Publishers need to treat digital disruption as a restructuring challenge and not a sales or revenue problem, entrepreneur and former Lonely Planet executive Gus Balbontin told a media agency event yesterday.
Mr Balbontin transformed Lonely Planet’s business from a publishing house with its entire product range based on books, into a producer of multimedia content across a wide range of subjects.
He addressed Wednesday’s MFA5+ Inspiration Series breakfast in Sydney, which was on the theme “thinking like entrepreneurs.” The Newspaper Works is a sponsor of the MFA5+ Inspiration Series.
“Lonely Planet thought that its problem was a business problem. ‘We need to sell more books, that’s our problem,’” Mr Balbontin said.
“The truth is that’s not the problem to solve. We need to make more people travel. That’s the reason we exist.”
He likened the problem facing publishers to the situation faced by former film and camera giant Kodak, which sought to address declines in film sales without planning for the bigger picture – a digital world where very few people use film.
Mr Balbontin drastically restructured Lonely Planet, reducing staff from 405 to 285, which he said “wasn’t fun” but was necessary to ensure the publisher survived.
He led Lonely Planet into the digital age and reduced its reliance on travel guides published once every two years, instead shifting the focus back onto encouraging and facilitating travel using any means. He was able to get the company back in the black.
He told the audience that it was often necessary to push back against executives’ insistence on hard numbers and ROI predictions, saying he often told them that he didn’t know how much money a new platform or strategy would make, but that it was critical to take advantage of new technologies.
One way around the problem of encouraging financially conservative executives to take entrepreneurial risks is to request funding more often but in smaller increments, he said.
Also addressing the audience of young media workers was Holly Ransom, a 25-year-old who has worked personally with Rio Tinto boss Sam Walsh, as a strategic project consultant for NAB and is one of the AFR’s 100 Most Influential Women in Australia.
She highlighted the fact that television took 75 years to reach 50 million people, while smartphone game Candy Crush took just three weeks.
“The pace at which now an idea can gather momentum and get the reach and mobility is quite extraordinary. It dramatically changes the game for niche markets, your ability to tap into those,” she said.