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lean back 2.0
everything
   is new again.

 i have gradually become used to dividing
    my reading into            the work,
 laptop info zone; and the chill, relaxing,
        ,
        leisurely read of the tablet.


 the laptop replicates the old newspaper
experience; the tablet replicates the book.
       everything new is old again.


         [   andrew sullivan, the sunday times   ]
everything
     is new again.



         the rebirth of lean-back media
i s s e e m i n g ly a g e n t l e , r e a s s u r i n g c h a n g e
                 for media businesses.

  i t i s a c t ua l ly a t s u n a m i t h at d e m a n d s
   u r g e n t r e - e x a m i n at i o n o f e v e ry t h i n g
     t h at c o n s t i t u t e s a m e d i a bu s i n e s s .
lean back

 the first age:       the second age:                      the third age:
lean-back print      lean-forward web                     lean-back digital




ritual pleasure      snacking and research,                    lean-back,
   of reading          c o m m u n i t y, s h a r i n g       only better
the web demanded a



        news is becoming a
   shared social experience ,
      with people swapping
     links in emails, posting
       on social networks,
   ‘retweeting’ news stories
     and haggling over the
       meaning of events in
       discussion threads.

       [   p e w i n t e r n e t & a m e r i c a n l i f e p r o j e c t, 2 0 1 0   ]
the web demanded a
                  the economist approach
                  to lean-forward web...

                                       face-book




                                        debates               google
                  tumblr                                       news

                        user                           ask the
                      comments                        economist




                   audio     print                   online   ideas youtube
     flipboard    edition   content     7 million  content    arena
                                      unique users




                     conversation                         by
                        cloud                         invitation

                 itunes                     the               linkedin
                                         economist
                                           asks




                                        twitter

                                                                         [   source: omniture   ]
the web demanded a
                                            ...that enabled us to build
                                          a valuable global community   .


          successful
          av e r a g e p e r s o n a l i n c o m e o f u s e r s
          o f t h e e c o n o m i s t o n l i n e : $ 11 5 , 1 9 8 .



          e d u c at e d
          u s e r s h av e ta k e n a n av e r a g e
          o f 4 e d u c at i o n c o u r s e s .


          i n t e r n at i o n a l
          t h e y to o k a n av e r a g e o f 1 4 b u s i n e s s
          trips and 7 leisure trips last year.



          i n f lu e n t i a l
          almost 1 in 5 hold a board
          d i r e c to r s h i p. 3 % h o l d o v e r f o u r .




[   s o u r c e : t h e e c o n o m i s t o n l i n e r e a d e r s u r v e y, 2 0 1 0 . b a s e : a l l r e s p o n d e n t s w o r l d w i d e i n e m p l o y m e n t   ]
[   ezra klein, the washington post   ]
lean back
          is different again:

                print readers spend about
          45 minutes with an issue each month.
           readers using their iphone and ipad
            spend an average of 160 minutes.
[ g q , va n i t y f a i r , w i r e d a n d g l a m o u r a p p r e a d e r s u r v e y, c o n d e n a s t 2 0 1 0 ]




  65% of people have increased the amount
they read due to e-books, with 80% attributing
    this to the                         of
          reading a book digitally.

   reading during ‘dead’ time was a key trend
    with travelling (72%) and waiting for an
    appointment (72%) proving most popular.
[ i m o d e r at e r e s e a r c h t e c h n o l o g i e s , d i g i ta l w o r l d b o o k c o n f e r e n c e 2 0 11 ]
lean back
is different again:




                 i never
              really found
           it very enJoyable
       to read a magazine on my
         computer or iphone.
        but with the ipad it’s a
        whole different story   .

     i can pinch out to zoom into
    a section; hyperlinks take me
directly to an article without making
     me flip through the pages…

... and i can read in bed without a light
       after my wife goes to sleep .
          [   j o n at h a n s e f f, m a c w o r l d ]
simplicity &
          finishability.
          no one ever asked for
       The economisT to be longer.


   o u r l e a n - b a c k d i g i ta l s t r at e g y i s
R A D i c A L s i m P L i c i T Y. i t w a s a c o n s c i o u s
  editorial decision to strip out our
  w e b i n n o vat i o n s — i n m a n y way s t h i s
      was harder than keeping them.

            so Why did We do this?
lean back 2.0
                                    % of respondents using tablets while...


    w at c h i n g t v


    ly i n g i n b e d


    w i t h f r i e n d s / f a m i ly


    waiting for someone


    other


    i n t h e b at h r o o m


    in a meeting/class


    running errands


    commuting




0                                        20                            40                                 60                                  80




           [   p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
lean back 2.0
         q. how much time in total do you think you will spend
              reading the economist ipad app this week?


25%                                                                                                                          25%




20%                                                                                                                          20%



15%                                                                                                                          15%



10%                                                                                                                          10%



5%                                                                                                                           5%




      none   less than      15-30      30 mins        1–1.5        1.5–2         2–2.5        2.5–3           3–4    4 hrs
              15 mins       mins        – 1 hr         hrs          hrs           hrs          hrs            hrs   and up




                    [    s o u r c e : t h e e c o n o m i s t u k i p a d s u r v e y, j u l y 2 0 1 1   ]
immersed in the content:
 4 2 % o f ta b l e t n e W s r e a d e r s r e g u l a r ly r e a d i n - d e p t h
      neWs articles. another 40% sometimes do this.

         t h e y a r e t h r e e t i m e s a s l i k e ly t o r e g u l a r l y
        r e a d i n - d e p t h a rt i c l e s a s to wat c h n e w s v i d e o s .




 [   p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
tablet news users read in-depth articles but share news
        less. participatory news is a part of the mix but even
         among the young (19-25) less than 1 in 5 share news
                       on the tablet regularly.




                                         42%
                                        o f ta b l e t
                                       neWs users
                                           read
                                         in-depth
                                         articles




                                                                                            16%
                                                                                           o f ta b l e t
                                                                                          neWs users
                                                                                          share neWs
                                                                                           on social
                                                                                           netWorks



                  [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 .
ta b l e t n e w s u s e r s a r e d e f i n e d h e r e a s t h o s e w h o c o n s u m e n e w s o n t h e i r ta b l e t s at l e a s t w e e k ly   ]
reading, not browsing
 i t ’ s h a r d to b r o w s e t h e w e b w i t h a n i pa d .

