A blog entry by Jonathan Bean, COO at Mynewsdesk
Take away your content, look at your business with fresh eyes and you might just have the start of a sustainable business model.
In May I spent two days chairing WAN-IFRA’s Nordic Local Media Conference. The conference drew an audience of media execs from across the Nordic region, all faced with the same challenge: How do we move from the analogue (or printed) world to the digital world and still have a credible and sustainable business for the future? I wish I could tell you that we came up with the magic answer, but alas, we did not find that particular holy grail. However the many ideas that were thrown around the room led us to believe that there is a bright future for the local media business – but not necessarily in its present form or in the form it has taken the past 50 years.
Spirit of Innovation and Partnership
Serge Taborin from Archant, the UK’s largest independently owned local media group, gave a great keynote on their success in developing various different business models around its online business. Key to this success was the spirit of innovation in his organization. It allowed him to take Archant from the printed to the digital world while maintaining profitability. Also key to his presentation was the idea that media companies need to partner with effective organizations to be successful in digital. The age-old business dilemma – to build, buy, or partner – was discussed.
Archants’ successful Group Buying (Groupon-style) initiative, Tickles, was presented as an innovative way to make money from engaged local audiences and advertisers: a win-win situation is created for both target groups, and a new revenue stream is created without cannibalizing on existing advertising revenue.
Also discussed in a presentation by Swedish Radio was the idea that “your enemy is your best friend… at least for now”. This referred to their competitive landscape being changed by the creation of the music streaming service Spotify. Their first reaction was an obvious one: “how do we compete with these guys?” But the smarter reaction was “how do we work together with these guys to make our content more accessible and reach users where they are present?”
This is a key lesson for all media houses in the digital age. “No man is an island” is a popular phrase, and that thinking should be applied in every media house regardless of important they believe their brand or content to be today.
Monetization was much discussed by many speakers, but again, no magic answers. Erik Saastad from Dagbladet in Norway stressed the point that at this stage, you have to start charging in some way, it didn’t matter for what or how much. The importance of trying, failing, and learning quickly was key to his thinking. He also, very wisely, pointed out that media brands were competing for people’s time, and he considered Angry Birds to be his competitor more than another newspaper.
Göteborgs Posten monetized approach, GP+, is only 8 weeks old, so no firm conclusions were drawn, but they did point out that it was based around strong lifestyle sectors such as fashion, food and drink and city-related stories. I see this niche approach as where we are going to end up: with individual journalists and sectors building up a network of readers or followers who will be prepared to pay for the individual journalist’s opinion but not necessarily for the media brand itself.
GP also pointed to the very important factor of political buy-in at the very highest level of media organizations. This is to make it possible for any digital monetization project to even get off the ground, despite opposition from cynics across all media organizations that have made their careers and will live and die in print.
The iPad/tablets – are they the savior for media houses and their decreasing print circulations?
Apparently, at last year’s conference, the iPad was hailed as the savior of the industry. One year later it was clear that this was not actually going to be the case. All user data presented by various parties clearly showed that we were only at the start of the tablet revolution. I concluded that media houses should concentrate more on their web offering and innovative business models around that, as opposed to making significant investments in iPad apps – at least for the time being, until tablet penetration increases.
Interesting data was revealed regarding how much consumers were prepared to pay for an app on an iPad ($3) versus smartphone ($1), but the real insight for me was how advertisers could use rich media and interactivity on the iPad to really engage with users. This simply is not possible with more traditional forms of advertising, and is a huge opportunity once the iPad and other tablet devices get beyond the urban and early adopter elite.
The best advice for media houses came from Carsten Worsoe from Nordjyske Media in Denmark who stated, “an effective media app should take inspiration from the magazine, depth from the news world and user experience from the gaming world – that is the magic formula.”
Applying the law of absence
Perhaps most controversial and thought-provoking was the final keynote of the conference given by Inma Martinez, President of the European Tech Tour, Serial Entrepreneur engaged with her fifth company, angel investor, and advisor to Associated Newspapers in the UK.
She offered some sage digital advice to traditional media houses: Apply the law of absence. Take away what you consider to be the core of your business, see what you have left and reverse-engineer the business from that. Numerous examples were given of successful companies who had made this leap: Cable and Wireless, who went from being a voice telecoms provider to a data telecoms provider; Nokia, who went from being a manufacturer of rubber products to a global telecoms giant were just a few mentioned.
They had all experienced this reverse-engineering process and now media houses need to do the same to be successful in the digital world. What is a media house’s core? Many would say it is content. If you take away content then what you have left is a brand, key journalists, readers loyal to a brand or journalist, and advertisers interested in those loyal readers.
The idea of the social journalist – and the split personality of a printed and online persona for a media property – was much discussed. Inma won me over with her argument. How many of the media execs can say the same? I have to admit though, how can you be converted to an area which right now is not making your organization any money? No choice, I would say, but it’s definitely a tough one.
The conference ended appropriately with an app developer who specializes in apps for 0-7 year olds. Scary, some would say. I would say that by the time those kids are media consumers, we will have finally worked out how to make money from the digital landscape – and this will definitely be through improving people’s quality of life, through improving user experience in an ever more connected world. Media houses and their staff will soon begin to take advantage of the networked economy, in which we are all starting to live, and apply innovative business models that allow a win-win situation for both advertiser and reader. If there was one crumb of comfort that we all took away from our two intensive days it was this: “We may not have the answer…but neither does our competitor.”