The digital battle is getting serious but who is fighting and why?

It’s the giants leading on the battle; it amazes me that the rest of us let them rule the ground alone.

It is all about power, owning the value chain and keeping / achieving profits. Who owns the production line ? Who have control over the infrastructure (path of delivery) and who has the strongest grip of the customers?

For some; helping people to improve their lives and decrease their sufferings and problems seems to be a necessary (but undesirable) cost aspect. No wonder people distrust whole countries, corporations and those who want to sell us yet another vacant argument.

Facebook is coming up with a mobile solution, but do not launch a cell phone. IPhone got behind in the innovation race. Kodak is bankrupt. Sony is losing money all over. Many newspapers tries to generate sufficient revenues by hiding behind firewalls. AT&T (and of course Telenor in Norway) are fighting too, they want the free ride of earning on others production of content. Media moguls are on the ground too, armed to their teeth with copyright arguments. North Korea and other nations are accused for running a cyber war. Most nations want some sort of control over the Internet, they say it’s due to fighting crime.

Confused? No need to be embarrassed. Most people are.

The digital revolution is really about who is producing value in the digital era and are able to deliver solutions to people’s problems and fulfilling their desires in the most benefitual way. It can be a revolution FOR the people, but then the people have to wake up.

The question is not about copyrights, VAT, or that the artists will not survive when everything becomes free. It is not about journalism or literature, storytelling, pictures and film as dying crafts. It is really about a new level of democracy, where the value is in delivering real value to people – the market.

For the media industry  it is important to understand this, and at the same time to understand that the real producers of added value (the artists, the storytellers, the journalists and so forth) need to get the fair share of the value produced!

Beyond advertisement?

The media industries have to increase their revenues and can do so by rethinking why they are in business. Where would that leave the marketing and advertizing business?

The problems for the media industry finding sustainable business models may very well be with the point of view, from where most media companies are trying to solve the problem. In my opinion this problem is a huge challenge also for the marketing/ advertizing business.

Media companies keep asking: “How to monetize on our content?” That is the wrong question.
Content is an expense, not an income. Editorial (or for that matter user generated) content and commercial content are expenditures. It cost time, resources and money to produce.

Lack of innovation in the business of advertizing and marketing?
The advertizing and marketing business have been fortunate enough working in close relationship with the media industry for decades, without a need for innovation for years. Still the majority of activity and commercial approach on-line seems like a “plain” adoption of print. But we have seen that the business is challenged from various angles:

Nike has implemented a GSM chip in their shoes, registering location, running speed and so forth. This combined with an “app” let people get the data of their jogging pattern and enabled them to share this with co-joggers on a community portal called Nike+(2009).

Ford’s social media strategy is surely shifting from traditional advertizing to make use of social media and monitoring behavior “You need to listen, see how they behave and act similarly” (Scott Monty (Head of Social Media)

Musicnodes is a Norwegian start-up that offers contextual placed music for purchase directly (micro payment). This benefit the artist (higher income per sale), the media where it is displayed (income sharing’s for transactions) and the customer, because they can fetch the music they want, in a freemium/premium model by choice.

All three examples threaten traditional revenues from banner ads. All three examples are mostly driven outside of the traditional marketing and advertisement business.

“Don’t try to bend the spoon. Rather imagine there is no spoon!”
With a perspective where the real value is not in the product, but in benefits for users (and brands) gives media (and advertizement) companies an opportunity to rethink what their offer really is. What added value does one provide?

Furthermore it’s worthwhile to (again) ask the board: “What is the purpose of our business?” – Because: “… it’s not profit. Profit is the result of why this company is in business.” (Simon Sinek)

A purpose for a media company could rather be: “To improve the population’s capability to be an active part of democracy, by providing information and knowledge” For the advertisement business it could be: “solve customer problems, when they have them, where they are and in the most convenient way possible”

In other words: A business that improves people’s ability to take part in the public discourse for media companies, and ease the living for people for the advertizing business. With such a renewed perspective media companies and advertisers will have a whole new landscape of how to reach their goals. One can become a content store, an e-publisher or an online (and offline) knowledge centre, in addition to traditional “media activities”. And if media companies start doing their bit, where would that leave the advertising business, if they don’t start re- thinking?

The marketing and advertisement business will have to get in front of the development we see. In short the whole value chains for the media industry are changing. This leaves advertisers no other alternatives than to take control over the situation and increase their product/ service line far beyond what they used to do.

Cultivate knowledge about your users!
Media companies and the marketing and advertizing business should look closer at what values they are able to create from cultivating knowledge about their users. If so, media companies will be enabled to provide contextual, specific, targeted editorial products to their (singular) users/ commercial customers (brands), in all the channels available: Broadcast, print, web, “pads” and mobile phones. The marketing and advertizing business would get the opportunity to implement a whole new way of doing their business.

This is one way of making use of the term: “Big data“. The more knowledge there is about customers, the more one can monetize on that knowledge.

The key question is: What is the knowledge about our users profile, behavior, actions and location worth, -and for whom? The answers will have to go far beyond content presentation, subscription and advertising models only. “Social media” activities and believing that the “mobile revolution” will be the “savior” is at best a naive approach.

Both the media industry and the marketing/advertising business have to totally change their perspective from where the real values are made and how to monetize on knowledge about their users, far beyond traditional segmentation. They need to know what their customers’ needs and desires are (even before the customers know themselves), and to be able to deliver the answers in the channel/ device at the right time to the right person. The mass market is gone forever. We now have to be able to deliver superb services and products that solve individual, personal felt problems instantly. Tomorrows media companies have to become more than “digital news / entertainment portals? The marketing and advertisement companies that don’t have the answers will have a hard time surviving the next decade.

Who do you believe that will be the ones”owning” the value of customer insight the next decade? The media industry or the advertisement industry?

Digital advertisement, what’s the point?

 Last week Mitch Joel ( @mitchjoel ) made me think!

In his article “The Trouble With Online Advertising”  I made a very short comment “ … Why not just skip ads?… and Why not just get useful?…“ 

Since my comment where so brief I thought that exploring this a bit further might be worth while?

Mitch’s article point at the fact that very few people like online advertisements, they hardly click on them and digital ads doesn’t pay off very well for the owner of the website. (That is if you don’t have an enormous amount of people using your web solution, such as Facebook.com or google.com, where the numbers of people is so huge that it becomes a money making machine, after all.)

Still, most of what happens in online advertisement and marketing is an eyeball game. “Collect as many users as possible, and sell the crowd to advertisers!”  – Just as in the good old days. Many voices are now speaking about that this isn’t working. Advertisement, also in the digital environment is increasingly becoming regarded as pollution, and doesn’t make sense.

In the print world it had a purpose, in a digital environment it’s just a set of extra click’s between a customers needs and suppliers ability to deliver. “Why not skip the ads? ” was my question and go directly to deliver the solution to the user.

We know all the arguments coming from the business of marketing and commerce. – “Sales don’t work like that” – “The purchase process doesn’t work like that” –“the customers are maybe not aware of their needs yet, and need marketing to realize their needs, before they will be willing to make a decision and actually purchase a product”. We could go on.

