. Companies need to demonstrate early gains against milestones outlined in an overarching transformation strategy. This can be achieved by refashioning the publication and business-unit portfolio for growth and sustainability; scoring digital wins in the core business; and pursuing growth in adjacent lines of business, such as existing verticals with unique, high-value content, related e-commerce initiatives, and online marketing services.
Build the right team, organization, and culture. A successful transformation requires a shift in thinking, organizational strategy, and technology investments. For example, media companies will need to hire a chief digital officer to support the development and management of digital initiatives, and to build a data and analytics capability. They’ll need new expertise in consumer insights and an increase in “digital-mindedness” among staff. Redesigned talent management programs will be necessary to attract, develop, and retain individuals with the required skills. And management across business units will need to develop cohesiveness in order to build—and sustain—enthusiasm and momentum for transformation among employees.