Articles by: "Chris Hansen, SVP Media and Information Services – 3Pillar Global"

Why data is media’s revenue diversification differentiator

August 8, 2022 Chris Hansen, SVP Media and Information Services – 3Pillar Global

For the better part of the last decade, there has been a clear case for revenue diversification as the key to sustainable success in media. Dependency on one or two revenue models is risky, especially amid times of economic uncertainty.

Revenue diversification is particularly critical as ad-supported business models provide less and less return. Programmatic ad buying increased efficiency. However, in many cases it has led to lower CPMs for media companies. As a result many have increased the number of ads per page, which limits advertising’s impact. Now, even that option is under threat as the digital media industry faces the challenges that come with cookie deprecation.

As important as it is, revenue diversification is challenging. Media companies have seized the opportunity to launch more revenue generating products over the past few years, including newsletters, podcasts, leadership communities, and live events, to name a few. Each of these products generates additional revenue, which is great. However, they also provide a precious resource: better audience data and insights. That said, not every organization has the ability to fully leverage these insights to further capitalize through diversification.

Media companies that have a unified view of their data can better engage with audiences and drive them to new revenue-generating activities. Unfortunately, they rarely have a single view of reader and customer activity. The key to revenue diversification is uniting these viewpoints to maximize engagement and better understand and promote the products that are going to continue driving revenue.

Seizing the diversification opportunity

Before we dive deeply into the challenge, let’s spend some time laying out the opportunity, because it runs wide and deep. Media companies have explored myriad ways to drive revenue, from old-school methods like selling branded merchandise, to the new school, such as branded streaming services.

While the roadmap will look different for each media entity, there are three diversified revenue streams that every company should consider.

Live events

The first is events, which are experiencing a comeback as attendees get more comfortable with in-person interactions. Events are a way for a media brand to translate its content and expertise into a real-world experience. By building events around popular content topics and leveraging editorial staff as on-stage talent, media companies can create an engaging, replicable experience that drives revenue. While the pandemic may have paused in-person events, it showed that digital and hybrid events are a viable business model going forward. This opens the door to even greater scale for an events business.

Ecommerce

Second is Ecommerce. More than opening an online store, the opportunity lies in integrating seamless opportunities for readers and subscribers to make purchases as a part of their engagement with the content and media brand. Many media companies leverage affiliate programs to match their content to products and monetize that connection.

More advanced media companies integrate products and ecommerce links directly into their content so that they get credit for these sales, as opposed to having their audience buy a product elsewhere. By leveraging the trust in their media brand, they can promote products and drive sales, which helps both the media company and the retail partner.

Community

Finally, there’s the media company’s community. This isn’t simply about building a dedicated members-only portion of a website, or a unique newsletter. Community is about more than creating an environment. It’s about exciting brand advocates and aligning with activists in an organic fashion.

In fact, there is a very large opportunity to build multiple communities that are aligned with a media property. Larger organizations can no longer view their audience as a monolith. Readers visit sites for a variety of reasons, and the larger audience may be composed of several smaller segments that engage with different content topics. Each of these audiences represents an opportunity to unite and align with a formal community, complete with targeted content, newsletters, events, and other revenue opportunities.

The roadblock to diversification

The challenge for any large media company is getting a single view across all of their readers so that they understand how to strategically market and promote these new revenue streams. Big media companies likely have numerous disconnected back end technologies that offer a view into their readers and how those readers behave on a site, interact with newsletters, or what they consume at events.

This happens because companies often use point solutions to manage the individual revenue streams. These systems may have different information on the same individual reader, but the media company can’t unite those views and get a full picture.This siloed data is much harder to use across different internal disciplines.

For example, consider an event attendee with an interest in crypto. The business publication running the event wants to own the crypto reporting and thought leadership space through newsletters and interest-based communities. Right now, they don’t have a way to promote additional content, newsletters, podcasts, or subscriber communities to the attendees once they leave the event, because that data isn’t accessible to any of the other teams.

The event revenue is great, but there’s a missed opportunity for deeper engagement.