Is there an elephant in the room?
The questions are wrong! It’s not about “How to market better?” I belive it’s about how to provide users with what they need, when they need it; at the place they are! – But that is not all…

“Why doesn’t anyone bother to get to know me?” “Why do I have to do the “purchasing process” all by my self?”  A wide range of businesses spend time getting the metrics right, collecting info about their costumers, defining target groups, finding out at when it’s best to present traditional advertisement to users. But…

Companies (and media houses) is not working to get to know what problems I could need help from someone to solve in my life. And it’s not about finding out what my values are, and what kind of ideas I’d like to support.

Maybe it is as Simon Sinek says? : “Because to many businesses doesn’t know why they are in business” and he states: “Profit is not a purpose of business, it’s a result.”  This TED talk  of his is about why people buy something at all. – Thank you for sharing Chuck Peters! ( @cpetersia )

For me, it’s sounds more important to discuss the purpose of your business, and then find ways (yes, possibly including advertisement) to meet users and customers that would like to support your purpose.

Feel free to Contact me for an informal meeting. if you would like to discuss your challenges.

Some older blog article (more or less) relevant to this subject:

Slik kan aviser ta betalt for innhold og kommersielle produkter 

What’s the value of you in the digital universe? 

Seven” right things” to do in digital business today

 

The Norwegian news business is restructuring, but is it enough?

This autumn will be one of the most thrilling times for Norwegian media business ever.  All major media companies faces no alternatives but change. What that change will be, is still unclear.

Schibsted is restructuring and is going to down size their paper activity. Schibsted says that they will reduce costs with a full year effect of approximately NOK 500 million over the next two years in the subscription based newspapers of Norway and Sweden, in addition to Spain.

From Reuters:“- The aim is to continue the digital transition in our media houses in order to gain as strong positions online as they enjoy today in traditional media. Strong editorial products will continue to be the fundament for healthy and profitable media house businesses also in the digital future, CEO Rolv Erik Ryssdal says.”

A pressen will announce their strategy at the «Media Business 2012-2016» conference in Oslo the 29th of august. We know that A- pressen and the CEO Thor Gjermund Eriksen will have to sell at least 7 local newspapers in order for the Norwegian authorities to formally accept the merge between Edda media and A-Pressen. According to  Kampanje  Eriksen states that the job ahead will be to merge the to media houses into one modern and powerful media company.

TV2’s CEO  Alf Hildrum says that they will spend more money than ever to maintain or even grow their market position. They now have Egmont as one of the major owners and have something to prove towards their owners. Not to forget that the broadcast business  also is in radical change and meet competition outside their normal arenas.

The main actions for the three major media companies as far as I can se it is in short this:

• Reduce cost and increase efficiency by:
  • Relocating
  • Restructuring of the organizations
• Increase and maintain market positions by:
  • Invest in mobile platforms
  • Invest in (digital?) content production

Does this sound familiar? This sounds like cut offs in staff.  I do hope there are changes more fundamental than this in the business going on.

I did not read a word about business models, new and appealing products both towards readers/ viewers or on the marketing/ commercial side.

I didn’t hear anything about investments in external companies that can offer such, or internal innovation activities.

I did not hear a word about what the media knows about their readers/viewers/ users needs – or how to monetize on the value of such knowledge.

And I didn’t hear anything about how to meet the real competitions in the media world: How to meet the fact that Google, Facebook, Twitter, Linkedin, streaming media solutions like Telenor is establishing and other disruptive initiatives are collecting the traditional media revenues in a quantitative- and qualitative way that has never happened before?

Fact is that a whole lot of other major enterprises have the ownership to the users/readers/viewers and are able to monetize that far better than the traditional media industry.

I hope that, by now, the news- and media industry has a strategy and concepts for revenues that goes beyond subscriptions and advertisement.

And I hope they are searching and getting hold of external competence, that is not “hold as hostages” but that get real influence with their outside perspectives.

This is far more important to focus on than the above mentioned bullet points. I’m not saying that reducing cost and increasing efficiency is not important, it’s just that it is basic, what will make the business transform and become healthy and strong for the future is in innovation and meeting real needs better in the new digital world.

As I’ve blogged about many times before, business models and concepts needed, already exists and many more are in their start-up, but I’ve seen few coming from inside the business itself.

For the people working inside the business (media people, and journalists) there are radical changes ahead. How to get the owners of media/ news companies and the employees to work together to make the needed change to happen?

In my opinion there is a problem with the public discourse, because it’s not easy to criticize your own employer. And it’s not easy for the parties to accept criticism from outside either.

In a situation where serious change has to happen, I’m afraid we will see defensive rhetoric’s from all sides in the coming year. Unions will try to defend their members from cut offs; management will try to defend the profit rate for their owners.

This energy rather ought to be used to discuss how to best serve the public in a manner they will benefit from, and enable the media/ news business to get a fair share of the value created.

Social responsibility in business

Social responsibility has become a “hot topic” over the last years. I’ll present some viewpoints to the subject, but first three examples from my network:

 

 

 

 

 

 

Ferd (@FerdCEO)
Why is it that a “hard core” industrial-and financial company like Ferd spends 20 mill NOK a year on supporting Social entrepreneurship?

In order to learn more I visited Ferd before the summer and had a long talk with Øyvind Sandvold (@oyvind_sandvold ) about the work Ferd is doing. What they support and what is outside their scope. You can read more about it HERE

I think the short answer is because they can! They have the assets and also valuable knowledge to share. Of course the element of charity is there.

But to my surprise Øyvind told me about another aspect: That there is a great “return of investment” for the Ferd company and the employees. Every project they support includes that one of the investments consultants (from the other investment funds) take part in the project as a board member, consult the Social entrepreneur and ensure that strategy, business plans and company start up secure the social business and its objective, and also has a growth plan. Øyvind tells me that these projects have become some of the most attractive assignment the employees can get involved in. They learn a lot, make great friends with people in the projects and experience that it’s very meaningful to provide their knowledge and to support social change. The most important part however is that Ferd as a company gets valuable knowledge in return.

Interesting enough: The Ferd social entrepreneurs has yet not received one application for a digital project!

Kavli (@KavliFoundation)
Most people in Norway know of the company Kavli. The Kavli Group is one of Norway’s largest and most international food groups, with some 800 employees creating a turnover of about NOK 2 billion. The companies produce goods for more than 20 countries. Maybe fewer people are aware of the fact that the profit from all Kavli products is channeled back to society, via the the Kavli Trust? They mainly donate money and focus on advanced science research, cultural activities and humanitarian work both in Norway and international.

Kavli has supported a great range of projects since 1962 and it’s interesting to note this project: Barnevakten.no  (Kids and Media). The organization has acquired a global reach with backing from the Kavli Trust. It is now a big operation with various web-based activities in the USA, the UK, Australia and Denmark as well as in Norway.