                     [   m i r at e c h w h i t e pa p e r , j u ly 2 0 11                         ]




             eye activity                                               and its
             on a website                                          corresponding app




  [   s o u r c e : w w w. m i r at e c h . c o m / b l o g / u s e r - t e s t i n g - i pa d - v s - c o m p u t e r   ]
reading, not browsing
      i t ’ s h a r d to b r o w s e t h e w e b w i t h a n i pa d .

                          [   m i r at e c h w h i t e pa p e r , j u ly 2 0 11                   ]




              people who mainly use apps for news are
                more active tablet users in general.

        they are more in-depth readers and were more
         satisfied with their tablet news experience.

     some even stated that the content they get here
     is worth more than content on other platforms.

    those who mainly use apps are also twice as likely
    as browser users to read magazines daily on their
           tablet (13% vs 6% browser, 9% both).




[   p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
reading, not browsing




         m a i n ly a p p s

         m a i n ly b r o w s e r




           53%
                                      46%
                    26%
                                               21%                 22%
                                                                             11 %

        easier to learn              enjoy the                  the news is
          new things                 news more                  worth more

                [ p e w r e s e a r c h ( u s ) i n a s s o c i at i o n
          w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
the fastest speed of change our
 industry has ever experienced.




          the kindle launched
         on november 19th 2007.

          the ipad launched on
           January 27th 2010.

          tablets and e readers
           are rapidly eclipsing
         paper and rival screens.

           we had centuries to
             adapt to print.
            decades to adapt
               to the web.

            we have
              to adapt to
             lean-back 2.0.
the fastest speed of change our
 industry has ever experienced.




                   i spend more time each
                  day on my tablet than i...




               r e a d a pa p e r b o o k                            59%


               listen to the radio                        52%

               use my                               43%
               desktop/laptop


               use my                             41%
               smartphone


               w at c h t v                 34%


                        11 %       none of the above



           0                  20             40                60



       [   s o u r c e : a d m o b , u s s u r v e y j u ly 2 0 11    ]
news consumption is changing:
      people are already
      using the tablet to
      get news they used
      to find elsewhere—
        primarily their
      desktop or laptop.


                                                      59%
                                                   used to get
                                                    their news
                                                   from a print



    79%
                                                    newspaper
                                                   or magazine



 used to get their
news from a desktop
     or laptop




                              57%
                              used to get
                            their news from
                              television
                                                source: pew research
                                              ( u s ) i n a s s o c i at i o n w i t h
                                                t h e e c o n o m i s t g r o u p,
                                                         o c t o b e r 2 0 11
the difference
                                                2 years will make:

                                                             current preference vs
                                                         expected preference in 2 years

                  100%



                   80%
                                                                                                                                              current

                                                                                                                                              in 2 years
                   60%



                   40%



                   20%




                               print         website         website        s m a rt-          ta b l e t   e-reader           audio          social
                                              pa i d          free         phone app             app                          edition         media




[   r e s p o n d e n t s : s u b s c r i b e r s a g e d 4 0 + . s o u r c e : b r a n d a s s e t ® va l u at o r u s a , 2 0 11 — t h e e c o n o m i s t c u s t o m s t u d y   ]
sales of tablets, smartphones
         and e-readers are set to grow fast:

                              tablet sales forecast 2010 — 2015
                                                   ,




                                                                                        326m
 18m    64m
                                                        252m
                                178m
                 104m



 2010   2 0 11    2012            2013                    2014                            2015


         b y 2 0 1 5 , t h e s m a r t p h o n e m a r k e t w i l l h av e g r o w n f r o m
a r o u n d 4 5 0 m d e v i c e s t o d ay t o 1 . 1 b n ( a n d r o i d , w i n d o w s , i o s , r i m ) .

                       by next year , 1 2 % o f u s a d u lt s
                    (28.9m people) w i l l ow n a n e - r e a d e r .



                                     [   source: gartner, emarketer   ]
economist readers in particular
   are buying these devices:




                  over 50% o f o u r u s
              r e a d e r s o w n a ta b l e t o r
               e-reader oR plan to buy
              one in the next 12 months

              28% o f e c o n o m i s t r e a d e r s
                o w n a ta b l e t / e - r e a d e r

                   20% o w n a n e - r e a d e r

                      11% o w n a t a b l e t

                23% p l a n t o p u r c h a s e
                 a n e - r e a d e r / ta b l e t
              within the next 12 months

          17% p l a n t o p u r c h a s e a t a b l e t
            within the next 12 months




    [   m e n d e l s o h n a f f l u e n t s u r v e y 2 0 11 ( u s )   ]
the proportion of us adults using e-readers
nearly doubled from 2010-2011 and is now 15%.


        agree—i use an electronic reader, such as
        a kindle, an ipad or a nook, to read books:



                                                  15%




                                    8%




                                2010 2011


           [   m e n d e l s o h n a f f l u e n t s u r v e y 2 0 11 ( u s )   ]
the tablet effect:




 because of the growth [of tablets and e-readers],
   paper use for print media including magazines,
newspapers, and books will have declined by as much
  as 21%, compared to their 2010 production rates.


        additionally, over the next 15 years,
         production could fall by 40—50%.

                 [   risi global study (2011)   ]
audience:


  l e a n - b a c k r e a d e r s a r e t h e m a s s i n t e l l i g e n t.
  a global psychographic, not a demographic.


interested in ideas. receptive to new concepts.
 c ata ly s t s f o r c h a n g e . w e l i v e i n t h e i r w o r l d .
audience:


the economic product of the united states
  has become predominantly conceptual.
               [   alan greenspan   ]
audience:



                  elite media




                                  mass
                                intelligence
demographics




                                                  mass
                                                  media



               small                                      big
                                    market size
audience:

W e a r e o f t e n t o l d t h at t h e o n ly Way f o r m e d i a c o m pa n i e s t o s u r v i v e
is to dumb doWn; that young people have narroW attention spans so
              everything needs to be delivered in sound bites.