Engagement is the key to new revenue streams

I’ve written before about how the relationship with the content consumer matters more than ever. This is especially true with revenue diversification, where the goal is to use existing content and expertise to drive more revenue. Whenever audiences interact with content, it creates data that helps better understand their interests, which helps media companies identify new revenue opportunities.

It’s possible to find new revenue streams without a unified view of the audience. However, media companies are leaving money on the table if they don’t try to better unite their customer view in order to understand engagement.

Perspectives | Supporter Spotlight

Multichannel experience: the key to surviving the media attention recession

June 20, 2022 Chris Hansen, SVP Media and Information Services – 3Pillar Global

The pandemic saw a historically high surge in media consumption and media audience growth. However, data heading into 2022 painted a bleaker picture. After two years of easy wins in the attention economy, media companies now face an attention recession.

Getting it right in the attention recession

Today, we face a difficult environment for media companies to prosper. That said, a few companies are getting it right and provide valuable lessons. The New York Times is one of them. The NYT managed to harness the temporary surge in media consumption and direct it into unprecedented growth for its new subscription services. While it has long been a leader in capturing subscriptions, the NYT was able to take the boom of the last two years and build upon it as part of a long-term revenue strategy.

The key to their success? An ambitious and high-quality multichannel strategy. The NYT didn’t just farm its audience’s surging interest for clicks and ad revenue. Instead, it created a unique brand connection by remaking their product offering into a complete, multichannel media experience. They added new subscription services for games, cooking, sports and more and evolved the brand into a kind of one-stop shop for media engagement.

And while The New York Times’ success stands out, it is also replicable. Media companies simply need to apply the core lesson: Gone are the days when customer attention was cheap and easily won with ad spend. Instead, the products that will drive revenue in the future will deliver a multi-or omnichannel experience that creates unique, differentiated value for the consumer.

Building for that kind of experience for your audience might seem daunting. But it can be done.

Valuing customer’s attention

It starts with constructing a revenue model that values your customer’s attention as much as they value it themselves. Too many media companies are afraid to transition to premium content providers. They worry if they develop content consumers have to pay for, they’ll be left behind for whoever can afford not to set up a paywall.

But that fear is misguided. Time and time again, consumers have shown they are more than willing to pay. However, they have to feel they are paying for something worthwhile. Most value their time, and the quality of how they spend it, more than they value saving a few bucks per month.

So, don’t be afraid of the subscription model. Instead, focus on developing the kind of unique, premium content that makes a subscription worthwhile.

Creating strong customer relationships

That said, embracing the subscription model won’t be enough if consumers don’t feel connected to your brand. There’s just no getting around it: Strong customer relationships matter. Seventy-six percent of consumers say they would buy from a brand they feel connected to over any competitor. To succeed, you need to be more than just a content provider; you need to become a brand that customers feel connection and loyalty toward.

Creating that brand connection is one of the key components of today’s omnichannel experience. Almost three-quarters of consumers already use multiple channels when interacting with brands. Each channel presents the consumer with a swarm of touchpoints with your brand; you need to be reaching them across each one, and weaving a coherent brand story and image into each of those touchpoint encounters.

Exceptional customer experience is key

Finally, a key takeaway for any media company is to optimize for customer experience and not just views. In today’s media ecosystem, plenty of consumers are experiencing digital fatigue with how their attention is used and abused. Media consumers aren’t just downshifting their consumption patterns; they’re overloaded and overwhelmed.

Attention-grabbing tactics won’t work any longer, and consumers are getting tired of clickbait. You want to optimize, not for views and clicks, but for a daily habit of interaction. Getting there starts with a media experience that can be enjoyed daily. And that starts with creating an owned media content experience that is high-quality and differentiated.

Consumers today constantly engage with a wide array of digital products and services across multiple channels, devices, and platforms. Compelling customer experiences that leverage multi-channel engagement can build lasting, continuous relationships with consumers. And these relationships will form the backbone of revenue streams that will outlive the attention recession.