Bien Bank (@BienSparebank)
Bien bank is a small bank and the only local bank in Oslo. It used to be a savings bank owned by the customers, and is now owned by a trust. In the same manner as Kavli, Bien banks profit is channeled back to the population of Oslo by supporting informational and educational activities towards children and youth, art and cultural projects and community initiatives.
Bien tells me that they are looking into digital projects as we speak.

In addition to these few examples, we all know of the wide range of classical charity organizations, aid organizations and government’s engagements of all sorts.

As we see social responsibility is not at all a new idea. Our western democracies are built upon such ideas. What I believe we will se in the coming years (and why I write about it) is new and innovative initiatives, more and more of them will be digital. And more and more of them will have elements of what Ferd has implemented: In short – funding and expert help towards Self supported and sustainable social entrepreneurs.  

We will se “niche” projects from groups that want to take part in changing a business, like  Spot.us that says this about themselves: “Spot.Us is an open source project to pioneer community powered reporting.”… (spot.us red) “provides a new opportunity to expand the impact of public media journalism by making it more responsive and responsible to the public, while deploying new ways to support freelance reporters and the newsrooms that depend on them.”

As a warning: We will also see fraud! Solutions created only to enrich criminals, like the warning states in this article in e24 concerning the risk of scandals and fraud in crowdfunding

But should we let the risk of criminal acts from a few, stop the actions from millions of people and thousands of companies around the world that genuinely want  to help and improve the world we live in?

Slik kan aviser ta betalt for innhold og kommersielle produkter

 

Avisbransjen er som vi alle vet inne i en svært spennende tid.

Det er store strukturendringer, det er en jakt på inntektsmodeller, selve journalistikken endres, alle «jakter» på å beholde leserne av papiravisen og på å tilby brukere digitalt innhold både tekstlig og audiovisuelt.

Dagens strategier
De strategiske valgene som nå gjøres er forskjellige. Morgenbladet og Klassekampen fokuserer på print. Dagsavisen legger (nesten?) alt sitt innhold bak betalingsmurer i løpet av kort tid. Det kan de gjøre ved hjelp av mediestøtteordningen, som den er nå – og ved en samkjøring av innhold, slik at leserne får samme innhold i alle plattformer. Hvordan det vil gå blir uhyre spennende å følge med på! VG og Dagbladet tviler jeg på vil (ønske/kunne) gå i en slik retning. Her er det helt andre utfordringer som må møtes. Torry Pedersens uttalelse i Kampanje tyder på at han i hvert fall vil gjøre alt han kan for ikke å bli sin bransjes «Kodak». ( noe Gisle Hannemyr kommenterer her) Aftenposten arbeider også kraftig for å beholde størst mulig inntekter på print abonnementsiden og vet at de må kompensere fallende opplagstall med økte digitale inntekter. Regionsaviser og lokalaviser er i stor grad eid av store aktører og har igjen andre konkurranseutfordringer, men har fordel av å være nettopp lokale og møter mindre konkurranse av den grunn. Nisjeaviser har noe av de samme fordelene ved å ha genuint innhold men har noen særegne utfordringer.

Felles for alle disse er at de må beholde så mange lesere de kan på print så lenge de kan og bygge opp inntektsmodeller digitalt som både folk og annonsører vil betale for.

Dekke behov og tilby noe som oppleves som fordelaktig
Jeg vet ikke hvilke resonnement som gjøres i styrerom og i ledergruppene rundt om i avishusene, men samtlige må tilby leserne noe de opplever at de har behov for og som hjelper dem i å «navigere» i samfunnet. Spørsmålet da vil være: Hva opplever leserne som en fordel for dem?

Å få svar på:

• Hva er nytt i dag, hva skjer?
• Hva er relevant for meg her jeg er og det jeg interesserer meg for?
• Hvordan kan jeg forstå det som skjer bedre?
• Hva burde jeg visst noe om?

Etter at internett kom og frem til nå tror jeg at lesere i økende grad opplever at de får disse spørsmålene mer eller mindre godt dekket via avisenes nettsider. (dvs. at de ikke opplever forskjeller mellom papir og nett som store nok, til at de beholder kjøpsvanene på papir) Robert Levine, (tidligere sjefsredaktør i Billboard og forfatter av boka «Free Ride») mener at det er betalingsvillige lesere i markedet. (les artikkelen i Aftenpostens nettutgave her) Robert Levine mener at hele kulturindustrien for tiden har, hva han kaller «gratispassasjerer», og at nettavisene er mediehusenes største fiende.

Jeg er ikke uenig i at nettløsningene til avisene er en utfordring, men mener analysen om at brukerne/ leserne er «gratispassasjerer» er å begynne i helt feil ende. Jeg mener at historisk sett at det er avishusene som har fått lesere og inntekter lettvint – om enn ikke helt «gratis». Hvert fall om man sammenligner med andre bransjer som har måttet arbeide mye hardere for å forstå målgruppene sine og deres behov/ problemer for så å kunne foreslå måter å løse dem.

Avisenes største «fiende» er ikke nettavisene eller leserne som ikke vil betale. Avisenes største fiende har vært deres tradisjonelle og veletablerte verdikjede og inntektsmodell. Det er dette avisene nå arbeider for å opprettholde – eller endre.

Inntektene på tradisjonell (banner) annonsering er for lave til å dekke kostnadene ved innholdsproduksjon i en digital verden. Løsningene på denne utfordringen har vært å redusere kostnader og effektivisere drift – bla. Ved samproduksjon (print/nett). Jeg har lenge hevdet at jeg ikke tror på denne modellen (med noen unntak). Ei heller tror jeg på forslaget til Robert Levine som i hovedsak ser ut til å være «Betalingsmurer». (Også med noen unntak)

Robert Levine sier noe annet interessant: «- Annonsørene betaler for kunnskap om leserne. Metoden vi har hatt til nå, har stort sett handlet om å telle antall lesere. Men annonsesalget på nettet baserer seg på hva du vet om leserne dine. Et tradisjonelt nyhetsmedium vet ikke spesielt mye, ikke kjønn, interesser eller alder.» Videre snakker han om at tjenester som Google, Facebook og Twitter vet mye om hvem man er, hva man etterspør, hvilke sosiale nettverk man har – og at det er de som tjener pengene online. Dette er veldig riktig og her mener jeg at avishusene har et godt stykke igjen å gå – men det er dit de må!

Jeg tror heller ikke det er en og samme typeløsninger som passer alle de forskjellige typene aviser. Det er stor forskjell på lokalaviser, løssalg, abonnementsaviser, og nisjeaviser. Derfor vil også løsningene på inntektsmodeller bli forskjellige. Uavhengig av dette er det to generiske faktorer som bør sees i sammenheng.

