Based on recent statistics and companies results, this article shows that French traditional media companies meet effective results in their attempt to raise online audience. However these players leverage poor online benefits and their global revenues tend to decrease. Let’s examine what development initiatives can be activated to reshape the media business model toward more profitability.
According to recent estimations published by Microsoft, internet usage in Europe should outstrip traditional TV in 2010, with an average time spent of 14,2 h/week against 11,5 for TV. Advertising revenues are following this trend, with investments on traditional channels (TV-press-radio) currently flattering or even decreasing.
Main traditional media companies have understood these market dynamics as they proceed to organisational and technological efforts toward online audience development. In France, the Médiamétrie // Netratings website ranking shows that traditional media companies are efficiently competing with a large array of pure players, content aggregators and UGC (User-Generated Content) platforms. For example in february French leading TV group TF1 was the 4th most visited French group behind Orange, PagesJaunes and Ilias (Free) thanks to about 15 million unique visitors, which covers 50% of Google’s unique visitors.
Most visited groups online in France in February 2009 (in millions of unique visitors) Source: Médiamétrie // Netratings
Content and channel diversification as key trends
Influenced by successful UGC models like Youtube or Facebook, news content portals are building substantial audience by integrating video content and web 2.0 features such as microblogging, widgets or social mapping. TF1 for example has recently launched a new version of its web portal that provides catch-up TV services, news contents, social features, and specific highlights on their UGC video platform WAT. Besides TV channels that have well integrated these features, press companies such as Le Figaro are moving away from traditional text contents to integrate videos and interactive features to their portals.
Another key trend is channel diversification, which goes toward mobile usage. Mobile terminals and networks evolutions offer opportunities to develop on-the-move audience, and a new channel for innovative advertising. Le Monde application for iPhone is an example of a success story as it brought up more than 400 000 downloads through the App Store.
Limited impact of an ad-based model
Traditional media are following usage evolutions, but they still face difficulties in terms of profits. They have built a revenue model mainly based on online advertising, which will not go beyond 20% of global advertising investments before 2012, says ZenithOptimedia.
Le Monde, in spite of its digital efforts, lost 43 million € in 2008 and is not optimistic about 2009, as key investors like car companies are highly affected by the crisis and consequently tend to reduce advertising budgets (-6,4% in the last two months in France, source: TNS MI).
These days an online consumer generates five to ten times less ad revenue than an offline consumer. This figure is raising concerns among media players that highly need to diversify their business model.
Audience development strategies need to be combined with diversified revenue models
Traditional media online revenues are currently dominated by advertising. TF1 group, that forecasts a turnover fall of 9% in 2009, gets 2/3 of its online benefits through advertising. It provides us an example of a model that needs to seek further diversification.
With the knowledge of these current issues affecting traditional media players, here are a few business development recommendations based on existing initiatives and experts advices designed toward a diversified revenue model:
- Fee based BtoC services and e-commerce
By contrast with online advertising, the e-commerce market is mature and maintains a steady growth rate. Players could use their offline sales experience (eg magazines, newspapers,…) to develop fee-based B2C online services through subscriptions bundles (archives, special editions,…) or even physical products.
- Cross media and mobile strategies
One key interest for the media is to provide content through several channels according to a 3-screen approach (PC-TV-mobile). Such a strategy could leverage new advertising opportunities. However, monetization of mobile audience is still pending on the development of a fine mobile audience measurement solution which is currently developed by GFK in a few European countries.
- B2B services
Main Media groups that have managed to build (or acquire) online development expertise have the capability to provide portals design or audience development services to external players.
- Strategic partnerships
Partnerships especially between content providers and broadcasters can provide 2 main advantages: the capability to bring faster strategic moves on both sides and international size.
These initiatives can be combined differently depending on company’s core business and audience. They are being investigated with scrutiny by media players in their transition from a single to a multi-sided business model.
For more details:
- Classement des sites d’information : effondrement du Figaro.fr
- 24/24 Actu, l’information vue par Orange
- Tf1.fr, nouvelle version du site
- TF1 se prepare à une année difficile
- IDATE – Media companies’ e-Commerce Strategies (March 2009)
- Le Monde : perte nette de 43,7 millions d’euros
- CNC - Baromètre du marché publicitaire (janvier 2009)
- Conférence EBG ”stratégie des portails d’informations”
- Médiamétrie // Netratings – L’Audience de l’Internet en France en Février 2009
- IDATE : Publicité – Médias, Internet, Télécoms - nouveau nerf de la guerre (Feb 2009)
by Yann Desjardins
[polldaddy poll=1592570]
(11 votes)
Loading ...
