The eCommerce model of Online Publication


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A group project when studying in HKUST, on the topic of the eCommerce model of Online Publication, analyzing the model from the perspective of consumer, producers and the community, with successful and failure stories studied. Also commenting on the future trends of the industry.

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  • Number of different publication for different type of readersSocial NetworkCreate loyalty and noise through Social CommunityAttract those who don’t read newspaper
  • Number of different publication for different type of readersSocial NetworkCreate loyalty and noise through Social CommunityAttract those who don’t read newspaper
  • Revenue Source
  • The eCommerce model of Online Publication

    1. 1. ISOM 5320 eCommerce Spring 2013 – Project News Publications Cliff Cheung Jason Yeung Joseph Man Matthew Tam Wonsky Chan
    2. 2. Newsweek – What Happens? On 19Oct2012 Newsweek announced that 31Dec was be their last printed issue. Since Jan 2013, the 80-years old magazine becomes online only.  What happen to the news and publication industry?  What are the forces in the industry that drive this traditional news magazine gave up the print copy?  Any change of the business model from the conventional news publication industry since we enter the digital era?  What are the latest trends?
    3. 3. Interesting Statistics
    4. 4. Interesting Statistics
    5. 5. Publication Industry – Consumer Consumer Community Publisher
    6. 6. Publication Industry – Consumer 63% mobile device owners said they used their mobile media devices to keep up with the news. 5 hours per week on average
    7. 7. Publication Industry – Consumer Pattern  Print is read early in the day and after dinner  Newspaper websites are read early, between breakfast and lunch, and after dinner  Phones are used steadily for updates  Tablets are used mainly in the evening Physical Newspaper Newspaper Website Early Morning ✓ ✓ At Breakfast Between Breakfast and lunch ✓ During Lunch Between lunch and dinner After dinner ✓ ✓ Advertisement strategy?
    8. 8. Interesting Statistics - Free Versioning
    9. 9. Publication Industry – Online vs Conventional Benefit • Improve user experience: video vs text • Read news anywhere anytime • Ease to search interested topics Price to Paid • Getting use to the annoyance of pop-up advertisement
    10. 10. Publication Industry – Online Consumer Community Publisher
    11. 11. Publication Industry – Publisher  Nearly 40% of publishers says they don’t charge contents on any platforms  39% of respondents choose paywalls.  Metered paywalls, the New York Times model, where a visitor can read a certain number of articles before the paywall kicks in.
    12. 12. Publication Industry – Save variable production cost
    13. 13. Publication Industry – Online Model Reference: “DEVELOPING AN ONLINE NEWSPAPER BUSINESS MODEL: LONG DISTANCE MEETS THE LONG TAIL”, George Sylvie, The University of Texas at Austin, March 24, 2008
    14. 14. Publication Industry – Publisher Ease to access the global market First six months of 2011 • 8.4% increase • US$876 million
    15. 15. Publication Industry – Save variable production cost Save Variable Production Time and Cost Economic of Scale: No marginal cost for any additional copy Collect user preference by news click rate > First news and consequence news that you read > Interested category (e.g. finance, sport, local news and global news) Tailor advertisement according to topics of consumer preference
    16. 16. Publication Industry – Online Consumer Community Publisher
    17. 17. Publication Industry – Online Model Publisher Consumer Consumer Publisher Consumer Consumer Consumer Consumer Web 2.0 Community
    18. 18. Publication Industry – Online vs Conventional • News can be shared thru facebook, twitter etc. • Feedback or comment to publisher • Everyone can be reporters • Blogger • Independent reporters
    19. 19. Next Media- Business Model & Pricing Strategy • Online since year 2006 • Hong Kong’s most visited interactive news portal. • Average of 3.7 million unique visitors and 148.0 million page views a month • Versioning • Local vs Overseas • Free content for local • Paid content for overseas since 2009 • Advertisement as a major revenue • Bundling online subscription • Single subscription for all publishing of the Next Media group
    20. 20. Next Media – Various PublicationAnd Formats • Web & Mobile • Interactive Video News (Action News) • CG Animated News Stories • Interactive News Stories (Newsgame)
    21. 21. Next Media – Social Media Network • Real time news via Facebook • Attract those are on social network • Interaction among readers • 141,857 liked, 97,541 talked on this channels