1. De forskjellige plattformene/kanalene har i stor grad samme innhold. Dette må for de fleste avishus endres. Om leserne opplever at de får dekket sitt nyhetsbehov gratis, er det forståelig at de ikke vil betale for samme produkt i en annen plattform / kanal.
2. Det må utvikles annonseprodukter som gir høyere verdi (og høyere betalingsvillighet) for annonsørene (som Robert Levine er inne på)

Et forslag er å lage forskjellig innhold på print, nettavis, lesebrett og mobil. Disse bør supporteres med egnede og sannsynligvis forskjellige forretningsmodeller. Nettavisen tror jeg det er klokt å la forbli gratis for brukere/ lesere. For å kunne legitimere betaling for de andre produktene må disse inneha kvaliteter og verdier som nettproduktet ikke har. En måte å tenke på er:

• Nettavisene fokuserer på hendelsesnyheter, interaksjon med lesere (debatt, blogg, brukergenerert innhold, nyhetstips, gaming osv.)
• Nettbrett tilbyr rike innholdsopplevelser: Tekst, touchdesign, bildejournalistikk, brett-TV, featurejournalistikk, samt gaming osv.
• Mobilproduktet er i høy grad personifisert og leser filtrert på eks. tema og kan tilby automatisk lokaliserings- og «pull» løsninger.
• Print- produktet tror jeg vil stå sterkest ved å øke papirkvalitet og grafisk/visuell design kraftig og tilby innhold som har lang varighet/ gyldighet. Feature, analyse og samfunnsstoff med både nasjonale og internasjonale perspektiver.

Dette er eksempler på hvordan aviser kan skape forskjellige produkter som utfyller hverandre, snarere enn å kannibalisere hverandre. Konsekvensen av dette er selvfølgelig at nettavisproduktet blir et «tynnere» journalistisk produkt enn i dag. Samtidig må ikke nettavisen som produkt bli et dårlig produkt. Det skal bidra til å bygge avishusets merkevare, øke interaksjon med brukere/ lesere (som kan brukes til flere forretningsformål) og markedsføre de betalte produktene i de andre kanalene/ plattformene osv. Dette vil kunne gi leserne behov for å benytte flere av avishusets produkter, noe som igjen gir grunnlag for å skape passende forretningsmodeller.

Kommersielle produkter i aviser
Aviser har tradisjonelt tjent pengene på annonsering og abonnementsinntekter. Frem til i dag har det dominerende kommersielle produktet bestått av forskjellige annonseformater (bannerannonser osv.) Rubrikkmarkedet er i all hovedsak overtatt av aktører som finn.no. Det er andre tjenester og produkter også, så som vektklubb, datingtjenester, kupong/ rabattløsninger osv. som bidrar til inntjeningen i avisene.

Geolokaliseringstjenester, kontekstuell- og atferdsreklameer på full fart inn i internettverden og har bare blitt benyttet av aviser i liten grad. Disse løsningene vil ha langt bedre forutsetninger for å skape større inntekter, dersom man differensierer innholdet i forskjellige produkter.

Annonsering som forretningsmodell er i all enkelhet å selge flest mulig lesere/ brukere til flest mulig annonsører til en høyest mulig pris. På web har man ikke klart å få spesielt høy pris for annonser, fordi det ikke har gitt annonsørene tilstrekkelig høy verdi tilbake. Dersom avisene vet mer om sine lesere (hvem de er, deres atferd, motivasjoner osv.) vil man kunne tilby kommersielle produkter av høyere verdi. Trendanalyser (sanntid), utnytte informasjon om leserne som øker deres konverteringsrate (folk utfører ønsket handling som f.eks. kjøpe et produkt) er to eksempler på å skifte fokus og heller selge informasjon om leserne enn bare å selge dem i volum.

Det er også spennende å se for seg om avisbransjen leverer annet innhold enn det man tradisjonelt har gjort. Et eksempel er å levere innhold som ingen andre har. Eksklusivitet har alltid hatt verdi. Kanskje VG’s, Dagbladets eller Aftenpostens økonomiredaksjon kan gå analyseselskaper i næringen og selge økonomirapporter/ analyser til næringslivet? Eller at man slår seg sammen med forlag eller filmselskap og blir ebokforhandler/ filmstreamingleverandør?

Det er vanskelig å spå om fremtiden men to ting er nokså sikkert:

1. Avisbransjen kommer aldri til å være det den engang var.
2. Folk har etterspurt innhold til alle tider og vil fortsette å gjøre det.

Les også :

What’s to do for the media business in turbulent times?

Tradisjonelle medieinstitusjoner er de “lost” ?

Jeg har skrevet om media  og hva som skal til for at medie- institusjonene har en funksjon inn i fremtiden tidligere. Nå skriver jeg om det en gang til. Samtlige medieinstitusjoner står midt oppe i radikale forandringer. Og ingen av dem synes å ville være med på det.

Robert G. Picard, en av de mest anerkjente økonomiekspertene innenfor mediebransjen gir relativt kraftig kritikk i forhold til mediebransjens økonomiske evner. De er riktignok farget av  at han er amerikaner, likevel har han  noen poeng.

Massemediene, som vi kjenner dem, hevder han, har hatt ett par hundre år, hvor man i bransjen ikke   har måttet beskjeftige seg med forretningsmodeller, eller å fundere på hvor inntektene skal komme fra.  Som et etablert ”massemedium” var det slik at publikum kjøpte avisene for å være opplyst og ingen stilte nevneverdige spørsmål videre. Tilhørigheten til hvilke medier man kjøpte av handlet mest om politisk tilhørighet. Denne ideen har levd så lenge at jeg har selv har snakket med folk  som ”savner ”Dagbladet som kulturpolitisk avis”. Det er faktisk lenge siden den har vært det!. Men ”vi” venter altså fortsatt., – snakk om god branding! Lars Helle hvor er du?

Forleden dag snakket jeg med en annen konserndirektør innenfor norsk medieverden. Vi var ”ukomfortabelt” enige. Det er behov for strukturelle endringer. Store. Alle journalister jeg har snakket med er engstelige for den slags snakk fra konsern, eller eierstrukturer. Jeg forstår ikke dette. Fremtiden eies kun av en eneste ting: Publikums opplevelse av å ha en fordel: Hvilken kunnskap kan dere medier gi meg, som jeg ikke kan fremskaffe selv? Slik tenker vi, vi utenfor journalistikken, utenfor medieverden.   Hva har dere å tilby? – om du vil. Det journalistiske faget står under ekstremt press, men det er ikke det verste, for kunnskapen (om enn fattigslig) kan publikum finne ved å ”Google” er enorm, men hvilken kunnskap gir google? Journalistikk er enda viktigere enn noen gang før, hva kan ikke ”Googles”? etter min mening : Kunnskap, erkjennelse. Når jeg leser tabloid og løssalgsavisene i Norge, eller majoriteten i  verden, savner jeg å tro på journalistisk kunnskapsformidling. Det er som om jeg selv kunne ”Googlet” meg til resultatet, hvorfor betale for å ikke å bli klokere da? Jeg “vet alt” men jeg forstår lite…

For å snakke om mediene – dvs. plateselskapene (husker dere?) filmselskapene( merker dere hva de hindrer oss i?) avishusene( ser dere hva de hindrer oss i?) magasinene( hvilken glede de ga oss) forlagene (hva holder dere egentlig på med?) – og hvor blir det av Donald Duck? Samtlige kjemper for en utdøende ide…

