Personanondata Predications and Posts: 2006 - 2013


Published on

Since I started my blog PersonaNonData in 2006, I had no idea where the journey would take me but I have always seen the blog as a close extension of what I’ve been doing since my career in publishing started: Trying to make sense of the business amid an ever changing environment.
That’s the nature of business, and I’ve always believed that if you don’t have an interest in the dynamics and influences pervading your company and business you should probably think about making a change. I frequently meet people who after long periods in publishing really have no idea what’s going on. I find that quite sad.
PersonaNonData has always been a selfish preoccupation but I do hope I’ve been able to shed some light on the business – at least as I see it – for some small group of publishers who enjoy my point of view.
And the photos of course!
Best regards,
Michael Cairns (aka Personanondata)

Published in: Education, Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Personanondata Predications and Posts: 2006 - 2013

  1. 1. 0 | P a g e 2013 Michael Cairns Information Media Partners April, 2013 Predictions & Commentary from Personanondata
  2. 2. PersonaNonData: Predictions & Commentary 2006 - 2013 1 | P a g e Dear Reader, Since I started my blog PersonaNonData in 2006, I had no idea where the journey would take me but I have always seen the blog as a close extension of what I’ve been doing since my career in publishing started: Trying to make sense of the business amid an ever changing environment. That’s the nature of business, and I’ve always believed that if you don’t have an interest in the dynamics and influences pervading your company and business you should probably think about making a change. I frequently meet people who after long periods in publishing really have no idea what’s going on. I find that quite sad. PersonaNonData has always been a selfish preoccupation but I do hope I’ve been able to shed some light on the business – at least as I see it – for some small group of publishers who enjoy my point of view. And the photos of course! Best regards, Michael Cairns (aka Personanondata) @personanondata 908 938 4889 Text and Images © Michael Cairns
  4. 4. PersonaNonData: Predictions & Commentary 2006 - 2013 3 | P a g e Predictions 2013: The Death of the Middleman. It seems to some that we’ve entered a period of stasis in the ongoing transformation of the publishing industry. This time last year, I noted that the routine operations of many publishers had fully realized the transition to electronic content and absorbed its implications. So perhaps the last twelve months have been about catching our collective breath. But anyone who thinks the big changes are behind us is probably fooling himself, and may be lulling himself into catastrophic inaction. The harbingers of dislocation are easy to see . . . if you know where to look. In the second half of 2012, we saw a slowdown in the growth rate of eBook unit sales; indications of a possibly significant substitution of tablets for eBook readers; a major strategic publishing merger destined to create a trade publishing goliath; and the sale of one of the big three education companies. Any one of these developments occurring independently could have been analyzed at length but, taken together, they suggest to me that more-- rather than fewer-- changes are on their way. The expectation that the big trade houses would consolidate has been going around for at least five years: in fact, it may be more surprising that the Random House/Penguin deal didn’t happen sooner. Now that it has, it’s a foregone conclusion that there will be another trade merger announced in the next few months, involving some combination of Harpercollins, Simon & Schuster and Hachette. Perhaps all three will combine and, if so, that deal would equal the one announced last year in scale and significance. But that’s probably unlikely. One publisher will almost certainly end up the “odd man out” and it will be interesting to see which it is and what they do next. On the education front, there has been widespread speculation that some merger of Cengage and McGraw-Hill Education will take place this year, since the two companies may end up with a common owner. In the short term, there may not be a full combination but some trading of assets may take place immediately to rationalize the respective businesses with deeper integration to come, perhaps, in 2014-5. In education more broadly, all education content companies (other than Pearson) are only at the beginning of their transition from content providers to embedded content and services providers. Professional information publishers provide content and services at the point of need and education publishers will be doing the same thing in the not-too-distant future. At CES this week, McGraw-Hill made some interesting announcements about product development investments they have been making which presage how this “services approach” may take shape.
  5. 5. PersonaNonData: Predictions & Commentary 2006 - 2013 4 | P a g e To segue slightly, the justification for a merger is often presented as an opportunity to save cost, apply economies of scale and/or gain access to a new market. At this point, expense and efficiency gains are more likely to be the primary drivers in both the McGraw-Hill and Random House Penguin cases. Each publisher anticipates significantly reducing costs in headcount, facilities, distribution and other areas in order to deliver the same total quantity of titles. They need to undertake this effort because the publishing value chain is compacting, making it easy for content producers/authors to reach consumers directly which, in turn, is also changing the financial model on which publishing is based. The functional areas where publishers added margin in order to make a profit – overhead, distribution, marketing & sales--are becoming less important (though not unimportant) when authors and contributors can reach their market directly. The implications of these changes for publishing houses have been clear for many years but addressing how their businesses must change to cope with them is nowhere near complete in the larger houses. Smaller, more nimble companies like Hay House and SourceBooks have travelled much further down this path. Education publishing is seeing similar changes but the process of dealing with them will be different. I expect we will see an aggregation model emerge in education, where content ‘platforms’ deliver content and services on a per-user basis. As I’ve mentioned before, this model is already in operation. Academic librarians and universities will be offered an extensive database of educational material from which faculty can choose the material – probably pre- selected, topic-driven packages – best suited to their classes. Platform providers such as Amazon, Blackboard, Pearson and EBSCO may soon be the only efficient way for publishers wanting to sell content (or access to their content) to reach students. The platform providers will negotiate distribution agreements with all other content providers and may compete against each other to offer the best combination of content. But a more likely and important point of differentiation will be the unique services and level of integration they can provide faculty, administrators and students. Instead of Pearson and EBSCO, think Reuters and Bloomberg . And instead of profit models based on revenue per book, think per head or per desk. (This model may begin to undermine the argument for DRM in education.) A very positive byproduct of this change in education will be a complete integration of library resources, institutional resources and consortia buying/negotiation that will allow better alignment with objectives for student success. It seems odd (to me) that educational content components, as they are currently supplied to students and faculty on campuses, often stand independently of each source and can only be ‘integrated’ through a manual, rudimentary process. And it’s even more odd when you consider that libraries have long been licensing tools and services from EBSCO and Serials Solutions which provide deep integration of and access to the databases and content the academic library licenses. It will only be a matter of time before pan-university content assets and access are brought together. Ultimately, 2013 may bring more significant change in the trade and educational landscape than we’ve seen in many recent years. While there will be a lot of focus on the big trade merger and its constituents, the industry’s other players will have to fight aggressively not to lose any advantage—we all recognize that “bigger is better” when it comes to applying economies of
  6. 6. PersonaNonData: Predictions & Commentary 2006 - 2013 5 | P a g e scale in a business whose underlying business model is changing radically. In education, we may be paying attention to McGraw-Hill and Cengage but Pearson, as the market leader, is likely to embark on even more aggressive strategies this year--under its new CEO, and with the divestiture of Penguin and possible sale of the FT Group, the company has forcefully declared education to be its focus. Opportunities for innovators will continue to emerge, as one would expect in a rapidly changing market. However, many of the niche or narrow solutions currently on offer--whether they be assessment , content-delivery or search tools-- are likely to ‘run out of market-space’ as these solutions become embedded in, and offered as an attribute of, the platform solution. I see opportunity in the delivery of solutions that help specific users – say, university faculty – take full advantage of the integration of content and services that will occur—for instance, on campus-- since many user groups may need to change the way they conduct their usual activities. The outcome of these work changes will be to produce more productivity and better solutions, but getting there will require ‘intelligent agents’ to facilitate—to help assemble content, training programs, workflow and productivity tools and similar applications to rewire their work environments. In education, this requirement may give platforms like Blackboard and Desire2Learn an advantage, given their installed base on campus. While change often produces anxiety, I see dynamism in the book (and “content”) industry that is exciting and invigorating. There will be many big changes in 2013 but in contrast to the most recent past where publishers were buffeted by macroeconomic changes, I expect these changes to reflect the elements of a positive shift in the way publishing companies operate and consumers – especially in education – consume content. We're going to end 2013 thinking completely differently about this industry. Some other trends I see emerging during 2013:  There will be more experimentation with subscription programs, possibly similar to the old book club model, with curated collections and incentives (such as free eBook readers). These could also be combined with social network capabilities to allow reading group subscription models and social networking. For example, these could be ‘self-defined’ groups: A reading group could set themselves up and choose from a variety of subscription models that allow their group to read a specific number of books, use a unique set of social tools and pay by subscription rather than per book.  A Chinese- or Middle-East- based publisher will acquire a major, brand-name media company. CurrentTV notwithstanding, this will be in information/professional or education.  “Self-publishing” will see huge international growth as Asian and Latin American markets develop.  The unlucky leftover of the three trade houses in play will be immediately acquired by Amazon (just wanted to see if you read this far).  There will be some consolidation in the eBook provider market.  The Apple bookstore will be re-launched and will end 2013 poised to surpass the Nook and move into second place behind the Kindle.  Similar to what takes place in gaming, innovative publishers will begin to engage readers in new book and content ideas even before the book is ‘completed’. In game
