RedefineRs:                   CaptuRing Mediawww.activate.com                   gRowtH dollaRs
IN THE NEXT 3 YEARS325 BILLIONGROWTH DOLLARSWILL GO TO THOSE WHO                       REDEFINE   THE MEDIA               ...
MEDIA COMPANIES HAVE A CHANCE        REDEFINERSTO BE THE                                3
growth fromExISTINGmedia businesses                   MEDIA                   GROWTHgrowth from        DOLLARS    NEWmedia...
NEW BuSINESS     GROWTH MATTERS MOST                $325 BILLION MEDIA GROWTH DOLLARS                                     ...
WHO WILL           WIN?   6
THIS PRESENTATION:HOW MEDIA COMPANIES CAN BuILD NEW                    GROWTH BuSINESSESTHE REDEFINERSA new generation of ...
THE          hack the       AN UNFAIR   REDEFININGREDEFINERS   organization   ADVANTAGE   STRATEGY                        ...
WHO ARE THE   REDEFINERS?         Businesses Born at the         intersection of tech and media         driven By human ex...
REDEFINERS ARE FREE FROM THE   LIABILITy OF LEGACy   UnbUrdened by legacy constraints   tHey can tHrive even witH lower ma...
Today   redefiner               11
REDEFINERS:SuCCESSORS TO DISRuPTORSDISRUPTORS                           REDEFINERSDriven by technology                 NAT...
WHO WILL REDEFINEyOuR BuSINESS?           IF IT’S NOT yOu                             13
ExPECT HITSFROM NOWHERE               14
expect hits from nowhere                 ONE GAME PROGRAMMER WORKING                 ALONE GENERATES 2 MILLION PAYING     ...
expect hits from nowhere                       140 million downloads of the                       game in 18 months, creat...
expect hits from nowhere                       Pioneered location-based aPPs,                       reaching 500 mm check-...
expect hits from nowhere                 Instagram                           iPhone APP showing PotentiAl for             ...
expect hits from nowhere             Most popular Music subscription             service, with over 10% of 10 MM          ...
expect hits from nowhere                           25MM USERS, STANDING OFF                           COMPETITION FROM AMA...
expect hits from nowhereHITS yET TO COME                           21
REDEFINERS DON’T WANTALL THE CuSTOMERS,they want theMOST VALuABLE           Ones.                                22
Technology Doesn’T sTopWHEN SOMEONEGETS        RICH                          23
TECHNOLOGy DOESN’T STOPWHEN SOMEONE GETS RICH                          24
the          HACk THE       AN UNFAIR   REDEFININGredefiners   ORGANIzATION   ADVANTAGE   STRATEGY                        ...
EVERyONE’S INNOVATION quESTIONBuy OR BuILD?                    26
yOu CAN      Buy TALENT,   But You     can’t   Buy INNOVATION.(And mediA compAnies need To AVoidsuckinG The life ouT of Ac...
THE RARE ACquISITIONS THAT HAVE THRIVED WEREGIVEN SPACE TO INNOVATE              ™                                        ...
EVERyONE’S INNOVATION quESTIONBuy OR BuILD?                    29
BuILDING yIELDS  GROWTH DOLLARS                   30
BuILDING A NEW BuSINESS MEANSHACkING yOuRORGANIzATION                                31
HOW TOHACk yOuR ORGANIzATION   Work outside of the media company org chart   Liberate team from the Legacy business   comp...
HACkING MEANS BuILDING AVIRTuAL STARTuP                           33
BuILD A VIRTuAL STARTuP: USE TODAY’S ASSETS AS THE SEED FOR TOMORROW’S NEW BUSINESS THINK ABOUT YOUR GOALS FIRST, AND RISK...
THE HEIST FILM STARTuP MODELASSEMBLE THE BEST TEAM FOR THE JOB                                     35
HACKING THE ORGANIZATION ENABLES ABuILD-FIRST                      STRATEGy                                            36
HACkINGWORkS          37
&    ACTING AS AN INDEPENDENT NIMBLE    VIDEO STARTUP HELPED HULU ATTRACT    A WEB SCALE AUDIENCE INCLUDING    1 MM PAyING...