Det er en enorm kamp der ute – og vi som bare har lyst på de gode historiene, hvem spør oss? – Ingen. Og i den fasen av utviklingen er dette litt forenklet sagt ikke klokt. Vi – dvs. lesere, forbrukere, publikum vi vil ha noen som hjelper oss og gjør oss klokere. Vi har, som mennesker villet ha – og vist at vi vil ha -noen som hjelper oss til å bli klokere i minst 28.000 år. Og vi vil gjerne betale for det. Betalingsviljen er ikke et problem. Problemet er ca. 200 års vanetenkning innen (enveis) massekommunikasjon om hvordan ta betalt for innholdsproduksjon. Nå er dette endret, systemene for hvordan ta betalt,-  ikke viljen til å betale for seg-  er i endring. Kun det. Så hvorfor stritte i mot? De neste 28.000 år vil folk gjerne ha god faglig journalististikk, stor fortellerevne og kunstneriske utrykk og er villig til å betale for det, på den ene, eller den andre måten. Jeg ber dere ganske enkelt om å la være å stritte i mot fremtiden, for det er ikke så vanskelig som det kan se ut som.

Plateselskaper, kommer ikke til å være en suksesshistorie i fremtiden. Ikke tenk ideen om å lage et plateselskap! Det er smartere å tenke at man skal være et musikkselskap. Film. Ja hva skal man si, makten fra Hollywoodsystemet er ennå stor. Eies av sånne som Sony etc. Men hvor lenge holder det? Hvem eier gleden av fortellingene på Youtube? Hvor er den gode historien? Kapitalkrefter er ikke et godt måleparameter.  Kinofiilmen vil leve, den vil leve godt, jeg er usikker på hvordan de neste femti år. Men den har kvaliteter som ikke kan erstattes. Kan hende at det krever ett glass vin, ett event, en filmpersonlighet tilstede osv. (men slik var jo opprinnelsen til filmkjendisene. -Tilstedeværelse. Kjære journalister, vær tilstede med dere selv, dyrk faget!

Som sagt med mange ord: Massemediene blir ikke borte, med mindre dere – fagfolkene flykter. Om dere flykter er det fordi dere ikke skjønner elementære økonomiske prinisipp: Lever verdi til deres “kunder”/ lesere – som oppleves – for dem større en det de opplever at de betaler for.

The Norwegian e-book database is able to challenge Apple and Amazon.com!

The Norwegian ebook database “Bokskyen” (“Book cloud”) is capable of challenging both Apple and Amazon.com. I just wonder if they are aware of the value they have at hand?

In an article in Aftenposten today I read that the technology used and the set up they have made in the platform created they may avoid becoming dependent on Apple’s and Amazon.com walled garden ebook strategy. I knew this two years ago, when the ebook platform was presented in “Web dagene 2009”, based upon the way they explained the technology.

Since then the owners of the platform ( CapplenDamm, Gyldendal and Aschehoug ) have focused on a strategy where the political fight concerning VAT and governmental regulative agreements have been the focus. Also keeping the “old publishing hegemony” have been a important strategy of the publishing houses in Norway, as in many parts of the world. Meanwhile the Norwegian bookreaders have become eager customers of both Apples ibook and of course Amazon.com for purchasing their e books. I’m not at all sure that the publishing companies have had the best strategy up till now, training their market to use the main (and world leading) competitors.

As for now it seems like the positive news, that they now seem confident and happy to be able to avoid Apple and Amazon.com and by that being able to keep a larger part of the profit, is the benefit they see. They are happy for the “deals” made with the government and for being able to keep a pricing model they feel they can live by, mainly continuing their business in traditional ways. This is not a great strategy for the future. In best case it’s an OK short term tactics that have worked out well – for now.

I believe that they don’t see other than only a very small part of the real business value that’s embedded in the platform they have at hand. Both Apple and amazon.com should be looking out. Google should have a closer look at what is really going on. Not to mention, the owners of the platform themselves should ask themselves if they haven’t overlooked something of importance. What that is? – Well they are welcome to define where they want to be the next decade and come and ask me how to get there.

Wikileaks is a test of our democracies in the digital era

It’s disturbing what happens with Wikileaks and how governments worldwide react. Lately it’s Twitter that’s “under attach”, as these two articles from the Guardian and Telegraph points out.

To me it seems like politicians, governments and bureaucrats worldwide are seriously perplexed and mislead by their own fear.

Can leaks be stopped?
Politicians and governments does everything in their power to stop Wikileaks, including putting pressure on Twitter and also major private corporations, such as Visa, PayPal, Apple, Bank of America, Amazon.com and other companies running server parks around the world.

It’s like they haven’t realized that the Internet is here. There are no ways to stop the digital era and the spread of information such as misuse of power,  except for one thing: Act within the national and international laws, be transparent, embrace the ethic and moral standards we are so proud of in the western societies. Then there will be no need for fear of scandals.

Why attack Wikileaks?
The central question is really this: If Wikileaks didn’t exist, would confidential material still have been published? My bet is – yes it would, and I may add – it should! All material that has a public interest should be published.

Wikileaks is nothing but a mediator. The leaks have come, as it always has, from whistle-blowers with access and motifs, not all of them noble. The only new is the amount of revealed documents and secrets. More than 250 000 documents is said to be in the hands of Wikileaks, only a few thousand documents have been revealed to the public, and most likely even fewer published in the news till now.

Why refuse to comment on the leaks?
What is a radical trend is that governments in several cases refuse to comment on revealed information because it’s a leak via Wikileaks (mark: Wikileaks is NOT a source- it’s a mediator) this statement from the Norwegian foreign affairs is an example:

“- We are generally reluctant to comment on internal reports that are published by WikiLeaks and believe that such leaks are unfortunate. Confidential communications and contacts are a vital and necessary part of diplomacy,”“said Imerslund.”

Even the United Nations officials refuses to comment on Wikileaks revealed news:

“The United Nations says it will not comment on documents leaked by the whistle-blowing website, Wikileaks.” The US Ambassador to the UN, Susan Rice, also declined to comment on the documents.

The real problem
This is not only clumsy; it’s a democratic problem of dimensions! Shouldn’t we not take leaks like the killings of journalists in Iraq, the leaks concerning the Israeli Government and their strategy towards Gaza and a lot of other dramatic facts seriously  because it came from the mediator Wikileaks?  And shouldn’t we all worry when the US department of justice issued a subpoena against Twitter to obtain personal details of five individuals connected to Wikileaks? (Including a member of the parliament of Iceland!) – And even worse, have tried to keep it all secret! People are now starting to question whether Facebook, Google or others have been ordered the same kind of subpoenas.

This article by Jon Wessel Aas in the Norwegian newspaper Dagsavisen explains excellently a wide range of reasons why Wikileaks have to be defended. Of course we should get worried, and we should embrace that we have a very powerful information flow via the Internet, that we still have a well functioning critical media that dares to reveal what goes on behind the curtains of power.

