Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

The "Heinz 57" Media Business Model

Posted by Tom Foremski - March 3, 2010


I'm sometimes asked what the new business model for media will be. My answer is that it will be a "Heinz 57" model. The Heinz food brand often has "57 varieties" in its promotions. And that's a good metaphor for the emerging media business model.

Frédéric Filloux illustrates this very well in his recent post about Fairfax Media, the Australian media giant. The company publishes 328 newspapers, 46 magazines, it operates 284 web sites, and 15 radio stations.

Fairfax Digital, a division of Fairfax Media, represents 10 percent of total revenues and 16 percent of its EBITDA in fiscal 2009.

Mr Filloux notes that:

... when we compare audiences for NYTimes.com and smh.com.au in their respective markets, the Australian news sites has roughly three times the penetration of the NY Times. And if we compare advertising market shares: the SMH is doing twice as well as the NY Times.

And its impressive financial performance is based on multiple revenue streams.

FD had no less than 15 revenues streams: advertising, subscription, commission on auctions, paid by the transformation of a contact, listings, e-commerce, mobile fees, etc. In New Zealand alone, FD’s classifieds and auction site TradeMe serves 70% of all the country’s web pages.

You can read the rest of Mr Filloux's excellent profile here: Digital Takeover, The Fairfax way | Monday Note.

It's a great illustration of how multiple revenue streams are key to the success of future media companies. And each one will have a different mix of revenue streams.

But it is tough to manage many different revenue sources. We will have tools and services that will help publishers to stay on top of things but clearly, we need a new breed of publisher.

It's not enough to lunch out with a few of your top advertisers. Publishers will need to be expert in many different aspects of their business: advertising, content creation, custom marketing, subscription management, lead generation programs, events, syndication, virtual goods and currencies, and more.


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