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digital confusion

a decade or two later, many media companies still find themselves in a state of digital chaos

Businesses must accomplish a “realignment of technology and business models, to more effectively engage digital customers at every touch point in the customer experience lifecycle.” (1) (source: Altimeter) Of all the industries that have had to face the digital transformation, for the better part of the last decade, the traditional media companies have not fared the best. In his September article from the New York Post on how Gannett, Advance Publications, Hearst Corp., McClatchy Newspapers and Tribune Co. are in “hush-hush talks about banding together to form a new company to sell ads to national advertisers”(3), Keith Kelly refers to the US’ five largest media companies as “battered”. And that may reveal a powerful paradox. (source: Nationa Post)

“Company culture is the basis of digital transformation, a fact supported by both our qualitative and quantitative research from 2013-2014. Without openness to change, either naturally or as a specific initiative, digital transformation stalls. We find cultures are open to change but are stuck in directional ambiguity or risk aversion..”

– The 2014 State of Digital Transformation by Altimeter

We will set the paradox aside for a moment as we first take a look at the state of digital tranformation for Canadian and American media companies. In the Canadian landscape, YPG has been an interesting player. It managed to rally after troubled years, stay in business, shift more than 50% of the revenues to digital and bounce back. As many of the analysts will tell you, it may, however, be naught but a temporary respite. It recently laid off 300 management employees, roughly 10% of its workforce, including some of the highest echelons, as part of a turnaround and in an attempt to rekindle its growth by 2018.(4) (source: Globe and Mail) And there are more layoffs to come as the company struggles financially.

In the meantime, its American counterpart, YP, announced in July that it’s splitting print and digital in two distinct companies in an effort to avoid conflicting interests, as generally prescribed by Clayton Christensen. Time will tell how it works out for them but many have failed at such strategy (Source:Riptide) and there seems to be no indication that both businesses will now thrive. Also on US soil, Gannett and Hearst seem to have mostly maintained an upper hand through acquisitions. Back at home, we’ve seen fellow Quebecor divest from local media to focus on telecom. All in all, it’s been an interesting decade for most, that much is certain.

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