A dilemma
On the other hand there is a dilemma with Wikileaks. They seem to want to control the publishing of the leaks. Sarah Ellison wrote an article in the Vanity fair about Julian Assanges meeting with the Guardian concerning who is to control publishing of secrets from the Wikileak files. To me it’s the amount of secret content, unclear motifs and that one small organization have the control of what, where and when to publish that represent a major democratic problem. I think that media organizations have spent very little time, up till recently, discussing this aspect. This seems to have been resolved by the ironic fact that Wikileaks themselves had a leak – according to the Norwegian newspaper Aftenposten. Another aspect is that other whistle- blowing sites are popping up according to Wall Street Journal. This makes the dilemma with Wikileaks less troublesome.

” The spirit is out of the oil lamp”
Politician’s and governments have no choice anymore.. Refusing to comment on allegations is not the answer. Whistle- blower websites aren’t going to go away. It has become radically more difficult to keep secrets. The Internet is a part of the digital era. It is great news for the democracy and terrifying for those who act behind the scenes with hidden agendas and “ugly motifs”. This new global transparency and speed of sharing information will hopefully help reducing corruption, genocide, global governmental mismanagement and a lot of other kinds of abuse of power from people, organizations and nations with substantial power. My advice to politicians, governments and officials is to act pro- actively, answer openly and willingly to allegations and to take serious and swift actions to correct faults made. Otherwise it’s our democracy that’s at stake, and the one to blame will in fact be our own politicians and governments.

Does Media businesses want to survive?

Reality is harsh for the media business, and has been so for the last decade. Is there any chance for the business to survive? It depends on what is the definition of what a media business is, and it depends on the media companies of today.

Ivar Trondsmo wrote about this in the Norwegian Aftenposten today. You can read it HERE The head of information in the Norwegian publishing house Gyldendal presented what they think is “six myths about the e-book”  HERE, what do you think represent the most relevant arguments for the future?

Why not ask the important question? What do we need the media production for? In my opinion, if we know the purpose, the business models and organization of it will evolve. The question is if the media institutions of today are willing to change, in order to be a future participant in the business.

I have a suggestion that I’d like to invite you to evolve and improve.

Using the press as a category for all news activities in TV, Radio, magazine, papers, web sites and so forth, and Publishing as another category for all production of “story telling” factual and fictional, in film, TV, books and so forth I hope to have made a simple viewpoint to discuss the core of what we as society want from media production, or – production of meaning. I don’t know if it’s sufficient, but hopefully you help evolve the perspective with me.

The press: We need the press to watch out and protect the democracy. This requires skills, quality, and guts.

Publishing: We need publishing to engage and tell us about life and what society is all about. It helps us understand ourselves and the relations we have towards other, as individuals and as communities. Publishing keeps us from falling out of culture and into barbary.

How to best ensure a system that provides these goals? As of today, the traditional media institutions are using their energy to preserve the power of yesterday, and aren’t able to realize that the fact is that this power structure is lost already. My problem of the ongoing development is that neither Apple, Amazon, Google,(or the like)  with their Apps stores, you tube sites iPad, Kindles and so forth have given an answer to what their purpose is, –  not a purpose we as a global, national society or for that matter individuals needs and wants.

Content production and products. I don’t think that it’s fruitful to fear the digital revolution, nor to be afraid of the “announced death of print”.  The printed newspaper, magazine, book have a glorious future in my opinion. They will surely evolve in quality and the prices change (as the volume of sold units will decrease, and most likely the profit increase). The digital business models are there, in place already. The Press and Publishing businesses needs to align their products, work-flows, processes, organizations and business models to a digital environment.All to be a part of the future. If they don’t want to, it’s not a real problem, others are already here to take their positions. I only hope it will be players in the business that are fulfilling our needs and wishes;  of a free press and an enlightening publishing system.

Publishing as the monks? In an internet world?

I could seem like Publishers have the same faith as the monks of the Catholic Church had in 1439 when the Print press came around and put the monks out of the labor of copying the Bible; they never thought it possible to replace the handwritten Holy book.

But a week ago one of the major Norwegian Publishing houses Gyldendal published posting at their blog an argumentation that reassemble the attitude of the old  monks and I simply cannot understand that it’s possible.

The blog posting is HERE (in Norwegian. The ingress states: “What’s the cost of publishing an e book?” Further readings on the subject be found at Eirik Newths blog (remember google translator can be used if not able to read Norwegian)

Why is it I have spent a full week thinking, before commenting on this? Simply because it’s difficult to believe the argumentation behind the figures presented. I’ve been speechless for a week on this subject. Now I’m able to speak again, – somewhat.

Gyldendal as a Norwegian Publishing house is not alone in this. This is NOT an attack on one singular Publisher, not in Norway, nor elsewhere. My comments aren’t even limited to Publishing houses providing books to the market. My comments are related to the whole of the industry of media productions including the press, publishing, music, broadcasting and so forth. There’s something happening within the media organizations, which are troublesome. –  It might be fear.

In short, the argumentation in the blog posting from Gyldendal shows how the industry has, for long,  wanted reality to be. Publishing houses are in problems, and still – in Norway – they doesn’t want to publish e books in Norwegian language ?!?  It all started approximately 10 years ago (The Internet was not something that would go away easily )and has evolved in several steps: (seen from a  publishing house perspective)

1) “No-  the decreasing revenues have no structural reasons – it will pass.”  (denial)
2) “There is a shift in media consumption, and we don’t fully understand it.” (still denial)
3) “Something is happening, nobody knows what it is.” (confusion)
4) “Internet is to blame, and we were stupid to give away content for free.”  (anger)
5) “Governments has to protect us” (grief)
6)” We have to get paid for the expenses we have.” (start of acceptance)

Anyone present able to see the flaw in this thinking? At the same time period Internet have evolved:

1) Internet is used for the web to present content, mostly for free
2) Advertisement is established as a revenue stream
3) Retail starts offering products via the Internet
4) Banking and travel businesses goes digital
5) The public sector goes digital and start offering digital self service solutions
6) Internet starts getting semantic, and long ago the knowledge of business on the Internet is established by understanding that the main value is knowledge about the users and how to syndicated services and offers towards them.

Anyone now getting the picture of how far off the media industry has been?

Fortunately the large picture isn’t as bad as it seems. Today I read the Schibsted ( one of the major players in the media industry in Norway have done a clever move. They have established a company that’s going to invest in start ups, to develop and grow great ideas for content and storytelling in a digital future. Look HERE , (and use google translator if you don’t’ know the minority language Norwegian) Most media houses have employed digital expertise, and established digital departments within their organizations. This is great steps in the right direction. Still it’s unclear what direction this is. That’s still a problem! If you do not know where you are heading – it’s not easy to get there. Schibsteds action seems clever, because it lets development happen outside of the traditional media organization (remember the comment I made in the start of this posting about the Catholic monks?) I believe that the people working in a organization with a 250 year history of backing and defining what they are, and what a “Public audience is” most likely aren’t able – as an organization- to do the actions needed to survive – not alone!  An important speech by Jay Rosen (Inaugural Lecture at Sciences Po école du journalisme in Paris sept 2010) explains some very important aspects of the rise and fall of the “audience” as we have known it.