  7. 7. PersonaNonData: Predictions & Commentary 2006 - 2013 6 | P a g e development, it isn’t unusual for games to be released with only the first three out of 10 game levels completed--why build the whole product if no one wants to play? Book and content producers may try to adopt and adapt this model for their new product development.  Manchester United will win the English Premier League title Predictions 2012: The Search for Attention There’s little more to say about eBooks these days: The migration is now embedded into business operations across the industry. Yes, there remain some issues and problems day-to-day but it would seem that the issue of most concern to publishers for the past five years (trade particularly) is now subsumed under business operations as usual. And that bores me. Sure, we could argue about the future purpose and value of a publisher but most (if not all) the big trade houses are doing better now than they were three years ago and continue to sign the big authors and sell lots of units. The amount of attention given to the self-publisher model is disproportionate to its viability as a solution better than that delivered wholesale by a traditional publisher. Yet, to some, the counter argument or disruptive solution is always more interesting and therefore garners more attention. There will be more big success stories in self-publishing but the larger point isn’t about replacing the old model with the new—it’s more about incorporating the new model into the old. Where self-publishing was derisively termed ‘vanity publishing’ 10 years ago, it could now be considered a vital component of a better, more efficient publishing industry. This set of predictions was harder to conceive that those in prior years and I am not sure why that it is. I’ve been going through this exercise since 2007 (the year I started this blog) and so went back over some of the things I suggested in years past. For example, in 2007, I said:  Several major US colleges will teach various social science courses entirely in simulation. The courses will not be taught in traditional lecture form but entirely within the software simulation. Now, five years later, there have been some experiments in this area but my comment was uttered in a time when everyone was building a home in the simulation game world and, at the time, it seemed inevitable we would all be spending half our lives in SecondLife. Clearly that never happened, and on the other hand, during 2011, I spent many weeks looking into the medical simulations ‘business’ which is very impressive and continues to push the boundaries of real simulation in education and training. What’s important here is that simulations solve several business, operational and administrative issues for schools and hospitals which drives
  8. 8. PersonaNonData: Predictions & Commentary 2006 - 2013 7 | P a g e the business case for their adoption. That might not have been the case for SecondLife (at least in a comprehensive sense). The anticipated benefits of simulated learning will only be realized if they solve a business problem(s). As I saw during my short research project, in medicine and especially nursing, there are very real addressable problems that simulations solve for educators and administrators. Some of the simulations centers I visited are almost exact replicas of hospital wards and operating theatres. It is quite incredible. The money poured into hardware at these centers is significant (and growing) but the next big change in simulations training will be how traditional medical content is integrated into delivery in the simulations context. No easy thing, but the merging of the practical and the theoretical is viewed as critical by educators and practitioners. The medical segment is representative of how education publishing in particular still has significant challenges to address as their industry deals with changes in technology, delivery and performance measurement. The following year (2008), I incorrectly predicted “McGraw-Hill will reorganize its business much as Thomson [Cengage] has done. MGH education could be sold to private equity.” The impact of the sale of MGH in 2012 is unlikely to drastically change the publishing landscape in the short term, but there may be larger structural changes across the entire business that will be more interesting. As we know, Apple is set to make an announcement soon which is rumored to be about educational publishing. If that’s true, it might stimulate some fundamental changes in education similar to the impact iTunes had on the music business. Sticking with education, in 2009 I suggested that the Obama administration would make wholesale changes in education policy and become more ‘federalist’ in approach. As some ‘celebrate’ the ten-year anniversary of ‘No Child Left Behind,’ the administration is pushing more (or allowing more) responsibility to the states for education policy while at the same time providing more assistance to ‘failing’ schools so they can improve. If anything, the Obama administration may be more ‘activist’ with their assistance versus the prior administration and this policy (or set of policies) is likely to aid education publishers in the provision of the next generation of assessment tools, which will be oriented more toward remediation and intervention (and which I touched on in 2010). Last year, I focused my prognostications on the concepts of curation and community: The growth of intimacy assumes that users will seek closer relationships with their core community of friends, workers or communities of interest in order to make decisions about the content they access, the products they use and the entertainment decisions they make. Book publishers, retailers and authors will need to understand how to actively participate in these communities without ‘marketing’ or ‘selling’ to them. Facebook is obviously the largest social community but, within Facebook, there are a myriad of smaller ‘communities’ and, within these communities, the web becomes highly personal. The relationships among the participants becomes ‘intimate’ in the sense that the participants share knowledge, information, even personal details that in a traditional selling or marketing environment would never be breeched
  9. 9. PersonaNonData: Predictions & Commentary 2006 - 2013 8 | P a g e by the vendor. The dynamic of selling becomes vastly different in this context and publishers must find a way to understand these new communities, the influencers that dictate behavior and the motivations that contribute to selling products (and services potentially). I still believe the above to be a trend even though it hasn’t developed as quickly as we might have expected. I fully expect the concept to mature over the coming years. Which suggests a lead-in to a theme for my 2012 predictions: Where 2011 was about the community providing a filter for its ‘members,’ 2012 will be more about the community helping focus/apportion the attention of its members. In a screen-based entertainment world, publishers will struggle to assert their right to a user’s time against competition that includes every media option out there from games to TV to social networks. This is different than the former paradigm because all media usage is rapidly migrating to tablet and applications-based consumption. And this includes television. With both major book retailers actively engaged in the tablet wars, it seems inevitable that tablets will be the predominant delivery mechanism for publishers’ content, including trade and education content. So, if our content is delivered on these devices, how do we establish and hold the user’s attention in an environment where the user can skip from media to media with almost no friction whatsoever. The answer to this question is partially reflected in last year’s post regarding community and curation. The most significant challenge publishers will face is getting their content shared and linked to and powerful social network marketing programs will be at the center of this effort. This doesn’t only apply to trade content--‘communities’ organized around ‘influencers’ such as academics/professors, institutions, specific courses, etc. will also drive the sharing and linking of educational publisher content. For example, an individual interested in business entrepreneurship might ‘friend’ the Harvard class ‘Entrepreneurship 101’ and use the reading list to guide his or her personal reading. Another key aspect of the quest for attention revolves around the metadata and the supplemental content publishers produce for all their content. Most of this remains either dis- or un-organized. A lack of depth and accuracy of meta-data is still a deficiency shared by most publishers, even as the need for more meta-data expands. On the whole, publishers are probably getting further behind. The thing that will help publishers win a larger share of attention will be multiple ‘entry points’ that enable the user to interact with their content and allow influencers to share and link to it. Not only do meta-data files need to be robust and detailed, but users need to be able to easily find references, indexes, TOCs, links, etc. and reviews as well as alternate views of the content (audio, video, even perspectives). Not only do these various elements provide ‘hooks’ which users can grab in multiple ways, they will also serve to build loyalty and authority for the content itself. And this could ‘index’ the content so that it scores high-ranking positions when consumers seek the content you are selling. Thus, the entire process feeds on itself.
  10. 10. PersonaNonData: Predictions & Commentary 2006 - 2013 9 | P a g e Searching for Attention will represent a significant challenge for all content owners but particularly publishers, as content amalgamates via the tablet platform. Not for nothing, I think I’d rather go on that journey with B&N and Amazon versus Apple or Google because at least they are booksellers. Whether that’s enough remains to be seen. Here are some additional trends to watch for over the next year or two:  The MGH deal aside, there’s a good chance we will see additional movement in the ownership of segments of the education business. Cengage will have little difficulty with their refinancing (doesn’t mean there won’t be any pain) but educational units on the periphery (medical, legal, etc.) may witness more consolidation in the coming year.  With the ‘settling’ of eBook content and processes within many publishing houses, we’ll begin to see more experimentation from publishers especially with expanded definitions of traditional book content. We’ll see eBook content – the ‘book’ part as a component of something that looks more like an issue of an online magazine. Obviously, an ‘issue’ where the ‘book’ part is the focus but ancillary material (in the magazine sense the supporting articles) lend deeper meaning, context and even leads to obvious tie-ins and sequels. Essentially, I think we will begin to see the beginnings of the renaissance of the ‘book’ that everyone has been moaning about.  In an area that I am focused on, we will begin to see a rapid movement towards atomizing educational content. Apple may well announce an educational publishing version of iTunes where content is such as chapters, cases and articles are sold in parts as songs are sold versus albums. Watch for a painful realization about pricing. The al a carte approach for content purchasing is something educators and institutions are looking for and initiatives similar to the iTunes model (and AcademicPub) are being welcome because they empower people to make better choices.  In sport, it will be a tight run thing at the top of the premiership this year but I still believe Manchester United will beat out Manchester City for the title. England will come second in the medals table at the London Olympics.