About the author

Chris Hansen is the Senior Vice President of Communication, Media, and Technology at 3Pillar Global.

Innovation | Perspectives | Supporter Spotlight

Three key trends in digital media product development

March 2, 2022 Chris Hansen, SVP Media and Information Services – 3Pillar Global

Digital media companies face fierce competition for the eyes, ears, and wallets of customers. But those who succeed have the potential to win big. With the rise of new content platforms and the emerging promises of web3, media companies have to evolve faster than ever to deliver the right experiences to the right people at the right time.

The pace of critical transformation has been accelerated by the global pandemic. Audiences have always been fickle media consumers. However, Covid-19 drove a massive, rapid change in consumption habits. People have become more demanding and expect better digital experiences to meet those demands.

In conversations with media executives, we’re hearing three major trends that savvy organizations should consider before launching new initiatives.

Data-centricity

The first trend is around data-centricity. Companies are awash in data, and the differences between sinking and swimming hinge on developing a strategy that leverages their customer (reader/viewer/subscriber) data. By gathering all of the information they have—from multiple first-party sources, as well as financial and operational data—into a single repository (which may be a data lake, data warehouse, or other cloud-based platform) companies can effectively manage and use their data.

With a data platform in place, organizations can begin to unlock insights from every angle. Internally, the data can be used to aggregate customer-level insights to create models that achieve acquisition, growth, and retention goals.

Externally, the insights can be used to develop better user experiences that incorporate learnings from across the customer journey. This enables media companies to provide unique experiences that align with the brand. Data also allows products and services to operate more effectively, particularly personalization, recommendations, and the like.

Improving customer experience

The next trend is a focus on providing optimal customer experiences. According to McKinsey:

“The CX programs of the future will be holistic, predictive, precise, and clearly tied to business outcomes. Evidence suggests that the advantages will be substantial for companies that start building the capabilities, talent, and organizational structure needed for this transition. Those that stick with the traditional systems will be forced to play catch-up in the years to come.”

One of the most effective ways media companies can improve the customer experience is through personalization. Countless studies have shown that personalization not only drives better engagement for media brands, it is welcomed—even demanded—by consumers. As audiences continue to expect more relevant experiences, media companies require more proficiency in data science to deliver on those expectations.

Diversifying revenue streams

The final trend is the disruption and diversification of revenue streams. In the past two decades, media companies have built strong digital products and services yet relied on traditional monetization paradigms such as advertising and indirect distribution channels. However, ad-based business models are no longer a sufficient primary revenue strategy for many media companies. This has triggered a shift to monetize their content in other ways, particularly through direct audience-based revenue.

Take The New York Times, which has focused on subscriptions as the key driver of growth. They leverage news, as well as additional content and channels (including cooking, audio, and games) to drive engagement and ultimately readership and subscriptions as well.

Disney has been a master at diversifying revenue streams. If you merely look at their Star Wars franchise, Disney has taken advantage of opportunities to cultivate new fans, deepen customer experiences, and generate new revenue streams. They’ve licensed the brand to Lego to produce Star Wars-based kits; built out new in-person experiences like Galaxy’s Edge at Disney World in Orlando; and added new fans and their subscription revenues by producing the Mandalorian series exclusively for their streaming service Disney+. Disney proves that quality content leveraged omnichannel drives business outcomes. Last quarter, their parks business reported a $2.45B operating profit and streaming added 11.8 million new subscribers.

The future: bumpy but bright

The evolution of digital media may be bumpy, in part because there’s an array of forces at play, such as developments in the web3 sphere, like the metaverse, NFTs, and blockchain, among others. Despite that, we expect the ventures that survive will continue to recognize the primacy of their audiences, by keeping an eye on and leveraging data-derived insights.

As digital businesses diversify their revenue streams, and adopt and adapt to new distribution and delivery mechanisms, the players must think differently and broaden their perspective and knowledge of their customers. Those that invest the time and effort to foster innovation will be the ones that thrive, no matter what changes come their way.