Conde nast worked with aCtivateto assemble a virtual startup tobuild the first-ever massivelymultiplayer magazine.        ...
&    UniqUe mUlti-media celebrity-news bUsiness:    television show, app and website; watched by    2.1m tv hoUseholds nig...
THE ANDROID TEAM LAUNCHED LIKE A STARTUPWITHIN GOOGLE, GROWING FROM NO MARKETPRESENCE INTO THE MOST POPULAR SMARTPHONEPLAT...
yOu’RE A   MEDIA COMPANy  NOT A           DATA CENTER                           42
DON’T INVENT TECHNOLOGy  CMS                database            real-time messaging        searchONCE-COstly tEChNOlOgy Ca...
hacked organizationsTHRIVE                 AS TECHNOLOGy                       EVOLVES                                    ...
LEARNING FROM      REDEFINERS      UX FIRST      LOW COST      LAUNCH + LEARN      TAKE FROM THE BEST IDEAS      FAST IS B...
the          hack the       AN uNFAIR   REDEFININGredefiners   organization   ADVANTAGE   STRATEGY                        ...
EVERy STARTuP WISHES THEyHAD GREAT CONTENT                            47
quALITy CONTENTis an        uNFAIR ADVANTAGE   48
CONTENT COMBINED WITH TECHDELIVERS NEW ExPERIENCES                             49
over timeTECH BECOMES A COMMODITy,CONTENT DOES NOT.                            50
quALITy CONTENT can make it cheaper to   BuILD                          an audience                            Buy        ...
quALITy MATTERS:CONTENT FARM SuBSIDIES ARE DEADFactory Farms are as unhealthy For contentas they are For FoodBusinesses wh...
quALITy DEMANDSA NATIVE ExPERIENCE ON EVERy DEVICEFully exploit the Features, Formats and experiencesoF each platFormdon’t...
AND MORE DEVICES MATTERNo platform wiNNer takes all: there will Never be aNother wiNdowsit’s Not just oNe persoN, oNe devi...
REDEFINED MEDIA COMPANIESDON’T JuST MAkE MEDIA,THEy HELP PEOPLECREATE MEDIA                            55
yOuR FINISHED PRODuCT IS THEIRRAW MATERIAL     The momenT qualiTy media is                 released To The world isn’T The...
MASSES MANuFACTuRELET THE WON’T JUST SHARE YOUR CONTENT, THEY WILLTHE AUDIENCEREMIX IT AND TURN IT INTO PHYSICAL GOODS.   ...
the          hack the       AN UNFAIR   REDEFININGredefiners   organization   ADVANTAGE   STRATEGy                        ...
it’s not a             DIGITAL STRATEGy                 it’s a                          STRATEGy                          ...
STARTuPS OVERuSETHE WORDPIVOT  BUT IT’S STILL AN  IMPORTANT IDEA FOR  MEDIA COMPANIES                       60
WHy IS EVERyONE TALkINGABOuT “PIVOT”?       RedefineRs know they need to change diRection when new       oppoRtunities dem...
Bringing     The           PIVOT TO BIG BuSINESSES             from magazine publisher to continuity marketer for books,  ...
GROW A                   WEB-SCALE                   AuDIENCE  100 million    web: success   The Apps business is fundAmen...
uSE APIs AS MEDIA BIz DEV 2.0Facebook           GooGle’s            TwiTTer                AMAZON NEEDSis not always      ...
GIVE PEOPLE A REASON TO PAy         Most new successes will be in the freeMiuM Model         custoMers care what the price...
MAkE ADVERTISING ACCOuNTABILITyAN OPPORTuNITy  Focus on measurability, not cPc resPonse rates  Don’t conFuse social meDia ...
REDEFINERSWILL    WIN.             67
TO CAPTuRE MEDIA GROWTHDOLLARS, BECOME A REDEFINER      HACK THE ORGANIZATION      BUILD NEW GROWTH BUSINESSES AS VIRTUAL ...
