Consulting

Digitization and Changing Business Models in the Media Industry: Part 2

In part 1 of this paper, we looked at digitization and its effects on the media industry. We examined how the ecosystems that tie participants together in common pursuit have been affected by this development. In these ecosystems, companies that have managed to find a market in this world of digitized media have found opportunities to grow; companies that continue to cling to analog methods for content creation (as well as management, sales, payment and distribution) are struggling to adapt.

A truly digital enterprise goes beyond creating processes that enable the creation and management of digital content. It also creates digital processes and systems for e-commerce, sales and perhaps most crucially, digital distribution of content to an ever-growing number of digital and mobile devices. Truly innovative companies are moving beyond the product centric world of analog content and distribution to create content-based services that can deliver real-time content, no matter where the customer may be.

Media companies have much to prepare for in developing truly digital capabilities across the value chain. Some of this work directly involves the content itself – how it is created, stored and managed for a new generation of customers who have different and greater expectations than their predecessors.

Other aspects of the media value chain that need to be addressed include how digital content is sold, packaged and distributed. These affect user experience as much as the content itself.

This paper presents the challenges of creating and selling digital content and looks at issues that affect the business models of media organizations. It also examines how digital trends impact the creation and management of content itself.

Conclusion
In this two-part white paper, we've examined the concepts of the business ecosystem to see how people and institutions exchange value through participation in these self-organized groups. We also looked at how changing just one aspect of a business model can lead to the development of new products and services.

We saw how digitization of content has led to new winners and losers in business. Companies that saw opportunity for new digital distribution channels 15 years ago have outpaced others who struggled to convert their content into digital formats. Newspapers and magazines have seen drops in revenues because of declines in advertising, although shifting venues. However, leaders in publishing, TV, film and gaming have examined the new ecosystems of purely digital participants to develop innovative products and services.

Much needs to be done by content companies to create new business models that serve an increasingly digitally competent audience. And the way in which content is created and managed has to evolve to enable those new models. Leadership in the digital media age will come to companies that institute processes for innovation to enable the rapid monetization of opportunities across the digital value chain.

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