1. RedefineRs:
CaptuRing Media
www.activate.com
gRowtH dollaRs
2. IN THE NEXT 3 YEARS
325 BILLION
GROWTH DOLLARS
WILL GO TO THOSE WHO
REDEFINE THE MEDIA
BUSINESS
Source: Activate analysis and estimates; Veronis Suhler, 9/10; PWC, 6/10;
eMarketer, 2011; Yankee, 2011; Analyst Reports & Company Data, 2010/2011
2
7. THIS PRESENTATION:
HOW MEDIA COMPANIES CAN BuILD NEW
GROWTH BuSINESSES
THE REDEFINERS
A new generation of upstarts has an advantage in winning media growth dollars, scaling quickly
with new cheap technologies. To compete, media companies need to become redefiners themselves.
HACK THE ORGANIZATION
Media companies will create more value from building, rather than acquiring, emerging
digital businesses. ‘Hacking’ – creating a virtual startup outside the organization – enables
a build-first strategy.
AN UNFAIR ADVANTAGE
Companies that want to gain an advantage in creating the next wave of media businesses must
face the challenge of combining content and technology to build new user experiences.
REDEFINING STRATEGY
Strategies must address the fact that there will be multiple business models, audiences,
devices and platforms. Companies need to determine how to win as their businesses
are being redefined.
7
8. THE hack the AN UNFAIR REDEFINING
REDEFINERS organization ADVANTAGE STRATEGY
8
9. WHO ARE THE REDEFINERS?
Businesses Born at the
intersection of tech and media
driven By human experience first,
Business model follows
will Be the ones to win the Battle
for growth dollars
9
10. REDEFINERS ARE FREE FROM THE
LIABILITy OF LEGACy
UnbUrdened by legacy constraints
tHey can tHrive even witH lower margins
TradiTional righTs
Distribution Deals
ContraCts
Production and
editorial models
10
12. REDEFINERS:
SuCCESSORS TO DISRuPTORS
DISRUPTORS REDEFINERS
Driven by technology NATIVE TO THE WEB AND APPS ERA
Focus on targeting the periphery FOCuS ON BETTER SERVING
oF incumbent companies’ business INCuMBENTS’ CORE CuSTOMERS
removes the value or revenues From
an establisheD market DRIVEN By A BETTER ExPERIENCE
result is chaos RESuLT IS A NEW BuSINESS
12
15. expect hits from nowhere
ONE GAME PROGRAMMER WORKING
ALONE GENERATES 2 MILLION PAYING
DOWNLOADS AND OVER $30 MILLION IN
REVENUES IN LESS THAN TWO YEARS.
Source: Company data, 4/11
15
16. expect hits from nowhere
140 million downloads of the
game in 18 months, creating
characters that spawn
merchandise & films.
Note: Paid & free; includes
iOS and other platforms
Source: Company data, 3/11
16
17. expect hits from nowhere
Pioneered location-based aPPs,
reaching 500 mm check-ins
from 8 mm users
in just over two years.
Source: Company data, 3/11
17
18. expect hits from nowhere
Instagram
iPhone APP showing PotentiAl for
hyPer-growth by reAching
1MM users in 8 weeks And
3MM in 9 Months.
Source: Company data, 4/11
18
19. expect hits from nowhere
Most popular Music subscription
service, with over 10% of 10 MM
users choosing to pay freeMiuM
subscription.
Note: Based off total number of free users
Source: Activate analysis of company and
industry data, 2010/2011
19
20. expect hits from nowhere
25MM USERS, STANDING OFF
COMPETITION FROM AMAZON,
GOOGLE AND MICROSOFT.
Note: Grew from 4MM users in 2010
Source: Company data, 4/11
20
31. BuILDING A NEW BuSINESS MEANS
HACkING yOuR
ORGANIzATION
31
32. HOW TO
HACk yOuR ORGANIzATION
Work outside of the media company org chart
Liberate team from the Legacy business
compLiance and constraints
aLLoW the team to Work independentLy
focus on buiLding neW (vs protecting the oLd)
32
34. BuILD A VIRTuAL STARTuP:
USE TODAY’S ASSETS AS THE SEED FOR TOMORROW’S NEW BUSINESS
THINK ABOUT YOUR GOALS FIRST, AND RISKS SECOND
PUT A STRONG LEADER IN CHARGE, NOT A COMMITTEE
OPTIMIZE FOR GROWTH, NOT SHORT TERM MARGINS
DRAW THE BEST TALENTS FROM WHEREVER YOU CAN FIND THEM
34
35. THE HEIST FILM STARTuP MODEL
ASSEMBLE THE BEST TEAM FOR THE JOB
35
38. &
ACTING AS AN INDEPENDENT NIMBLE
VIDEO STARTUP HELPED HULU ATTRACT
A WEB SCALE AUDIENCE INCLUDING
1 MM PAyING USERS.
Source: Company data, 4/11
38
39. Conde nast worked with aCtivate
to assemble a virtual startup to
build the first-ever massively
multiplayer magazine.