                                      that is not true.




 26.8m people              8.5m visitors               8m copies of                   28.2m
  now listen               to the louvre               civilisation                subscribers
    to npr                                              video game                   to hbo
                                                       series sold
audience:

        pay t v h a s s h o W n t h at va l u e i s c r e at e d a n d e X t r a c t e d t h r o u g h
i n v e s t m e n t i n Q u a l i t y c o n t e n t. d ata s h o W s t h at m o r e p e o p l e Wa n t t o b e
  challenged by What they read, Watch and listen to than ever before.

         it is a mass phenomenon that We call mass intelligence.




                                                  © warner bros, 2011                                          © sky and hbo, 2011


      “nolan cashed in his hard-earned                                    “sky atlantic hd is unashamedly
    artistic and financial freedom with                                        d e d i c at e d t o q u a l i t y.
    inception, the $160m auteur vehicle
    t h at p r o v e s r e a l ly e x p e n s i v e m o v i e s           sky atlantic hd is a key part of
d o n ’ t h av e to b e s t u p i d to b e s u c c e s s f u l .        our strategy to help further grow
                                                                        the content gap between what you
 it’s a film that imagines that the multi-                              can get with sky and what you can
  plex masses aren’t so dumb after all.”                                          get elsewhere.”

           mark kermode, film critic                                        s t u a r t m u r p h y, d i r e c t o r o f
                                                                        programmes (sky 1 and sky atlantic)
audience:


                 mix and

people who read/                                      people
watch/attend at                                      magazine
 least two of...
                                                    us weekly
                                                    the oprah
                                                    magazine

                               33%
  the economist

    the new
    yorker

  the atlantic
                                 39%                         sports
      hbo                                                 illustrated

  art galleries                                                 espn

  live theatre

    classical                  32%
     concert


                                                    family guy
                                                   the simpsons

                                                    saturday
                                                    night live

                                                    american
                                                      idol




                  [   source: mri, fall 2007   ]
audience:


a truly mass phenomenon:
 ‘ W e l l d o n , m y s u n ’ : a n i g h t at t h e o p e r a f o r 2 , 2 0 0
  s u n r e a d e r s m a d e w av e s a r o u n d t h e w o r l d i n a n
            a m a z i n g m o m e n t i n b r i t i s h c u lt u r e .

     t h e o p e n i n g n i g h t o f m o z a r t ’ s d o n g i o va n n i
      at l o n d o n ’ s r o ya l o p e r a h o u s e w a s pa c k e d
     t o t h e r a f t e r s e x c l u s i v e ly b y s u n r e a d e r s .




         [   source: thesun.co.uk, september 2008                      ]
audience:


and their ranks are growing...
               international student numbers

 3.5 million



  3 million



 2.5 million



  2 million



 1.5 million



  1 million



     500,000
               1975   1980   1985   1990   1995   2000   2005 2009



                       [   source: unesco, 2009    ]
audience:


 smart is the new cool.




1982               2002
the way forward
the way forward


reinvention is required.
t h e o l d m o d e l s a r e i r r e d e e m a b ly b r o k e n .

the Web didn’t satisfy our appetite for the
p r i n t e d W o r d . l e a n - bac k d i g i ta l w i l l .

everything is back to normal—apart
f r o m t h e p r o d u c t, t e c h n o l o g y, p r o d u c t i o n
processes, subscription and neWsstand
marketing and advertising sales.

We must not adapt legacy models, We must build
reader-led business models from scratch.
what does this
mean for media
 businesses?

   editorial
   product


    business
     models



   marketing



  advertising



   production
product:




                                   rs
                               se
                           t ug o re r
                       le
                  a b d i n at h e o
          o rf t r e at s r v i d s ) .
       %                c       r     e
    7 1 r e f e g fa e s o t u r
      p rin tur pic
        a       c        r              o
    h e n p ir e f e               s t e
        a                      re n th n.
    th 6% p                  a
                          mp t i        io
      (2             c o s p l i u l at
                is n           p
           th ve             o                 t
                e        l p               ou
          an nera                     e a b e ly
          ge                     ar lik d
                             rs s as rea as
                          se e         y         .
                    s u im         rl les os
              e w e e tg u l ar t i c v i d e
            n r
              th o re th a ews
                  t ep h n
                       d
                 i n - w atc
                t  o




                                                                              [ source: pew research (us)
                                                     i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
product:

         the rebirth of reading
      means the rebirth of writing.




              i n v e s t m e n t i n h i g h - q u a l i t y, l o n g - f o r m j o u r n a l i s m
           i s n o t c o m p l a c e n c y, i t i s b a s e d o n a u d i e n c e i n s i g h t.

       i t i s n o t o n ly T h e e c o n o m i s T t h at c a n p u l l o f f t h i s t r i c k .
                      t h e m a s s i n t e l l i g e n t a r e a b i g m a r k e t.
product:

                               better how?
                  l e a n - b a c k d i g i ta l i s n o t l e a n - b a c k p r i n t.
                         the medium will shape the media.

               w e a r e j u s t b e g i n n i n g to i n n o vat e to e x p l o r e
                   i t s p o t e n t i a l to i n c r e a s e r e a d e r va l u e .



           example 1:                                                             example 2:
    multi-platform bundling                                                      audio edition
product:
           how a news organisation
             works is changing.
           a p r o l i f e r at i o n o f d e v i c e s , f o r m at s
              a n d way s to e n g a g e t h e r e a d e r
            d e m a n d s n e w s k i l l s , n e w c a pa c i t y
                        and new structures.
product:
              a s W e l l a s m a k i n g t W i t t e r , fa c e - b o o k
             a n d g o o g l e pa r t o f t h e n e W s e c o s y s t e m ,
             the internet has also made possible
            e n t i r e ly n e W k i n d s o f s p e c i a l i s t n e W s
              o r g a n i s at i o n s — i n c l u d i n g a h o s t o f
              n o t- f o r - p r o f i t n e W s o r g a n i s at i o n s
              t h at r e ly o n p h i l a n t h r o p i c f u n d i n g
               a n d s p e c i a l i s e i n pa r t i c u l a r k i n d s
                                of Journalism.

           m a n y o f t h e s e n e W o u t f i t s c o l l a b o r at e
            W i t h t r a d i t i o n a l n e W s o r g a n i s at i o n s ,
           ta k i n g a d va n ta g e o f t h e i r b r o a d r e a c h
                a n d t r u s t e d , e s ta b l i s h e d b r a n d s .