THE STRATEGy CONSuLTINGFIRM REDEFINEDHelp our clients drive growtH:power new revenues, beat competitors, develop newbusine...
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Redefiners: Capturing Media Growth Dollars

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Redefiners: Capturing Media Growth Dollars

  1. RedefineRs: CaptuRing Mediawww.activate.com gRowtH dollaRs
  2. IN THE NEXT 3 YEARS325 BILLIONGROWTH DOLLARSWILL GO TO THOSE WHO REDEFINE THE MEDIA BUSINESS 2
  3. MEDIA COMPANIES HAVE A CHANCE REDEFINERSTO BE THE 3
  4. growth fromExISTINGmedia businesses MEDIA GROWTHgrowth from DOLLARS NEWmedia businesses 4
  5. NEW BuSINESS GROWTH MATTERS MOST $325 BILLION MEDIA GROWTH DOLLARS $212 billion $1.4 trillion new business growth [15% p.a.] $113 billion existing business growth$1.1 trillion [3% p.a.] 2010 2014 5
  6. WHO WILL WIN? 6
  7. THIS PRESENTATION:HOW MEDIA COMPANIES CAN BuILD NEW GROWTH BuSINESSESTHE REDEFINERSA new generation of upstarts has an advantage in winning media growth dollars, scaling quicklywith new cheap technologies. To compete, media companies need to become redefiners themselves.HACK THE ORGANIZATIONMedia companies will create more value from building, rather than acquiring, emergingdigital businesses. ‘Hacking’ – creating a virtual startup outside the organization – enablesa build-first strategy.AN UNFAIR ADVANTAGECompanies that want to gain an advantage in creating the next wave of media businesses mustface the challenge of combining content and technology to build new user experiences.REDEFINING STRATEGYStrategies must address the fact that there will be multiple business models, audiences,devices and platforms. Companies need to determine how to win as their businessesare being redefined. 7
  8. THE hack the AN UNFAIR REDEFININGREDEFINERS 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 righTsDistribution Deals ContraCts Production and editorial models 10
  11. Today redefiner 11
  12. REDEFINERS:SuCCESSORS TO DISRuPTORSDISRUPTORS REDEFINERSDriven by technology NATIVE TO THE WEB AND APPS ERAFocus on targeting the periphery FOCuS ON BETTER SERVINGoF incumbent companies’ business INCuMBENTS’ CORE CuSTOMERSremoves the value or revenues Froman establisheD market DRIVEN By A BETTER ExPERIENCEresult is chaos RESuLT IS A NEW BuSINESS 12
  13. WHO WILL REDEFINEyOuR BuSINESS? IF IT’S NOT yOu 13
  14. ExPECT HITSFROM NOWHERE 14
  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. 15
  16. expect hits from nowhere 140 million downloads of the game in 18 months, creating characters that spawn merchandise & films. 16
  17. expect hits from nowhere Pioneered location-based aPPs, reaching 500 mm check-ins from 8 mm users in just over two years. 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. 18
  19. expect hits from nowhere Most popular Music subscription service, with over 10% of 10 MM users choosing to pay freeMiuM subscription. 19
  20. expect hits from nowhere 25MM USERS, STANDING OFF COMPETITION FROM AMAZON, GOOGLE AND MICROSOFT. 20
  21. expect hits from nowhereHITS yET TO COME 21
  22. REDEFINERS DON’T WANTALL THE CuSTOMERS,they want theMOST VALuABLE Ones. 22
  23. Technology Doesn’T sTopWHEN SOMEONEGETS RICH 23
  24. TECHNOLOGy DOESN’T STOPWHEN SOMEONE GETS RICH 24
  25. the HACk THE AN UNFAIR REDEFININGredefiners ORGANIzATION ADVANTAGE STRATEGY 25
  26. EVERyONE’S INNOVATION quESTIONBuy OR BuILD? 26
