Tag: business models

  • Can media become social enough?

    A few days back, it was reported that Facebook now had a million active advertisers, and that LinkedIn has 3 million company pages. I’ll let that sink in, in case you hadn’t heard. Despite all the social-ness, I realised it’s impossible not to call it media. The wiki definition for media is “tools used to store and deliver information or data” That, for me, is a smartphone now! I also wondered how many media behemoths could boast of a million active advertisers. And that’s when it really struck me how much the traditional media we were used to have been sidelined – yes, they still get advertising revenue, but from a sheer reach perspective. Google, Facebook, YouTube and many more platforms get anywhere between a few million to a few hundred million visitors every day.  To put it all in perspective, TOI – the world’s largest English daily has a readership of over 7 million.

    Media and advertising have had a very intertwined life, unless of course the publication/channel has been on solely a subscription based model. I think the magic of Facebook (and Google, before it) and those that followed is that they have democratised advertising by not just making it something any small business could spend on according to their means, but also giving them the ability to advertise according to contexts – intent, interest, social etc.  Though Google, Facebook etc are still intermediaries, they never flashed their powers, though the latter has begun to, recently. As brands move away from a one-size-fits-all mode of advertising, these platforms give them more options of form and function, and changing the face of advertising. (Google’s exploits are known, here’s a pertinent read on Facebook)

    In such a scenario, what really does a traditional media channel have to offer to its consumers and clients? I’m not saying that they’re all going bankrupt next Sunday, but it’s clear which way the wind is blowing. One way, of course, is to use their brand value, and replicate (and grow) their audience on devices and platforms which better serve advertising interests. They can hone their value offerings by offering various contexts and their combinations – local, social, interests, and so on, and build business models for each. The early movers are already making big deals. But that is the red ocean that everyone is fighting for. How really can a player differentiate?

    Biz_Is_The_ArtI had a vague thought. Media’s original strength was its relationship with users and the trust involved. In the social media era, how can that be leveraged? Flipboard has already allowed users to become curators and create their own magazines. Is that the future, along with shared revenue on advertising? What if users can also curate the advertising their ‘subscribers’ can see? After all advertising is also news/information and has a certain value depending on the source. Traditionally, media  has been the middle man between advertisers and users, but what happens when everyone is media? Can media start aggregating influencers in every domain, including niches, provide them the material for curation, negotiate on their behalf to relevant advertisers, and share the revenue? Perhaps the next  disruption will be the platform that can handle the complexities involved. What do you think?

    until next time, mediator

  • In duress

    A few days back, when I met Balu and Conall, we happened to talk about the lifecycles of services (Twitter and Foursquare was the context) and then discuss whether product lifecycles were being compressed too. It is interesting because let’s say an organisation has invested in a new technology and brought out a product. If they price it high, adoption will be slow, and it may never become mainstream. If they subsidise and price it low, they may lose out if a better technology arrives before they  break even. Mobile phones (feature compatibility and obsolescence), content storage devices (VHS to Blu-Ray) were some of the examples discussed.

    Dina wrote a couple of good posts (Part One, Two) recently on durability,and whether it is losing its power as a consumer driver. The plethora of brands advertising in the youth category would seem to agree (best expressed in Fastrack’s ‘Move On’ campaign), but as pointed out by Goutam Jain in the post, in many cases it would be intrinsic to the brand’s value. The rise of ‘good enough’ in the real time era is not helping the durability cause either. We could go from fidelity in devices to that in human relationships and the cause/effects in consumption, but maybe we should get Dina to do it later. 🙂

    The second post is also a great read and is based on the comments on the first, and introduces some excellent dimensions to the original thought.  Convenience + cost of exit, opportunity cost of not entering the next ‘upgrade’ are things that I’d like to add to that.

