Many media companies are betting on international expansion as a means to future growth.
That’s partly because many Western countries are saturated by media companies, all vying for limited audience attention, and traffic growth tails off. For those companies who have to answer to investors there’s inevitable pressure to continue delivering growth, and expansion into new territories suddenly looks very tempting.
Evan Rudowski is managing partner at Atlantic Leap. He specialises in smoothing out the problems media companies face during international expansion. He believes that having a company who can facilitate the move is a must for media businesses already pressed for time and resources:
“Some of the companies we work with they have a challenge of growing their domestic business as fast as they’d like and of course that requires the full focus of the senior management team.
But at the same time adding an international expansion… it’s a juggling act to try to make that happen from the set point of management attention, staff resources and of course also financing.”
He has first-hand experience of those pressures, having been tasked with launching Excite.com’s European division as its managing director. He recalls being overwhelmed by vast cultural differences that ultimately had some effect on the bottom line of the business, and specifically cites a lack of understanding of currency exchanges as being a challenge in the early days.
When it comes to international expansion, even some of the bigger businesses realise they can’t simply buy their way into new territories. Take Bloomberg, for instance, which is partnering with Quintillion Media for its expansion into India.
Rudowski explains why it’s increasingly vital that media companies find partners in the new territories:
“It’s always helpful to find a local partner to either provide knowledge, provide resources, to help gain access to audiences. It’s very difficult for independent companies to figure that out themselves. Having the right kind of cultural compatibility and shared objectives is very important and sometimes those international partnerships can fall down when those things aren’t well aligned.”
Atlantic Leap’s purview (as the name suggests) is aiding US media companies expand into Europe, and vice versa. Rudowski argues that cultural differences run deep, and ultimately can harm some companies:
“In recent months we’ve seen, companies like Uber being very very aggressive, a Silicon Valley approach to scaling, [and] that has led them to run into trouble in places like Germany where they actually have to pull out of the market because they’ve run into not only regulatory charges but even cultural challenges.
“Those types of issue are things they run into when they don’t think about how to bring people on side and work within the culture and to invite them to participate rather than just saying ‘we’re going to disrupt’.”
For media companies especially, there are certain considerations that need to be made when expanding internationally. Matters of tone and of cultural sensitivity require that media companies know a territory well when they launch, which tends to be why most companies establish bureaux staffed with locals when they expand.
Rudowski explains why that’s so important, in a climate in which failures are subject to more scrutiny than ever:
“Unfortunately, in the current media world we’re in today… business models are starting to erode and are becoming unable to sustain the kind of investment in content that media companies were used to be able to make. It doubles the challenges or even multiples the challenges if they’re also trying to endure different markets.
“I think that’s a big challenge for media companies to get right, it’s how do they make sure that what they’re offering is relevant to the local market or at least localised properly and how do they produce content that works which then of course is what attracts sponsorship or a subscription.”
As a result, while for many media companies international expansion is a key part of their strategy over the next couple of years, it remains a high-risk high-reward game. It’s vital, then, that they take cultural differences into consideration when planning their next move, and realise that what works in one territory won’t necessarily work everywhere.