39
40. &
UniqUe mUlti-media celebrity-news bUsiness:
television show, app and website; watched by
2.1m tv hoUseholds nightly and 16m UniqUe
visitors per month.
Note: TV show ratings and website traffic
Source: The Nielsen Company, 2010/2011
40
41. THE ANDROID TEAM LAUNCHED LIKE A STARTUP
WITHIN GOOGLE, GROWING FROM NO MARKET
PRESENCE INTO THE MOST POPULAR SMARTPHONE
PLATFORM IN A FIERCELY COMPETITIVE MARKET.
Note: Based on share of U.S. smartphone subscribers as of January 2011
Source: Comscore, 3/11; The Nielsen Company, 3/11
41
43. DON’T INVENT TECHNOLOGy
CMS database real-time messaging search
ONCE-COstly tEChNOlOgy CapabilitiEs arE NOw availablE as frEE Or OpEN sOurCE
iNvEst iN thE parts that arE uNiquE tO yOur busiNEss
yOu CaN makE a grEat ExpEriENCE by CONNECtiNg thEsE piECEs
tEChNOlOgy EvOlutiON is ONly gOiNg tO gEt fastEr
43
51. quALITy CONTENT
can make it cheaper to BuILD
an audience
Buy
than to
one.
51
52. quALITy MATTERS:
CONTENT FARM SuBSIDIES ARE DEAD
Factory Farms are as unhealthy For content
as they are For Food
Businesses which treat users like cattle
are vulneraBle to Being redeFined By those
creating For actual humans, instead oF
search engine roBots
52
53. quALITy DEMANDS
A NATIVE ExPERIENCE ON EVERy DEVICE
Fully exploit the Features, Formats and experiences
oF each platForm
don’t create
shovelware
53
54. AND MORE DEVICES MATTER
No platform wiNNer takes all: there will Never be aNother wiNdows
it’s Not just oNe persoN, oNe device
plaN for dozeNs of platforms aNd billioNs of devices today, aNd a New
successful device every moNth
platform promiscuity is a virtue
54
61. WHy IS EVERyONE TALkING
ABOuT “PIVOT”?
RedefineRs know they need to change diRection when new
oppoRtunities demand it
media gRowth RequiRes continually aligning the business
to the customeR
to gRow, a media business can piVot by changing audiences,
pRoducts, content, functionality, inteRnational maRkets
oR foRmats
61
62. Bringing
The
PIVOT TO BIG BuSINESSES
from magazine publisher to continuity marketer for books,
video, events in health and wellness
from giant screen documentaries at museum theaters to
mainstream blockbuster 2d/3d films in multiplexes
from mailing dvds to streaming
from “the point” group organizing to group buying
62
63. GROW A
WEB-SCALE
AuDIENCE
100 million
web: success The Apps business is fundAmenTAlly
differenT from The Web business
Apps don’T (yeT!) go virAl The
WAy WebsiTes do
App Audiences Are A differenT
scAle, requiring A differenT kind
of AdverTising business
1 million
apps: success
63
64. uSE APIs AS MEDIA BIz DEV 2.0
Facebook GooGle’s TwiTTer AMAZON NEEDS
is not always neither Good followers are noT TO BE NAVIGATED
your Friend nor evil a digiTal sTraTegy CAREFULLY
PartnershiPs should start from what PeoPle want, not what comPanies want
use social networks as a Platform
don’t just send your biz devs to the meeting, also send your develoPers
64
65. GIVE PEOPLE A REASON TO PAy
Most new successes will be in the freeMiuM Model
custoMers care what the price is, not what your costs are
$$$$$$ assuMe that pricing will evolve as an iterative conversation
with custoMers
65
66. MAkE ADVERTISING ACCOuNTABILITy
AN OPPORTuNITy
Focus on measurability, not cPc resPonse rates
Don’t conFuse social meDia metrics with real
aDvertising metrics
strategy must anticiPate a Future where every
imPression can be connecteD to real
consumer behavior
66
68. TO CAPTuRE MEDIA GROWTH
DOLLARS, BECOME A REDEFINER
HACK THE ORGANIZATION
BUILD NEW GROWTH BUSINESSES AS VIRTUAL STARTUPS
ANTICIPATE HITS FROM NOWHERE
PIVOT THE STRATEGY TO EXPLOIT NEW OPPORTUNITIES
USE CONTENT AS AN UNFAIR ADVANTAGE
CREATE ENGAGING NATIVE EXPERIENCES FOR EVERY AUDIENCE
68