    Brand equity is something that falls naturally into the scope of this discussion. But what i was more interested in its impact on the content that brands create, including their communication. Look at say, print ads, whose physical durability is perhaps one day (equity created might probably last longer), or radio jingles and television commercials., with a slightly larger shelf life. On the internet, it can exist ‘forever’. But there are costs involved in all of these, and in terms of durability, they might not really deliver in this era of content abundance, fleeting attention spans, and the constant search for the next ‘wow’. Also, on a smaller scale, what happens when you design say, applications for a particular platform/device like a Facebook/ iPad, and it doesn’t prove to be durable? It is many ways, a gamble.

    So, when I read Clay Shirky’s amazing post ‘The collapse of complex business models‘, I sensed a tangential connection. To broadly summarise, the post uses Joseph Tainter’s ‘The Collapse of Complex Societies’, in the context of TV content producers’ inability to cut expenses below revenues, and explains how at some point, the level of complexity added to a system fails to add to the output, and becomes just a cost, because the different levels extract more value than the total output. Also, by this time, the system is too large and too interlocked for it to adapt quickly and change. Then ‘collapse is simply the last remaining method of simplification.’

    The post throws light on what is most likely the ‘tripping point’ for contemporary media. With increased connectivity between individuals thanks to various platforms, more ideas are being formed and honed. As new products and services arise, consumption patterns change, new needs are discovered and a disruption (which is perhaps another way of  describing simplification) always seems around the corner. I see this as a message to brands, many of whom have evolved their organisations, products and services on the basis of older ways of communication. How much has durability of products been a factor in the design and structure of communication and organisational processes? Or was it a result?  As durability ceases to be a major factor, is the new imperative flexibility?

    until next time, we still call it consumer durables 🙂

  • The next content aggregator

    There was a good ‘debate’ at the McKinsey debate zone on whether people will pay for content, in the context of newspapers. An old debate by now, and one whose conclusion is being seen around, with very few exceptions (the reasons for the relative success of the Big 3 of fee-for-content services—the FT, the Economist, and the WSJ are also dealt with), but made interesting because of its succinctness. Clay Shirky writes about the ‘high price of charging for content’, and starts with a very interesting line – “People will pay for content if it is necessary, irreplaceable, and unshareable.”

    [Before we go further, I have to share this amazing read (or listen) with you – Clay Shirky, at the Shorenstein Center on the Press, Politics and Public Policy. (also read the first 3 links to the commentaries on the web, the fourth is a twitter feed)]

    I’ll attempt a summary because the context is needed for the post. He talks about the temporary arrangement that had allowed accountable journalism to create an advertising based business model, and how in the internet era, specialist information sources have disrupted that model and allowed advertisers many more, and better options. He talks about how the newspapers’ way of bundling content, where readers and advertisers subsidised the content they didn’t want, doesn’t work now, and the aggregation has now moved from the ‘server-side’ to the ‘client-side’. He sees “the newspapers’ ability to produce accountability journalism shrinking”, and is convinced that “those changes are secular, monotonic, and irreversible, rather than being merely cyclic and waiting for the next go around.”  He also points out a major and adverse side effect of this disruption – the absence of newspapers as a bulwark against civic corruption. (While there are other media and their ‘sting ops’, I’d still say that the role of newspapers in this regard is still important). This is something I remember debating a few months back over at Iq’s blog, when he wrote on this issue.

    He believes that newspapers are irreplaceable in accountability journalism, and sees three kinds of experiments happening in the new media landscape – market based (commercial, the traditional advertising model of publishers), public (funded by income other than revenue – like non-profit models) and social (crowdsourced models). The internet makes the first difficult to sustain, the second easier, and the third, easiest.

    In a recent post, Umair Haque writes about the open ‘mediaconomy’, which offers tons of soda, but good wine too, and that’s the reason why most old media companies are in trouble now – ‘they’ve been for long producing generic soda, instead of distinctive kinds of wine.’ And in an economy where supply of soda far exceeds demand, how long will people continue to pay for it? As Umair points out, its not just about media, but any industry that’s doing the same.

    Now, a few days back, when I was searching for some information for a holiday, I went to my list of regular suspects – a  few Indian hotel/destination review portals and a few travel portals. I did find information, but was given a choice of hotels that I wasnt too happy with. I had opened another tab for the traveler advice on WikiTravel, and happened to come across options in the ‘Stay’ section which I hadn’t seen anywhere else. In fact it gave me more options than I’d have liked and I was forced to choose from two equally good places, whose websites had all the information I wanted.