                         tom standage,
                 digital editor, the economist
product:




          develop
        new reading
       opportunities...
relaxing at home
       •
  on the plane
       •
 out and about
       •
   on the run
  on the move
       •
  waiting for
   the train
       •
with the family
product:
                      don’t turn your back
                        on your readers.
     l e a n - b a c k d i g i ta l’ s r e l at i o n s h i p w i t h t h e w e b w i l l n e e d s o rt i n g .
                    t h e n e w y o r k p o s t d o e s n o t s e e m t h e way to g o :




                                                     thanks for coming!
                                       n y p o s t. c o m e d i t o r i a l c o n t e n t i s
                                       n o W o n ly a c c e s s i b l e o n t h e i p a d
                                       t h r o u g h t h e n e W y o r k p o s t a p p.




                                         [   s o u r c e : n y p o s t. c o m / i pa d r e d i r e c t /   ]
product:
     business
      modeldon’t turn your back
                             on your readers.
     l e a n - b a c k d i g i ta l’ s r e l at i o n s h i p w i t h t h e w e b w i l l n e e d s o rt i n g .
                    t h e n e w y o r k p o s t d o e s n o t s e e m t h e way to g o :
business model:
we need to move beyond
the pay–barrier debate.
        advertising revenue will never support
   the commissioning model for high-end journalism.

           ad revenue from building scale will not
             k e e p pa c e w i t h t h e c o s t o f c r e at i n g
            distinctive content to build audience.

        T h e G U A R D i A n m ay n e v e r s u s ta i n h i g h - q u a l i t y
j o u r n a l i s m d e l i v e r e d f o r f r e e w i t h o u t c r o s s - s u b s i d y.
business model:
                 the broken
               paywall model:
            r e a d e r s w i l l n o t pay f o r c o m m o d i t i s e d
                  products in sufficient numbers.

         generic content does not provide enough
                va l u e to c o m p e t e w i t h f r e e .

T h e T i m e s m ay n e v e r b u i l d a s u s ta i n a b l e s u b s c r i b e r b a s e
        i n i t s c u r r e n t f o r m w i t h o u t c r o s s - s u b s i d y.
business model:
 there are lots of functional media models.
  all successful models are underpinned by reader insight
      a n d a b l e to c r e at e a n d e x t r a c t va l u e at l e s s t h a n
                           t h e c o s t o f c r e at i o n .




                       the                        the                   reuters
gawker              economist                    young                  breaking
                                                 turks                   views




fox news            mashable                 mumsnet                  financial
channel                                                                 times
business model:
    u n d e r s ta n d r e a d e r s . w o r k o u t h o w to c r e at e
    va l u e f o r t h e m a n d e x t r a c t va l u e f r o m t h e m .




what we’re prepared to pay for things
  is extraordinarily subJective and
incredibly contextually determined.

         [   rory sutherland, chair, the ipa, uk                       ]
business model:
                              the rebirth of paid content

                  amazon customers buy 3.3 times as many books
            a f t e r b u y i n g a k i n d l e — a f i g u r e t h at h a s a c c e l e r at e d
                  i n t h e pa s t y e a r a s p r i c e s f o r t h e d e v i c e f e l l .

                                       [    wall street journal, august 2010                               ]




                           m o r e t h a n a q u a rt e r o f a p p u s e r s h av e
                          pa i d f o r n e w s o n t h e i r ta b l e t, c o m pa r e d
                                 with just 5% of browser users.

                         o f t h o s e w h o pay t h e va s t m a j o r i t y ( 8 6 % )
                          g e t n e w s o n t h e i r ta b l e t d a i ly a n d 5 3 %
                         spend more time with news now than they
                               d i d b e f o r e t h e y h a d t h e i r ta b l e t
                                (versus 30% of all news users).


[   s o u r c e : p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
not a zero-sum game:

                     75%                                                               25%




                     50%



                     25%



                      0%
                            with the launch          the economist     other people
                               of the app i          is interested   in my household
                              consider my             in the needs        read the
                              subscription                of its         economist
                             g r e at e r va l u e       readers           on my
                                for money                               ipad/iphone




 [   source: fox insight july/august 2011. base: 1,204                  ]
not a zero-sum game:
                                                        global mobile app + advertising revenue =
                                                       $12 billion in 2011e revenue, up 17x in 3 years


                            $15 billion
mobile ad + apps spending




                                                                                                                                               $12bn

                            $10 billion                                                                                    te
                                                                                                                         ra
                                                                                                         h
                                                                                                       wt
                                                                                                    gro
                                                                                                 al
                                                                                              nnu
                                                                                            da
                                                                                         oun
                             $5 billion
                                                                                       mp
                                                                                     co
                                                                                3%
                                                                              15
                                                         $0.7bn



                                                          2008                           2009                            2010                    2 0 11 e

                                                                                                            mobile advertising                       mobile apps




                             [   s o u r c e : g a r t n e r , 2 0 11 . n o t e : a p p l e h a s pa i d > $ 3 b n t o d e v e l o p e r s a s o f s e p t e m b e r 2 0 11 ,
                                     i m p ly i n g g r o s s a p p m a r k e t r e v e n u e o f $ 4 b n i n 3 y e a r s ; g o o g l e i n d i c at e d d u r i n g
                                              c q 3 e a r n i n g s c a l l t h at i t e x p e c t s $ 2 . 5 b n m o b i l e a d r e v e n u e i n 2 0 11 e ]
not a zero-sum game:
    reaching new audiences


                    previous experience of
             the economist by digital subscribers:


        print             cancelled/    never had
                                                         lapsed print
    subscribers           suspended/      a print
                                                         subscribers
    at p u r c h a s e   not renewed   subscription


          6%                4%            77%                12%



                                        77% of digital subscribers are
                                        new to us and 12% are lapsed.




