Technology is ever growing and evolving, causing disruption within every industry. Dian Gemiano, chief marketing officer at KG Media, shared how his company has responded to this disruption and changed its business model for sustainability during the INMA Asia/Pacific News Media Summit on Thursday.

To begin understanding how to manage the digitalisation within the media industry, KG Media looked at the trend of music sales in the United States to plan how to strategise their business model. Physical copies of music in the United States declined as the digital world evolved. Digital music replaced physical sales, causing a disruption in the music industry.

Gemiano showed graphs of how KG Media’s digital content is the most resilient for its company. The graphs showed KG media’s growth and decline in the success of print, TV, radio, and digital advertising. There are significant drops and rises throughout all of the advertising outreach — except digital advertising, which only grows. 

“Transformation is inevitable for us. Digital is the future for KG Media,” said Gemiano.

Gemiano explained KG media’s dual transformation strategy, which is intended to transform its products to digital. 

First, KG Media focuses on transforming the core business model by “transforming the product to more digital-driven and consumer centric,” said said. Next is “creating digital and active products, and accelerating the scale up and the revenue.”

Advertising contributes more than 80% of KG Media’s revenue, and it can be complex to keep readers satisfied while also achieving revenue from advertising. 

KG Media gathers customer and reader satisfaction data through a simple math problem: Advertisement impressions and page view multipled by the number of ad units in one online page, article, or video, shows how satisfied your customer or reader is with the approach. “We are doing this every day, and we need to manage the growth of our digital ad revenue,” Gemiano said. 

Transforming its core business

First, was the “digitialisation of conventional products,” which changed the model to subscription based, turned print media into free digital versions, and explored digitalising KompasTV and radio. 

KG Media then focused on building a marketing and advertising solution, which created an ecosystem of different services — research, branding and creative, content marketing, influencer marketing, ad network performance, and media planning. 

“When we integrate our business equation, what value can we add to our partner? The answer is by creating these services,” Gemiano said.

Over the past year, digital subscribers have grown at KG Media. New digital subscribers are replacing readers they lost from print media, while also growing a younger audience which will sustain the company.

“The print subscribers are dropping every year, while digital subscribers are going up. The goal is to maintain the same number of readers in a proper scale and replace what we lost from print.”

KG Media’s KompasTV aims to focus on streaming and video-on-demand. It is now the most-viewed Indonesian news YouTube channel, with almost 10 million subscribers.

“The key is 6,000 video uploads per month,” Gemiano said. “This is not just uploading the video, but data-driven uploads every month ... deciding which news needs to be edited, and when and how can we present this video for our viewers.”

Growing products and revenue

“We are using a lot of assets in our marketing and advertising ecosystem that accelerates our revenue,” Gemiano said. The company is embracing disruptive tech for media by keeping up with the latest tech and apps, and understanding if they can benefit KG Media: “We keep expanding and experimenting with new technology, and fit it into our growth plan,” he said. 

Gemiano talked about exploring innovation at KG Media and its “Initiate Business Exploration Project,” which allows the team to develop products: “At least 50 exploration projects are happening that we manage in a pipeline, and then it goes to the product development team and incubation unit.” 

KG Media manages over 170 national, hyperlocal, and entertainment news Web sites. Several integrated teams covering technology, product analysis, advertising tech, video tech, programming, product development, and data management help manage the Web sites to achieve growth and advertising revenue. 

“We integrate a lot of technology and product in one structure that serves all 170 Web sites. Thats easier for us to manage all the changes and experimentation that happens in digital media. This is how we expand our digital product,” he said.

These business models and ecosystems seem to work for KG Media. Right now, the Web sites see 70 million unique users per month, more than 1 billion page views per month, and 25 million hours spent on the sites by users per month. Focusing on digitising its products has also lead to 40% reach for Internet users and 50% readers for print media.

The summit, which is free to participants, continues on Friday. 

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