Perspectives | Supporter Spotlight

The omnichannel approach to navigating media industry disruption

October 26, 2021 Chris Hansen, SVP Media and Information Services – 3Pillar Global

Media disruption has become a fact of life in the digital age. Media disruption is a fact of life in the digital age.ons become more diverse, new channels are emerging more rapidly than most media companies can respond.

This pace places an extreme burden on media companies. They don’t want to throw money at every novel channel in our here-today, gone-tomorrow culture because they can ill afford to waste time and resources. Nor can they afford to overlook the next big trend and risk irrelevancy.

When an ad-supported model drove revenue, companies could risk complacency. With the depreciation of the cookie, there is a growing need to move fast to attract attention and leverage first-party data to drive engagement.

New channels, new strategies

Media companies and publishers have re-adjusted their revenue strategies to focus on subscriptions as per-page revenue from advertising has dropped. In a recent interview, New Yorker editor David Remnick noted that advertising sales in their print magazine largely subsidized the content in the magazine for most of its life. Now, digital and print subscriptions pay for the newest Borowitz Report.

Can a successful subscription service be enough for a media company to thrive in the years ahead? For the New Yorker and loyal reader base, the answer is likely yes. For many others, survival means embracing a truly omnichannel strategy that distributes content everywhere that content can be consumed.

The New York Times went through a tumultuous transition a decade ago as it dealt with substantial drops in print readership and revenue. Yes, they have done well with digital subscriptions. However, the Times has also developed a plethora of content products, built for the changing habits of their audience.

The Daily, a long form audio content for the passive Times’ listener, is an excellent example. It demonstrates how companies like The New York Times provide a range of content formats that meet the broad expectations of today’s audiences. Products like these also access emerging digital engagement channels, which offer new revenue streams and drive subscriptions.

New revenue: ecommerce and events

The definition of media is continually evolving. ESPN and Barstool Sports are content companies that also support new endemic opportunities such as sports-betting. Synergies like these not only create new revenue streams but drive ongoing multi-channel engagement. You don’t just read about or watch the game, you participate in the game along with your favorite content brand.

Ecommerce is also becoming a way to leverage brand recognition and build stronger relationships with consumers by supplementing information with a physical product. It may not be a surprise that HGTV sells doormats. But did you know that Barstool Sports now sells One Bite frozen pizza?

Media company events are nothing new. However, they are becoming an ever more common way to drive revenue, engagement and brand loyalty. ComplexCon, the event put on by Complex Networks, is an excellent example of meeting their Millennial and Gen Z audience how and where they want to engage. The New Yorker Festival just saw its second biggest revenue earnings ever in its new hybrid format.

True omnichannel lies ahead

What are some of the promising omnichannel opportunities going forward? As The New York Times has demonstrated, audio is proving to be quite popular. (As well as a bit of what’s old is new again). Given that audio is a fairly passive content channel, it can exist in the background without demanding focused attention from the consumer. In our multitasking culture, having the freedom to absorb ambient media while also exercising or mowing the lawn is highly valuable.

The once-taboo is now an opportunity for media companies looking to engage. As states begin to legalize online gambling and sports betting, there are opportunities to drive new branding and co-branding revenue streams, creating one of the most direct opportunities for the right media brands to surround and interact with the content. It is critical that companies keep their eye on changing trends and emerging opportunities that align with their brand and target audience.

The long game

Indeed, whatever activity a media company chooses to tap into, they must do it authentically and on-brand. The excellent podcast series on systemic racism Who We Are, created by Vox Media and Ben and Jerry’s, is an example of high-quality brand extension.

What direct revenue will these and other emerging markets create? That’s the billion dollar question. But it also misses the point. Creating a content ecosystem that authentically connects great content to your audience supports behavior that drives subscriptions and ultimately sustainable revenue. The key is being open to experimentation. And experimenting does not mean developing a TikTok strategy in 2022 to gain younger viewers.

Some (well, many) attempts will fail. However, those that succeed could become significant new revenue streams. The advent of 5G all but guarantees a turbocharged environment of innovative new channels for media companies to explore in the coming decade.