Back to Gyldendals published figures of the cost of a print book and an e book. They may add up, but they have no relevance. The figures represent a need /wish to maintain the “old model”, to ensure the people continuing doing what they always did, to ensure that the publishers (heavily invested in book stores) get their investments back. And none of this has anything to do with the market, (the people/ audience) –  now able to decide not to join the ideas of what a piece of literature should cost.

The market offer books, e books, told stories in other manners than what a “Publisher” wants. (Amazon, Facebook, Google, Apple – and the Norwegian bookstore Haugen bok are more than ready to grasp the market, excluding the publishing houses – but without any other motifs than profit) By that, the publishers have forgotten what Gutenberg had to offer: A cheaper, more democratic, simpler way to add value for everyone able to read. The added value was Knowledge, without dependency. – This used to be the pride of media houses, content producers of any kind. It looks like someone forgot this, and it seems like the conservative and protecting mode may very well scare away some of the most valuable assets the media industry have to offer to the population of the world – protection of the democracy on the altar of their misunderstood job security.

A ”dogfight” between giants have started. Will Apple.inc have someone taking big bites of their apple?

Apple launched iPhone 4.0 in Norway today. I have to say the show isn’t what it used to be. Yes people sat in line till midnight to get their hands on the very first ones.

But also an increasing number of people on twitter was shaking their heads over Apple’s attempt to create yet another mass hysteria, without anything else new to show, but a new model of a cell phone. Speaking of branding problems, Apple recently lost a lawsuit concerning their policy to stop ‘apps’, they’ve met resistance about their censorship policy, and there’s a wide range of lawsuits concerning patents going on between the giants.

All of this is hurting Apple in a different way than back at the days where Microsoft was the “enemy” and Apple was the underdog. This is a new situation where Apple seems to have become more arrogant towards their customers and partners. But something is about to happen, customers and partners aren’t going to be as dependent on Apple and their iStore anymore. Get me right, I like Apple, I like Google too. I like Facebook, and the good old IBM as well. I like Twitter and I like Amazon.com. In short; I like the new world we got with the Internet. But I don’t like that the giants all seem to have become greedy and all have tried to lock in their customers in their own one-stop-shops. It’s like trying to maintain old school business models into the future.

The “dog fight” isn’t on behalf of us as consumers; it’s a battle of big bucks and control! Google, IBM, Nokia, Sony Ericsson, HP, Facebook, Apple, Amazon.com and the like all want to make sure that the competitors doesn’t grow to strong. This is a sad, unnecessary fight that seems inevitable. The threat for Apple isn’t only the battle of market shares.

The media industry is undergoing a dramatic age of transformation. None of the media industry participant can stand by the side passively and have Apple, Amazon, Youtube or other players control their ability to renew their business and business models.TV, Film, News corporations, publishing houses can’t afford it and have to go into the battle too. It’s really an easy calculation to make: Can some of the existing content platforms (iStore, Amazon, youtube) provide a solution that’s cheaper than if the corporations in the media industry cooperate and produce their own open content platform? In Norway some of the major publishing houses have done parts of this already and are in serious negotiations with the “giants” of how to get access to their marketplaces.

There is no way the worlds publishing houses will accept that Apple conduct censorships, like they did with the book Ulysses – or determine the cost of an e-book. Yesterday I read that Apple has denied Times.inc to sell subscriptions in their store, I’m not sure if this is true, it seems too unbelievable.

What I’m saying is that there’s an upcoming “dogfight” between giants of the internet AND amongst content providers. And it seems like Apple sits in a spot where they are far too easy to attack – from all angles, and I can’t see how they possible can win this – without doing the obvious: Open up for all to place their content in their store, let anyone buy it (whatever device, hardware or software) and let the market decide what business models that works. Make it easy and smooth to be a partner and to be a customer. It’s really not so complicated.

Update: Eirik Newth and I was interviewed by E24 conserning Apples censorship policy. You can read the article Here

Sustainable business models in a digital environment

People have been telling stories at least for the last 28.000 years, it’s not likely that the demand for great stories will vanish at any time soon. Professionals are more likely to be great to tell stories that  people would prefere to listen to. Journalism is in no way in danger – BUT, the mindset of newspaper people seems to still burden online media activities.

Even in this article  the word “circulation” pops up. When did an internet professional use that word? When speaking of how to generate revenue, the term subscriber, and advertisement is the only two ideas that is mentioned. This is sad, and leaves very little hope for the media houses as participants into the future if the mind set isn’t turned upside down in a hurry.
There are a lot of alternative ways to provide content in a digital world, but to be dependent of traditional media houses. There are lots of experiences of business models that work in a digital environment. The The Copenhagen Institute for Futures Studies’ 1 report and 2 report have published two interesting papers on business models. One comment is needed. CIF is supposed to study the future, these papers have the ‘problem’ that the future have met the present! The development is so rapid that the future is already here. One important statement from CIF is “Everything that can be digitalized will be digitalized – and the value goes toward 0$. Kevin Kerry, the editor of Wired magazine have stated “The value is beyond free” in order to explain how to make money in a digital environment, where the cost of content production is close to 0$, due to the free reproduction costs.

In order to defind value (a necessity if you want to build sustainable business models) it’s kind of clever to look for what is reconed to be a scarce resource, or in other words, what cannot be reproduced. An example is the music industry. The revenues in the world of distributing music have increased, not decreased. Surprised? The “stealing” sharingand waste downloading on the net have increased the sale of music – it’s true, whatever the record companies try to tell us. The only one loosing on this have been:  – The record companies. Content creators, have increased their share of the profit. In addition they have earned more money on something that cannot be reproduced by any other then themselves; Live concerts. A live concert is a scarce recourse, and cannot be reproduced. What can we learn from this?
1) The value is NOT the news/ content itself (ok, some times it might be, but often not). Rather try to look at the user/participant as your real value
2) Providing your user/ participant with real time/ location/ technology, content and advertisement with relevance is a must. In addition to that, content have to be contextual to the user/ partisipant. (segment/time/ location/ channel/device)
3) Generate revenues from the knowledge you have about your users / participants

How to start changing the mind set to enable innovation and transformation concerning establishing sustainable business models and revenues? It’s maybe worthwhile contemplating over this: (Copenhagen Institute for Futures Studies) People would like to pay for :

• Accessibility
• Navigation
• Security and consistency
• “Good enough” – to High quality
• Exclusivity (added by me)

What’s to do for the media business in turbulent times?

 The media business has struggled greatly, worldwide. Advertising and circulation revenue have dropped greatly. Throughout 2009 we heard weekly about the problems, cutbacks, reductions and layoffs. Are we looking at a dying industry, or at best, a sharp change of the industry? 