    22. 22. Next Media – Advertising – A major revenue • Sell advertising space as an online publisher • Serve adv banners via DoubleClick • Provide advertising solutions to merchants • Various CPM models for specific section or run of site • Different Ads Formats from banner ads, pre-roll in- stream ads, keyword ads, customized campaign site, supplement (副刊) and etc.
    23. 23. Next Media - Financial Performance  Sales of news papers / books & magazines are declining.  Advertising income from conventional channel are the major revenue source.  Internet advertising income has significant growth from $11M to $47M. Not yet a major part of the income source, but could this be the future trend for this company? • Is it a right direction? • Switch from print to web to mobile • Switch from reading text to watching video news
    24. 24. iSunAffairs – Network Effects  A new magazine starts in 2011.  News magazine targeting the Chinese community globally.  Editors and reports from the southern weekends.  Major focus on the Chinese political news.  Printed copy at convenience stores, book stores and mail delivery.  Paid Android, iPad, and online version  Gain popularity thru social media including facebook and twitter  Viral marketing  Connected consumers  gain noises & reputation thru reporting of several political events.  Global Long Tail  Niche Product
    25. 25. iSunAffairs – Not successful yet  Suspense in Jun and switch to online version only in Sep 2013.  Monthly loss of HKD 500K from insider news.
    26. 26. The Daily – Features and subscription fee iPad news apps by News Corp. BACKGROUND • The world’s first iPad-only digital news-paper launched on February 2011 by News Corporation • Pure digital news paper for iPad without hard copy release INVESTMENT • 100 staff • Initial investment: US$30 million • Running cost: US$26 million a year SUBSCRIPTION MODEL • US$0.99 per week • US$3.99 per month
    27. 27. The Daily – Contents FEATURES - The content will be delivered to subscriber device every morning - 100 pages content including six areas: news, sports, gossip and celebrity, opinion, arts and life, and apps and games - Include Interactive features with HD video - Popular games like Crossword and Sudoku
    28. 28. The Daily – Outcome  Seems very attractive and eye catching  This business turn out to be unsuccessful.  Why failure?  High cost  Not the preferences of target readers  Free alternatives for the same contents
    29. 29. Bloggers – A Different Business Model?  Blog – Free conversation, broaden the marketplace of ideas by allowing more people’s voices to enter the discourse  An example of CROWDSOURCING  Blogger is NOT a journalist  Journalistic objectivity - truthfulness, accuracy, objectivity, impartiality, fairness and public accountability  If false fact was reported, the newspaper has the responsibility to post a correction in public  CANNOT put bloggers and journalist into same category yet
    30. 30. Can view in different platforms Variety of interests Blogger that has good reputation Localized ad
    31. 31. Bloggers – So why people write blogs?  Express their own opinion  Share their expertise to public  MONEY !!! • Advertising – showing ads to readers in blog • Affiliate sales – referring customers to other businesses • Donations – persuade the readers to contribute and support • Getting famous – this includes consulting assignments and speaking engagements • Reputation – Serve as a marketing tool • Get new position – gain recognition and hope to be hired by an organization
    32. 32. 75.20% 74.80% 57% 56.60% 56.30% 46.40% 0.00% 20.00% 40.00% 60.00% 80.00% Ad networksFreelance / contract workPrivate ads Sponsored postsEvent sponsorships Affiliate sales Blog Revenue Source Blog – Where are the money come from?
    33. 33. Top 20 Earning Blogs
    34. 34. Top 20 Earning Blogs
    35. 35. Will merchants spend more money online / blogs or printed newspaper / magazine? Money spent on blogs and online media are effective. More ad spending will shift from traditional news publication to online.
    36. 36. Future Trends – Yahoo! and Google buys News App  News are free!!  Both Yahoo and Google buys News App.  Collect consumer preferences.  BI and tailor advertisement.  May arouse further concerns on privacy.
    37. 37. Trends - Sales of Prints are Dropping
    38. 38. Trends - Readers are Maturer and Richer
    39. 39. Will Digital News Publication be successful?  New York Times shows success on online generated revenue and profit growth.  Seems this is the trend of success in the industry, even no guranteed.
    40. 40. The World is Evolving…
    41. 41. Q&A