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Business models in media industry 2nd part

Business models in media industry 2nd part

This is continuation of the article business models in media industry with presenting the next 6 models.

8. Agency Business Model

The model presumes creating internal agency in the media company. It is also one of the fastest growing sources of revenue for such companies. The expertise inside media companies is looking like an agency to more and more brands around the world. Many have given up trying to create branded content and media campaigns on their own, or even with traditional legacy agencies. As a result, many media companies that have created in-house agencies are seeing results that have come to represent from 5% to 60% of total revenue!

Here is the list of factors that make a successful an in-house agency?

  • Knowledge of a desired audience;
  • Knowledge of the brand’s customers;
  • Access to and a relationship with the desired audience;
  • An audience database second to none;
  • Exquisite storytellers. Expert videographers;
  • Media tech expertise;
  • Proven, sophisticated design capabilities;
  • Multimedia, multi-platform, multi-channel expertise;
  • Proven marketing expertise;
  • A nuanced understanding of how to build sophisticated multi-platform campaigns.

And according to the sample used, the model looks like this:

  • Client focus: B2B
  • Income collection: Direct
  • Income potential: Medium
  • Transaction costs: High
  • Profit potential: Medium
  • Requirements: Creative teams within the organisation. Marketing intelligence competencies.
  • Risks: Increasing competition from both traditional and upstart advertising and marketing agencies

9. Brand Licensing Business Model

This model presumes robust brand extension strategies of media companies. Such model is vital to maintaining relevance in today’s hyper-competitive marketplace. To a degree, brand extendibility represents the most logical way to achieve profitable brand growth, however, many companies struggle with how far to stretch, where specifically to extend, and how to ensure success. Manufacturers are increasingly willing to partner with publishers to make branded products because of then-digital properties (i.e., compelling content and robust social media accounts). Additionally, publishers also possess the first party data of millions of customers. Brand extension strategies can spread the impact of a company into new areas and products, reinforce the credibility of this company, help it connect with new audiences, and even strengthen its image around the world.

  • Client focus: B2C & B2B
  • Income collection: Direct
  • Income potential: Medium
  • Transaction costs: Low
  • Profit potential: Medium
  • Requirements: Strong and valued brands
  • Risks: Core brand deterioration due to poor licensing choices

10. IT Provider Business Model

There are several media companies that like the Washington Post sell a content management platform. The most well-known implementation of this model is of the WordPress, whose parent company Automatic raised $300 million from Salesforce. Being an IT provider is to be a member of a very exclusive club. Only the largest, best-funded, and most established publishers can create and then sell or license technologies and, as a result, tech sales and licensing was the least common revenue source for publishers in a Digiday 2018 survey. Most publishers lack the resources to build tech products because it takes lots of expensive talent and lots of time to build market-ready technologies. It also takes big investments, like Amazon CEO Jeff Bezos’s purchase of The Washington Post, which then built Arc and Zeus, its content management platform and advertising platforms, to license to other publishers.

  • Client focus: B2B
  • Income collection: Direct
  • Income potential: Medium
  • Transaction costs: High
  • Profit potential: High
  • Requirements: An IT team that has already created (or is capable of creating) unique media software and working comfortably with clients
  • Risks: Substantial investments to hire expensive IT talent, and creating and maintaining the software

11. Investor Business Model

Most media companies’ resources are either insufficient to be making big investments or are tied up in reinvesting in the company itself.

But some of the legacy media companies still have the wherewithal to make substantial investments in a wide variety of companies in a wide variety of industries. Usually, however, the investments are made with an eye either toward gaining a foothold in a new area of media or in a promising industry related to the media company’s expertise. But for those who do invest, the results can be both financially lucrative and immensely beneficial for both the media mission and the business mission of the company. Investing provides perhaps a potential new source of revenue and almost certainly unique insights into new technologies, new markets, and new (and potentially competitive) businesses. That said, they can also tank, resulting in the loss of all or most of the money invested. Proceed with caution.

  • Client focus: B2B
  • Income collection: Intermediated
  • Income potential: Medium
  • Transaction costs: Medium
  • Profit potential: High
  • Requirements: Unique (and expensive) investment talent with deep understanding of the media start-up world and the start-up world within your niches
  • Risks: There is no guarantees. You risk losing int all. The potential gains are in insights into the cutting edge of the industry and profits

12. Educator Business Model

This model sounds a lot like a subset of the Events business model but with an educational focus that are much more substantial and require a very different approach in comparison with consumer-oriented festivals, awards dinners, travel excursions, bridal expositions, beach parties, and such that make up the bulk of media company events. One example are the masterclasses the media companies organize. Such classes and workshops tend to have a higher price point than our other events, because of the educational content provided. Another difference is that such a masterclass could be last some hours, one week or even many weeks. Good example are the Guardian Masterclass series that included diverse programme of courses across a variety of disciplines, including journalism, creative writing, photography and design, film and digital media, music and cultural appreciation, social media and data visualisation, business skills and wellbeing.

  • Client focus: B2C & B2B
  • Income collection: Direct
  • Income potential: Medium
  • Transaction costs: Medium
  • Profit potential: High
  • Requirements: Internal expertise or access to external expertise; a reputation for expertise in your niche(s); an audience looking for expand their knowledge base
  • Risks: Poor execution; lack of expertise; poor reputation; courses that miss the target audience’s interest

13. Nostalgia Business Model

The last model is based on income from selling archived materials. Although such a revenue will not replace the print advertising income or compete with revenue from events established from years media companies can use their archives as assets that they have already paid for, so aside from handling, they can make clear profit from selling their archives. There is a market for old photos and collections of previously published material in themed print and e-book collections. In The New York Times’ Innovation report, one of the big missed opportunities is called out is the use of its archived content. One of the big advantages legacy publishers have over digital upstarts is access to years of high-quality content — content that can be resurfaced or repackaged and sold to both readers and advertisers.

  • Client focus: B2C
  • Income collection: Direct
  • Income potential: Low
  • Transaction costs: Low
  • Profit potential: Medium
  • Requirements: An easy accessed database of old photos; stories, pages/covers easily reproduced. Someone/team assigned to handling sales/fulfilment
  • Risks: Cost of handling exceeds profits due to inefficiencies, insufficient demand

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