Media companies are reluctant to invest online

German publishers and TV broadcasters are more and more reluctant to engage in brand-independent online activities. After the investment euphoria of recent years, media houses are starting to consolidate their portfolios, according to an analysis by the strategy consultancy OC&C Strategy Consultants.

The portfolios and the question of how the media houses Axel Springer, Hubert Burda, Gruner and Jahr, Georg von Holtzbrinck, The Media Lab, Du Mont Schauberg as well as Pro Sieben Sat1 Media AG and the RTL Group in particular their strategic positioning were examined adjusted through acquisitions and sales within the past twelve months. It showed that the publishers and TV broadcasters only acquired 16 investments in 2009, compared to 98 in the previous year. “There are several reasons for the reluctance of the companies: The market is relatively saturated and the individual fields of activity are largely occupied. In addition, new, promising business models are currently in short supply, ”says Michael Rzesnitzek, partner at OC&C. In addition, there would be economic pressure on media companies from the crisis in the advertising market, under which many would concentrate more on their traditional core business. With a view to how the traditional business of publishers and TV broadcasters can be translated into new, sustainable forms, the online segment continues to play a strategically important role.

In the past year, the media houses examined would have a total of 222 holdings, of which only 34 have so far been sold or discontinued. Since the 34 departures in the current study are compared to 50 new acquisitions, the publishers and broadcasters examined currently have 238 online participations. For the future, further recruitment and sales of online offers must be expected in the industry in isolated cases. This is mainly due to the fact that the companies currently neither have the financial resources nor the necessary management capacities to force further online investments. There were changes in particular in the categories “Commerce”, “Content”, “Community” and in the “Advice & Assessment” area.

The growth in non-brand-related online activities or those online investments that do not relate to an already established print or publishing brand is declining sharply. Because while the non-brand-related activities grew by 79 percent in the previous year, the growth in the current financial year can only be quantified at 7 percent. A quarter of this decline relates to the “content” category. “Paid content” is currently being traded as a lifeline for online offers that cannot be refinanced through advertising. The willingness of users to pay money for content on the web has not fundamentally improved, however. For successful offers, content and functionalities are required that are indispensable for users and are also only available from one provider. These are typically more likely to be found in the professional or B-to-B environment.

www.occstrategy.com/de