The future for media companies demands an omnichannel approach. While content is still king, customers now dictate how and where they will consume it. To win a battle fought on many fronts, media companies need to jump into the arena and embrace change. This means combining insight-driven experimentation with new emerging channels and technologies. That’s the kind of customer-centricity that will ensure content drives new revenue opportunities.

Perspectives | Revenue

Media companies have been disrupted. Here’s 3 ways they can flip the script

June 22, 2021 Chris Hansen, SVP Media and Information Services – 3Pillar Global

There is no question the business model of traditional media companies has been disrupted over the past 10 years. Companies that aren’t experimenting with new, unique premium content experiences risk, at best, being left behind their competitors and, at worse, failing. Diversification is key to building a sustainable business model. But survival is not enough. So, here are three things for media companies to consider as they try not only to survive but to disrupt.

1. Embrace the change

The ad supported business model will never again be the sole salvation of the media business. Digital advertising has become dominated by Google and Facebook. These two tech giants pull in over 60% of all digital advertising spend and over 85% of all new digital advertising revenues. Those are 2019 statistics, so their slice of the pie is undoubtedly even larger today.

Innovative media companies are diversifying and building new revenue streams. They have shifted to creating premium content experiences that drive customer revenue through subscriptions and memberships. Media companies are also leveraging events and ecommerce as a new way of engaging their audience and to increasing revenue streams. With the death of the cookie they have no choice.

Fortune Media is a good example of this new product mindset. Historically, Fortune’s primary consumer product was their magazine. They’ve moved to digital subscriptions and diversified interactive content to grow subscriber revenue such as Fortune Connect, introduced in 2020. Fortune Connect is a combination of self-guided learning, best-in-class journalism and weekly networking events for business leaders. It’s an example of using data to discern customer preferences and create a new and different type of brand experience.

2. New players = new competitors for eyeballs and loyalty

There is a no-holds-barred competition going on for the attention and loyalty of digital customers. There are new and disruptive channels emerging competing for hearts and minds from companies creating unique and interactive experiences to drive subscriptions and brand value.

Take Peloton. They certainly don’t fit the traditional definition of a media company. But don’t let the bike fool you. Their business is subscription-based fitness content, which includes spinning, yoga, bootcamps, and meditation. They spent a reported $103 million on content development in 2019 designed to bind their customers to their platform.

It may not matter whether Peloton considers itself a fitness company, a hardware company, or a media company. However, it should matter a great deal to media companies. There are a finite set of eyeballs connected to humans. And they’ve got a dwindling amount of expendable time in their day to consume content.

It is all the more urgent that media companies find ways to deliver value that differentiates and builds loyalty.

3. Be nimble and fail fast

The ethos of many technology companies is to accept failure as a consequence of experimentation. Media companies can even celebrate failure (well, practically) – as long it is a part of the journey to success, of course. Digital media publishers should continually explore new monetization strategies to be competitive, even if some efforts don’t work out. If and when companies fail, it’s critical to do so quickly and understand why so that they can try another approach.

I’m a proponent of “failing smart.” Make a data-driven decision, do your customer research, validate product market fit and understand how your product satisfies a customer need. Identify and remediate issues and unforeseen challenges to drive a successful product. Don’t over-analyze and paralyze. Take calculated risks, listen to your customers and react quickly. Embrace the bold but be smart.

Quibi is a high-profile example of a failure I suspect wasn’t data-driven. On paper, the company seemed to have everything required for success. They had proven executive talent, almost $2 billion in funding, blue-chip media company investors, and A-list creative talent. Yet only 500,000 subscribers had signed up by October of 2020, though it’s reported the company had projected 7,000,000 by that date. Clearly the founders vastly overestimated consumer demand and willingness to pay for premium, short-form content.

To avoid these kinds of mistakes — both market fit and product fit — media companies should invest in product market fit research to validate customer needs, as well as invest in data platforming and cloud architecture to continually improve customer experience and build loyalty through deep learning and truly understanding customer preferences. Media companies can create value and new revenue streams by integrating customer-specific data and insights to power differentiated services.