  27. yOu CAN Buy TALENT, But You can’t Buy INNOVATION.(And mediA compAnies need To AVoidsuckinG The life ouT of Acquired sTArTups) 27
  28. THE RARE ACquISITIONS THAT HAVE THRIVED WEREGIVEN SPACE TO INNOVATE ™ 28
  29. EVERyONE’S INNOVATION quESTIONBuy OR BuILD? 29
  30. BuILDING yIELDS GROWTH DOLLARS 30
  31. BuILDING A NEW BuSINESS MEANSHACkING yOuRORGANIzATION 31
  32. HOW TOHACk 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
  33. HACkING MEANS BuILDING AVIRTuAL STARTuP 33
  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 MODELASSEMBLE THE BEST TEAM FOR THE JOB 35
  36. HACKING THE ORGANIZATION ENABLES ABuILD-FIRST STRATEGy 36
  37. HACkINGWORkS 37
  38. & ACTING AS AN INDEPENDENT NIMBLE VIDEO STARTUP HELPED HULU ATTRACT A WEB SCALE AUDIENCE INCLUDING 1 MM PAyING USERS. 38
  39. Conde nast worked with aCtivateto assemble a virtual startup tobuild the first-ever massivelymultiplayer 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. 40
  41. THE ANDROID TEAM LAUNCHED LIKE A STARTUPWITHIN GOOGLE, GROWING FROM NO MARKETPRESENCE INTO THE MOST POPULAR SMARTPHONEPLATFORM IN A FIERCELY COMPETITIVE MARKET. 41
  42. yOu’RE A MEDIA COMPANy NOT A DATA CENTER 42
  43. DON’T INVENT TECHNOLOGy CMS database real-time messaging searchONCE-COstly tEChNOlOgy CapabilitiEs arE NOw availablE as frEE Or OpEN sOurCEiNvEst iN thE parts that arE uNiquE tO yOur busiNEssyOu CaN makE a grEat ExpEriENCE by CONNECtiNg thEsE piECEstEChNOlOgy EvOlutiON is ONly gOiNg tO gEt fastEr 43
  44. hacked organizationsTHRIVE AS TECHNOLOGy EVOLVES 44
  45. LEARNING FROM REDEFINERS UX FIRST LOW COST LAUNCH + LEARN TAKE FROM THE BEST IDEAS FAST IS BETTER THAN PERFECT 45
  46. the hack the AN uNFAIR REDEFININGredefiners organization ADVANTAGE STRATEGY 46
  47. EVERy STARTuP WISHES THEyHAD GREAT CONTENT 47
  48. quALITy CONTENTis an uNFAIR ADVANTAGE 48
  49. CONTENT COMBINED WITH TECHDELIVERS NEW ExPERIENCES 49
  50. over timeTECH BECOMES A COMMODITy,CONTENT DOES NOT. 50
  51. quALITy CONTENT can make it cheaper to BuILD an audience Buy than to one. 51
  52. quALITy MATTERS:CONTENT FARM SuBSIDIES ARE DEADFactory Farms are as unhealthy For contentas they are For FoodBusinesses which treat users like cattleare vulneraBle to Being redeFined By thosecreating For actual humans, instead oFsearch engine roBots 52
  53. quALITy DEMANDSA NATIVE ExPERIENCE ON EVERy DEVICEFully exploit the Features, Formats and experiencesoF each platFormdon’t createshovelware 53
  54. AND MORE DEVICES MATTERNo platform wiNNer takes all: there will Never be aNother wiNdowsit’s Not just oNe persoN, oNe deviceplaN for dozeNs of platforms aNd billioNs of devices today, aNd a Newsuccessful device every moNthplatform promiscuity is a virtue 54
  55. REDEFINED MEDIA COMPANIESDON’T JuST MAkE MEDIA,THEy HELP PEOPLECREATE MEDIA 55
  56. yOuR FINISHED PRODuCT IS THEIRRAW MATERIAL The momenT qualiTy media is released To The world isn’T The end of The process, iT’s The beginning. 56
  57. MASSES MANuFACTuRELET THE WON’T JUST SHARE YOUR CONTENT, THEY WILLTHE AUDIENCEREMIX IT AND TURN IT INTO PHYSICAL GOODS. 57
  58. the hack the AN UNFAIR REDEFININGredefiners organization ADVANTAGE STRATEGy 58
  59. it’s not a DIGITAL STRATEGy it’s a STRATEGy 59
  60. STARTuPS OVERuSETHE WORDPIVOT BUT IT’S STILL AN IMPORTANT IDEA FOR MEDIA COMPANIES 60
