NZ media company Stuff Limited has been building out its revenue streams over the past four years to become a world-leading example of a media business adapting to the challenges of the 21st century.
The Kiwi arm of Australian publisher Fairfax Media has entered several different markets, including broadband, electricity, health insurance, and movie streaming, challenging the way competing companies are operating.
The most successful example of this to date has been hyperlocal social media site Neighbourly, which is challenging Facebook’s market share. The site currently has 600,000 users – impressive for a country of 4.8 million people.
Stuff chief executive Sinead Boucher said the transition to a sustainable funding model was a huge internal and external task. The company is moving from a corporate mindset to a more entrepreneurial approach, taking advantage of disrupted markets.
“In the last four years in particular, we have undergone a really radical makeover.
“We are determined to keep taking advantage of digital disruption that is hitting other industries.
“I think one thing we can agree with the media industry is we are good at dealing with disruption, so we look for the signs in other industries and think how can we go in and be the disruptor and take advantage of what is going on there, rather than being the victim,” she said during an INMA webinar.
Most media companies are moving toward a model that focuses on digital subscriptions as a core to their business, with revenues from advertising substantially supplementing it. This is not the Stuff approach.
She believes the economies of scale cannot sustain this model, as New Zealand is a significantly smaller market. “What sort of business would sustain us in the future? We just can’t see how we can make a business around paid content subscriptions,” Ms Boucher said.
Instead, Stuff has built out its business model with market leading Stuff.co.nz at its core, with Neighbourly becoming an increasingly important asset.
The company has engaged in several joint ventures to varying degrees, leveraging other assets for success.
Broadband service Stuff Fiber and energy provider Energy Club NZ are two key examples.
Utilising data obtained from Neighbourly, Stuff can identify users who are most likely to be looking to purchase one of the services or switch providers, allowing for more accurate targeting and advertising capabilities.
Print products also are being used to drive sales through advertising.
Added advantages arise through ventures such as video streaming site Stuff Pix, allowing the company to incentivise customers to take up other Stuff products, for example, offering a free movie for taking out health insurance through Done Health Covered.
This approach is working for Stuff, with digital revenues increasing 35 per cent year on year, as revealed in Fairfax’s half year results in February.
Ms Boucher attributes this to New Zealanders wanting to support local business, challenging the perceived market power of large multinational companies like Facebook.
This begs the question: will Stuff remain solely a media company?
Ms Boucher believes that the business model of Stuff may be moving toward one similar to Amazon, with several different ventures surrounding the namesake site.
While journalism will always be at the core of the business, the company is continuing to move away from the legacy print mentality of its past.
Stuff is doing this by continuing to question where the company fits into the lives of Kiwis and how it can continue to improve community connection.
“We are reframing what that [community connection] looks like,” Ms Boucher said.
“We are connecting more Kiwis with the stuff that matters (content), the stuff they love (things they can buy) and the stuff that brings us together (Neighbourly) everyday.”