4 strategic tipping points for digital content providers

Written by Robert G. Picard Wednesday, 19 March 2014 10:00 PDF Print E-mail
Legacy and borne-digital content creators are now approaching tipping points where they will be forced into deep strategic thinking and choices that will affect their future operations. Consideration of the platforms on which they operate, the platform(s) that receives preference, and the income and expenses they will bear will all inform the strategic choices.

The growth of digital consumption is forcing content creators to confront issues of offline and online consumption, but also to respond to the rapid growth of consumption on different types of digital devices—especially mobile devices. These changes are moving many firms closer to the tipping points.

In deciding how and when strategy needs to be reconsidered, managers need to watch for four critical strategic tipping points. These are points at which significant contemplation and decisions must be made or the enterprises will be put at risk by indecision:

1. When content income surpasses advertising income

2. When digital income exceeds print income

3. When mobile use (tablet, smartphone) tops desktop/laptop use

4. When income from print products no longer pays the costs of print operations
The issue of content income surpassing advertising income is important because it means that greater company attention must be paid to consumer needs and desires and that the advertiser interests must become secondary.  This represents a significant change in focus that has not been the norm in commercial media for 50 to 75 years.

When digital income surpasses offline income the question of whether a digital first strategy is desirable becomes moot. At this point digital first strategy becomes imperative and factors that may have been previously moderated moves in that direction must be overcome.

A number of content providers have already reached the mobile tipping point, where the majority of their content use and time comes from tablets and smartphones, and many others are rapidly approaching that point. At this point content production can no longer start with the version for print or desktops/laptops and be migrated to mobile devices, but needs to switch to production for mobile devices with larger screen devices and print secondary or tertiary in importance.

Those working both offline and digitally are likely to reach a point in which income from print products no longer pays the costs of print operations.  Some have already surpassed it. This will force them to confront the issue of whether to stay in or exit print. There is no simple answer to the question because it involves complex cost accounting and brand issues. When the tipping point is reached, however, the question must be considered in much the same way as digital services which did not stand alone financially in the past were supported by print.

Companies will respond to these tipping points in different ways because of their varying markets, resources, cultures, and capabilities. The important thing is that managers watch for the tipping points, consider their implications, and consciously make decisions about how they will respond to them.

Source http://themediabusiness.blogspot.com/2014/03/4-strategic-tipping-points-for-digital.html