  61. WHy IS EVERyONE TALkINGABOuT “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 millionapps: success 63
  64. uSE APIs AS MEDIA BIz DEV 2.0Facebook GooGle’s TwiTTer AMAZON NEEDSis not always neither Good followers are noT TO BE NAVIGATEDyour Friend nor evil a digiTal sTraTegy CAREFULLYPartnershiPs should start from what PeoPle want, not what comPanies wantuse social networks as a Platformdon’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 ACCOuNTABILITyAN 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
  67. REDEFINERSWILL WIN. 67
  68. TO CAPTuRE MEDIA GROWTHDOLLARS, 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
  69. THE STRATEGy CONSuLTINGFIRM REDEFINEDHelp our clients drive growtH:power new revenues, beat competitors, develop newbusinessesFocus on media, tecHnology,inFormation industriesdeFine new revenueopportunities:advertising sales, audiences, content, new digitalproducts, subscription growtH, pricingwHy activate?nimble, practical, native to digital, results-driven,deep industry experience 69
  70. CREATED ByMichael J. WolfMichael@activate.coM tWitteR: @MJWanil Dashanil@activate.coM tWitteR: @anilDashMichele anDeRsonMichele@activate.coM tWitteR: @MicheleactivatehiMesh BhisehiMesh@activate.coM tWitteR: @hiMeshBhisechRistopheR MoRfchRis@activate.coM tWitteR: @chRisMoRf© 2011 Activate Text CC BY - SAPlease remix and reuse this presentation by attributingand linking it to: http://activate.com/redefiners 70
  71. WE HELP MEDIA AND TECHNOLOGy COMPANIES CREATE SPECIFIC STRATEGIES FOR GROWTH.INVENT BREAKOUT GROWTH STRATEGIESIdentify and exploit new opportunities, redefine the rules of the game in mediabusinesses, and position companies for sustainable growth.INNOVATE TO BUILD NEW PRODUCTS & BUSINESSESIdentify new, higher growth products and services and create virtual startupsfor rapid development and launch.DIGITAL STRATEGY AS BUSINESS STRATEGYApply a digital worldview to the opportunities created by emerging technologies:devices, platforms, modern content models, and social media. 71
  72. INCREASE AUDIENCE AND TRAFFICImprove programming mix and distribution and add interactive features and functionality.Redesign programming and editorial organizations to optimize content mix.POWER ADVERTISING SALESTake share away from competitors, develop new advertising categories, create new advertisingunits and packages, improve pricing and yield management, and redeploy ad sales teams.ORGANIZE FOR GROWTHAlign business, creative, sales, and technology talent to be ready for nascent opportunitieswhile maximizing performance of core businesses.DEFINE & REFINE PRICINGCreate new pricing structures that fully realize pricing potential and fit within the realityof how people (and companies) use and pay for media and technology experiences.MAKE CONTENT A VIBRANT ASSETDefine modern programming, editorial, and production models. Build compelling experiencesnative to new devices. Incorporate rich functionality, social media, game dynamics, andcontent syndication.OPTIMIZE MARKETING & DISTRIBUTIONDevelop the capabilities that propel consumer-led growth: customer retention, physical anddigital distribution, subscriber marketing, and segmentation. 72
  73. NEWave South, 8th Fl New York, NY 10010257 Park yORkLOS ANGELES hillS, Ca 902118383 wilShire Blvd BeverlYVISITwww.aCtivate.ComFOLLOW@activateiNc 73
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