  11. 11. PersonaNonData: Predictions & Commentary 2006 - 2013 10 | P a g e Predictions 2011: The Growth of Intimacy Things might have been worse: As 2009 came to a close, there wasn’t a lot of optimism about 2010 yet; as the year unfolded, things were neither worse nor better than they had been. And now, there is even some excitement spurred on by the launch of the iPad and the rapid growth of eBook sales. Certainly any analyst, technology company or consultant publicizing his or her [proprietary] forecast of eBook and eReader sales for the next decade was almost guaranteed to gain some attention, especially as each successive forecast sought to outdo the prior reports. Encouraged by the boosterism, many pundits think this is ether the end of book publishers or a new dawn. I don’t think it’s either, but the transition from print to electronic could mimic the transition music made from vinyl to disc which stuffed record company profits in the short term (only to entirely undercut the industry for the long). It is too early to tell how book publishing will survive this transition, but it is entirely possible that we will look back on these ‘transition’ years as ones in which publishers missed an opportunity to connect directly with their readers, having limited their ‘opportunity’ merely to replicating the book experience on the screen. Change and progress is glacial in the book industry while, all around the industry media markets and products advance at break-neck pace. Evidence of massive and rapid change surrounds the publishing industry: This time last year, tablet computers were utilitarian business equipment; now, with the iPad, they are status symbols and, for millions, a gateway page to life online. In 2009, few televisions were web enabled but this year this is a standard feature opening up the web for living room leisure activity on a big screen. Content produced by publishers is now showcased in these channels and on these devices, yet book publishers continue to be bit players in the evolution of eContent and indications are this is unlikely to change appreciably in the future. Some of the macro changes I mentioned last year continue to roll out into the mainstream, such as the migration toward subscription models for education content and trade reference, collaborative content and data sharing in academic publishing and an adoption of the rent vs. buy model for content. And while none overtook the business in any wholesale manner, all continued to grow in significance during 2010 as they will in 2011. The Growth of Intimacy In 1961, Newton Minow (newly installed as Federal Communications Commissioner) made a famous speech to the National Association of Broadcasters in which he described television
  12. 12. PersonaNonData: Predictions & Commentary 2006 - 2013 11 | P a g e programming as a ‘vast wasteland’ and he suggested those in attendance watch a day of television where, “You will see a procession of game shows, violence, audience-participation shows, formula comedies about totally unbelievable families, blood and thunder, mayhem, violence, sadism, murder, western badmen, western good men, private eyes, gangsters, more violence and cartoons. And, endlessly, commercials--many screaming, cajoling and offending. And most of all, boredom. True, you will see a few things you will enjoy. But they will be very, very few.” The web may be all of this in spades but, increasingly, the web user is demanding guidance and intermediaries who will then aid in their selection of appropriate and meaningful content. As I’ve discussed before, curation will become a marketable skill set and audience building around specific interests and specialties will be increasingly valued by content users. Just as publishers may have purchased publishing companies with defined title lists in years past, they may now consider purchasing “communities of interest” (and their associated apps and Facebook pages, etc.) to which they can market content/products. These communities may become the ‘imprints” of tomorrow with defined – even built in – product development, marketing and selling channels. The growth of intimacy assumes that users will seek closer relationships with their core community of friends, workers or communities of interest in order to make decisions about the content they access, the products they use and the entertainment decisions they make. Book publishers, retailers and authors will need to understand how to actively participate in these communities without ‘marketing’ or ‘selling’ to them. Facebook is obviously the largest social community but within Facebook, there are a myriad of smaller ‘communities’ and, within these communities, the web becomes highly personal. The relationships among the participants becomes ‘intimate’ in the sense that the participants share knowledge, information, even personal details that in a traditional selling or marketing environment would never be breeched by the vendor. The dynamic of selling becomes vastly different in this context and publishers must find a way to understand these new communities, the influencers that dictate behavior and the motivations that contribute to selling products (and services potentially). This is the next level of social networking: It isn’t enough to have a Facebook page or a Twitter account. Authors and publishers need to engage deeply where it matters in order to build awareness, build their brand (if necessary) and establish selling channels. In the case of Facebook, the company already has a vast amount of book-related information broadly collected from their community and undoubtedly the sales volume that results from the discussions on Facebook is large. Most importantly for vendors, the ‘conversion’ rate from an ‘intimate’ recommendation to purchase is likely to be far higher than from any other source or marketing activity. Finding and understanding the applicable nexus within these communities that delivers the widest possible ‘conversion’ rate will be critical if publishers are to participate in the growth of intimacy.
  13. 13. PersonaNonData: Predictions & Commentary 2006 - 2013 12 | P a g e While publishers may think the ‘growth of intimacy’ will have more relevance to trade publishing, this may not be the case. As LexisNexis and some other professional publishers have proven that a social strategy that encourages users to act as curators for other users has significant value in building and supporting the publisher value proposition and brand. I see this evolving in education as publishers encourage academics and students to participate in social networks focused on specific topics and content. But a word of caution: Building a social network simply to facilitate the sale of your content or textbooks will never work. A critical aspect of Facebook is that it is vendor agnostic and thus provides the latitude for the community to come up with the right solution or product. With reference to Minow, it won’t be the ‘broadcasters’ that ‘[could] do better’ as he suggested, but it will be the consumer that will find a way to get to the content they value using their web of ‘intimate’ relationships. Curators (or docents) will become critical for users in this discovery process and, if publishers aren’t connected to this network a meaningful way, they will be consigned to the vast wasteland of skateboarding dogs and porn. The growth of intimacy will be a recurring theme for all content producers over the coming years and addressing the various aspects of this trend may result in important changes in the way publishers develop and market their products. Here are some additional trends to watch for over the next 12-24mths:  Prices for dedicated eReaders will fall to $30-50 and will increasingly be used as “fee-with- purchase” subscription promotions with newspapers and magazine subscriptions or combinations thereof.  That newspapers will be moving toward a paid subscriber model is rapidly becoming old news (with the NYTimes expected to launch their service in January); however, to raise their value proposition, newspapers will be more interested in limited content syndication partnerships that lower the number of outlets with access to specific content, thus raising the exclusivity for the content and the value proposition for consumers. Rather than the same story appearing in hundreds of outlets, consumers will be looking for exclusive insights, analysis and commentary that can’t be found elsewhere. (Again, a ‘curation’ theme going on here).  Tentatively, ranking “best social sites” will attempt to do the same thing that bestseller lists do in reflecting interest and popularity. The parameters will be unclear (or experimental) initially but this data – organized as a ranking – will become a valid measurement of commercial success and reader interests in the same way that bestseller lists do today.  Print will increasingly be diminished by publishers - not directly because of electronic versions, but by their dismissive attitude to the quality of paper and bindings. Shoddy quality will serve to undermine value as paper rapidly yellows, bindings split and pages fall out.  The popularity of eBooks and eContent will also chip away at the Byzantine (or British Empire- like) organization of many international publishing companies, which effectively splits rights by country and region rather than by language. We will start to see international publishing companies completely rethink the ‘local office’ formula where in
  14. 14. PersonaNonData: Predictions & Commentary 2006 - 2013 13 | P a g e different editions with different pricing, layouts, covers, release dates, etc. are produced by local staffing. Instead, publishers will begin to dismantle these operations and replace them with ‘centers of excellence’ where specific offices prove their expertise in specific functional or content areas and provide these services to the rest of the worldwide publishing operations. Direct customer-focused staff will remain but the duplication of functions – driven primarily by the content normalization that eContent imposes – will result in the elimination of functions across the global enterprise. Publishing companies will become stronger as a result, since they will be able to aggregate expertise in specific areas and distribute it broadly across their operations.  International ownership of publishing companies is par for the course but we haven’t seen entities from China, India or the Arab world make a material impact on English language publishing. That will change as these markets mature and local investors determine they needn’t be simply buyers of English language materials but they could own the producers of this content as well. Most of these markets are still untapped: the market for English language content continues to grow and the supply of content locally produced and distributed internationally is still in its infancy. There are over 5mm college graduates in China each year versus less than 2mm in the US. This represents a vast market opportunity for all types of content and it is more than possible that a Chinese investor will buy a large English language publisher to address both supply and demand in this market. The same scenario could be true of the Indian and Arab markets. Watch for a big news takeover during 2011. Lastly in sports: Last year I predicted that Manchester United would win the Premier League title over Arsenal but, in fact, United lost by a point to Chelsea. The point was effectively lost in a late season loss to Chelsea but, this year, Chelsea look well out of it. So again I predict United will win the title over Arsenal. I also predicted that England would win the Ashes series in Melbourne which they did last Tuesday. Hooray!
