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Overview of current situation for news publishers primarily print, but will apply to all providers. Suggests models and strategy will follow up.
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Challenge&Possibilities
PreparedbyTerryGarrett(seelastslideforcontactinfo)
Thispresentationisdirectedtotraditionalmediaplayers,primarilyprintpublishers.
Theideasandconceptsrepresentasynthesisofthethoughts,opinionsandresearch,whichmanyhavecontributed.
Ihopethisprovidesanoverviewofthecurrentsituationthatleadstoquickandfuriousinventionandinnovation.
TherehavebeenmanygoodideasfloatedbyearnesteffortsofNewspaperNext,PewCenterandAJR.
There’stoomuchtoeinthewaterandnotenoughbaptismforimplementationofthoseideas.
Fairlysimpleandstable
• Youknewhowthegamewasplayed.
• Youactedaccordingly.• Supplyanddemandwerefairlystable.
• Milddisruptionsproducednewideasandyoucouldadaptwithoutmucheffortorpain.
iterateintuitiverelationships…aggregateseamlesse‐services…reinventstickyusers…HA!
Toomanylevelshappeningsimultaneously:Dryingupoffinancing,deepbudgetcutbacks,disappearingsalesandaudience…
Youdon’tknowwhattodo.
• Youreactconstantlyandlosesenseofbeingproactive.
• Youwanttimetosortitout.
• Youhavetotrynewthings,butwhat?
• WTF?
Marketdriveneconomy overpastfiftyyears
Consumerspending73%ofUSeconomy
Drivesadvertisingspendingandproliferationofmediachannelsandplayers
ConsumerspendingroserapidlyAND
Advertisingspendingfollowedandincreased10Xpre‐1980levels…
Mediachannelsbecameover‐saturatedwithplayers
Matureplayersprofitharvest,butmakelessinvestmentincontentquality,slowergrowth,losemarketsharegradually.
Start‐upsshowheadygrowth,investinmarketing,makelessprofitsthanincumbentplayers…
•Movefromgorgingonthe“mediabuffet”topost‐consumptionfatigue,over‐whelmed,overstimulated,toomuchofagoodthing
•Diminishedengagement,indifferencesetin…
Thenconsumersbegin
•Mentalsortingofmostmediachannelsandplayersinto‘allaboutthesame’,lumpymass
Orintoaslimmer‘musthave’niches
1908averagenewspapercosts5¢(fornewscontent,pre‐massadvertisingera)
2008averagenewspapercosts50¢
Adjust1908coststo2008
forequivalentprice:
$2.67percopy
In100years,Newscontentwasdevaluedinprice400%
Content Device Devicecosts Perceptionofcontent
TV TVsets *Relative FREE(exceptcable)
Radio Multi‐sets Relative FREE
Dailynewspaper Paper Nominalrecurring Paid,butnecessary
Magazines Paper Nominal‘+’recurring Paid,necessaryluxury
Otherprint Paper Nonerecurring FREE
* Expense of acquiring device was relative to consumer’s income
Twodevicescandeliverallformsofmediaanywhere,anytime
DeviceandserviceCost:relativetoconsumer’sincome
Perception:FREEcontent
VE
▼ Traditionalmediaplayersbundledcontent(manyarticlesbecamedailypackagedproduct)
▼ Webunbundlescontentpackages[atomizesit]
▼ Webplayers[search,aggregators,reconstructors]re‐bundlecontentintonewpackagesundertheirbrand,whichdilutesoriginator’sbrandbasedonsinglepackageidea
▼ Google,Yahooatomizesadvertisingandchangeprice/valuemetricandbuy/sellmethodology.
• Newplayerscapturenewwebadincome,deviceanddistributionincomeandreducetheincomepotentialfortraditionalmediaplayers…wholackabilitytoscale.
• Consumersgetafreerfreeride TellmesomethingIdon’tknow!
Newmodelsforcontentandadvertisingareurgentlynecessary.
Thereisnogoingback.
Majoroverhaulisrequired.