    WikiTravel is free, created and curated by users, who take the time out to update and add information. They will obviously incur costs when doing this, and spend some time. They obviously are supported by a revenue model (personal) that allows this, a revenue model that most likely is part of the old economy (commercial, unlike public or social) And that’s what makes me worried about the transition period, the part when the old economy is too weak to support the new, and the new doesn’t have a way to support itself.

    The other point is that the content is out there, but the soda and wine are all mixed, and I’m yet to figure a model where I’m sure I’m not missing something. Yes, there is Reader, Twitter and perhaps a couple of other places, but these do have a tendency to evolve into an echo chamber every now and then. Serendipity does lose out a lot when I put systems and processes in place. Newspapers were aggregators in their time. I can customise tools to give me the news on only those categories I’m interested in. (Rarely) Sometimes people add the serendipity. In many cases, when I’m searching for specific information, the tools (search) and the humans (crowdsourcing) have failed me. I have ended up ‘discovering’ new resources – sites/tools/people and then sharing it. Its not as organised a way as I’d like, but I guess we’re still evolving.

    There is quite some work happening though. Google Reader recently added some ‘Magic’ which helps users discover interesting content faster. The new ‘Explore’ section has a generic popular items as well as recommended sources suggested basis the reader trends and web history (if opted in). Feeds can also now be sorted by ‘magic’, again basis the history of ‘like’ and ‘share’.  Twitter lists will add a new dimension to discovering users and content, and with the deals with Bing and Google, search is going to be more real time, and more importantly, involve a human filter – using the lists layer to deliver better, more relevant search results. The impact on SEO should be fun. TweetMixx is a site I came upon recently, and looks interesting in this context.

    Where will it land up? Is it possible to create an aggregator whose context is subjective preferences, but that will still bring in serendipity? (people who liked this also liked?) What kind of content aggregator will evolve that can either sustain itself without revenue, or convince me to pay for it? Or perhaps that single-entity era is over. It does make me wonder if at some point in time, everyone will be Hiro Protagonist like characters, paid for each piece of information they add into the overall system. 🙂

    until next time, infobesity

    Bonus Read: A very good read on ‘Why the great Indian media companies will fail on the internet‘

    Update: Set up Parse.ly Lets see what it delivers. 🙂

  • Flipping news models

    Google’s Fast Flip has been receiving quite a lot of attention these days. Based on the Google News model of aggregation and categorisation, Google has partnered with quite  few sources including BBC, BusinessWeek, Washington Post, New York time, to name a few, which shows previews of their pages on Fast Flip, but looks exactly like they would on the source site, almost. We’ll come to that in a bit. The stories can be accessed basis sources, sections and the other parameters we are used to – recent, most viewed, recommended etc. Oh, yes, much of it is the user interface, that lets you ‘flip’ through the content, ‘like’ stories, and you can click through to the source site, if you want to read the full story. It has its rough edges, and is far from being any sort of killer to anyone, but its a damn good start, much better than any interface that any publication has brought out so far. On the revenue front, there are contextual ads on Fast Flip itself, and Google will be sharing revenue with newspapers. It is interesting to note that the previews of the source sites do not include ads. So if I am able to read a story completely in the preview, (which in many cases I am), I wouldn’t go to the source site, nor would I see/click the ads there. This is potentially an area of conflict, since the (shared) revenue from the one ad that’s displayed on Fast Flip cannot compare with the revenue from the source site. Meanwhile, I’m looking forward to a time when perhaps, Google Reader will have a similar interface. 😉

    In the last few weeks, this is the second instance of Google engaging with publications and ‘helping’ them create a revenue stream. The first instance was Google sending a proposal for micropayments, in response to a request for paid content proposals from the Newspaper Association of America. As per an NYTimes blog, this would be an extension of Google Checkout. Google is only one of the companies that have sent a proposal, and the list includes Oracle, IBM, and Microsoft. The system is of course in its early planning stages, and the business model has a 30-70 split (Google-publisher). Though Google still doesn’t believe that paying for content will be the remedy for newspapers’ woes, it  still has a vision of a premium content ecosystem, which includes five key features that combine the Google’s e-commerce, search, and advertising platforms.

