Aug
22
Telling the Truth about Content
Filed Under Blog, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, social media, Uncategorized | 2 Comments
Here on the South Shore of Nova Scotia, where I find myself in annual joyous residence, we are all fairly laid back about the big issues that seemed so front of mind in frenetic London. Let the market decide (a good philosophy if you have a strong economy based on extracting much-needed natural resources, and well-regulated banks that stayed upright when the rest of us fell over) seems to be the order of that day. Nova Scotians do not appear to panic easily so the absence of crisis-creating media exposure is part of the joy of being here. And being in Canada I have revisited the excellent website of the Toronto IP lawyer James Gannon. And I would in particular recommend to anyone the masterly satirical essay entitled “How I Learned to Stop Worrying and Love the Copy “. (http://jamesgannon.ca/2011/04/15/how-i-learned-to-stop-worrying-and-love-the-copy/).
Towards the end of his piece Mr Gannon quotes Michael Geist as saying “The truth is that you can compete with free if you provide value” and this simple statement has been giving me pause for thought as I walk the beach on my morning constitutional. What is it about this simple statement that has proved, in the last 30 years, so very hard to understand in the pre-internet content industry? We have, after all, a superb communications pipeline at our disposal, and it efficiently allows us to source all pre-existing media content through that pipeline. Those who do not wish to communicate in this way would be wise to withhold their content entirely from the network, since if they do not then one of two things will happen: they will be marginalized by competitors or, if the content has interest or relevancy, “outed” into the open web and illicitly re-used for free.
So “content” for its own sake is not a valid business model anymore? I think this is true now and will become much more obvious as time goes on. This is why putting firewalls around things only creates a temporary windbreak, not a permanent end to the forest fire. The valid business model is now service, and if we pitch the service solution correctly then we get adhesive customers, renewable revenue flows, and distance ourselves from that commoditization of content that increasingly afflicts the content value model. In fact, we should struggle to make our content available as widely as possible, implanted in our customer’s web environment, and maintained as a constant reminder of the tiered service value we can add. Tiers of service which begin with the App, and move forwards through customization and personalization of content to customization of analysis and focus. And that ziggurat of value is a climb where we cannot slacken for a moment, since competition will be fierce, and where we can never quite glimpse the summit, since value requirements will change over time.
Quite soon in this process much of the underlying content which we are so busily trying to protect will become a shadow presence, referenced and referred to but seldom read as such. Its presence will be taken for granted and content derived from the network process itself will assert its importance. As we move to this point it will appear absurd to be worrying about the underlying ownership status. I was reminded of this when looking at Amazon’s social reading initiatives, which seem to have edged into the market earlier this year without much public comment. This development (https://kindle.amazon.com/) competes with Amazon’s own Shelfari acquisition, and sites like Goodreads or Library Thing. If you were a publisher of general consumer books, surely this is the value point at which your acquisition policy would be focussed? And once you had readers who recorded all of their purchases and shared them with others on your site, including your books as well as your rivals, and you opened up the site to allow users to make comments on what they are reading, add footnotes, review, argue and correct, and then (as Amazon has done) you connected all this to Twitter and FaceBook, or in education to emerging social spaces around rentals like Chegg, then you are beginning to climb that value chain.
And then comes monetization. Some service values will be select, minority interests with strong membership and therefore subscription characteristics. Others will be populist, sponsored or maintained through online advertizing. The value we will seek to protect here is the service value, usually a function of underlying software and the way it works on content. And between visits to the patent courts to try to secure the unsecurable for 15 years, we will keep enhancing, changing, building the customer experience and competing through our ability to analyse the user experience and improve it.
Publishers used to do that last bit very well. They could do it again if they would relax around the content and follow the game. At the moment who do you see emerging on top? Amazon or one of their major publisher suppliers? No comment on that from my end of the beach, but you can always see who is winning by their willingness to be reasonable and offer concessions to the flagging pack following them.
