Jack Griffin, CEO, Empirical Media gives his predictions of the four biggest trends that will affect media and information services in 2014. www.empiricalmedia.com

1. GREY AREAS
SILVER LININGS
WHITE SPACES
AN EMPIRICAL APPROACH FOR MANAGING DISRUPTION
JACK GRIFFIN, CEO
IIS 2014
January 29 - 30, 2014

2. em·pir·i·cal
Originating in, or based on, systematic
observation, fact, or application of the
scientific method
2

3. an empirical approach
A continuous process of understanding
what is out in the open and constantly
looking for what is hidden from view
3

4. “
A new medium is never an addition to
an old one, nor does it leave the old
one in peace. It never ceases to
oppress the older media until it finds
new shapes and positions for them.
”
– Marshall McLuhan, 1964
4

5. Two Kinds of Disruptors
ones we CAN see
ones we MIGHT NOT see
5

6. MAGAZINES:
The Change We
Could See
6

7. MAGAZINES:
The Change We
Might Have Missed
7

8. In a single decade, a new magazine industry
8

9. In a single decade, a new magazine industry
9

10. MUSIC:
The Change We
Could See
220 MILLION SOLD: 1979 - 2010 (3 DECADES)
10

11. MUSIC:
The Change We
Might Have Missed
25 BILLION SONGS DOWNLOADED FROM ITUNES: 2001 - 2013 (1+ DECADE)
3.5 SONGS FOR EVERY PERSON ON EARTH!
11

12. Ongoing disruption and transformation in music
12

13. NEWSPAPERS:
The Change We
Could See
13

14. NEWSPAPERS:
The Change We
Might Have Missed
14

15. NEWSPAPERS:
From high to low in
ten years
15

16. TELEVISION:
The Change We
Are Seeing
16

17. TELEVISION:
The Change We
Might Be Missing
17

18. TELEVISION:
Netflix is almost as popular
as cable among young adults
18

19. What Has Happened?
§ Disconnection of media/entertainment products from physical devices
§ Unbundling of content sections from one another
§ From producer in control to customer in control
§ From opt-out to opt-in
19

20. The Opt-in World
§ 50% of Americans now own
a Tablet or E-Reader
§ 56% own a SmartPhone
Source: Pew Research, 2013 and 2014
20

21. Opt-in World for Content
An app for everything
21

22. Opt-in World for Advertising
Google adds optionality, December 2013 to charge only for clicked on ads
22

23. The Four Leaders of the Opt-in World
SOCIAL
SEARCH
COMMERCE
ENTERTAINMENT
23
Source: CoRise, October 2011

24. The Only Constant is Change
24

25. “The Now Accelerators”
DATA &
ANALYTICS
DEMANDBASED
PRICING
MOBILITY
& TOUCH
NEW
CONTENT
SOURCES
25

26. A Framework for Managing Disruption
an empirical approach
GREY
AREAS
SILVER
LININGS
WHITE
SPACES
A continuous process of understanding
what is out in the open
and constantly looking for what
is hidden from view
26

27. A Framework for Managing Disruption
an empirical approach
GREY
AREAS
“Understanding
& Inquiring”
SILVER
LININGS
WHITE
SPACES
“Optimizing
& Executing”
“Imagining
& Extending”
27

28. GREY AREAS - “Understanding & Inquiring”
Some Empirical Questions
§ What has the customer hired us to do?
GREY
AREAS
§ What are the real economics?
§ Who is the real competition?
§ What drives what?
28

29. FORBES: Understanding Grey Areas
29

30. SILVER LININGS - “Optimizing & Executing”
Some Empirical Questions
§ What is (or could be) valuable?
§ What is unique?
SILVER
LININGS
§ What is working and what is not?
§ What do the data tell us?
§ What are the patterns?
§ What do we need to stop doing?
30

31. THE NEW YORK TIMES: Executing Silver Linings
727K
Mobile Redesign Midyear 2013
Digital
Subscriptions
+28%
Q3 2013
Website Redesign January 2014
31
New York Times Press Release, October 2013

32. WHITE SPACES - “Imagining & Extending”
Some Empirical Questions
§ What do we have permission to do?
WHITE
SPACES
§ What kind of culture do we need?
§ What capabilities will we need to add?
§ What do we build? What do we acquire?
32

33. MEREDITH: Extending into White Spaces
33

34. Conquering White Spaces the Netflix Way
34

35. According to Reed Hastings
§ A highly-successful process-driven company
- With leading share in its market
- Minimal thinking required
- Few mistakes made – very efficient
- Few curious innovator-mavericks remain
- Very optimized processes for its existing market
35
Source: Reed Hastings, Working at Netflix; Aug 01, 2009

36. Then the Market Shifts…
§ Market shifts due to new technology or new competitors
or new business models
§ Company is unable to adapt quickly, because the
employees are extremely good at following the existing
processes, and process adherence is the value system
§ Company generally grinds painfully into irrelevance, due
to inability to respond to the market shift
36
Source: Reed Hastings, Working at Netflix; Aug 01, 2009

37. The best managers figure out how to get great outcomes
by setting the appropriate context,
rather than by trying to control their people.
37
Source: Reed Hastings, Working at Netflix; Aug 01, 2009

38. Context, not Control
Provide the insight and understanding to enable sound decisions
CONTEXT
§ Strategy
§ Metrics
§ Assumptions
§ Objectives
§ Clearly-defined roles
§ Knowledge of the stakes
§ Transparency around
decision-making
CONTROL
§ Top-down decision-making
§ Management approval
§ Committees
§ Planning and process valued
more than results
38
Source: Reed Hastings, Working at Netflix; Aug 01, 2009

39. With the Right People,
Instead of a Culture of Process Adherence,
Culture of Freedom and Responsibility,
Innovation and Self-Discipline
39
Source: Reed Hastings, Working at Netflix; Aug 01, 2009

40. What Will Jeff Bezos Do?
GREY
AREAS
SILVER
LININGS
WHITE
SPACES
40

41. “ ”
Ever tried. Ever failed.
No matter. Try again.
Fail again. Fail better.
– Samuel Beckett
GREY
AREAS
41

42. “
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
”
– T. S. Eliot, Four Quartets
WHITE
SPACES
42