Case Study

Digital Media Publishing Company Reduces Risk and Improves Performance by Reforming Its Business Model

Industry

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Client Situation

A billion-dollar digital media publishing company was enjoying success as a world leader in its field by licensing content from third parties and publishing it on its websites, with a monetization model based on digital advertising. The business model had an inherent business risk, however, as costs were relatively fixed and revenues variable. The company executives were considering reforming its business model to reduce risk and unlock hidden value.

Solution

The executive team hired a E78 team member who was experienced in strategic analysis in digital media as a consultant to lead development of a new business model and strategic plan to accomplish these objectives. Working with the key company executives he developed a new business model based on value sharing, a new partner relationship methodology, and a contract negotiation process with a potential to reach over 1000 media publishers across 53 countries. The new model and strategic plan would potentially extend media licensing rights, standardize contracting and reporting processes, and add new publishing content with third-party media partners.

Results

The new model was fully implemented within a 9-month timeframe, and resulted in:

  • Significantly reduced business risk
  • Increase in user engagement of 18 percent
  • Net operating income improvement of 40 percent

The new business model also soon became the standard adopted by many other digital media publishers globally.

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