The media landscape is constantly changing. The media is something all of us consume every single day. Media houses have invested in multichannel content distribution to serve their audiences regardless of time and place. The most engaging stories reach a wide audience in a few hours or even within a blink. We also read stories as Facebook timeline news from our friends, watch them as YouTube videos or share them on Instagram. Overall, the media sector has gone through a drastic turmoil over the past years, and this highly dynamic business is likely to change even more in the future.
Take print as an example. Using print as a medium for news to reach an audience is steadily decreasing. For Alma Media, a stock-listed media company that expanded from Finland to Central and Southeast Europe, the Baltics and Sweden, print-generated revenues have sunk to roughly 55%. However, the printed format is still the most popular choice for reading newspaper content for Alma’s audience. The new generation, though, looks at digital first because they want to consume news on the spot, sharing their thoughts with one click.
In this operating environment, Alma Media has been implementing a strategy that has created growth in its digital services while also ensuring the vitality of its traditional print-based business operations.
Alma Media’s digital transformation has been successful. Nowadays a bit more than one-third of Alma´s revenue comes from digital services, which already generate two-thirds of the group’s profit.
We had an interview with Santtu Elsinen, the Chief Digital Officer at Alma and Mikko Korttila, General Counsel (Legal Affairs, M&A and Corporate Development) at Alma, in order to see where the future of media lies and what companies like Alma do in order to stay ahead of the game.
The Next Big Thing In Media: Machine Learning and Artificial Intelligence, Robotic Journalism, Augmented Reality
So what is the future of media? Santtu Elsinen is looking especially for cases that do not depend on what used to be the norm – advertising.
“Advertisements are a very important revenue stream for us but we should not depend only on them” says Elsinen.
He believes that machine learning and artificial intelligence offer considerable possibilities in serving the customers more personally and in automating the production processes. Emerging ways of storytelling, such as virtual and augmented reality, are also interesting fields for the future.
The complete shift towards digitalisation is an evolution that foremost involves people. For many – it is an emotional process as innovation depends on destruction of what used to be the norm. This can be a painful process and hence can take time.
To speed up the process Alma Media and others are pushing to engage with external expertise, startups and growth companies. For Alma, the focus is specifically in Central and Eastern European markets.
“Those markets are fast growing, personnel with needed skills is available and the cost level is still reasonable” points out Elsinen.
Alma’s strategy involves investing into growth companies as well as buying services in order to increase performance and coverage. The media company is currently involved in over 50 pure digital online platforms in 12 countries, with minority shares in Serbia and Bosnia-Herzegovina.
Growth Through Investments In Marketplaces in Baltics and Eastern Europe
One strategy for Alma Media has been to look at marketplaces in the Baltic and Central and Southeastern European region. According to Mikko Korttila, marketplaces have a strong revenue potential and Alma looks to engage only with market leaders.
“Baltics and Central and Southeastern European markets have been very interesting for us” says Korttila.
“We have been actively investing in suitable businesses that complimented our ongoing operations. But we have also divested when the fit was not there anymore. Investments have to make business sense and they need re-evaluation continuously. The markets are developing fast.” says Mr. Korttila, referring to Alma´s investments of € 150 million between 2012 and 2014.
In 2016 Alma completed the acquisition of Finnish business media company Talentum with € 70 million, one of the biggest recent restructuring moves in the Finnish media sector.
Alma Media is focusing on services that complement their current offering with digital services around living, recruitment and travel. This strategy shows in the divestments of local Kainuu newspaper business and Alma360, a customer media and content marketing services company. Other examples include investments during 2016 in Remonttibulevardi Oy (renovation bidding service) and Rantapallo Oy (travel portal and online travel agency), and the acquisition of Jobote s.r.o., Czech start-up developing and providing new technology in recruitment.
Media Companies Engaging With Startups
To continue the digital transformation and to stay at the top of the game, media companies need to innovate through startups. That is why Alma Media will be coming to Media Honeypot conference in Helsinki on the 9th of February. If you would like to meet them there, you can apply to the conference here.