We all know the business model of the media world is changing dramatically, moving from a reliance on print advertising to an increasing focus on digital subscriptions. Many media companies understand the need to lead this transformation, but it requires constant innovation. It takes an “innovation mindset” to achieve and maintain sustainability, where publishers continuously explore what attractive new revenue streams can be incorporated into their diversification strategy.
Silicon Valley companies have long been known for driving innovation and disruption. They are successful in changing their industries and the world. We wanted to have a deeper look at what media can adopt from their strategies.
This report is the result of many hours of interviews, surveys, discussions during the encounters with some of the best of the best in our industry. In the preparation of our discussion about How Silicon Valley Is Transforming News Business we interviewed not only our speakers and moderator, but also our participants and supporters. You will find in here the write-up from the event with Dow Jones’ Chief Innovation Officer Ed-ward Roussel, Les Echos’ CEO Pierre Louette, Media Entrepreneur Frédéric Filloux and journalist and consultant George Brock. You will also find in depth interviews with them, the results from the BDZV survey Spotify for News about news aggregation and the result of the survey among our participants.
The questions discussed were the most critical questions of our times for news media: about business models, innovation, the threats from GAFA (Google, Apple, Facebook, Amazon) and how to best deal with them and what we could learn from them. We dis-cussed about fake news, regulations, subsidies and last but not least, about how quality journalism sup-ported by a state of art technology is indispensable fora future self-sustained news media. You can find here many ideas you can implement in your organisation. We hope this report will inspire you to do the necessary steps on your way to innovation.
“Some of the biggest Silicon Valley companies are moving into the news business; so whatever your position is on that you need to formulate a strategy to deal with it” was Edward Roussel starting point for our discussion. The big tech companies also became big advertising companies, added Pierre Louette. What is the best way to deal with these developments? A smart approach to GAFA would be to “try to learn from their ways; to engage, to use AI, and to adopt the best practices they have developed.” (Pierre Louette).
Our seven top takeaways about what we could learn from or handle Silicon Valley are:
- Tech is at the heart of everything – having a technological approach for media is absolutely critical.
- Data is a huge differentiator. The tech companies have that competitive advantage, which is the data. Armies of engineers who have the capacity to build products rapidly and at scale are sitting behind this data.
- Talent management as a deciding factor. In Silicon Valley they foster and encourage the best possible talent.
- Be open to aggressively experiment, use data, and learn about consumer habits. If technology serves consumers, then it is fundamentally good.
- Tech companies are fearless – that’s something that the media industry can learn from tech. Media companies should attempt to take a few more risks with their products.
- Media companies need to get a lot better at rapid prototyping and testing. This is one critical takeaway that media companies should emulate from Silicon Valley.
- Agility is one quality that stands out in Silicon Valley, while news media tends not to have it. In Silicon Valley they have the ability to maneuver and to think their way in any direction that they want to take. That brings them to innovation.
And what about the business models of the future?
“Business models will fragment and change. One big trend of recent years, that is expected to continue, is that media houses are charging their reader to monetise the news, because people are using more subscriptions. There are plenty of opportunities for business models – the key is to stop thinking in terms of a single business model, a single solution, one magic. There will be a balance across the world between people who have either membership or subscription schemes. There will also be advertising supported business models. There will be some variations of business models: organisations that make significant money from events, e-commerce etc.” (George Brock).
Frédéric’s call for mutual cooperation between media and big tech was impressing: “In the evolution of the tech-media relationship there was a huge missed opportunity for mutual cooperation. This all could beso different. If tech said we could co-develop this with the press and the media industry had safeguards such as legal contracts, and the right to withdraw, then development could be done at cost and charged for in a mutualised way(…). There are so many areas where there could have been a giant technological leap. I still believe that is possible”.
Some of the ideas will be familiar to you. Some maybe new. We hope it will be inspiring.
We sincerely thank all our interview partners and interviewees for their time, openness, and insights into their work.
Ioana & David