[   source: economist group customer database, august 2011               ]
not a zero-sum game:
        time spent with news now compared
           with before owning a tablet




                                                                                                                4% spend less time
                                                                              65%
                                 30%
                                                                            spend
                               spend
                                                                      same amount
                               more
                                                                          of time
                                time




[   s o u r c e : p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1   ]
not a zero-sum game:
                           circulation growth
                                          economist circulation volumes – september
                                                                                                digital:
                 1,800                                                                        27% increase

                 1,600


                 1,400
volumes (‘000)




                 1,200


                 1,000


                 800


                 600

                 400


                 200



                            2002   2003      2004   2005   2006    2007   2008   2009         2010    2 0 11


                                                                                      print           d i g i ta l




                         the right app has unlocked digital revenues for the economist.
not a zero-sum game:
                 develop mobile commerce
                           % used mobile device to purchase the following:

           18%

           16%


           14%


           12%
market %




           10%


           8%


           6%

           4%


           2%



                 auction       bank            credit          electronic          financial                online        stock
                  sites      accounts          cards            pay m e n t s     news/stock                r e ta i l   trading
                                                                                    quotes
                                                                                                                  uk     us        jp


                                [   s o u r c e : c o m s c o r e m o b i l e n s j a n 2 0 11 , m pa   ]
not a zero-sum game:
develop mobile commerce



                                     of tablet users:

                                 want the ability to buy
                                 d i r e c t ly f r o m a d s


                                 s tat e d t h at t h e y wa n t to b e a b l e
                                 to purchase products and services
                                 d i r e c t ly f r o m e d i to r i a l f e at u r e s .


                                 t y p i c a l ly e n g a g e w i t h
                                 d i g i ta l m a g a z i n e a d s




[ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
business model:

changing the economics
    of distribution
      in print we struggle to deliver for
  t h e w e e k e n d i n m a n y pa rt s o f t h e w o r l d .

        p o s ta l d e l i v e ry i s e x p e n s i v e a n d
              i n c r e a s i n g ly u n r e l i a b l e .
ma r k e t i n g
marketing:
         the five p’s reimagined:

                                        product:
     t h e d e m a n d f o r i n t e l l i g e n t, i m m e r s i v e l e a n b a c k i s
    a b s o l u t e b u t t h e p o t e n t i a l f o r l e a n - b a c k d i g i ta l to
  deliver an enhanced experience is still to be explored.



                                            price:
       r e a d e r r e l at i o n s h i p w i t h c o n t e n t b e i n g r e d e f i n e d
             and there are few price-point benchmarks.


                                           place:
 we can be everywhere, but how much power should we allow
 d i g i ta l s a l e s c h a n n e l s , s u c h a s i t u n e s a n d a m a z o n , t o e x e r t ?


                                     promotion:
t h e pa r a d o x o f i n f i n i t e c h o i c e m e a n s s o c i a l i s a k e y d r i v e r
    and in an age of media consumption as a form of social
   e x p r e s s i o n , h o w d o w e s tay r e l e va n t a n d a s p i r at i o n a l ?


                                          people:
                  m a s s i n t e l l i g e n c e i s a g l o b a l m a r k e t,
                          but how do we serve them?
advertising:
                                                 opportunity or
                                              time spent consuming media vs % of advertising spending, usa 2010
                                    50%
                                                                                                                                         time spent
                                                                                                 43% 43%
                                                                                                                                         advertising spend
% of total media consumption time




                                    40%
     or advertising spending




                                    30%
                                                        27%
                                                                                                                      25%
                                                                                                                                                                     a $20 billion
                                                                                                                                                                     opportunity
                                    20%                                                                                    19%                                         in the us
                                                                             16%

                                                                                  11%
                                    10%            8%                                                                                       8%



                                                                                                                                                 .5%


                                                    print                     radio                  tv             internet               mobile

                                                                  [   s o u r c e : k p c b / e m a r k e t e r , m a r c h 2 0 11   ]



                                             tablet users tend to be more highly educated,
                                            employed full-time and have a higher household
                                                income than the us population overall.

                                      [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
advertising:




     Will need:


   n e w c r e at i v e
     s ta n d a r d s

   new measures

    new skills

    new market
conclusion
conclusion
     lean-back 2.0
    is not the end.
           i t i s t h e l at e s t
        W av e o f d i s r u p t i o n .

 everything old is neW again.
       b u t d i f f e r e n t.

    and it is different again
   from the Web, Which means
it should be Just as scary for
   neW media brands, With no
    eXperience of delivering
       l e a n - b a c k c o n t e n t.

but it is not a Zero-sum game.

s u r v i va l a n d p r o s p e r i t y m e a n
  reimagining our business...

          ...all over again.
conclusion
       the big questions
       we ask ourselves
             (and you might too)


  Will the medium change media?


   W i l l t h e r e l at i o n s h i p W i t h
   customers/readers change
 because of neW intermediaries?


  W h at W i l l a d v e r t i s i n g b e l i k e ?


   Who could steal our lunch?


     can We change far and fast
e n o u g h — a n d W h at i s s to p p i n g u s ?
conclusion
disruption is an occupational hazard:
      the internet was not the first radical change
                t o h i t t h e m e d i a i n d u s t r y.

      s i n c e t h e 1 9 8 0 s t h e r e h a s b e e n w av e a f t e r w av e
                       of technological change.

   m o s t h av e a d a p t e d . s o m e h av e d i e d . m a n y m o r e h av e
          ta k e n t h e i r p l a c e . m e d i a h a s p r o l i f e r at e d .

