Jun
29
Quis custodiet ipsos custodes?
Filed Under B2B, Blog, Education, eLearning, Industry Analysis, internet, news media, online advertising, Publishing, social media, Uncategorized, Workflow | Leave a Comment
Who guards the Guardians? The Latin tag I learnt at school applies in a very general sense to the ability of a free press to survive in a digital age, but I want to address it very specifically to the Chief Executive of the Guardian Media Group as he enters his second year of guarding the Guardian at a time when many reasonable, progressive and liberal minded people in the world wonder whether such an institution can long survive. As one who started reading it as a student in 1960 and who treasures it as much today, I wonder too, so I decided to write to Andrew Miller with some thoughts on possible strategies:
Dear Andrew, Congratulations on surviving Year 1, and please do not be affronted by this letter of advice. You and I have never met, and I have no conflicts of interest with GMG, but I do have a great sense of engagement, and want the good that the Guardian accomplishes in the world to go on in some form or other in our digitally networked world. When I was a boy The Guardian was a voice in Manchester, then the UK and now globally. Sustaining it using the conventional business models of failed newspaper publishing is not going to work so we are going to have to think more laterally. Since you are a not-for-profit Trust-owned institution the issue is not one of returns to investors, it is simply one of survival . But sustainable survival is vital, and that, I shall argue, means creating a new mix of old business models.
Lets look first at the exemplars of survival in our own times. Two stick out immediately. DMGT have created a B2B empire around data which, alongside their interests in Euromoney and events, surpasses the newspaper side of the group in both revenues and margins. This is the story of 15 years of activity, with the man who painstakingly collected and backed the data acquisitions in areas like environmental checking and property now running the whole group. This “solution” repairs group results to a great extent, but it does not extinguish the slow leak of market and margin at Northcliffe (unlike GMG, they stayed regional when they should have sold) or Associated. Even the discovery of global success for the Mail as a celeb voyeur vehicle digitally does not do that. You have wonderful global usership too, and you can’t seem to monetize it either.
The other critical exemplar is Hearst. Here they are playing two games at once. Diversification is represented by Hearst Business, now a world leader in healthcare and medical diagnostic information (including the UK’s NHS). Moving within the value chain is represented by the iCrossing acquisition, which allows them greater control of ad markets, and, now that they have bought Hachette Fillepatchi’s US interests, gives them greater inventory in which to deal. So here is a huge endorsement of the “old” magazine model – provided that you are bigger in a diminishing market and can exercise greater control/derive margins from the syndication of advertising. But I am really sorry, Andrew: neither of these models offers a solution to you.
What, short of re-inventing the newspaper, does? Lets look at some strengths and weaknesses. It is surely useful, though it must appear troublesome at times, that you have an asset like EMAP and an asset like Trader Media. On the latter we will have to bow to your expertise, since you were instrumental in creating it in its current form. The last financing deal with your partners, Apax, seems like a good way in a bad year to liberate some cash, but this asset remains your landbank, the place where you turn in a rainy day for a cash injection. But like all these things, when your need is great TMG’s value will be low, and every move has to be agreed with your co-investor. When both of you are agreed, ie now, then exit beckons. I would take it.
Which leaves EMAP, a troubled asset if ever there was one. The ability to sell this successfully now is, in my view, nearly nil. You will be forced to put in new management and restructure, close more and more print and try to rationaize a portfolio vehicle in markets where the focus has gone digital and vertical. In EMAP’s main verticals it does not have a complete workflow solution (areas like construction and automotive), while elsewhere only in fashion does it have standalone digital environments. This is a break up, the lateral thinking starts here, and somehow you have to persuade your friends at Apax, whatever the complications of their fund structures, that this is the case.
In the digital world the foot print of the Guardian looks viewed from my seat, like this: strong UK community environments amongst educationalists and teachers, social services and policy, government workers and the media industry. All of those, with the exception of UK civil servants, have natural extensions into global markets. GMG has started down the track of investing these communities with content (though all have been hit hard by recession). Given its strong branding in these areas, surely it makes sense to push forward with networked services for these communities , and services that have a real impact on their workflow and working lives. Have you noticed how TES Connect (the former Murdoch Times Educational Supplement, affected like you by the collapse of teacher recruitment advertising in the UK) has developed a very successful service helping teachers to exchange lesson plans and learning resources? Where are your equivalents of these in education (you may have to use that TMG cash to buy TES!), or in social services or in media? Unless you are digitally plugged into the network lives of your principal groups of users, and unless you offer yourselves as the branded, trusted means of them communicating with each other, I fear that you will lose your grip on them. Unfortunately I cannot tell you what the next “newspaper “will look like, but I can tell you that it will be invented by users themselves in these networked communities.