  15. 15. PersonaNonData: Predictions & Commentary 2006 - 2013 14 | P a g e Predictions 2010: Cloudy With A Chance of Alarm As we greeted the New Year in 2009, we knew we were in for it economically and, as I suggested in my prediction post this time last year, one of the most obvious assumptions was that things would get worse before they got better. Contrary to expectations, publishing may have come out a winner in spite of the steady litany of bad news on the magazine, newspaper and television fronts that percolated all year. While recognizing the economic challenges in store for us back in 2009, I also suggested a resurrection of sorts could be had as businesses began to accommodate the fundamental changes that were taking place in the industry as they executed their business plans. Sadly, there have been few bright spots in media during 2009, and after having taken the pulse of views on the near-term future in publishing by speaking to a number of senior publishing executives, my belief is we will not see any appreciable improvements during 2010. While some of their collective views can be attributed to ‘hedging,’ external trends support the lack of optimism whether they be reductions in education funding and library budgets or the increasing reliance on “blockbuster” authors or pricing issues. Many of the macro trends that I have noted in years past remain prevalent and in some cases have accelerated. For example,  Educational publishers appear to be increasing – rather than decreasing – their investment in electronic media and more importantly, are beginning to think of their electronic products as distinctly different from their print precursors. In particular, educational publishers have started to talk meaningfully about “databases” and “subscriptions.”  Newspapers – particularly NewsCorp – have been particularly active in attempting to build paid content models which support the separation of ad-based and subscription-based models. Newspapers aside, even trade publishers – notably Disney - are beginning to experiment in interesting ways with paid subscription models. On the other hand, my expectations for further compacting of the publisher supply chain and increasing collaboration across publishing segments appear to have run aground. Interestingly, an executive I recently spoke to noted that the separation of publishing units that historically sat together – education with trade with information, for example – has negatively impacted publishing companies ability to learn and benefit from the experience and market testing of their sister companies. Possibly a decrease in access to ‘institutional knowledge’ has, in general, contributed to some media companies’ hesitancy to experiment. Prognostication being the point of this post, there are some newer macro changes I see that
  16. 16. PersonaNonData: Predictions & Commentary 2006 - 2013 15 | P a g e will define the publishing and media space more and more over the next three to five years and it will be interesting to see how these develop.  Firstly, 2009 was the ‘year of the eBook’ as new devices seemed to launch each week. But the eBook, as we understand it today, only has three more years to run. By the end of 2010, we will be focused on the ‘cloud’ as the implications of the Google Editions product become clearer. This accelerated migration away from a physical good – even with an eBook, the title was ‘physically’ downloaded – will challenge our notion of ‘ownership’, rewrite business rules and provide the first true ‘strata’ for communities (or social networks) to develop around content. The Apple iSlab (iSlate, iTablet, iEtc) will become a key driver in this development as the company becomes the first consumer electronics maker to apply their design expertise to multi-content delivery. (I don’t count SONY because they got it completely wrong).  A closely related (but somewhat tangential) development will be the realization by publishers that the library market could become a threat to their business models as mobile and remote access is aggressively marketed by companies such as Serial Solutions and EBSCO. Currently, these products are not specifically related to trade and academic titles; however, the implications for all published product will become clearer as patrons’ ease of access to ‘free’ content grows and as the resolution services improve. Remote access to information products by library patrons is obviously not new, but applied to mobile computing it will change many things about the library model. This trend coupled with the ‘cloud’ concept above, will require an industry-wide re-think of the library business model.  There are hints that the silo-ing of content that has been endemic to information and education for many years could become a trend in trade as well. Examples remain sparse, though Harlequin and Tor are routinely cited as exemplars of this trend.  Subject-specific concentrations of content in trade will become a more broadly viable model; but simply concentrating content is not enough. Trade publishers will begin to license or commission ancillary content that adds a transactional element to their offering (not exclusively in a monetary sense). In effect, this additional content will provide a reason for consumers to return periodically to the site for free reference, news or dictionary content. Thus, this content will complement the subject-specific content that publishers generate themselves. As each segment develops, the ancillary content will also become core content to the publisher and may eventually be produced by them (although, initially, the content may be licensed). Over time other services will be built within each subject silo, and this maturity will replicate the product development seen in information publishing over the past ten years as those businesses established subject specific franchises around topics such as business news, tax and legal information. Aside from these macro trends that will grow in importance over the next few years maintaining the status quo will still be the operative task during 2010. Here are following are some more specific predictions for 2010:  Certain segments (financial, legal and tax information and education, for example) continue to be challenged and any business that relies on the library market will face a very difficult
  17. 17. PersonaNonData: Predictions & Commentary 2006 - 2013 16 | P a g e time. Funding will be worse in the coming year (fiscal 2011) making retention, renewals and price increases problematic. By the end of this year, we could see some consolidation in the information media space.  We will see the return of an old model of collaboration between magazines and traditional publishers as magazines look for ready-made content. Witness the return of the serial and short story to the pages of periodicals as their publishers look for low-cost content for their plodding (but suddenly more aggressive) migration to electronic delivery. In turn, electronic magazines will offer publishers a more effective, targeted and supportive mode of marketing than publishers have seen in years.  2010 will be a year of warfare: Publishers against retailers, wholesalers against retailers, retailers against retailers, publishers against consumers. It may be nasty, brutish and short, but will any of them truly understand the stakes? (See macro trend number one).  Finally, we will see consolidation of at least two major trade houses. This is likely to precipitate another combination by year end. An outsider company (not a current trade publisher) may make a major move into the trade market.  Last year, I predicted that out-of-work journalists would become ‘content producers’ and we have seen that develop as companies like Demand Media and Associated Content build market share. I see this trend accelerating during 2010. As magazines migrate to platform models, they become 24/7 publishing operations with a significantly increased demand for content far beyond their capabilities. Where they will succeed is in curating content for their specific audiences; however, much of this content will be produced for them, rather than by them in the traditional manner. In effect, magazines will outsource editorial.  And in sports, Manchester United will retain their Premier League title, winning on goal difference over Arsenal; Barcelona will win the Champions League; and England will win the deciding fourth Ashes test in Melbourne in December. Predictions 2009: Death and Resurrection Like the guy who is asked how he went bankrupt, ‘slowly and then quickly’, the escalating economic downturn in 2008 has really been brewing since the end of 2007, but we only fell off the cliff in fall 2008. I still believe (as I noted in January 2008) that 2007 will be viewed historically as a watershed year for media: the economic decline will further accelerate the macro trends the industry witnessed as 2007 evolved. These trends include:  The rapid commitment to electronic delivery of content in both education and trade
  18. 18. PersonaNonData: Predictions & Commentary 2006 - 2013 17 | P a g e  Separation of ad-based and subscription-based models in both information and professional publishing  Forced concentration in the traditional publishing supply chain countered by (nascent) new channels including direct-to-consumer  Further blurring of the edges across media segments: More publishers will offer all content – not just their own - wider services and applications, and broader linking and partnerships designed to draw customers The economic difficulties today are stark compared to the boisterous 2007 where the price for publishing assets kept going up and many big deals were made. During 2008, many high-profile divestitures were either abandoned (Reed Business) or ignominiously completed (TVGuide magazine sold for $1). 2009 is likely to see both the unraveling of some of the deals done in 2007 and some opportunistic buying but, more generally, the deferment of many companies' corporate development strategies. Naturally, 2009 will see new companies emerge and there are numerous precedents for companies launched in economically challenging markets ultimately becoming very successful. Perhaps challenging the status quo is easier when the status quo is concentrating on just staying "status". Predictions 2009  An easy one: It gets much worse before it gets better. When times were good an oversupply of market options – particularly in retail – hid a myriad of structural problems. Right-sizing in media retailing and distribution will result in one major physical book retailer, one wholesaler and one online retailer. Media will be a sideshow compared with some other segments, particularly clothing and department stores.  Another easy one: Several major city newspapers will change hands for less than the debt they carry. Local and hyper-local models will expand and further encroach on the market for traditional big city news. Coupled with linking, content licensing and arrangements with classified providers like Craigslist and EBay, there will be a rapid expansion of the (hyper) local online news provider market.  Out-of-work journalists will see increasing opportunities to become ‘content producers’ as more and more companies seek to enrich their sites with professional content that appeals to their target market. The typical website ‘experience’ becomes more expansive and deeper than a company catalog or press release site. Journalism as a function becomes more widely dispersed across many business segments.  The NYTimes will either close the Boston Globe and ‘rebrand’ a NYTimes version for the Boston Market or sell it for a $1 saddled with as much debt as they can get away with. Sunday's paper will now come on Saturday: The UK market successfully went down this road and the US will (belatedly) follow.  In media M&A, look for companies that have lots of cash to act opportunistically: NewsCorp, Holtzbrink, Bauer, Bonnier, Bertelsmann, Axel Springer, Lagardère, BBC (Commercial).
