Strategic change

Category: Entertainment

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Looking out the telescope : 

Looking out the telescope What’s over the horizon

Market trends: 

Market trends Consumption Revenue Competition Brand Service Culture


Consumption News consumption people who enjoy keeping up with the news down from 54% in 95 to 45 % in 2000 (pew:us) watch TV news regularly: 1993 =77%, 2000 = 56% enjoy keeping up with the news under 30 = 31%, over 50 = 57% graduate 54 %, non grad 41 % read a newspaper yesterday under 30 = 29 %, over 65 = 63 % Driven by age and education


Consumption Readership Weekday readers: 1970 = 77%, 2000 = 55% (US: Simmons/Scarborough) Young are not reading newspapers as much in 1979, 61% of 25 to 34 year olds read papers, in 1999 only 44% read papers readership drops with age if same trends continue only 33% of the 25 to 34 year cohort will read when they are 55. this is less half the number of 55+ who read newspapers now worse for Gen Y Demand for news is waning and the young are not getting the habit


Consumption Fragmentation Diversity of medias to get news Newspapers at top of useage, but not dominant Newspapers have to change the metric to useage eg RBS

Consumption : 

Consumption Two big cohorts Boomers and Gen Y Boomers Boomers are living longer Median age is climbing rapidly and will be above 40 in 2020, compared with 27 in 1970 (US Census) 20 % of population will be over 65 from 2010 This will be BB’s decade, high income and fewer dependencies Buy services and experiences Follow them to their grave


Consumption Gen Y Tidal wave Now are 11 % of population In 2010 will be 30 %, same size as boomers Buy goods Multi media, multi task, brand conscious, optimistic Gold mine for which ever media channel can get them Can we serve two menus from the same restaurant?


Revenue Consolidation Consolidation of buyers top 6 agencies have doubled market share Consolidation of industry Globalisation Half ad spend is now on global campaigns Balance of power has shifted against media


Revenue Fragmentation of delivery channels Multiplicity of media all vying for share Digital media able to minimise wastage Endless inventory Minimal barriers of entry Supply side boom is pushing price down Below the line growth Double the growth of advertising Not accessed by most media As demand softens


Revenue Cream skimming Technology advances allow high end niche publications to steal categories eg real estate New functionality allows new operators to compete and steal market share eg employment Mass market mindset is killing us


Competition Globalisation Fragmentation due to technology Rapid movement into niche markets Commoditisation of news Network and interactive communications driving new consumer paradigm Low inflation


Brand Only six US newspapers have a strong brand (US: readership institute) Reflects lack of clear positioning Brand not aligned with commercial strategy Brand not reflecting consumer need and competitive advantage Brand too often a brag box


Culture Reflect similar cultures to army and hospitals (US Readership Institute) Inward Defensive Aggressively so in case of editorial Perfectionist/obsessive Silo mindset Inflexible and lack of innovation Across the board with managers only exception


Service As important as content for consumer satisfaction (US: Readership Institute) More important to older readers Six factors are critical: Condition and completeness; quality of paper, font , colour; When and how delivered; accuracy of bill; cost and overall customer service. Highly under rated by media


Conclusions Readership Less interested in news Not getting what they want Variable reader wants: monitoring, keep up, water cooler and self improvement type content Community/local (people), lifestyle/go and do, advertising and international and national provided it is relevant are top categories Need new metric we can all aim at


Conclusions Readership (continued) Want easy to read and easy to find content Self promotion is critical Get their news elsewhere eg TV Is not relevant to their generation eg gen Y

Conclusions : 

Conclusions Revenue Fewer bigger players Caught in yield trap Supply boom Pricing power declining Key category under attack Inflation masked underlying trends Shift away from direct advertising Performance can be strongly affected


Conclusions Competition Big players are running commodity game Low returns on content Fragmentation is spawning new and highly flexible competition Lack of positioning is death


Conclusions Brand under used and misused Brand has to be defined in terms of consumer need and targeted at key variable audience Positioning has to be strategic and relevant to all parts of the business


Conclusions Culture highly dysfunctional Not currently able to make the journey Service highly underrated and consistent with lack of consumer focus


Process Develop the market trends data Bring all groups of the business together Allow self discovery of need to change Allow synthesis of ideas of what to do Adopt a positioning and value statement which is relevant to consumers, business and functional units and employees (common aspirational goal) Agree what needs to be done to bridge the gap: critical success factors for all departments Adopt a set of action plans and timetable Align performance targets of departments, sections and people Recruit and incent accordingly


The Challenge: To move us from a mass market, inward, slow moving, risk adverse , price making newspaper company focussed at boomer generation; to a strategically positioned, consumer driven, innovative, value based media business, servicing our users with relevant news and advertising. We help make people smarter

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