Take action now

I suspect the definition of a media company in 2025 will be substantially different from the media company of 2021. The disruption by non-traditional media companies has already taken root, forcing traditional media companies to adjust quickly. The pandemic has only accelerated the need for change and innovation. How healthy traditional media companies will be in 2025 depends on actions they take right now.

Advertising | Perspectives

Farewell cookies, hello true omnichannel experience

March 24, 2021 Chris Hansen, SVP Media and Information Services – 3Pillar Global

While we all know the end is coming, we’d usually rather not contemplate it. That’s the approach most media and adtech companies have taken toward cookies over the past year or two.

These companies have long used cookies to monetize their content. Yet we all know the end of cookies is near. However, Google drove the final nail in the coffin with the announcement that they won’t support alternative identifiers after they kill cookies across their stack (including Chrome).

Really, this should come as no surprise to anyone. Content companies have been looking down the barrel of this gun for a long time. A few years ago, I was at a Google summit for adtech leaders when the company announced it would do away with third-party cookies in Chrome. You could almost feel the panic. Without cookies, how would adtech platforms grow revenue? And without adtech, how would media companies monetize their content?

After Google’s most recent announcement, adtech stocks, which have been on a tear in 2021, took a hit. But in all likelihood, the market will stabilize and rebound. Many of the stocks already have. Content companies that already shifted their attention to strategies that are less cookie-dependent (CTV, subscriptions, curated communities, etc.) are thriving.

Logged in

However, content companies that don’t have a cookie-less strategy need to get one, fast. Relying on contextual advertising or alternative identifiers is far from a panacea. The good news is that many media companies already have good customer understanding, or the tools to get there.

These days, we live in a subscription-based world. Many sites require registration — if not payment — before accessing content. Gartner has predicted that by 2023, 75% of B2C companies will offer subscription services, and for good reason: The success rate of selling to an existing customer is 60-70% compared to 5-20% for new customers.

Without the cookie, content companies are now “forced” to create a direct, permission-based relationship. A positive side effect could be a level of personalization and customer engagement that the cookie could not provide.

Positive steps

As content providers and publishers shift from cookies to a new paradigm of permission-based services, here are three areas of focus for content companies:

Create a better customer experience. Admit it: the cookie spoiled you. You were tracking that visitor to your site with a focus on scale and not quality. However, a better, truly omnichannel experience will drive behaviors that your advertising customers will appreciate. Consumers will gladly subscribe to your content and give you permission (and declared data) to help you better serve them. And their increased engagement will drive up page revenue.

Have a data strategy. The cookie made you beholden to your ad/martech partners. Now that you have formed a relationship with your customer, own that relationship. Build the right product tools and platforms, and don’t leave it to someone else to determine your success (or failure). The first-party relationship you are creating with your readers, viewers, and customers gives you direct data on their habits and interests. These are things that third-party platforms could only infer.

Build more digital products. Be everywhere. Host virtual events, like Complex Networks ComplexLand. Create curated members-only communities, like Fortune Connect. Embrace new ways of generating revenue. Experiment! Be agile (and Agile). Don’t be afraid of fragmentation. Own your relationships and customer experience by having an omnichannel strategy.

The death of the cookie isn’t the catastrophe you might think it is. It is a necessary evolution. If you embrace it, it can actually set you up for long-term customer engagement and sustained higher revenue. Change has come … and it is good.

About the author

Chris Hansen is senior vice president of 3Pillar Global’s media and information services client service vertical.

Advertising | Perspectives

3 trends that will define media success in 2021

February 8, 2021 Chris Hansen, SVP Media and Information Services – 3Pillar Global

Covid-19 hit some sectors of the media industry hard (live sports, concerts and trade shows). The global entertainment and media industry saw its largest revenue decline in more than two decades. However, the pandemic has also presented an opportunity for companies embracing digital strategies that are aligned with consumer trends and expectations.

