Trends in Innovation at Media Publishers — part 2
Innovation methods, business models and diversifying of revenue streams. Green media and sustainability
By Nikolaj Christensen, Department of Strategic Development, Danish School of Media and Journalism, DMJX
Like in any other business the media business model has been disrupted in recent years by both technological changes, changes in user habits and by globalization of the content and advertorial market. Most medias are struggling to reinvent themselves and their business models. New media players are entering the marketplace with new products and skills.
Recently a group of representatives from media companies, media labs and academics were gathered in Copenhagen for the fifth Media Lab Days, to share insights about current trends and ways to navigate them. The event was arranged by Wan-Ifra (World Association for News Publishers) and The Danish School of Media and Journalism.
You can read Part 1 of the article here
In this article we will take a look at some of the trends, which were discussed during the two days event.
McKinsey’s Three Horizons
When looking at innovation methods and ambitions two things keeps popping up: the need for diversifying revenue streams and the level and radicality of innovation. Concerning the latter one McKinsey’s Three Horizons of Growth are often used as a reference. Shortly presented the three horizons are: 1. Maintaining core business, 2. Nurturing emerging business, 3. Create new business.
Lately McKinsey’s model has been challenged in an article in Harvard Business Review. The principle of the model still makes sense, but the argument for a revision of it is that the pace of innovation and changes has increased dramatically, which might indicate that innovation is taking place more simultaneously than in succession.
Making innovation work at The Globe and Mail
The Globe and Mail is a Canadian Publisher that uses McKinseys Three Horizons as a reference for innovation. It has a long history of more than 175 years, but it is still a very strong mission driven organization. As Gordon Edall puts it, “…every day the people there go to work with the idea that we exist to build a better Canada”. Gordon is Head of Lab at The Globe and Mail and on the Media Lab Days he gave an insight to the structure of and results from their Media Lab.
Innovation work is mainly centered around trying out new technologies and integrating them into core business. So a lot of work is focused on data, VR, machine learning, but also on making new partnerships and bringing new people in. At the Globe and Mail everyone is invited to come up with ideas for Lab work and if an idea is accepted as having a potential the persons involved will be given 90 days to try it out as well as a credit card with a 1.000 CA$ to come up with some sort of proof of concept.
Some really good ideas came out. Some that saved us money, some that made us money - Gordon Edall, The Globe and Mail
“Not all ideas turn out as a new business models, but they all add to the learning of the organization and are seen as such.”
Maintaining this simple scheme is both cheap and easy to scale if needed. In the beginning the Lab itself had no budget and no one worked permanently there. Hence, the Lab only existed when ideas were proposed and send on to be developed on. Now Gordon Edall has the task of keeping the stream of new ideas going .
Gordon Edall has developed The Lab and its activities in Three steps
1. He started out by being the eyes and ears in small meetings and talks around the organization. He was listening for whenever someone was wondering why something had not been tried out, changed or done. So he listened for statements like “…it would be great if…”, “…can’t we just…” or “…why the f*** do we…”.
2. In the next step, he has recruited people with the potential of being change makers. He pulls the ideas out of them and match them with the skillsets for doing what they think is so important. Therefore, a team will mostly be composed of what Gordon Edall calls “a thinker of thoughts” a “doer of things” and a “finder of money”.
3. Some really good ideas has come out. Some that saved The Globe and Mail money, some that made money. One of the ideas generated a VR project in a joint venture partnership with Samsung at the documentary festival Hot Dox.
“But what we really want to do with this innovation program is we want to learn how to be a different organization. We need more people to think like entrepreneurs and in innovator fashion.” For that purpose the Globe and Mail is using Adobes open source innovation tool kit Kick box to help people organize their process and distinguish between a good and a bad idea.
So over time part of the product is actually the people of the organization as well as concrete new project ideas. At The Globe and Mail they have had several successful projects on horizon 1 level doing incremental innovation, optimizing processes and enhancing quality in both products and processes. On horizon level 2 new activities in the event market field developed to become a really important alternative revenue stream. Now a lot of effort is put in to horizon 3 projects on developing data pipelines and machine learning projects, which will be commercialized outside the organization.