   T h e e c o n o m i s T h a s b e n e f i t e d f r o m a n d c a p i ta l i s e d
                 o n f av o u r a b l e w i n d s o f c h a n g e :

                      — globalisation
              —spread of the english language
               —the era of mass intelligence

                a n d W i t h l u c k t h i s i s t h e l at e s t …
the i(deas) pad:
designed for the age
of mass intelligence.
lean back 2.0



      andrew rashbass, chief executive
                 the economist group
                        n o v e m b e r 2 0 11

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Lean back media: the shock of the old

  • 2. everything is new again. i have gradually become used to dividing my reading into the work, laptop info zone; and the chill, relaxing, , leisurely read of the tablet. the laptop replicates the old newspaper experience; the tablet replicates the book. everything new is old again. [ andrew sullivan, the sunday times ]
  • 3. everything is new again. the rebirth of lean-back media i s s e e m i n g ly a g e n t l e , r e a s s u r i n g c h a n g e for media businesses. i t i s a c t ua l ly a t s u n a m i t h at d e m a n d s u r g e n t r e - e x a m i n at i o n o f e v e ry t h i n g t h at c o n s t i t u t e s a m e d i a bu s i n e s s .
  • 4. lean back the first age: the second age: the third age: lean-back print lean-forward web lean-back digital ritual pleasure snacking and research, lean-back, of reading c o m m u n i t y, s h a r i n g only better
  • 5. the web demanded a news is becoming a shared social experience , with people swapping links in emails, posting on social networks, ‘retweeting’ news stories and haggling over the meaning of events in discussion threads. [ p e w i n t e r n e t & a m e r i c a n l i f e p r o j e c t, 2 0 1 0 ]
  • 6. the web demanded a the economist approach to lean-forward web... face-book debates google tumblr news user ask the comments economist audio print online ideas youtube flipboard edition content 7 million content arena unique users conversation by cloud invitation itunes the linkedin economist asks twitter [ source: omniture ]
  • 7. the web demanded a ...that enabled us to build a valuable global community . successful av e r a g e p e r s o n a l i n c o m e o f u s e r s o f t h e e c o n o m i s t o n l i n e : $ 11 5 , 1 9 8 . e d u c at e d u s e r s h av e ta k e n a n av e r a g e o f 4 e d u c at i o n c o u r s e s . i n t e r n at i o n a l t h e y to o k a n av e r a g e o f 1 4 b u s i n e s s trips and 7 leisure trips last year. i n f lu e n t i a l almost 1 in 5 hold a board d i r e c to r s h i p. 3 % h o l d o v e r f o u r . [ s o u r c e : t h e e c o n o m i s t o n l i n e r e a d e r s u r v e y, 2 0 1 0 . b a s e : a l l r e s p o n d e n t s w o r l d w i d e i n e m p l o y m e n t ]
  • 8. [ ezra klein, the washington post ]
  • 9. lean back is different again: print readers spend about 45 minutes with an issue each month. readers using their iphone and ipad spend an average of 160 minutes. [ g q , va n i t y f a i r , w i r e d a n d g l a m o u r a p p r e a d e r s u r v e y, c o n d e n a s t 2 0 1 0 ] 65% of people have increased the amount they read due to e-books, with 80% attributing this to the of reading a book digitally. reading during ‘dead’ time was a key trend with travelling (72%) and waiting for an appointment (72%) proving most popular. [ i m o d e r at e r e s e a r c h t e c h n o l o g i e s , d i g i ta l w o r l d b o o k c o n f e r e n c e 2 0 11 ]
  • 10. lean back is different again: i never really found it very enJoyable to read a magazine on my computer or iphone. but with the ipad it’s a whole different story . i can pinch out to zoom into a section; hyperlinks take me directly to an article without making me flip through the pages… ... and i can read in bed without a light after my wife goes to sleep . [ j o n at h a n s e f f, m a c w o r l d ]
  • 11. simplicity & finishability. no one ever asked for The economisT to be longer. o u r l e a n - b a c k d i g i ta l s t r at e g y i s R A D i c A L s i m P L i c i T Y. i t w a s a c o n s c i o u s editorial decision to strip out our w e b i n n o vat i o n s — i n m a n y way s t h i s was harder than keeping them. so Why did We do this?
  • 12. lean back 2.0 % of respondents using tablets while... w at c h i n g t v ly i n g i n b e d w i t h f r i e n d s / f a m i ly waiting for someone other i n t h e b at h r o o m in a meeting/class running errands commuting 0 20 40 60 80 [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 13. lean back 2.0 q. how much time in total do you think you will spend reading the economist ipad app this week? 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% none less than 15-30 30 mins 1–1.5 1.5–2 2–2.5 2.5–3 3–4 4 hrs 15 mins mins – 1 hr hrs hrs hrs hrs hrs and up [ s o u r c e : t h e e c o n o m i s t u k i p a d s u r v e y, j u l y 2 0 1 1 ]
  • 14. immersed in the content: 4 2 % o f ta b l e t n e W s r e a d e r s r e g u l a r ly r e a d i n - d e p t h neWs articles. another 40% sometimes do this. t h e y a r e t h r e e t i m e s a s l i k e ly t o r e g u l a r l y r e a d i n - d e p t h a rt i c l e s a s to wat c h n e w s v i d e o s . [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 15. tablet news users read in-depth articles but share news less. participatory news is a part of the mix but even among the young (19-25) less than 1 in 5 share news on the tablet regularly. 42% o f ta b l e t neWs users read in-depth articles 16% o f ta b l e t neWs users share neWs on social netWorks [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 . ta b l e t n e w s u s e r s a r e d e f i n e d h e r e a s t h o s e w h o c o n s u m e n e w s o n t h e i r ta b l e t s at l e a s t w e e k ly ]
