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Study: 5 efficient growth strategies for news publishers

World News Publishing Focus

World News Publishing Focus
Your Guide to the Changing Media Landscape

Study: 5 efficient growth strategies for news publishers

Our study was conducted specifically to find out which growth strategies the leading publishers of the world are pursuing.

Here are the five fundamental growth strategy patterns we identified:

  1. The Consolidator typically bases its strategy on operational excellence. Highly efficient processes lead to low costs. Combined with a good market penetration, the consolidator usually demonstrates much higher revenue margins than its peers. This is why the consolidator can pay attractive prices for other publishers and get the return in reasonable time.
  2. The Digital Publisher invests in digital publishing models. Typically, a leading market position either in reach or in quality is the basis for relatively high digital revenues (either in advertising or paid revenues). This is the starting point for investing in complementary business models, mostly digital marketplaces or thematic verticals.
  3. The Digital Entrepreneur goes far beyond publishing and invests in e-commerce or transaction business models. In most cases, these investments are not integrated in the publishing organization. The shareholdings are bundled in a digital unit separated from the core business as there are few operational synergies.
  4. The Service Champion is a master of operational excellence in its service units. Typical starting points are printing facilities, logistic capacities and marketing services. After getting first external clients, the Service Champion converts its service units into profit centres which position themselves independently in the market.
  5. The Diversifier rather invests outside the publishing business. It creates a business portfolio in which newspaper publishing is just one part of many. Often, the Diversifier eventually sells its publishing business to the Consolidator when it finds that growth perspectives seem better in the other parts of its portfolio.

Empirical evidence shows that publishers can combine a maximum of two of the fundamental growth strategy patterns for their individual strategy. But that is it. If you try to pursue more than two strategy patterns at the same time, chances are high that you become unfocused. And focus is the starting point of success.

Successful publishers pursue more than a good strategy

The good part of the story is that there is more than one way to grow. The bad part: It takes more than a strategy. SCHICKLER has found a distinctive attribute that separates the growing and successful publishers from the rest: Profitability in the core (publishing) business.

The reason is simple: all growth strategies need a high amount of financial resources compared to the typical investment levels of a publisher. This money needs to come out of the operational business. Consequently, operational excellence is a fundamental basis for future growth.

Successful publishers are aware of this and include the future investment needs into their strategic planning. Even in declining markets, future earnings must enable a reasonable return for the shareholders plus substantial investments in growth.

We have found that the core profitability of growing publishers is up to 75-100% higher than the average in the market. This operational excellence is not only the source for financial power but it also automatically leads to growth initiatives because the organization is fitter and more ambitious. Or, in other words (freely adapted from Oscar Wilde): Have the simplest strategy. Always be satisfied with the best.

Rolf-Dieter Lafrenz has been Managing Partner at SCHICKLER for over 15 years now. In this time he continuously advanced and expanded the activities of SCHICKLER, which partners with WAN-IFRA Global Advisory, in the media sector. Having successfully managed and accomplished more than 200 consultancy projects, he is a sought-after expert for a broad range of media-related topics. One focus of his expertise is in the fields of strategy and ad sales. SCHICKLER Management Consultants’ experience reaches from print to online, from radio to television and from mass media to specialized publishers as well as corporate media. From generating strategies to benchmarking for publishers, from editorial topics to sales optimization, from project management to interim management, the company covers a range of topics today.

Author

WAN-IFRA External Contributor

Date

2016-04-12 10:53

Author information


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