BONNIER: DIGITALIZING THE MEDIA BUSINESS
Conlon Cash, Brooke McCarter, Sundeep Shamanur, and Cole Welch
OUTLINEIssue IdentificationSituation Analysis
Internal External
AlternativesRecommended StrategyImplementationRisks and Contingencies
ISSUE IDENTIFICATION
How can Bonnier achieve an uptake in readers to offset the declining sales of traditional media?
Would introducing an innovative product solve this issue?
Goal: Increase Sales
“[R&D’s] task is to identify opportunities to develop and initiate new projects in a fast-changing media world.”
Issue
CONSUMER CULTURE
Traditional Media
Digital Media ???
Analysis
INTERNAL ANALYSIS
• Innovation• Large variety of magazines
Strengths
• Decline in traditional magazine sales• Decrease in profit from 2009 – 2010• Digital applications only brought in 2% of revenues in 2011
Weaknesses
Analysis
EXTERNAL ANALYSIS
• Android and other markets• Digital media culture• Technological advances
Opportunties
• Volatile consumer culture
Threats
Analysis
KEY SUCCESS FACTORS
Innovation
Digital PlatformDiversity
Analysis
FIVE FORCES MODEL
CompetitionHigh
SubstitutesHigh
BuyersHigh
New EntrantsMedium
SuppliersLow
Analysis
ALTERNATIVE 1: SOCIAL MEDIA SERVICE
Pro • Keeps up with the trend in “pro-sumer” culture• Matches company culture of innovation
Con • High risk
Create a micro blogging app that allows users to keep up to date on topics that they are interested in that
are exclusive to that app.
Alternatives
ALTERNATIVE 2: CROSS PROMOTION
Pro • Increase in traditional sales• Increases awareness of online
Con • Hard to know if consumers will purchase magazine given the decline in sales
Entice consumers to purchase print magazines by offering exclusive interactive content online or using
the app only if the consumer purchases it.
Alternatives
BLOG APP CROSS PROMOTION
Brand Awareness
Additional Revenue Sources
New Product
Adresses Consumer Preferences
Dynamic
Adds Value for Customer
Increases Tradtional Subscription
QUALITATIVE ALTERNATIVE ANALYSIS
Alternatives
QUANTITATIVE ALTERNATIVE ANALYSIS
Weight Alt 1 Alt 2
Feasibility 25% 3 5
Innovation 25% 5 2
Timeliness 15% 3 4
Risk 15% 3 4
Digital Integration 20% 5 3
Total 100% 3.9 3.35
Scale of 1-5; 1 = Worst; 5 = Best
Alternatives
RECOMMENDED STRATEGY
It is recommended that the R&D Department to develop the microblogging app that targets digitally conscious consumers and allows these consumers to tailor the content to their preferences.
Recommendation
PROJECT BLOG+
Addesses Consumer CultureMicrobloggingSocial MediaDigital Integration
Supplies Information Variety
Implementation
PERSONAL PROFESSIONAL
Twitter Full Website Articles
Project Blog+
Project Blog+ is a mix between personal information and a long, professional format.Implementation
PROPOSED PRICING STRUCTURE
Free VersionApp Price:
Free
Revenue Generation:Advertising
Paid VersionApp Price:
$7.99/month $84.99/year
Implementation
Sports
Movies
News
Health
Music
Home Improvement
Movies
Music
Video Games
Politics
Health & Fitness
Cars
Fashion
Gadgets
Etc.
FREE VERSION
PAID VERSION
Implementation
IMPLEMENTATION
Short Term (0-6 Months)• Build infrasctructure to deliver the content• Network with potential writers
Medium Term (6-12 Months)• Test market in Sweden• Review the data
Long Term (12+ Months)• Full roll out on Apple and Android markets
Implementation
OUTCOME
Issue: How can Bonnier achieve an uptake in readers to offset the declining sales of traditional media?Adresses Key Sucess Factors:
InnovativeDigitalVariety
Implementation
FINANCIAL INCONSISTENCIES
The parent company’s profit is not currently tied to the success of the R&D department
Why? − Digital apps and digital subscriptions only make up a total
of 3% of revenues− The Parent Company brings in the majority of its inco,e
from investment in subsidiaries
What else is going on?Subscriptions declined from 2009 to 2010, having a substantial impact of on parent company profit
Implementation
PROFIT TRENDS
2009 2010 2011 2012 2013 2014
-500
0
500
1000
1500
Profit (loss) for GroupProfit (loss) for Parent
Implementation
RISKS & CONTINGENCIES
Risks:Writers don’t agree to the ideaSuffcient growth is not obtainedThe idea never leaves the development stagePoor expectation of consumer culture shift
Contingencies:Infrastructure for Blog+ can be licensed in the same manner as Mag+Shift resources to cross promotional strategy
Risks and Contingencies
WHEN TO EXIT?
Tests:FitPerformanceCompetitive Advantage
Risks and Contingencies
QUESTION AND ANSWER SESSION
QUOTE
“The world of passive consumers was turning into a new world of connected “pro-sumers”
where users actively tailored content and created their own content.”
QUOTE
“Imagine this: the best minds in the industry have spent 15 years in addressing this issue, and
they haven’t come up with anything. You will not know more in February than you know now,
so you might as well start doing something.”- Jonas Bonnier
QUOTE
“Their task is to identify opportunities to develop and initiate new projects in a fast-changing
media world.”-Describing the RD department
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