  • 16. reading, not browsing i t ’ s h a r d to b r o w s e t h e w e b w i t h a n i pa d . [ m i r at e c h w h i t e pa p e r , j u ly 2 0 11 ] eye activity and its on a website corresponding app [ s o u r c e : w w w. m i r at e c h . c o m / b l o g / u s e r - t e s t i n g - i pa d - v s - c o m p u t e r ]
  • 17. reading, not browsing i t ’ s h a r d to b r o w s e t h e w e b w i t h a n i pa d . [ m i r at e c h w h i t e pa p e r , j u ly 2 0 11 ] people who mainly use apps for news are more active tablet users in general. they are more in-depth readers and were more satisfied with their tablet news experience. some even stated that the content they get here is worth more than content on other platforms. those who mainly use apps are also twice as likely as browser users to read magazines daily on their tablet (13% vs 6% browser, 9% both). [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 18. reading, not browsing m a i n ly a p p s m a i n ly b r o w s e r 53% 46% 26% 21% 22% 11 % easier to learn enjoy the the news is new things news more worth more [ p e w r e s e a r c h ( u s ) i n a s s o c i at i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 19. the fastest speed of change our industry has ever experienced. the kindle launched on november 19th 2007. the ipad launched on January 27th 2010. tablets and e readers are rapidly eclipsing paper and rival screens. we had centuries to adapt to print. decades to adapt to the web. we have to adapt to lean-back 2.0.
  • 20. the fastest speed of change our industry has ever experienced. i spend more time each day on my tablet than i... r e a d a pa p e r b o o k 59% listen to the radio 52% use my 43% desktop/laptop use my 41% smartphone w at c h t v 34% 11 % none of the above 0 20 40 60 [ s o u r c e : a d m o b , u s s u r v e y j u ly 2 0 11 ]
  • 21. news consumption is changing: people are already using the tablet to get news they used to find elsewhere— primarily their desktop or laptop. 59% used to get their news from a print 79% newspaper or magazine used to get their news from a desktop or laptop 57% used to get their news from television source: pew research ( u s ) i n a s s o c i at i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 11
  • 22. the difference 2 years will make: current preference vs expected preference in 2 years 100% 80% current in 2 years 60% 40% 20% print website website s m a rt- ta b l e t e-reader audio social pa i d free phone app app edition media [ r e s p o n d e n t s : s u b s c r i b e r s a g e d 4 0 + . s o u r c e : b r a n d a s s e t ® va l u at o r u s a , 2 0 11 — t h e e c o n o m i s t c u s t o m s t u d y ]
  • 23. sales of tablets, smartphones and e-readers are set to grow fast: tablet sales forecast 2010 — 2015 , 326m 18m 64m 252m 178m 104m 2010 2 0 11 2012 2013 2014 2015 b y 2 0 1 5 , t h e s m a r t p h o n e m a r k e t w i l l h av e g r o w n f r o m a r o u n d 4 5 0 m d e v i c e s t o d ay t o 1 . 1 b n ( a n d r o i d , w i n d o w s , i o s , r i m ) . by next year , 1 2 % o f u s a d u lt s (28.9m people) w i l l ow n a n e - r e a d e r . [ source: gartner, emarketer ]
  • 24. economist readers in particular are buying these devices: over 50% o f o u r u s r e a d e r s o w n a ta b l e t o r e-reader oR plan to buy one in the next 12 months 28% o f e c o n o m i s t r e a d e r s o w n a ta b l e t / e - r e a d e r 20% o w n a n e - r e a d e r 11% o w n a t a b l e t 23% p l a n t o p u r c h a s e a n e - r e a d e r / ta b l e t within the next 12 months 17% p l a n t o p u r c h a s e a t a b l e t within the next 12 months [ m e n d e l s o h n a f f l u e n t s u r v e y 2 0 11 ( u s ) ]
  • 25. the proportion of us adults using e-readers nearly doubled from 2010-2011 and is now 15%. agree—i use an electronic reader, such as a kindle, an ipad or a nook, to read books: 15% 8% 2010 2011 [ m e n d e l s o h n a f f l u e n t s u r v e y 2 0 11 ( u s ) ]
  • 26. the tablet effect: because of the growth [of tablets and e-readers], paper use for print media including magazines, newspapers, and books will have declined by as much as 21%, compared to their 2010 production rates. additionally, over the next 15 years, production could fall by 40—50%. [ risi global study (2011) ]
  • 27. audience: l e a n - b a c k r e a d e r s a r e t h e m a s s i n t e l l i g e n t. a global psychographic, not a demographic. interested in ideas. receptive to new concepts. c ata ly s t s f o r c h a n g e . w e l i v e i n t h e i r w o r l d .
  • 28. audience: the economic product of the united states has become predominantly conceptual. [ alan greenspan ]
  • 29. audience: elite media mass intelligence demographics mass media small big market size
  • 30. audience: W e a r e o f t e n t o l d t h at t h e o n ly Way f o r m e d i a c o m pa n i e s t o s u r v i v e is to dumb doWn; that young people have narroW attention spans so everything needs to be delivered in sound bites. that is not true. 26.8m people 8.5m visitors 8m copies of 28.2m now listen to the louvre civilisation subscribers to npr video game to hbo series sold
  • 31. audience: pay t v h a s s h o W n t h at va l u e i s c r e at e d a n d e X t r a c t e d t h r o u g h i n v e s t m e n t i n Q u a l i t y c o n t e n t. d ata s h o W s t h at m o r e p e o p l e Wa n t t o b e challenged by What they read, Watch and listen to than ever before. it is a mass phenomenon that We call mass intelligence. © warner bros, 2011 © sky and hbo, 2011 “nolan cashed in his hard-earned “sky atlantic hd is unashamedly artistic and financial freedom with d e d i c at e d t o q u a l i t y. inception, the $160m auteur vehicle t h at p r o v e s r e a l ly e x p e n s i v e m o v i e s sky atlantic hd is a key part of d o n ’ t h av e to b e s t u p i d to b e s u c c e s s f u l . our strategy to help further grow the content gap between what you it’s a film that imagines that the multi- can get with sky and what you can plex masses aren’t so dumb after all.” get elsewhere.” mark kermode, film critic s t u a r t m u r p h y, d i r e c t o r o f programmes (sky 1 and sky atlantic)