 

 

There is an ongoing change, a paradigm shift between print media/ digital media. Traditional media houses have still not managed to sort out how to transform themselves, which last year’s poor results confirms. 

The real challenge is to manage the existing business model, and at the same time to build sustainable business models for the digital markets. 

It is important to be realistic, but realism has to be based on future expectations, not the history of a great past. Organizations that manage through tough times do not focus only on the problems they have with the existing business model. Successful businesses are able to focus on innovation and re-structuring as well. The winners are those who are able to position themselves in a favorable spot – quickly. 

Increased demand and a lack of willingness to pay at the same time?
There is no evidence to suggest that that the demand for knowledge and stories will drop – – in fact, we need easier access to more information.  At the same time media companies do not get paid for content in the digital world. Isn’t that a paradox? 

To answer this we must look at what customers traditionally feel that they have already paid for. Is it the content itself, or is it a combination of delivery media (paper), the transport of the content (to the news stand or at the door) and the trust of the supplier (that you can trust that the content is of quality) In the traditional business models, where these elements have been “inseparable”, the question has merely been of academic interest. On the other hand, digital consumers experience that they have already paid for digital services such as the news online by having paid for the PC, software, Internet subscriptions, etc. At the same time consumers are willing to pay for the ability to send SMS, to download “apps”, games and music to their PC and mobile. The point is that the willingness to pay for services online is there, consumers just don’t want to pay for the content itself. 

But in the digital world well functioning business models already exist — just look at what Google, Facebook, YouTube and Twitter have established. What scale of users they have gathered and the value this represents in ad revenue alone. If we look at Amazon, Barnes & Noble, Kelkoo, Restplass.no to name a few, we notice that the business models are based on interaction, behavior analysis, profiles and user statistics in order to maximize sales. The business models vary, but one common feature is often “split revenue models”, where several players sharing knowledge and parts of the value chain.

Our recommendation would be learn from this, and evaluate what is the real value of the media business at hand. We believe that it is essential to connect traditional instruments with new ways to manage content. There are great opportunities to establish commercial services and products towards both advertisers and users.  

Perhaps content isn’t the future value for the media business. Perhaps the real value is the knowledge and management of users / participants and their behavior.  We believe the media industry as a whole has already been subjected to “Disruptive Innovation” and the only way to survive in the industry is to adapt very quickly. The main point is to create added value for the sum of buyers in the digital universe, through business models that also provide revenue to media houses. The most important prerequisite for success in this is to have the right combination of business strategy, organization, competence, and not least technology platforms, that can realize the goals 

Technology is part of the product
 Products like Apple’s new iPad will be a very important force to change the way we use PCs, Internet and handheld devices. When the major players (Apple, Microsoft, Amazon, Sony, etc.) facilitate easy deployment and use of digital content, it is obvious that the demand is increasing dramatically – and fast. 

Technology is the most visible instrument of the business model that until now has succeeded. Pervasive and holistic thinking assumes that the technological platform is part of the product being sold, and includes suppliers, distributors and consumer’s own infrastructure. The most important change is that technology is no longer just a tool to produce the goods, but an important part of the product itself. The development of consumer technology has both driven and been a part of the new successful business strategies, and has – in our opinion – matured the digital media market. At the core the major players have a complete set of technology platforms that implement the business model’s financial structure, production and distribution lines in a holistic strategy. 

The development of mobile phone and laptop computers are the consumer technologies that have contributed the most visible for the consumer for this development. Now, these devices meld together, and become smart-phones and reading lists that give users a unique experience. At the same time the digital distribution channel – the Internet – both increases their availability and opens the opportunity to deliver better quality, and ease of access, to the consumer. The development of broadband and mobile broadband will continue to contribute to increased quality of the services. 

The digital distribution has created many questions about the copyrights that both the business and organizations have tried to answer. Due to the fact that the internet characteristics are ‘open and free’, this will be a continuous discussion that will ultimately lead to answers. 

Our conclusion is that the willingness to invest in technology and include technology in hardware/ software/ infrastructure as a part of the business model is an important success factor in the development of new media products and services.  

Change Management
When the technology and framework conditions change, when value chains change and new players arrive and threaten the industry’s traditional players the only way to survive will be to defend their position by being willing to change the way the organization works, the processes of workflow and the perspective of how the market functions. The digital world is in its nature interactive. “Readers”, “listeners” and “viewers” are descriptions of users who will vanish from our vocabulary in a digital environment. We see a huge, rapid growth in use of social media that turn “users” into “participants” and “co-producers” of content and discourse. 

By this, the media businesses have gotten a new set of challenges in terms of how content is established, produced, presented and managed. In addition to completely new ways of defining products and services, media organizations have to change the production lines and workflow. As the manufacturing process to produce a book, news story or a magazine, has become irrelevant in the future digital media world it will affect, workflow and requirements of professional competences and organizational conditions. It will also be necessary to break down the strict distinctions (silos) that have been in different companies within a media group. 

It’s needed to establish a close relationship between the various divisions, products and services, in order to cultivate and manage the knowledge about user patterns, and transform that into added value towards the market of advertisement, subscriptions and services provided. 

Next step
We believe that quite a few media houses will need external expertise in business strategy, change management and technology. We know that coming from the outside of the organization and facilitating processes that help media corporations discover new perspectives will enable them to create profitable solutions. To make the move from “traditional” to “new” reality is a mission where a holistic perspective is one of the needed assets to ensure a strong strategic foundation to make such a transformational step. Media houses must implement innovation processes, replace business models, develop new concepts for products and services, invest in appropriate technology, ensure smooth organizational processes and implementation, and simultaneously develop criteria for success and value propositions. Establishment of  new, digital value chains and multi-channel strategies are essential elements in future business models for all media houses. Some newspaper has taken some steps along the road, while parts of the publishing industry (book / textbook / magazine) still have some distance to go before the necessary technological elements are in place

There must be a sharp distinction between content on the one hand, and the products and services on the other. This is the only way to profit by what structured data provides in the way of opportunities. There is no other way to take advantages of the semantic options in the triangle of editorial content, profile and participant’s content and commercial content.  A key point is to “Produce once- and deliver it on as many surfaces and channels possible”. This will be eReading lists, mobile devices, web, PC desktop applications, etc. It includes the ability to integrate content of various formats merged into a total user experience of text, sound, image and video.

Some tips concerning the mix of business models we would be able to help establish:

•           Behavioral & profile targeted advertising
•           Contextual marketing
•           Product/ service and contextual advertisement
•           Classified/ Community/ social media advertisement
•           Demographic, Geo – demographic, Techno graphic
•           Subscriptions mobile/ desktop/ ’apps’ prod and services
•           Traditional DM activities, banner ads, campaigns, branding
•           Multichannel & SCRM  action
•           SEO & SEM, Conversion rates

In combination with the knowledge of these business models the media industry needs to keep a strong focus on where they come from, and what is valuable in today’s experience. They need new sets of competence in new areas, such as change processes, digital value chains and multi-channel strategy.

By Geir Stene, Bjørn Hole
This article is written on our own initiative.