  19. 19. PersonaNonData: Predictions & Commentary 2006 - 2013 18 | P a g e  Gathering of ‘equals’: Media owners unable to sell assets may seek to partner with another media company in the same boat and combine assets to form a new company. One combination that could be interesting is Nielsen Business Media with Reed Business Information (– pure speculation on my part). Others in this space looking for options might include PRIMEDIA, McGraw-Hill, and Penton.  The Obama administration will make wholesale revisions to education policy which will pain education publishers who have made particular investments in assessment companies. Long term, the assessment market will be robust; however, with explicit indications that student performance is no better for the ‘no child left behind’ programs, fundamental changes will be instituted including a more federalist direction. Ready your lobbying dollars.  Evidence that the edges of media segments continue to overlap: Google will bid for the 2014 and 2016 Olympic broadcast rights.  Social networking and ‘community’ building will become the CEO’s pet project as a ‘cheap’ alternative to decreased ad and marketing budgets with, predictably negative results. Senior-level misunderstandings of what constitutes effective social programs will result in efforts being treated casually. Piecemeal approaches will predominate and there will be a continued lack of cohesion of marketing with social networking. Programs backfire as customers witness the cynicism. Effective social networking is not just for Christmas.  Professional and information publishing will effectively leverage LinkedIn-like networks (possibly using their platform) to extend social networking to their closed networks. Lexis/Martindale is creating a private legal social network platform.  Too much LinkedIn with my Facebook. More people will do what I did in 2008 and build barriers around their online social networks and selectively cull ‘friends’ or ‘connections’ Sheer numbers have no logic, friendship is earned and legitimate business connections are money. Quality, not quantity, will reign. Don’t take it personally. Predictions 2008: Return to the Scene of the Crime This is the time of year when prognosticators attempt to handicap the future while, at the same time, trying to explain why they were so horribly wrong with respect to the prior year. I am no different. 2007 saw some stunning developments in the publishing and media space--particularly in mergers & acquisitions—and, broadly speaking, I see several trends emerging. First, I expect more change driven by M & A activity in 2008. Second, as more companies bound by traditional publishing models migrate online and join those already there, the application of technology in our industry will accelerate. Third, we will see a ‘squeezing’ of the value-chain (from author to publisher to consumer) driven by publishers looking to build community models around content and authors. Associated media markets, such as broadcasting, newspapers and games, also influence our industry in interesting ways. We are starting to see our traditional segment descriptors –
  20. 20. PersonaNonData: Predictions & Commentary 2006 - 2013 19 | P a g e publishing, newspaper, broadcasting, information – become meaningless as content becomes ubiquitous and network access (or distribution) becomes universal. Publishers and information providers must expand their capabilities beyond traditional market segments if they want to remain competitive. On a related note, there is an escalating ‘compacting of media’ taking place, where the interests of all media players are converging on issues like rights, piracy, market concentration and access to markets or even consumer attention. (Text) book content, broadcast TV programs, movies, music, games and news can all be delivered via Xbox or IPod: In this environment, where does the power lie? Who “owns” the customer? And how are content-selection decisions made? A publisher can no longer be one-dimensional and hope to survive, which is why companies like Lexis, West and Pearson are building delivery ‘platforms’ where (traditional) content is only a part of the offering. In the not-too-distant future, we may look back on 2007 as a significant transition year for the media business. In education, a number of large companies were taken private and will reemerge five years from now as fundamentally different, platform-based companies. The Hollywood writers strike will redefine how content producers are compensated as content distribution expands to the Internet. Journal publishers will trace the history of their ad-based revenue models back to Reed Elsevier’s experiment with oncology online. And in the news & information segment, NewsCorp’s purchase of Dow Jones and Thomson’s acquisition of Reuters will radically change the model of information delivery. Even the self-publishing market showed a level of maturity with the consolidation of AuthorHouse and Outside our immediate universe (but no less relevant as advertising becomes a more important revenue stream) is the purchase by Google of adserver DoubleClick. Here are my predictions for 2008: Education:  Recognizing the potential for aggressive competition, McGraw-Hill will reorganize its business much as Thomson has done. MGH education could be sold to private equity. Cengage will spend aggressively to round out its content and assessment products with course management and school resource planning tools. Information:  We will see at least one mega-deal involving, perhaps, D&B, the information assets of McGraw (S&P) or Bloomberg. Following closely on the heels of past investments in tax, legal, financial information, the insurance segment will become a focus of aggressive new investment for information providers. Trade:  It also seems inevitable that there will be some additional consolidation in trade and this could result in a higher profile for Hachette, Bloomsbury and/or Macmillan. One publisher
  21. 21. PersonaNonData: Predictions & Commentary 2006 - 2013 20 | P a g e may get out of the self-publishing market but another will jump in with both feet. A company like or the AuthorHouse/iUniverse combination could be targeted by a trade publisher seeking to expand its market and build an author community. More trade publishers will eliminate imprints in favor of theme-specific content. Retail:  The ongoing rumors of a Barnes&Noble/Borders combination will continue until one of these retailers purchases a third. This new combination will not materially change the book retail market, but the combination of the two companies will result in a financially stronger retailer. Other:  Broadcasters will have a strong advertising year due to the political calendar and the Olympics. (A three-party race for President will be an added boost).  Facebook and LinkedIn will join forces, but we will also see the development of more ‘by invitation only’ social networks. (Potentially, these could be administered by the current incumbents but they are more likely to be new entrants).  As many as ten brand-name magazines will cease publication or reduce their frequency due to ad-base declines and the rise of specialty web sites.  News sites (either branded or not) will ramp up efforts to harness niche bloggers and online publishers (either by acquisition or association) in an effort to boost traffic, broaden audience and develop more relevant op/ed and reportage. Incumbent news providers are realizing that acquiring an established online presence with a built-in audience represents a path to growth and they will begin to employ this tactic during 2008. As always, it looks like the coming year will be an exciting one in media. At least according to me. Predictions 2007: Taking it in Leaps and Bounds There are any number of people offering media predictions for 2007 and it is a fun exercise which can also be a useful tool for strategic planning. Consultants use a tactic called ‘scenario planning’ to generate discussion and thought focused on issues impacting a business. In sessions I have managed, I have placed up to ten ‘scenarios’ or predictions on the walls of a conference room where each member of the group is given instructions to vote on the likelihood of each scenario without speaking to the other participants. The scenarios reflect a combination of the existing status-quo and an extrapolation or exaggeration of anticipated
  22. 22. PersonaNonData: Predictions & Commentary 2006 - 2013 21 | P a g e market change. Each scenario should be plausible and represent a challenging future environment in order to generate legitimate discussion. A red dot placed on the scenario means it will never happen and green means the participant agrees it will happen. The scenarios can be anything that the facilitator decides could be relevant to the company but should be done in consultation with someone at the company. (The scenarios are not shared before the meeting). Additionally, they can be absolute; ‘this will happen’ or more general ‘over the next five years…’ As the group completes the ‘voting’ the facilitator has the group examine each scenario in detail and will encourage the group to think about the implications of each scenario in a few dimensions; technology, human resources, competitors, etc. The outcome of this exercise is a better understanding of the company’s challenges and an understanding of the company's possible weaknesses (or strengths) relative to the scenarios the group thinks most likely. A document should be prepared from this seminar session and this document can become a material part of the development of a strategic plan. Even discussion of those scenarios the group does not believe are likely can be useful in challenging the executives to closely examine their assumptions. This is an exceptional exercise in encouraging senior management to examine, understand and interpret what is going on in the wider world as a fundamental requirement of their daily responsibilities. It can be the case that management develops a bunker mentality and is subsequently blindsided by events that they should have anticipated. My predictions below are not fully thought out scenarios for a number of reasons – they are not specific for one thing – but nevertheless they are fun to think about. As an editorial comment, I emphasize that I have no inside information on the veracity of any of these. Predictions for 2007:  NYTimes will eliminate the Saturday print edition of the newspaper. It will also create local web news sites for every major metropolitan city in the US and will stream video from their owned broadcast television stations, classified advertising will be free. The company will also launch a citizen’s paper: The New World Times. NYT will create suite of news gathering tools – web services – and make available to ‘citizen journalists’ content and research traditionally only available to professional journalists.  YouTube TV: Just like America’s funniest home videos we will see a TV show based on original YouTube video content. It will win its’ night by 10% and will be turned into a weekly Saturday night talent show.  Using cell phones’ camera as a barcode reader will lead to an explosion of mobile in- context/ in situ mobile advertising – followed in 2008 by RFID based in-store advertising (with software for cell phones). Mobile advertising will surpass 5% of all ad dollars spent by agencies by end 2007. (Web currently at 20%)
  23. 23. PersonaNonData: Predictions & Commentary 2006 - 2013 22 | P a g e  Google launches product placement advertising program. Based on similar key word algorithms advertisers will bid for placement in movies, television, other broadcast, sports, etc. prior to production and/or live telecast. Program will represent 10% of all fall 2007 upfront spend.  FCC will hold hearings on standards related to product placement advertising in late 2007 as the market explodes.  Apple will think about buying Disney and Electronic Arts but will buy TiVo and SlingBox. Apple will also launch a Beatles version of the I-Pod including the entire Beatles catalog plus video/movies. The Beatles I-Pod will retain the tradition Apple artwork (Green apple front, cut away apple on the back).  Yahoo will by EA and within six months launch a social network gaming site based on EA content.  No-one will buy Netflix  Social Media in Education: Several major US colleges will teach various social science courses entirely in simulation. The courses will not be taught in traditional lecture form but entirely within the software simulation.  News Corp will buy Dow Jones and Financial Times and sell HarperCollins and Hachette will by HarperCollins.  EBay will by Linden Labs (Second Life). Within six months they will integrate EBay selling tools into SecondLife enabling virtual store fronts, sales assistance and virtual trading. Will launch program with major retailers and create first Second Life mega-mall in cooperation with Westfield. EBay also launches SecondLife media placement agency to handle all media inventory on SecondLife.  T Mobile buys Skype from EBay.  Linden dollars will be included in the Feds M1 currency calculation.  Neil Young’s Living with War wins the Grammy for best Rock Album. Corporate Data Strategy and The Chief Data Officer – Sept. 8th, 2011 (Part 1 of 4) Are you managing your data as a corporate asset? Is data – customer, product, user/transaction – even acknowledged by senior management? Responsibility for data within an organization reflects its importance; so, who manages your data? Few companies recognize the tangible value of the data their organizations produce and generate. Some data, such as product meta-data, are seen as problematic necessities that generally support the sale of the company’s products; but management of much of the other data (such as information generated as a customer passes through the operations of the business) is often ad-hoc and creates only operational headaches rather than usable business intelligence. Yet, a few data aware companies are starting to understand the value of the data generated by their companies and are creating specific business strategies to manage their internal data.
