Leaders should learn new skills, celebrate small wins for digital transformation in legacy newsrooms
By Kim Yoo-chul
Over the last few decades, media organizations have been pursuing a so-called "red ocean strategy," a business plan involving competition in an existing industry. The primary goal of this strategy is to beat the competition and exploit present demand. Food and media industries, for example, are considered to be the active followers of this strategy as there are a lot of smaller companies also competing for market share.
In fact, media organizations are being increasingly threatened due to the COVID-19 pandemic, which has forced legacy and old media to thoroughly rethink the way they do business. Legacy newsrooms, for example, are feeling pressured to defend their bottom lines amid the continued fall in newspaper circulation and flattening advertising sales. This situation makes it pretty obvious to them that change is needed if they intend to evolve or simply stay afloat.
But the pandemic itself hasn't led to a sharp fall in readership numbers. In fact, exactly the opposite has happened. Overall, the media industry has displayed solid growth in terms of content consumption over the last few years.
Leading media organizations here saw an increase in the number of digital subscribers, creating momentum to move forward with detailed, digital-oriented strategies at an even faster pace.
|Maryam Daryabegi / Courtesy of Innovation Bazar|
"The media industry has gone through a lot of changes in the past decade and will go through more changes in the coming years. Old (legacy) media companies need to grow with their audience. They need to make efforts to invest in new business models to better connect with their users on multiple touch points and to generate more revenue. Most media companies are shifting towards a more digital model and if they don't make changes now, they will fall behind," Maryam Daryabegi, a design thinking professor at New York University (NYU), said in a recent interview with The Korea Times.
Daryabegi, who is also an educator for the executive certificate course in digital business strategy at the Massachusetts Institute of Technology's (MIT) Sloan School of Management, added it is imperative for legacy media companies to leverage data-driven capabilities and transform digitally to achieve sustainable growth.
"In the old days, media companies operated in a slower environment, which required much more planning and investment. Whereas transitioning into digital, enables faster experimentation, testing and iterations in short cycles," the expert, also an Inaugural Forbes Women Nominee in 2021, added.
Asset mix, channel strategy: ideas for small market players
The digital transition of legacy media might seem difficult, time consuming and expensive. This process also includes improving the work culture, reassessment of journalism and expanding business models.
In Korea, the news content ecosystem is largely dominated by several major vernacular dailies and dozens of TV channels. Small market players, therefore, are forced to limit their ability to produce quality journalism in already constrained market conditions.
Daryabegi, who helped transform some of the most successful firms including IBM, Pfizer, JPMorgan, Bank of America, Credit Suisse, BASF and Neiman Marcus, presented several applicable and actionable strategies that could be executed by traditional media companies with small market shares.
"The best applicable strategies that will help old media organizations with small market share get digital capabilities are _ identify channel strategy, invest in premium content, review the asset mix, redefine data-driven content and change the structure but gradually," she said, adding small market players could leverage a customer-first approach to create sustained growth.
Channel strategy is the specific way that firms expand their target audience at detailed touch-points. While this is viewed as a marketing plan, because this strategy has more to do with customer engagement, she said media organizations with small market shares need to focus on fine-tuning and developing a channel strategy by using various tools, such as email, social media, SEO, pay-per-click ads and even direct mail for audience retention.
"US media companies have a customer-first approach. They put the customer at the center of their decision-making instead of organizing around their products. They use a data-driven, multi-channel marketing approach in targeting their consumers. They understand where consumers are spending more of their time, where they can be reached by digital ads and where they can conduct transactions in real time," Daryabegi said.
She added that the value of network effects should not be underestimated for old media companies in terms of increasing the customer base, market share and the overall value proposition of a media company's content.
"A user's decision is based on the number of other users already using the product (content). When a user buys an iPhone, their decision will be based on the design, simplicity and type of apps that are available on the platform. To harness the power of network effects, it's important to design an effective business model in such a way that your platform creates unique and differentiated value for each user, adding the delivery of content that could meet audiences' unmet needs will help legacy media organizations increase their customer base and beat the competition," she said.
Leaders should set vision for teams
For a digital workflow, Daryabegi said it's crucial for senior newsroom staff accept and embrace the mindset change with analytics, sales and communication seen as equal stakeholders to the traditional newsroom focus on reporting and editing.
"Although legacy media organizations can't reap the results of digital transformation overnight, leaders should not lose motivation in developing and implementing their digital transformation initiatives. Digital transformation requires strong managerial skills and leadership. Leaders should give themselves space to plan and set aside time to drive the transformation itself, which is an extremely difficult task when time and attention are in short supply," said the NYU professor.
Daryabegi stressed that leaders should prepare an environment for change and identify the "why," "how" and "what," think critically, set the vision for teams, create clear actionable plans, engage in an agile way, learn new skills and mindsets, celebrate small wins and reward their teams for their achievements.
"Data-driven leadership helps with better understanding of a legacy media organization's realities, challenges, opportunities, goals, competition, customers and therefore, enables the leadership team with their enhanced decision-making. It is highly important to set clear goals and actionable plans for digital transformation strategies to understand the current and future state, to define challenges and to optimize processes," she said.
"Content is king. The rise in popularity of content marketing is largely about the customers. Curating compelling content will help media companies to lock in existing audiences and gain more support from their target audiences. Relevant content reaches your audience on a more personal level that is influenced by their interests, wants and needs. High-quality content helps in building brand reputation and trust and that leads to more customers. In addition, repeat customers are great for boosting brand loyalty and sharing positive reviews."