So how can you speed up that verticalization of the Guardian? Raid the EMAP cookie store. EMAP owns BETT, the leading educational technology fair in Europe, it owns Local Government Chronicle which is the only other thing that many of your local government readers use, it owns a raft of media properties including BRAD (and you could even sell CAP to TMG and add value through investing the used car value chain). Some of this will not fit and will have to go, but other properties will increase the speed with which you can deepen and concentrate Guardian Professional and really make an impact on the working lives of your major readership/classifieds groups. In other words, the strategy is “use the brand and authority, and the accident of acquisition, to move from B2C to B2B to a service environment that has news, opinions and networks at its heart as it goes global”.
Andrew, if you are still awake, two more things trouble me. Please do not go the paywall route: for my money the FT have the game to emulate, and as you turn into a service environment that model will be easier to adopt, while your news and commentary can remain free. Secondly, while David Astor’s Observer was the vehicle of my political awakening (Suez, 1956) you have inherited a very pale imitation. It will all have to go into the Weekend Guardian (but do make sure that Peter Preston keeps writing – an important sanity check for all of us!).
All my very best wishes for a very successful second year – you really do have to succeed. David
Jun
25
Harry Potter and the Ghostly Hargreaves
Filed Under B2B, Blog, eBook, Industry Analysis, internet, mobile content, Publishing, social media, Uncategorized | Leave a Comment
I blame it on a questioner at a presentation this week, who, in a tone that seemed to invite me to confess or “come out” asked me whether I was against copyright. I tried to explain that I was not against it on a principle, but that it seemed to me hugely irrelevant to the workings of a networked society involved in digital communication. It embodied the terms of trade of the Gutenberg world. Since everything else had changed why were we so determined that this should stay the same?
She seemed relieved, as one might be, having found a bigger heretic and being able to point to him and say “burn him first”! But she recalled me to a moment in 1985 when the Publishers Association appointed that wonderful publisher-lawyer, Charles Clarke, and myself as delegates to the European Commission’s Information and Society “Legal Observatory”. Accompanying Charles to Luxembourg, and playing Sancho Panza to his deft Quixote was a joy. The meetings were unbearable, and remained so for five years. Charles found windmills galore in the droit moral to tilt at, while on his orders I could be relied upon to propose an adjournment until after lunch, when it was permitted that like good ambassadors we could lie (and often sleep) abroad for our country. Never at any time did we hear an idea worth reporting back from here to anyone, and I observe that we initiated 25 years of legal reform of copyright provisions in Europe in progressively more obtuse efforts to fit copyright protection to digital content in ways that legislators have wrangled over and users ignored.
Charles, in his own writings on all of this, increasingly resorted to the dictum that “the answer to the machine lies in the machine”. I might claim ownership of the last three words, but I gladly cede them to his glorious memory, and to those who saw this as a sign that DRM was the answer, and that the object of technology was to create blocks for people using that technology. Again, I feel agnostic, or at least heretical. For me, the object of the technology is to enable seamless re-use in a networked society where the nature of communication is about repurposing content to make it mean something to other users. We are surely past the time when users can be re-educated to stop acts of re-use that are natural actions flowing from the functionality of the networks and nodes that they are using. This stable door is now wide open and the forces of law and technology will not bring the horses back again.
So what is our government doing about this? Hearing the scandalous news that Google could not have started here under current UK law we appoint the good Professor Hargreaves to form a commission and investigate (though we have not even digested the last commission, under the good FT editor Gower) to report back. And what does he want to do? Adjust the terms of trade, redefine “fair use” and revise the rules on the good ship Copyright, which long since sank. How ghostly is that? And who wants another Google? And one started here! This is a scandalous misuse of government funds and the debating time of an industry which should be concentrated on building out service values in the world that actually exists.
But what is this? Here comes Ms J K Rowling and her Pottermore supersite. She has as her advisor, Laurie Kaye (http://laurencekaye.typepad.com/), the best media lawyer in Britain (in my view, by a country mile). And it appears that here is no DRM. Just fair pricing and unrestricted availability. Download from here to any reader. (Does this make sense of the Overdrive – Amazon relationship? Note that O’Reilly distributes DRM-free via Overdrive). All her publishers are seemingly plugged into this solution (doubtless via revenue shares). Watermarking will enable Ms Rowling’s staff to detect, and, I hope, prosecute, those who take her work and try to earn their own income from pirating it. But she does not appear exercised if your kid shares some of this content with another kid in the same class. She has a brand, is developing it through this content (http://www.pottermore.com/en/press) and will make money from the site as a service, not from individual content sub-segments. She and her advisors are in tune with their times. The government, the Professor and many publishers are not. Time will deal with them. Meanwhile, at a time when the Web is decreasing rapidly as a proportion of overall internet usage (great article by Ben Elowitz on All Things D (http://allthingsd.com/20110623/the-web-is-shrinking-now-what/?mod=snhome) here is a good reminder of what web publishing can really mean.
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