    While Google is described by many as the single largest threat to newspapers, its definitely not the only one. From new hyperlocal community sites (eg. Patch) to remnants of old giants (AOL’s Digital City, Yahoo Local) and from new age media entities like Huffington Post to new and varied kinds of aggregators (Guzzle.it, OurSignal, MeeHive, Thoora) different services are catering to the different needs that newspapers used to satisfy. The important aspect is that the new entities are well versed in leveraging the latest tools and collaborating with those who can add to their utility value. A good example would be the tie up between Huffington Post and Facebook for HuffPost Social News. Social sharing, real time are changing the way news is being consumed. I recently read about The Twitter Times, which creates a customised ‘newspaper’ by checking the links from people you follow, and the popularity of those links. Even while massive changes are happening online, and affecting the lifestyle of individuals and society at large, newspapers are still grappling with how to evolve new business models. (a good, albeit dated read on battle plans)

    There was a short but interesting discussion on Twitter a few days back, where Surekha brought up the example of PressDisplay’s business model (aggregation of various newspapers and consumers pay for access) to ask whether a DTH kind of model would work for newspapers. I didn’t think it would. The only other distribution network for television content is the local cable guy (ignoring the web for now). But ‘news’ and even the ‘features’ content can find its way to the consumer through multiple sources and media – TV, web, mobile, and multiple sources within that.  The entry barriers have fallen drastically. Scarcity model vs Abundance model. Keeping in mind the cost that newspapers incur in creating the content and the incremental value that they give the consumer, how much would a consumer pay a newspaper aggregator, and how much would the newspapers get out of that. Yes, Press Display will make money, but ask newspapers to survive only on that revenue or even that plus web advertising, and it would be a tough task. This is why newspapers are finding it hard to negotiate this transition stage (discussed earlier) because its not one answer and its definitely not a common answer. Again, as I’ve discussed here earlier, there are inherent differences between news gathering processes in the print and online space – batch processing vs real time processing. It calls for a (albeit cliched) leaner meaner structure, not just for operations’ sake, but also perhaps from a profitability perspective.

    The more I think about it, the more I realise that its not just processes, there is a cultural angle to this. As Terry Heaton points out in “The Web’s widening stream“, the knack of creating and facing disruptive innovations. We’ve discussed David and Goliath before, David becomes version 1.0, 2.0, 3.0 faster and faster, each version better than the other (because he fixes the bugs in 1.1, 2.5 etc) while Goliath reels because it can’t even figure out the answer to 1.0.  His strength has become his weakness – scale, and he doesn’t have a culture that encourages moving fast, learning from mistakes, being open to changes amongst other things. In fact, newspapers have been lazy and guilty of doing the exact thing that Seth Godin warns about in “Flipping abundance and scarcity” – putting free on top of a business model, and now rapidly trying to change it.

    I don’t think India is impervious to these changes, the time frame will vary because of several factors – technology adoption delays, vernacular content to name a couple, but as I keep repeating, its no time to be complacent. From Rediff and Instablogs which have evolved their own news collection systems to hyperlocal players of different kinds – governance based like Praja, Citizen Matters, local businesses review based like Burrp, and several other niches, the different domains of newspapers are being challenged. More importantly we’re increasingly getting used to ‘streams’ – FB, Twitter etc. The principal revenue model of newspapers has been advertising (as opposed to circulation), they have been the medium to reach audiences, with the most basic of audience filtering. The radical change (as Heaton points out) is that advertisers can be part of the stream themselves, with such filtration techniques that they can target an individual if necessary. So, for newspapers, if the advertiser won’t pay, the reader has to. The reader , meanwhile has figured out that on the web, he has an abundance of choices.

    until next time, stop press?