The media industry is undergoing an intensive transformation as it adapts to digital environments. The intensifying need for media companies to capture future growth opportunities and respond to rapidly changing market realities is driving mergers and acquisitions. Since 2000, 90% of media consumed in the US has been controlled by just 6 corporations. The last 10% are quickly consolidating, with 53% of media and entertainment executives expecting to pursue an M&A deal in the next 12 months, according to The Global Capital Confidence Barometer.
As this trend continues, organizations need to be equally prepared to grow or shrink in the coming years. Choosing systems and solutions that support this need for flexibility is critical. We’ve compiled our best tips for choosing a solution that will suit your needs, no matter what the future holds.
Scaling up: how the right partners and systems support media mergers & acquisitions
Mergers and acquisitions are rife with technology and organizational challenges—many of which M&A teams may not have planned. Whether it’s people or software licensing, the transition period after M&A is rarely predictable.
If your media organization is considering or in the midst of M&A, here are some of the key technology issues you can anticipate, and how to stop M&A technology problems before they begin:
Problem: changes in technology can strain business units
Your end-users need to stay connected and productive, but the rapid changes brought about during M&A often disrupt workflows and frustrate entire departments. System development or outsourced configuration can take months, if not years, leading to low employee morale and a drop in productivity.
Solution: Find a SaaS solution that allows you to consolidate disparate systems, is built specifically for multimedia selling, is easily configurable by YOUR team, rather than requiring custom development, and can integrate with existing or new systems.
Problem: planning IT budgets in the face of M&A can be like shooting in the dark
When preparing a budget, it’s extremely difficult to estimate the impact of any acquisitions that may take place during the upcoming budget year, especially if you rely on on-premise infrastructure. Will your data requirements skyrocket or stay the same? How many servers will need to be upgraded?
Solution: Strong SaaS partnerships shift capital expenditure costs to operational expenditure costs. Media companies want to preserve cash. Hardware requires an upfront (capital) investment. As an operational expense, cloud-based software allows you to pay on a monthly or yearly basis, and you can adapt your budget as your requirements increase or decrease.
Problem: dispersed IT infrastructure and staff redundancy
Treating different business unit IT configurations as separate entities within a conglomerate creates a bottleneck in accessing consumer data and other assets stored in on-premise servers.
Solution: Cloud computing centralizes data across properties. Putting all business units within a conglomerate on the same core systems and in the cloud will streamline data access, create user onboarding consistency and allow IT to service all business units from a central location.
Problem: newly acquired businesses with outdated tech
As your media companies merge, you’re forced to go through the time-consuming process of updating or recovering important data before sending the old tech to the graveyard.
Solution: Updates and releases that keep pace with media industry needs. Software built for scalability is designed to flex with any industry and user needs. The best SaaS companies launch new releases four times a year (at Lineup, we launch new releases every six weeks), and allow you to decide when to implement them. This means your organization can take on a proactive approach to the pace of innovation.
Scaling down: how partnering with the right vendors will reduce costs as your media organization downsizes
If your company needs to downsize and has established IT departments and equipment, switching systems and vendors will likely be costly and inconvenient. However, the right software partners can provide extensive financial benefits like budget savings and increased workplace productivity. Here’s how:
Evaluate your total cost of ownership
Calculating TCO allows you to uncover all costs, both direct and indirect, of ownership. You should be able to evaluate a new solution fairly easily. Done right, you should be able to compare the two scenarios ‘apples-to-apples.’ If your goal is to reduce costs, you should aim to replace multiple systems with a single new investment to achieve ROI. For example, Adpoint can replace multiple CRM, booking and delivery systems – and that consolidation typically results in substantial cost savings for our customers.
Reduce hardware costs
Hosting and storing your data in the cloud means that instead of purchasing in-house equipment, hardware needs are left to the vendor. Not only will you cut the costs of servicing hardware, but the costs of maintaining a large, on-premise data center will also vanish.
Decrease labor and maintenance costs
If cloud servers or other hardware need repairs or upgrades, it is the responsibility of the vendor and doesn’t cost your company any time or money. Eliminating routine maintenance can free your IT staff to focus on important initiatives and development. In some cases, this could even allow you to reduce staff size.
Preparing for the future starts with the right questions now
Thinking ahead isn’t always possible, but it’s an essential part of software and vendor choices. You don’t know what the future holds – so set your organization up right for success, regardless of what this competitive industry may bring.
“Our existing systems were developed when it was a single channel world. Data was fragmented and involved considerable workarounds to deliver robust business and sales intelligence. With Adpoint, we now have a fully integrated corss-media solution and revenue perspective throughout ESI operations that will reduce administration time per booking and has expanded our sales capabilities overnight. With Adpoint being cloud-based, we are also no longer tied to our building and can get our sales teams out to see customers more.”Rich Mead, Group Operations Director, ESI Media