  24. 24. PersonaNonData: Predictions & Commentary 2006 - 2013 23 | P a g e Establishing an environment in which a corporate data strategy can flourish is not an inconsequential task. It requires strong, active senior-level sponsorship, a financial commitment and adoption of change-management principles to rethink how business operations manage and control internal data. Without CEO-level support, a uniform data-strategy program will never take off because inertia, internal politics and/or self-interest will conspire to undermine any effort. Which raises a question: “Why adopt a corporate data strategy program?” In simple terms, more effectively managing proprietary data can help a company grow revenue, reduce expenses and improve operational activities (such as customer support.) In years past, company data may have been meaningless in so far that businesses did not or could not collect business information in an organized or coordinated manner. Corporate data warehouses, data stores and similar infrastructure improvements are now commonplace and, coupled with access to much more transaction information (from web traffic to consumer purchase data), these technological improvements have created environments where data benefits become tangible. In data-aware businesses, employees know where to look for the right data, are able to source and search it effectively and are often compensated for effectively managing it. Recognizing the potential value in data represents a critical first-step in establishing a data strategy and an increasing number of companies are building on this to create a corporate data strategy function. Businesses embarking on a data-asset program will only do so successfully if the CEO assigns responsibility and accountability to a Corporate Data Officer. This position is a new management role and not additive to an existing manager’s responsibilities (such as the head of marketing or information technology). In order to be successful, this position carries with it the responsibility for organizing, aggregating and managing the organization’s corporate data to better effect communications with supply chain partners, customers and internal data users. Impediments to implementing a corporate data strategy might include internal politics, inertia and a lack of commitment, all of which must be overcome by unequivocal support from the CEO. Business fundamentals should drive the initiative so that its expected benefits are captured explicitly. Those metrics might include revenue goals, expense savings, return on investment and other, narrower measures. In addition, operating procedures that define data policies and responsibilities should be established early in the project so that corporate ‘behavior’ can be articulated without the chance for mis- and/or self-interpretation. Formulating a three-year strategic plan in support of this initiative should be considered a basic requirement that will establish clear objectives and goals. In addition, managing expectations for what is likely to be a complex initiative will be vital. Planning and then delivering will enable the program to build on iterative successes. Included in this plan will be a cohesive communication program to ensure the organization is routinely made aware of objectives, timing and achievements. In general terms, there are likely to be four significant elements to this plan: (1) the identification and description of the existing data sources within an organization; (2) the
  25. 25. PersonaNonData: Predictions & Commentary 2006 - 2013 24 | P a g e development of data models supporting both individual businesses and the corporate entity; (3) the sourcing of technology and tools needed to enact the program to best effect; and then, finally, (4) a progressive plan to consolidate data and responsibility into a single entity. Around this effort would also be the implementation of policies and procedures to govern how each stakeholder in the process interacts with others. While this effort may appear to have more relevance for very large companies, all companies should be able to generate value from the data their businesses produce. At larger companies the problems will be more complex and challenging but, in smaller companies, the opportunities may be more immediate and the implementation challenges more manageable. Importantly, as more of our business relationships assume a data component, data becomes integral to the way business itself is conducted. Big or small, establishing a data strategy with CEO-level sponsorship should become an important element of corporate strategy. Setting the Data Strategy Agenda - September 8th , 2011 (Part 2 of 4) Once a company has recognized the tangible value of its data, the CEO will assign the role to a direct report making this initiative his or her sole responsibility. As noted in my first post, managing data as an asset is so important that it requires direct senior management responsibility and should not be delegated to the head of marketing & sales or IT (in each or any case, both bias and conflict with their ‘real’ responsibilities will prevent the program's benefits accruing to the entire business). In addition, the ability to break down silos, confront the assumed internal politics and impose a solution will be greatly diminished if the executive in charge already has other functional responsibilities. In my view, if this is the approach of the CEO, the initiative will fail. By way of example, the Chief Data Officer at Dun & Bradstreet sits at the highest levels of the company in recognition of the importance of data to that organization and is evidence of the strategic importance of that data. The first task of the “Chief Data Officer” (CDO) and their team would be to conduct a business- wide data audit to determine where data is being collected, both through internal efforts as well as externally by customers, vendors and other partners. This is an important first step and should be as expansive and specific as possible. Things to look for include not only the data sources themselves but their quality (perceived or explicit), frequency of update or creation, source/owner, format, whether the data conforms to any particular standard and whether the data is ever validated against this standard. Reviewing standards might also include not just the data’s technical framework but also whether it is subject to normalization – to a specific categorization method such as BISAC, for example. I once undertook an effort like this at a large educational publisher and the process took about six weeks and required site visits, interviews and the reviews of policies and procedures. During this exercise, it is more than likely that some amount of ‘visioning’ will take place and this feedback should be captured during the analysis; however, at this early stage, the only really important aspect of this effort would be where someone might say ‘we currently make
  26. 26. PersonaNonData: Predictions & Commentary 2006 - 2013 25 | P a g e use of this particular data source, but we would really like to use this other one and can’t because our systems can’t handle it’. Questioning and challenging the current state should be the focus during this evaluation stage. There will be ample opportunities to focus on the ‘to be’ environment as the project evolves. Out of this ‘baseline’ analysis will come several recommendations concerning how the data strategy initiative will roll out. The baseline analysis will define all existing data sources, the resources required to manage each effort, the tools deployed in support and perhaps an estimate of what would be required to centrally manage the data operations. In turn, this analysis will form the basis of the business operating plan for the data strategy program and, in common with any business plan, it will include a set of objectives, suggested approach or tactical plan and the requirements or measurements for success. It is likely the initial plan will be progressive in terms of scope and complexity for several reasons: Firstly, this initiative is likely to face significant internal skepticism and, therefore, early observed success will be important in retaining support. Remember, the CEO has also placed his or her ‘reputation’ behind this initiative, and for this reason, the initial roll-out should be modest. Secondly, taking a full-scale approach is unlikely to result in benefits that anyone will support, and finding and assigning an appropriate level of resources to an initiative of that breadth would be cost prohibitive. As often happens, trying to ‘boil the ocean’ will fail. Thirdly, starting the project on a relatively small scale will enable the project team to select a project scope they feel they can comfortably deliver on. There are likely to be varying approaches to initiating a corporate data strategy but, for my money, I would start with product meta-data. Corporate Data Program: Where to Start? – September 8th , 2011 (Part 3 of 4). There are likely to be many approaches to initiating a corporate data strategy but, for my money, I would start with product metadata. Theoretically, this is data you maintain the most control over (you will find out if you actually do during your initial review). In my opinion, product metadata should be considered the basic foundation upon which to build a corporate data strategy. On this foundation, a “data value” can be assigned to all the data a business produces. Product data might also be seen as the data asset from which all other corporate data flows. For example, as businesses begin to generate more user/transaction data, this information will be far more valuable if it is tied back to robust product metadata. Establishing your corporate data strategy around product metadata also has another advantage in that the company is always best placed to manage the information that describes their products. How companies describe and inter-relate information about their products is increasingly viewed as the most proactive activity a company can impose on supply-chain partners (or directly to consumers) in order to positively impact sales. The deeper, more descriptive and interconnected the metadata is, the better all products will perform in a sales environment that is increasingly congested. Unfortunately, only a small number of companies manage their data in a uniform manner and, typically, descriptive metadata continues to be poorly managed and