1 WillconsumerspayapriceaboveFREEfornewscontent?
2 Willadsalesaloneyieldenoughincometosupportanewsoperation?
3 Does‘qualityofcontent’mattertoconsumers?
4 Howdoconsumersparticipateincreatingthecontextofnews?
5 Doesbrandofnewscontentprovidermattertoconsumers?
6 Howimportantisdistributionofcontenttoconsumers?
Nameatleastthreeconsumeritemsthatwereoncepaid,butarenowFREE.
Nofairsayingnewscontent,oranythingrelatedtotheweb.
Freecheckingaccounts
Thepointistherearefewinstancesofconvertingconsumerproductsorservicestofree.
Thereasonisobvious,it’sadamntougheconomicmodeltomakework.
FREEcheckingasalossleadertowritingbadmortgages?
Theproblemisthatit’sbeenpricedatFREEbytraditionalplayersforsolongnowtheybelieveit’sworthlessandconsumersexpectit.
① Traditionalplayersaremotivatedtothinknewscontenthasvaluenow,becausetheadvertisingsalesrughasbeenpulledoutfromunderthemandonlinepricessuck.
② Theyhaven’tfiguredoutthenewvaluecreatedforcontentwhenconsumers,bloggersandothersrateit,shareit,commentonit,re‐bundleit.Asamatteroffact,theyhaveresistedthispracticewhentheyshouldworkitandseethevalue.Itcreatescontextfornewsconsumption.
Newscontent
Commodity
“Undifferentiatedquality”“Allinfoisequal”“Info=News”
Isthistrue?
o Newscontentpublishershavebeentoldandsomebelievethatnewsisacommoditythatisvaluelessinandofitself.
o Itisvaluableonly asameanstoattractaudienceandselladvertising.
EvencommoditieshavevalueatapriceaboveFREE.
gold silver soybeanscorn
copper porkbellies(yum,yum)
Howso?Commoditiesarethingsfairlysimpletoidentifyandvaluebasedonsimplersupplyanddemandvariables.
Newscontentisrapidlybecomingmorecomplex.Itisbasedonthoughtsandideasabouteventsandthings,andsubjectivelyvalued.
Commodityisthewrongnountoassociatewithnews.Itoversimplifiesitstruemeaningandvalue.
Valuedependsuponhowwellnewsis:
▼ Conceptualized
▼ Contextualized
▼ Whereandhowit’sdelivered
▼ Whenit’sdelivered
▼ Crediblesource
“Idon’tthinkIcaneatallthisonmelunchbreak”
FREErattlers,allyoucaneat!
Whatgivesthemmoreenjoymentforlesstimeinvested?
▼ Publishersmustknowtheutilityofnewsforconsumers[thinkNewspaperNext‘Jobstobedone’list]
▼ Helpthemfindit—makeitreadilyavailableviacomputerandmobile
▼ Helpthemshareit,rateit,evaluateitinanewcontext—connectedconsumptionfactor
Consumerssharecontenttheyvaluewithselectedothersortothecommons.
Connectedconsumptionhelpsthemfilteranddiscovercontent.
Didyouhear…?
X
Newscontentprovidersmustexploitandleveragethistogreatadvantageforall.
Think‐like
strategyDevicesand
Sharingapps
BloggersConsumersNewsAggregators‘Linkeconomy’
▼ Addstocontentvaluebyprovidinganewmeasureofcommunity‐propagatedcontext…communitytellsoneanotherwhatthenewsisworthandwhy.
▼ Notfixed,butconstantlymutableandelastic.
▼ Contextandcontentarenolongerone‐way,
Editor/writerconsumer.
▼ Whichmeans,italtersthenatureandvalueofcontentinameaningfulandpositivewayforconsumersandcontentproviders
FromthePewCenter’sStateoftheNewsMedia2008report
“Asurveyofjournalistsfromdifferentmedia...Majoritiesthinksuchthingsasjournalistswritingblogs,therankingofstoriesontheirWebsites,citizenspostingcommentsorrankingstories,evencitizennewssites,aremakingjournalismbetter—aperspectivehardtoimagineevenafewyearsago.Thesenewtechnologiesareseenaslessathreattovaluesorademandontimethanawaytoreconnectwithaudiences.Newspeoplealsoarelessanxiousaboutcredibility,thefocusofconcernafewyearsago.”
