After a decade of digital transformation in the media industry, the market has finally reached some kind of stability. Media companies have now restructured themselves to respond to the new landscape. It feels like the last decade has been about trying to make sense of the changing world and reacting to it, rather than aggressively looking for new growth areas.
Having spent the last 15 some years in the field, I personally believe the digital transformation is just kicking in, rather than slowing down. This is definitely not a time to become complacent, it’s time to invest in growth. Apple announcing that it will spend 1B dollars on original content in the coming years just shows that companies with unprecedented war chests will move to areas where they have not been before. This should make traditional media and content companies very nervous.Everyone wants to become Disney. And Disney is trying to become everyone else as quickly as possible.
And it might be quicker than you think, as Disney has embraced corporate venturing tools as their go-to weapon for growth. I believe corporate venturing might just be the secret ingredient to make any company’s growth happen on a new level, as it tackles a few of the most common blockers for growth.
Attitude for change is a key turning point for growth. Genuinely willing and being actually ready for change are the biggest challenges for media and entertainment companies when trying out new business models. The focus should be on finding new growth opportunities and piloting them. Too often companies try to grow their core business using the new tools digital transformation has provided them, instead of finding new business models that might even cannibalise their current business – even though this very rarely happens. A lot of companies have set up internal innovation labs which sit under management but anything that is seen as too revolutionary is killed and projects that support current business models seem to be continued.
Besides looking outside current business models, I think the other forgotten opportunity is geographical growth. The Internet is global and media companies shouldn’t see their business local but truly as a global one. Companies like New York Times and Guardian, have realized this and found growth in markets they don’t currently own. Especially around video, this has not happened yet, apart from the newcomers such as Netflix, Amazon, etc.
Corporate venturing, by nature, forces a company to look to new horizons. As you surround yourself with external partners whose mission and vision are independent to your protected business mission you will be taken into completely new business areas and/or markets. With a variety of tools available from collaboration programs to co-investing and acqui-hire, a company with corporate venturing agenda has more opportunities to jumping bravely.
By investing and working with the startup ecosystems of the world media companies could investigate new business models and new geographical opportunities without having to disrupt their core businesses (yet). What this requires though is a real commitment. It’s not enough just to show up at conferences and meet a few start-ups. Corporate venturing requires a different mindset throughout the organisation than what companies have become comfortable with – all the way from the legal department to brand office and from strategy to the CFOs desk.
But if this is done properly the media companies make themselves future proof and agile to stay relevant with their consumers for the next century. And I promise it will be worth the effort.
Antti Rantanen is one of the Founders of Avanto Ventures, a leading corporate venturing advisory in the Nordics. He has worked in various advisory roles for 17 years at the forefront of Digital Transformation, through companies such as Accenture, Vibe, Avaus Consulting and advised leading European companies in various industries. Currently, with Avanto Ventures he advises corporations on how to create structures to enable growth through innovations with the global startup ecosystem.