  27. 27. PersonaNonData: Predictions & Commentary 2006 - 2013 26 | P a g e locked in silos deep within organizations. Ironically, if the logic of a “corporation” as a collection of assets makes sense from a financial point of view, isn’t that logic undermined by the disaggregation of information about the collective assets of the organization? For many companies, this describes their product data management ‘philosophy’. As such, their data management is more reflective of their own internal structures rather than a pragmatic understanding of the mechanics of their markets. Just as consumers seek products and services – often via search – in the broadest sense and not in accordance with artificial corporate hierarchies, the smart approach to product metadata management would be to centralize it at a broad or corporate level. This approach would facilitate the most effective integration of all products so that the best combination of product options can be presented to a customer. In choosing product data as the first practical implementation for your data-strategy effort, your team will also benefit from an existing set of methodologies, policies and procedures. (This wouldn’t necessarily be the case if you were to choose customer data or web traffic data, for example.) In launching this first initiative, your internal communications will want to explain to the individual business units and the business as a whole what benefits they will realize as the project becomes operational. All participants in the metadata initiative will be striving for a ‘future state’ where each business and constituency will be able to spend more time analyzing and leveraging better and more complete data. Thus, the future state will be materially different than the “legacy environment,” where staff spend their time chasing and remediating data rather than benefiting from value-added tasks supporting their business units. In my next post, I will spell out in more detail what benefits may accrue from this initiative but, overall, they include the application of scale economies to the management of data, the attribution of control mechanisms (such as thesauri) and a greater ability to merge and mingle metadata to improve revenues. Strategically Managing Data for Long Term Benefit – September 8th , 2011 (Part 4 of 4) In this series of articles, I have attempted to describe the organization and development of a corporate-wide approach to data management. In doing so, I have suggested that product metadata is a good place to initiate a phase one approach to centralizing management of a business’s data. The underlying premise of this series is that data represents a core asset of any organization and, if effectively managed can produce incremental benefits to the organization as a whole. In my view, the efforts detailed in the prior articles will have a material impact on the business in three ways: (i) The application of scale economies to the management of data; (ii) the attribution of control mechanisms (such as thesauri) and (iii) a greater ability to merge and mingle metadata to improve revenues. Below, I suggest how some of these benefits might be actualized: Scale:
  28. 28. PersonaNonData: Predictions & Commentary 2006 - 2013 27 | P a g e  Centralizing metadata management allows the organization to take advantage of scale economies in factor costs, technology and expertise. Not every business unit can afford to acquire state of the art technology or the market’s best metadata expert but these types of decisions are almost encouraged if their benefits can be spread across the enterprise. The financial benefits of better data management can also be most appreciated and captured at the corporate level, thereby providing greater financial justification for the adoption of technology and staffing to support the data strategy. Collective Dictionaries “You say tomato, I say tomato” - Thesauri, ontologies and the attribution of consistent cataloging rules:  Business units don’t speak to one another nearly enough and this is absolutely the case in the way they manage information about the products they sell. The manner and method one business unit may use to describe a product could be vastly different than that which a sister unit may apply to a similar or likely compatible product. Take, for example, a large legal publisher publishing journals and educational materials: It would make logical and strategic sense that the metadata used to describe these complimentary products would be produced using the same metadata language and dictionary, yet that is rarely the case. (Think of this as a ‘chart of accounts’ for data).  Additionally, the manner and method by which authors and contributors are required to compile (write) their authored materials are unlikely to take account of the potential for compatibility and consistency across content type. As is readily apparent, traditional content silos are breaking down as users are accorded more power in finding specific content and an organization will be significantly hampered if it cannot provide relevant material to customers irrespective of its format. Inter-relationships and cross selling:  Companies frequently leave it up to channel partners to aggregate compatible or complimentary products. Naturally, at the retail level this activity happens across publishers; however, to not provide the supply chain with an integrated metadata file that represents the best complete presentation of all the company’s products suggests a contradiction with the wider corporate business strategy of acquiring or developing products that ‘fit’ with corporate objectives. In other words, why doesn’t the company’s data strategy support the corporate business strategy in managing a collection of related and complimentary products and services? To do this, data strategy should be a component of business strategy planning.  The opportunity inherent in managing data in this manner will be a real ability to sell more products and services to customers. Providing relevant “packages” of content that add related and complimentary products to the item originally sought will generate cross- and up-sell opportunities. Why rely on a hit-or-miss approach provided by your channel partners? (Or worse, an association with a competing product). This activity is only possible with good data yet; if done effectively, can become a significant competitive advantage with incremental sales. Return on investment would be seen in metrics such as average revenue per customer and/or average shopping cart revenues. Importantly, selling more products to
  29. 29. PersonaNonData: Predictions & Commentary 2006 - 2013 28 | P a g e a customer who is already interested in buying from you is always easier and more profitable than finding new customers. Market, promotions and branding:  Combining a company’s products in a logical manner reinforces branding and messaging. If product information is disaggregated and disorganized, it is likely that the branding and messaging in the mind of consumers similarly lacks effectiveness. Channel Partner Relationships:  A company may be able to exert more leverage with a channel partner if it is in a position to represent all of its products in a coordinated and managed manner than if this interaction is dispersed across the organization  Matching and marrying data with partners will be less problematic and more effective if data models can be allied – time to market will be significantly reduced and planned benefits of the relationships should accrue in shorter time frames.  Additionally, providing a well-managed metadata file that supplies the type of product descriptive cohesion described above is going to benefit your channel partners as well, not only making their lives easier but also make them money by selling more of your products. Acquisitions – integration of new data:  Historically, the integration of companies and new products with respect to product metadata might have been a haphazard affair. At a consolidated level this task becomes much easier with the added benefit that connections between products, adoption of standard dictionaries and standards may have an immediate financial impact. As noted before, it is likely the justification for the acquisition of the company in the first place was its compatibility or consistency with a strategy and it is logical that this be reflected in the manner in which the products are managed.  It is likely we will see that companies with ‘best in class’ approaches to data asset management will be valued more than those without. Increasingly, companies will be asked about their data policies and management practices and those which ‘under-manage’ their data will be seen as less attractive – for acquisitions, partnerships and other relationships. Those are some of the general benefits of better corporate data management and developing a corporate data strategy. The effort required to implement a data strategy program isn’t inconsequential and planning should be rational and realistic; however, as data management across a business becomes more and more ‘strategic’ the faster you adopt an approach, the faster your business will benefit. If you believe the tasks involved are difficult (or near impossible) now, they are only likely to get more so; therefore, it would be best to get started now.