Innovation initiatives at Der Spiegel
At the german news organisation Der Spiegel the innovation work is done both on the inside and the outside of the organization. The aim is both to establish an innovation culture in the organization and to create an innovation network reaching out. The work with the surroundings is oriented towards university cooperation and the startup company scene. The hope is to inspire each other, doing prototyping with the universities and starting an accelerator program.
You need allies to get the innovation started — Swante Fischenbeck, Der Spiegel
Recently a Media Lab has been established and a new process has been put in to work. In a first brainstorm involving a broad group of people from the organization and looking at both the strategy and ongoing projects three topics were chosen:
· Snackable content
The following work inside the organization has been centered around the media lab with a team of six people with diverse skills from trend to platform knowledge, multimedia and sales. A lot of energy is put in to trend and market surveys, which leads to concrete projects. To choose among the potential projects the focus is on purpose, scope and stakeholders. The project starts with a short explorer phase after which user interviews and observation will be done. In the later phase the team will be expanded with UX and Tech experts. On the way the team is looking for consumer insights but also for internal experiences with the topic among the whole staff of Der Spiegel.
Swante Fischenbeck, who is part of the innovation management of the lab, see several take-aways so far.
- The support by the top management is important, but no magic bullet in itself.
- On the other hand, the middle management and the people in charge of the resources and their engagement are the most critically factors.
- You need allies to get the innovation started, which is why Der Spiegel started growing a community of supporters of innovation projects. You have to convince people that innovation methods and tools and working differently is not something that changes everything, but just another way of doing things that really helps.
- It’s hard to get everyone on board. Some won’t like what you are doing, but lighthouse projects are really useful to attract people and frame the story of innovation.
For Swante Fischenbeck and Der Spiegel the reference for everyone working with innovation is to “think and act — step by step”, which encompass the innovation philosophy at Der Spiegel of going slowly but steady.
With a growing need for everyone to act responsible in relation to general sustainability and the UN Sustainable Development Goals it will become mandatory for media companies to consider the carbon foot print of their activities. This includes a closer look at the production chain, partnerships, publishing practice and user habits. The term Green Media is rather new, but was used by the president of the European Commission Ursula von der Leyen in a recent presentation on her Green Deal ambition in Helsinki.
A big part of the energy used in consumption comes from handling of data and streaming.
Gordon Perkins, professor at The Norwegian University of Science and Technology, who is studying the field, thinks that media publishers will have to reconsider some of their strategies of pushing content towards the users. For example, the automatic streaming of video when opening websites. We are not given the choice of not having streaming on the website, but Gordon Perkins think that it “might be a more responsible approach, because these videos are sort of increasing my carbon footprint without my knowledge, without my consent.” So maybe in the future consumers will demand the possibility of for example less streaming and lower resolution.
In Denmark JP/Politiken has recently announced that they want to be CO2 neutral in 2025. Their CSR report for 2019 tells that they have deduced 15.000 tons CO2 last year. They are currently looking at all activities to see how the number can be reduced, especially the physical distribution of newspapers where the use of electric vehicles will be increased. Part of the reduction will come from climate compensation projects chosen together with the consultancy company Cowi.
According to a newly published report from Ericsson Industry Lab the carbon footprint from the ICT (Information, Communication and Technology) has been stable around 1,4% of the global emission for ten years. In reality this means an increase of emission. The report from Ericsson, which has been analyzing the whole production life cycle, concludes that it should be possible to reduce emission with 80% compared to today if all energy consumption comes from renewable energy.
But even when optimized, the use of internet and streaming is still an energy consumer factor. which is closely connected to the choice of the individual. So we might very well have discussions in the near future of consumer responsibility in that area like the ones we have in relation to meat consumption and traveling by airplane.
You can read Part 1 of the article here