Colin White, UK CEO of mobile solutions company Oxygen8 Communications, highlights the potential for incrementally increasing revenue, without incurring major business risk, by creating a single, consistent offer across all channels

The media market is in transition. Increasing audience fragmentation and declining advertising revenues from traditional media are creating increasing pressure on media companies. Whilst there has been an explosion in demand for digital media, especially video and IPTV, as yet, few companies understand this shift in consumer behaviour, nor are they attaining the expected financial rewards.
In a bid to maximise new media, too many companies are pitting their own traditional print, radio and TV products against associated websites, cannibalising both audience and revenue as a result. The lack of strategic thinking, combined with inept processes, further jeopardises the long term revenue stream.
This digital marketplace is undoubtedly the future. Media companies need to become attuned to selling new media advertising, from mobile to IPTV, in a way that complements, not undermines, traditional products, and reflects the expectations of the consumer.
This shift in approach requires not only an investment in technology, resources and understanding, but also a significant corporate restructuring to deliver an integrated cross-media strategy that maximises average revenue per user (ARPU).
Few organisations, however, are willing to make such changes in the face of the economic downturn or, to be frank, following the significant dent in revenues that resulted from the problems with premium rate IVR and SMS services last year.
This latter point should be a major wake-up call. Organisations have got to get to grips with new consumer behaviour, their likes and dislikes, if any new media strategy is to successfully replace declining revenues elsewhere.

Embrace Digital
Tough decisions need to be made: organisations cannot simply sit still. Traditional revenues will continue to decline and the audience will fragment further. So how can organisations begin to embrace the digital arena without exposure to significant business risk and untenable investment?
The first objective must be to maximise revenues from existing value-added services, such as competition and content, by cross-selling from one medium to another. By encouraging a customer using an SMS application to also use a web application or access free IPTV content, the company can begin to increase ARPU, and drive incremental revenue gains.
In addition, long term success in the digital environment will be highly dependent upon generating traffic to support new advertising platforms. Key to this strategy is the creation of relevant, free offers that are highly targeted at specific groups of consumers and leverage existing content and customer loyalty.
Taking this initially low key approach, organisations can begin to explore the new media, understand opportunities for revenue generation from IPTVand mobile without massive risk and whilst gaining some incremental revenue.

Barriers to Entry
To make this work, however, organisations need to engage with service providers that can support and understand traffic generation across the mix, from IPTV to 3G video and advertising into a WAP portal. Without highly innovative, relevant products and services that leverage existing collateral to attract the new consumer across all digital solutions, the strategy will fail to deliver.
Achieving this will be a challenge for media companies and service providers alike. From increasing regulation to multiple payment mechanisms, organisations must address serious barriers to entry to this cross-media marketplace. Reacting to the publics lack of trust in premium rate mobile services, Ofcom has introduced far more stringent regulations. While service providers need to obtain the correct licences, media companies must also ensure they understand these regulations and their potential impact on new business models.
Creating a unified billing solution is also essential to support everything from the new mobile billing technology PayForIt to PayPal and credit cards onwards. The networks have created a tough accreditation process for PayForIt in a bid to retain high standards and effectively block new entrants to the market. However, success will depend upon an ability to support the diverse payment methods that will be adopted by consumers.
Underpinning the entire campaign must be detailed customer understanding. This will require tight integration between the unified billing platform and a single Customer Relationship Management (CRM) system. It is this information that will enable an organisation to track customer behaviour across every digital medium and then support cross-selling activity.
Indeed, it is rapid understanding of traffic flows and revenue streams across IPTV, mobile and 3G that will enable organisations to create effective digital media strategies that ride the wave and adapt to market changes.

Market Sophistication
There has been a dramatic sea change over the past few years. The market has moved from the relative simplicity of 2001 to a highly sophisticated, highly regulated market today. Organisations and service providers alike need to demonstrate cross-media skills and competencies, as well as infrastructure that supports cross-media decision making. And while many are resisting additional investment at a time of declining revenues, this remains a fast-changing arena: the further media companies fall behind, the more difficult it will become to put in place a viable, and profitable, interactive strategy.
The opportunity to leverage the power of digital media whilst gaining additional revenue, without incurring high risk, is an attractive proposition for any media organisation. The challenge is to overcome the organisational barriers to create a single, unified offering that maximises ARPU across all channels, mitigating audience fragmentation and developing a very valuable insight into emerging consumer behaviour that will drive on-going success in the digital market.