  30. 30. PersonaNonData: Predictions & Commentary 2006 - 2013 29 | P a g e Business Out of the Ordinary By nature, business development is often more disappointing than validating. That brilliant deal you thought was so obvious and beneficial can fail for all kinds of reasons. Rallying internal support for a business initiative can be harder than finding the perfect external partner and there’s no accounting for how short-sighted or uninspired a company might be in assessing its position and prospects. Most of my experience is in publishing and I am routinely surprised by the wide gulf between the small number of companies interested in exploring new ideas and the majority who can’t or choose not to. Business development is all about mutual benefit-- defining an outcome that balances the inputs to the product or project and the output of success. Publishers, in particular, often seem to go out of their way to discourage advances from potential partners. Thinking about this topic recently, I was reminded of a series of meetings I organized while at Berlitz, the language company. When I assumed income statement responsibility for one of their business units, I found I’d inherited an unexpectedly lucrative licensing deal when the first-quarter royalty check came in at more than $98,000 when we had budgeted $100,000 for the full year. In addition to being pleasantly surprised, I realized we could do even more with the relationship, now about to enter its second year. As business partnerships went, this was one of the best. One day a couple of years before, two IT professors talked their way into Berlitz and happened to reach the right executive – purely by chance – with the idea that they could marry their CD-ROM technology with Berlitz’s self- teaching language material. The product got off to a slow start and revenues were small for the first year, but the Berlitz executive who did the deal had pressed his advantage and we were taking 20% off each sale. By the time that check came in, the guy who did the deal was gone and I (happily) was running my first real business. The second-quarter check that year was $150,000 and we finished the year over $400,000. That first foray seemed to indicate that technology had a role to play in the delivery of educational material despite the fact that, in those early years of ‘multi-media’ publishing, the CD-ROM product was simply a direct translation of the print/audio product. But more sophisticated opportunities were obvious to anyone willing to think differently and, even before our one-product CD-ROM partner was acquired by a much larger company, I’d started to explore how we could expand this relationship. Once The Learning Company (publisher of the Reader Rabbit series) acquired our partner, I began discussions to form a deeper association. I got very little support from senior management at Berlitz, many of whom believed self-teaching materials would cannibalize in-class instruction and somehow damage the Berlitz brand (- an insane proposition). Over the course of the next six months, I wrote business plans and extrapolated models with the sole goal of forming an equal partnership between Berlitz and The Learning Company (it took that long to get the two groups together). The idea was simple: Apply the Berlitz brand to TLS’s entire language learning product line rather than to just the one product they had acquired with their purchase.
  31. 31. PersonaNonData: Predictions & Commentary 2006 - 2013 30 | P a g e By that time, I had decided to leave Berlitz--arranging the CEO meeting was the last meaningful thing I accomplished and I did it proudly. On my way out, I commented to our CEO was that there wasn’t anything else to do: We had agreed terms which were being reviewed, but it still took another year to complete the deal. That unproductive year probably cost Berlitz over $1mm in profit. Even more dispiriting was that fact that, once the deal was done, neither Berlitz nor TLC was able to expand beyond the language titles each already produced. Had they done so, they would have created an education brand of far greater strength and depth. Successful business development requires vision and commitment and, if these aren’t in play, all initiatives fail. Good business development requires that you do your homework and have a clear idea how the project will be mutually beneficial. In my development dealings, I’m less concerned about wasting my potential partner’s time than I am about wasting my own. This isn’t arrogance on my part: I’m always comfortable in the knowledge that I’m proposing something of significant value to the target and, given the chance, I can present my case convincingly. Sadly, many other industry overtures don’t fall into this category because no real thought has gone into the proposal and it’s often glaringly obvious. In the run- up to the London Book Fair last month, I received many proposals for business services bearing no relationship to what our company does. Bogus proposals like these cause all of us to be circumspect about any business development initiative because, all too frequently, they are irrelevant. It can be hard to overcome this barrier. Nevertheless, despite these spurious approaches, I am frequently baffled by the sheer lack of curiosity exhibited by some of the companies I’ve contacted. Publishing and media are currently undergoing wrenching change—the way we now do just about everything will be very different five years from now (and maybe even next year). Some, with withered hands firmly pressing against the figurative front doors of their publishing houses, deny entry to any new force as if they could overcome change with feigned ignorance and exasperation. I don’t forget the few slammed phone receivers or nasty outbursts but I do relish when they come back for a second look--it proves that good business development eventually wins out. Curiously, digital conferences are big business because, supposedly, there is a collective striving for greater knowledge or understanding about the direction of our business. If attending a digital conference is a substitute for real, proactive business development –actively looking for new ideas and partners – have we changed how we conduct daily business operations in order to be more receptive to development opportunities from potential partners from outside our traditional universe? Not in my experience. (Presumably, your conventional partners are all tapped out!) Who on your staff is responsible for fielding the occasional new business opportunity? Are they identified on your web site? Let me take a step back; is anyone identified on your web site? And, if they are, do you list their phone numbers and e-mail addresses? I’ve visited many web sites where the only communication option is via an anonymous “info@” e-mail
  32. 32. PersonaNonData: Predictions & Commentary 2006 - 2013 31 | P a g e address! I understand there’s resistance to hearing from all kinds of wackos but this is the way business is conducted. And I’ve got news for you: For anyone with a modicum of patience, tracking down almost any phone number and email address is ridiculously easy so not putting these on your website is only an irritant. A far better approach would be to identify the executive responsible for fielding business development proposals, describe the kind of business ideas you are interested in and define a format for proposing them. Present press releases from completed deals to give visitors to your site essential background and context for prospective partnerships. Proactively manage this process and you will not only save yourself (and your potential partner) valuable time while still opening up your company to new and interesting business opportunities. One thing I learned when I attained a certain level of management responsibility was to be immediately and also politely forthright about my interest level in proposals. Don’t just slam the phone down—take the time to clarify your understanding of the overture and then be clear about why it’s not something you’re interesting in pursing. There’s nothing worse than wasting everyone’s time on repeated attempts to make something work if one party is really not interested: End it as soon as possible but do so professionally and with an explanation. You say you don’t need to provide an explanation? I would disagree; not only is it professional courtesy but the intellectual exercise of thinking things through is essential for seeing how, in the future, out of the ordinary ideas could support your business objectives in ways you hadn’t thought of. As our industry continues to corkscrew through changes, we increasingly feel like its 'business out of the ordinary', but this is manageable and, while some of us might want to ignore our circumstances, most of us would like to survive in this new and different world. That requires a receptiveness to new ways of working and openness to new partners offering ideas and solutions we’ve never thought of. Therein lies the true opportunity for good business development. Once, Berlitz was a company virtually devoid of technology: The customer experience was completely dependent on humans delivering live language instruction; their salaries and rent for school locations around the world comprised the vast majority of the company’s expense. We knew nothing of technology but saw the potential in a simple CD-ROM product and it is sometimes upon the most tenuous of platforms that key relationships can be established. I believe that those companies open to extrapolating beyond their current circumstances are those that will embrace business development as a function for growth beyond the confines of their existing environments and will prosper as a result. Companies who don’t, won’t. I Steal Stuff – March 15, 2011 I remember a conversation early on in my tenure at my last company that ended along the lines of ‘well, you know, consultants just take credit for the ideas they hear from the employees’.
  33. 33. PersonaNonData: Predictions & Commentary 2006 - 2013 32 | P a g e There is some truth to this and, having been on the employee side of that observation/ accusation, I can attest it can be demotivating to hear consultants spouting your ideas and concepts to a room full of people. Consultants (me, for example) might counter that, if they’re doing their job well, they are able weave together the implications of discrete ideas and potential strategies across the organization. That, of course, isn’t always within the purview of individual employees. Every one of the operations jobs I have undertaken in my career has either been a new position or I’ve replaced someone who was fired. I’ve never come into a job where the person who held my new position was still with company. What I’ve found consistently is that good ideas and strategies for building or expanding the business were all in plain sight and that, with a little diligence and execution, success can come quickly. Another interesting aspect of my career is that I’ve been hired into positions where I had little to no specific experience. I have also found that skillful ‘adaptation’ and execution of the ideas already known or present in the organization can aid in building a deeper and more rapid understanding of the dynamics of the business you’ve been tasked with operating Early in my career at Berlitz, I was given responsibility for their direct-mail business, selling language learning materials in airline and travel magazines. I had no experience in direct mail and the manager in charge of the unit had neglected the business and was no longer employed. Direct mail is all about testing and math, and the prior manager had done a test which called for placing a four-color tri-fold insert in the American Airlines Advantage mileage statement received each month by members. The test had been done six months before I took responsibility and had been successful (it actually made money) but, through inattention, he had not expanded the program to the full membership list. My staff told me about this and we decided to go all in with a full mailing to over 12million recipients. When I inherited the business mid-year we were already running well short of budget but, thanks to the strength of this program and other improvements, we made our budget that year with room to spare. That American Airlines program was a great start and in the following year we placed the insert four more times. We also explored other, similar mileage programs but none performed as well. With this strong performance as a foundation, we began looking at other aspects of the business for opportunities. I had a small telemarking team that took all the incoming phone orders but this team had never been properly trained (nor really paid any attention). As I began working with them it became clear they could do much more to expand sales. One aspect of language self-learning is that very few people finish the course. We even used to joke that no one ever got past the first of the twelve cassettes. (Cynical I know, but the customer generally blames themself not the product – just like health clubs). Berlitz offered a second-level product for the same price but, unsurprisingly, less than 10% of buyers purchased the second (more advanced) level course. We now had a tremendous number of calls coming in to our little telemarketing operation due to bigger, more frequent mailings to American frequent flyers and all the other direct response ads we continued to place. As a team, we determined that if we could hook the callers into purchasing both level 1 and level 2 at the same time, we could potentially generate far more