Aug
14
The Slow Death of Newspaper England
Filed Under Blog, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, social media, Uncategorized | Leave a Comment
Every week now another piece falls into place. The decline of the newspaper business as anything that anyone would want to progressively invest in is now turning into a rout. Like B2B magazine publishing, the question now is not what does the future hold, but how do we clear up the junk afterwards. These gloomy thoughts are prompted not just by Trinity Mirror’s catastrophic results this week, in which the half year to end July saw pre-tax profits decline from £84.8m last year to £28.9m this year, on revenue down from £382.2m to £371m. Or by the reaction of the markets: shares jumped 18% on rumours that the company was organizing a further share buyback, thus sacrificing its balance sheet on the altar of market valuation. And I am not further comforted by the fact that the Sunday Mirror gained from the disappearance of the News of the World, a situation which is purely temporary now that the Sun on Sunday has entered the market. Or by the announcement that the group internal investigation clears Piers Morgan and his colleagues from charges of phone hacking; this story has two years to run, and there seems to be no last shoe dropping/fat lady singing syndrome in sight yet. You could wallpaper the bathroom using denials and announcements from News Corp on internal investigations that show no wrong doing, and the same may yet be true of Trinity Mirror.
No, the piece that got to me was a report by that doyen of Fleet Street rectitude, Roy Greenslade, in his Guardian blog. He quotes David Lis, at Aviva Investors, as saying in the Sunday Times that “Its imperative that there is consolidation within the regional newspaper space. It simply has to happen.” We must listen to Mr Lis with respect: his company apparently own 10% of Trinity Mirror, whose shares have fallen two-thirds in value this year, prior to that buy back rumour. One wonders what his position is on the buyback, or indeed on the dividend (axed two years ago and unlikely to return), or the advertising trend at Trinity Mirror (down 11.1% on the half year) And he wants to buy more of that? Nothing braver has been said in any walk of life since Neville Chamberlain returned from Munich promising “Peace in our Time”!
Is it not yet apparent that the managers of the major regional press interests have done everything that capable and reasonable men can to save the ship? We have now had a decade of staff cutting, regional print centres to raise productivity and reduce costs, regional editorial services producing look-alike products in the towns and cities of Britain, and exodus from locality to create a minimum service level on the narrowest editorial presence, churning out doctored agency text designed to keep the ads apart on the page – until all of a sudden there were no ads. And the flight to the web, in the jealous editorial hands of the existing print papers, proved to be a real failure either to create something new and local or to extend the hallowed brands of the print world into web presence. Having once almost succeeded and then failed to persuade Trinity to buy Thomson Directories, and having seen them developing directories in Scotland in more recent years, I hoped that a penny had dropped, and that they were about to embark on a complete local advertising strategy online, something we often anxiously talked about years ago when Fish4 was being created with their support. But, no. Courage and convictios fell at the final hurdle.
So why, Mr Lis, are you persuaded that putting together one cost-pared declining business with another with the same problems makes any sense at all? There are few more cost savings to make. Advertisers will seek greater discounts across more newsprint. There are no competitive positions to close out – these papers are all local monopolies anyway. The trick that your company needs to perform is to invent the equivalent service values of the once popular local press in an online and mobile context. You need to do it, despite the disadvantage of starting in print, with these factors in mind:
1. The newspaper was always a partnership with the community – but newspapermen forgot that.
2. You cannot press a format onto a geography and call it a community.
3. Format is created by need and formalized by experience. Formats that outgrow needs have to be re-invented, bottom up.
So can you recreate the newspaper? No, but you can certainly create answers in digital media for issues of local and hyper-local communication, trade and exchange. Will they look like newspaper websites? Not at all – news is only important when other needs, which may include targeted news, are satisfied. Can you create environments that link whole communities? Of course, given time, but in some places it will be the schools, in others local businesses, in some sports, in others issues outcry (like high speed trains in Bucks) that will create the initial focus. Once the flame is going, feed it with tools and apps, manage it for the community and monetize it through eCommerce and sponsorship. And make it mobile from the first instance.
Meanwhile, readers of my letter to the CEO of Guardian Media Group will have recognized what is happening there. Apax and GMG declared a “special dividend” for EMAP, taking out a £100m benefit from a debt restructuring deal, presumably so that GMG can plug the hole in its finances arising from this years’ losses. They will not need reminding that even family silver can run out, and plugging losses does not secure a sustainable future.
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