Disney, for example, lost over $6 billion in revenue from the closure of its theme parks. But Disney+ reached 50 million subscribers worldwide two years ahead of schedule. In January, Fortune – once just a print magazine – announced its redesigned website, an immersive video hub, and other premium offerings. All of this strongly positioned them strongly to counteract the advertising slump that hit the industry last spring. In October, the company launched Connect, a membership community and online platform for purpose-driven, mid-career professionals.

Here are three trends we’re likely to see this year:

1. The relationship with the content consumer matters more than ever.

Cookies were a convenient crutch. They were the building blocks for digital advertising and helped drive revenue for media companies as they transformed. Now that cookies are nearing their end, some companies are panicking while others are evolving. The ones that succeed will be the ones that focus on creating a continuing relationship with the consumer. This means engaging with them differently, through a soft or hard paywall, or as a curated member experience (e.g. Fortune Connect). This not only preserves advertising, which is a significant source of revenue, but opens the door to new, diversified revenue streams.

The ultimate death of the cookie will turn out to be a blessing for the media industry, even if it creates disruption in the short term. Necessity drives innovation. The cookie’s demise will revamp the way companies post content and interact with their consumers. In 2021, we will see even more innovative media business models that will define the coming decade.

2. Pandemic-driven changes won’t revert.

There is no going back, so let’s embrace the change. Let’s highlight some of those changes. In the first 28 days on Netflix, The Queen’s Gambit was watched by 62 million households. No, it didn’t reach M.A.S.H. season finale numbers of 106 million. However, M.A.S.H. aired on a major broadcast network at a time when there were only a few.

We’ve seen an acceleration in media companies following in Netflix’s footsteps. Peacock is betting on a network show that first aired in 2005 – The Office – to drive premium subscriptions at $5 a month. Who is the largest audience for that show? People who aren’t old enough to have worked in an office.

Just as the music industry needed to evolve and find new ways to engage and monetize consumers when streaming took off, so must media companies. Experiments bringing what would have been blockbuster movie releases like Mulan, Soul, and Wonder Woman 1984 to Disney+ and HBOMax will forever change, but not completely destroy, the theater industry. (Alamo Drafthouse-like experiences may well be the theater experience of the future). And let’s be clear, the definition of media is evolving. Consider Peloton: a fitness company? Sure. A hardware company? Maybe. A media company? Absolutely.

Successful media companies aren’t embracing a move to digital. They are disrupting their own legacy business models to become digital. Spectator events have become intimate digital experiences. (Think DJ D-Nice spinning to 120,000 live viewers including Diddy, President Joe Biden, and Janet Jackson on IG Live in the early days of the pandemic).

Sporting events are better with fans in stands. However, sporting experiences can, and should be, complemented with connectivity to the players, drivers and coaches. Leagues have already embraced fantasy sports, but could they openly embrace sports betting? And are there opportunities to connect with online gaming to create a full-surround fan experience, digitally?

It is critical to focus on the consumer and how they consume and where they consume and providing new ways to consume – directly. This will create new and stronger revenue opportunities.

3. Legacy media companies can succeed. But they have an uphill climb ahead.

Legacy media companies have the most to gain from transformative change. However, they start at a massive disadvantage compared to new media companies like Complex Networks and Spotify. (Yes, Spotify particularly with the acquisition of podcast content companies such as Gimlet).

These brands and what they represent have lasting value. However, they demand reinvention with a focus on digital channels, habit-forming digital products, multiple streams of monetization and libraries of content. When Maven bought Sports Illustrated last year, it did so with the intent of “revitalizing and strengthening” the publication for a new era by focusing on technology.

Past the tipping point

A recent McKinsey report noted that Covid-19 has “pushed companies over the technology tipping point.” Media companies that want to succeed will have to rethink their digital business models in 2021. And they have no time to waste.

While most software products were once developed on a 6-to-12-month timeline, the pace of change has accelerated. Consumer expectations are far more immediate. But with the right digital product strategy, the media industry could see a game-changing resurgence in 2021.

About the author

Chris Hansen is senior vice president of 3Pillar Global’s media and information services client service vertical.