Freecontent
Donorsupported
Freecontent
Adsupported
Paidcontent
Paidcontent
Adstoo
Noads
Free&Paid
Free&Paid
Adstoo
Noads
AWordfromOurSponsor
Massadvertisingmodel
JosephPulitzer'sNewYorkWorld1890Adjustedto2007dollarsNet Income $916million
Google’sWorld2007NetIncome$5billion
Innovation
Createdadvertisingtoamassaudience
Createdbidpricingandself‐adminadvertisingtoaverytargetedaudience.
Targetedadvertisingmodel
Google’sinnovationreshapesalladvertising‐basedmedia,notjustonline.
Itisdisruptinganestablishedmarketplaceandconvertingvastsumsofmarketsharetoitself.
Themagnitudeofoperatingincomeat5timesthelevelofthepreviouslydominatingmodelshowsit’spower—amassivereshapingstrategy.
Thenatureofthedisruptionissosevereandshareconversionsoquickthatitwillwipeoutasignificantnumberoftraditionalmediaplayers,includingmajoradagencies.
PlayersneedanEntirelynewapproachtoselling,distributionand
businessadministration.
THINKMANY$mall$$$$$$$$$$$$$$$treams$$$$$$$$$$$$$$$$$$$$$$$$$
vs.
$$$
• Bannerads:someincomebutnotenoughtosupportanorganization
• Classifieds:ditto• Affiliate:lotsofroomforgrowth
• Mobile:nascentstagewithlotsofupside
Unbelievablethishasbeenignoredbytraditionalplayers.
Canbe:1. Locally‐dominatedorniche‐dominated
2. Networkedglobally
3. High‐utilityforconsumersandadvertisers
4. Integratedwellonlineandwithmobile
Butbrandvalueisgenerateddifferentlythanbefore.
Connectedconsumptionplusatomizeddistributionplayabigroleinbrandvalue.
Alotaboutbrandworthbasedonthevaluetheyreceive.• Makeiteasyforthemtoconveythatinformationandhelpthemspreadtheword.• Consumerscanpromoteorkillabrandinquickfashion.• Themoretransparencyandthemoreplayersfacilitateconsumercommunicationabouttheirproductsandservices,thehigherthebrandvalueprobability.
① Newvaluechainbasedononeofthesixmodelsselected
② Qualityofcontentmattersmoreorlessdependingonthemodelselected
③ Adincomefrommanysmallstreams④ Webisthehubforcontentmanagement
anddistribution⑤ Connectedconsumptionisthenew
branddriver
Traditionalplayershaveadaptedandadoptedpractices—poorlyinmostcases.
It’surgenttobeinnovativeinstead.
Thatdemandsnewmodelsbaseduponbeingashaper,notafollower.
Withanorganizationalculturethatfosters:① self‐responsibility② creativity③ enthusiasm④ experimentation⑤ innovation⑥ integrity⑦ cooperationanddirectcommunication
traditionalplayershaveachance.
TraditionalPlayers
Gottamakethedonuts
IfIwantyouropinionbyGodI’llgiveittoyou!
Wannagoforarunafterwefinishcodingthatnewfeature?
I’mcreatingacompleteanalysisofeachmodel(6)includingrequirementsforeachvaluechainnodeandtherelationshipbetweenthem.Additionally,I’llcreateproformabudgetsforafewofthemorepromisingmodelsthatapplytotransitioningplayers.
I’mconvincedthattraditionalplayersmuststartthistransitionalprocesswiththeattitudethatsays,“Ifwestartedanewmediacompanytoday,whatwoulditlooklike?” It’stheonlyapproachthatremovesthebiasofwhichresourcesarevaluableandwhicharen’t.
Ifyou’reinterestedinlearningmoreaboutwhatyoucandobyreviewingtheanalysisofthemodelsmentioned,pleasecontactme:
TerryGarrettGarrett.tm@gmail.com415.302.9583ManagementandWebConsulting:BusinessAsIfContentManagementSystems:OasisWebLogisticshttp://bizasif.comandhttp://oasiscms.com