Information technology the key to media profitability

With influential organisations such as the BBC, the SABC, the New York Times Company, the Times of India (the largest English-language newspaper in the world), the Washington Post, Ster-Kinekor and the Walt Disney organisation setting the pace, information and communications technology (ICT) is increasingly being acknowledged as the key to profitability in the media industry.

The Times of India, for instance - with a daily readership of nearly three million - has used SAP for Media and elements of the mySAP Business Suite to double its turnover to US$400 million.

Its now more streamlined, integrated systems have enabled it to reduce the time needed to invoice for advertising from seven days to the day of publication. From needing days to make changes to advertising material, it can now accept changes up to two hours before going to press. It was able to change from measuring and invoicing advertising material on column centimetres to square centimetres overnight - enabling it to include the normally wasted space of the 'gutters' between columns in its pricing and, thereby, get more value out of its newspaper 'real estate'.

Manchette Publicit'e, part of the Paris-based Philippe Amaury media group that designs and sells advertising space in a range of leading French newspapers including Le Parisien, Aujourd'hui en France, and L'Equipe, combined SAP and non-SAP applications to create a Web-based solution that has cut the cost of selling advertising space by 50% and given customers a faster, more efficient way of doing business with the company.

Aiming to reduce costs and increase revenue by supporting cross- and up-selling advertising and subscription opportunities, the New York Times Company, publisher of the New York Times, The Boston Globe and The International Herald Tribune, this year selected applications from mySAP Business Suite and SAP for Media to support its advertising management, home delivery and single copy circulation systems. It will also use the SAP NetWeaver platform to standardise its reporting and analytics processes.

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Says SAP Africa's industry solutions manager, Zach van der Walt: "The media and entertainment industry is a complex one, with many unique operating requirements. It doesn't fit neatly into a general distribution or supply chain category. So there haven't been many off-the-shelf technology solutions designed for it that cover all its operations end-to-end in an integrated fashion. And that has meant that, until recently, technology hasn't been able to make a truly significant difference to the bottom line.

"Even the SAP for Media solution, with consistent practical and strategic input from major media companies who participate in the International SAP Media User Group to make the solution progressively more relevant for the industry, has taken 12 years to mature.

"Now, though, powered by the SAP NetWeaver technology integration stack which enables the SAP solution to work with any bespoke systems a media company might already have, the solution offers the single most effective and affordable way for an organisation to systematically improve its efficiency and business intelligence - and, thereby, its profitability. In an environment where new competitors, content and content delivery channels are a constant challenge, media companies are increasingly turning to it to simplify and automate their business processes and keep them ahead of the game.

"For instance, just in the area of advertising - the source of up to 80% of an organisation's revenue - SAP applications enable you to offer much more flexible products for diverse titles and media. You can tailor prices, discounts and other terms and conditions to the individual needs of customers. You can extend booking deadlines and accept last-minute deals because you need less time to process orders. You can automatically identify cross- and up-selling opportunities, increasing revenue accordingly. And because your advertising systems are integrated with your production, financial accounting and payroll systems, you reduce costs and massively boost time to value."