Simon-Kucher: 90 percent online content behind paywall in 2016

10 May 2013 Consultancy.uk

Bad news for internet junks that mass consume free content. Within three years, around 90% of high-quality online content will be behind paywalls, expects Simon-Kucher & Partners. The consulting firm bases its forecast on research held among 2,700 managers from several industries.

According to the study, the media sector possesses the most pessimistic outlook compared to any other industry. Only 27% of media companies expect significant profit margin (EBITDA) increases in the next three years. As a result of this negative outlook, two thirds of media companies expect the 'for free all' culture to come to an end. They highlight that by 2016 up to 90% of high-quality content would have to be behind paywalls to maintain the sustainability of their business models.

Simon-Kucher & Partners - Online content

Paywalls

''Media companies clearly see optimised content offers (print and online) as key success factors for the future, but these offers needs to be priced correctly'' says Mark Billige, partner at SKP and an expert in Technology, Media & Telecoms. He adds: ''Media sector senior management has understood the importance of switching to paid content for websites and apps as digitisation grows''. Billige advises media firms to closely investigate their pricing strategy before starting such initiatives as they might turn out harmful if clients on a large-scale abandon a channel. He recommends firms to establish a dedicated pricing function, which can closely monitor value perception and prices charged.

Educate online population

The consultants acknowledge that the transformation will be received with high criticism from online customers. Consumers have until recently had free access to content, regardless of the resources used to make the material available. ''Readers can however understand the value of the content'' says David Smith, Senior Consultant at SKP. Key will be the strategy the media industry follows in educating clients. ''Customers are naturally sensitive to the value they give to content, and therefore they could be educated to pay more''.

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Grant Thornton advises on deal for high-growth cloud hosting firm

08 April 2019 Consultancy.uk

Grant Thornton’s North West Corporate Finance team has completed its first TMT deal of 2019. The professional services firm advised the shareholders of Hosted Desktop UK on their investment from specialist SME lender Beechbrook Capital.

Technological disruption and changing consumer behaviour have continued to affect top Technology, Media & Telecommunications (TMT) players in recent years. The industry has seen revenues border on stagnation over the past decade, at 0.4% annual growth since 2008. While the industry is keen to develop new digital services and models to meet market challenges, they face a range of barriers – meaning the recruiting of talent specialising in innovative software and technology has become a key goal for the industry.

Amid this, Hosted Desktop UK (HDUK) provides cloud computing services to small and medium sized businesses across the UK. The firm’s cloud solutions provide businesses with IT reliability, flexibility, value for money and business continuity. As the firm bids to grow in the UK, with demand for its disruptive technologies high, HDUK has secured a key investment from specialist SME lender Beechbrook Capital.

Grant Thornton advises on deal for high-growth cloud hosting firm

The transaction was Beechbrook Capital’s maiden deal from its latest UK SME credit fund, which supports small and medium-sized businesses in the UK with EBITDA of £1 million and above. Manchester law firms Pannone Corporate (sell-side advice, led by Mark Winthorpe) and DWF LLP (buy-side advice, led by Jonathan Robinson) also advised on the deal, while Grant Thornton’s North West Corporate Finance team advised HDUK’s shareholders.

The deal represents the Grant Thornton branch’s first TMT deal of 2019, with a team comprised of Partner and Head of Corporate Finance Peter Terry, Manager Daniel Brecker and Assistant Manager Cariad Mudford advising HDUK shareholders on the investment. It is the third key deal in the TMT sector that the GT North team has advised on in the last 18 months, following the £16.5 million sale of Salford-based Sonassi to Iomart in December 2017 and NorthEdge Capital’s investment in Yorkshire company iPortalis in August 2018.

Grant Thornton’s Peter Terry said of the news, “As our domestic and working lives become ever-more technology dependent, it’s no surprise that there continues to be strong investor interest in any asset in the cloud computing, data infrastructure and connectivity space… We were pleased to work with Beechbrook Capital on the first deal in its new fund. It shows that despite the well-documented uncertainties in the economy there are still good funding options for dynamic SMEs and their management teams.”