  • 32. audience: mix and people who read/ people watch/attend at magazine least two of... us weekly the oprah magazine 33% the economist the new yorker the atlantic 39% sports hbo illustrated art galleries espn live theatre classical 32% concert family guy the simpsons saturday night live american idol [ source: mri, fall 2007 ]
  • 33. audience: a truly mass phenomenon: ‘ W e l l d o n , m y s u n ’ : a n i g h t at t h e o p e r a f o r 2 , 2 0 0 s u n r e a d e r s m a d e w av e s a r o u n d t h e w o r l d i n a n a m a z i n g m o m e n t i n b r i t i s h c u lt u r e . t h e o p e n i n g n i g h t o f m o z a r t ’ s d o n g i o va n n i at l o n d o n ’ s r o ya l o p e r a h o u s e w a s pa c k e d t o t h e r a f t e r s e x c l u s i v e ly b y s u n r e a d e r s . [ source: thesun.co.uk, september 2008 ]
  • 34. audience: and their ranks are growing... international student numbers 3.5 million 3 million 2.5 million 2 million 1.5 million 1 million 500,000 1975 1980 1985 1990 1995 2000 2005 2009 [ source: unesco, 2009 ]
  • 35. audience: smart is the new cool. 1982 2002
  • 37. the way forward reinvention is required. t h e o l d m o d e l s a r e i r r e d e e m a b ly b r o k e n . the Web didn’t satisfy our appetite for the p r i n t e d W o r d . l e a n - bac k d i g i ta l w i l l . everything is back to normal—apart f r o m t h e p r o d u c t, t e c h n o l o g y, p r o d u c t i o n processes, subscription and neWsstand marketing and advertising sales. We must not adapt legacy models, We must build reader-led business models from scratch.
  • 38. what does this mean for media businesses? editorial product business models marketing advertising production
  • 39.
  • 40.
  • 41. product: rs se t ug o re r le a b d i n at h e o o rf t r e at s r v i d s ) . % c r e 7 1 r e f e g fa e s o t u r p rin tur pic a c r o h e n p ir e f e s t e a re n th n. th 6% p a mp t i io (2 c o s p l i u l at is n p th ve o t e l p ou an nera e a b e ly ge ar lik d rs s as rea as se e y . s u im rl les os e w e e tg u l ar t i c v i d e n r th o re th a ews t ep h n d i n - w atc t o [ source: pew research (us) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 42. product: the rebirth of reading means the rebirth of writing. i n v e s t m e n t i n h i g h - q u a l i t y, l o n g - f o r m j o u r n a l i s m i s n o t c o m p l a c e n c y, i t i s b a s e d o n a u d i e n c e i n s i g h t. i t i s n o t o n ly T h e e c o n o m i s T t h at c a n p u l l o f f t h i s t r i c k . t h e m a s s i n t e l l i g e n t a r e a b i g m a r k e t.
  • 43. product: better how? l e a n - b a c k d i g i ta l i s n o t l e a n - b a c k p r i n t. the medium will shape the media. w e a r e j u s t b e g i n n i n g to i n n o vat e to e x p l o r e i t s p o t e n t i a l to i n c r e a s e r e a d e r va l u e . example 1: example 2: multi-platform bundling audio edition
  • 44. product: how a news organisation works is changing. a p r o l i f e r at i o n o f d e v i c e s , f o r m at s a n d way s to e n g a g e t h e r e a d e r d e m a n d s n e w s k i l l s , n e w c a pa c i t y and new structures.
  • 45. product: a s W e l l a s m a k i n g t W i t t e r , fa c e - b o o k a n d g o o g l e pa r t o f t h e n e W s e c o s y s t e m , the internet has also made possible e n t i r e ly n e W k i n d s o f s p e c i a l i s t n e W s o r g a n i s at i o n s — i n c l u d i n g a h o s t o f n o t- f o r - p r o f i t n e W s o r g a n i s at i o n s t h at r e ly o n p h i l a n t h r o p i c f u n d i n g a n d s p e c i a l i s e i n pa r t i c u l a r k i n d s of Journalism. m a n y o f t h e s e n e W o u t f i t s c o l l a b o r at e W i t h t r a d i t i o n a l n e W s o r g a n i s at i o n s , ta k i n g a d va n ta g e o f t h e i r b r o a d r e a c h a n d t r u s t e d , e s ta b l i s h e d b r a n d s . tom standage, digital editor, the economist
  • 46. product: develop new reading opportunities...
  • 47. relaxing at home • on the plane • out and about • on the run on the move • waiting for the train • with the family
  • 48. product: don’t turn your back on your readers. l e a n - b a c k d i g i ta l’ s r e l at i o n s h i p w i t h t h e w e b w i l l n e e d s o rt i n g . t h e n e w y o r k p o s t d o e s n o t s e e m t h e way to g o : thanks for coming! n y p o s t. c o m e d i t o r i a l c o n t e n t i s n o W o n ly a c c e s s i b l e o n t h e i p a d t h r o u g h t h e n e W y o r k p o s t a p p. [ s o u r c e : n y p o s t. c o m / i pa d r e d i r e c t / ]
  • 49. product: business modeldon’t turn your back on your readers. l e a n - b a c k d i g i ta l’ s r e l at i o n s h i p w i t h t h e w e b w i l l n e e d s o rt i n g . t h e n e w y o r k p o s t d o e s n o t s e e m t h e way to g o :
  • 50. business model: we need to move beyond the pay–barrier debate. advertising revenue will never support the commissioning model for high-end journalism. ad revenue from building scale will not k e e p pa c e w i t h t h e c o s t o f c r e at i n g distinctive content to build audience. T h e G U A R D i A n m ay n e v e r s u s ta i n h i g h - q u a l i t y j o u r n a l i s m d e l i v e r e d f o r f r e e w i t h o u t c r o s s - s u b s i d y.
  • 51. business model: the broken paywall model: r e a d e r s w i l l n o t pay f o r c o m m o d i t i s e d products in sufficient numbers. generic content does not provide enough va l u e to c o m p e t e w i t h f r e e . T h e T i m e s m ay n e v e r b u i l d a s u s ta i n a b l e s u b s c r i b e r b a s e i n i t s c u r r e n t f o r m w i t h o u t c r o s s - s u b s i d y.
  • 52. business model: there are lots of functional media models. all successful models are underpinned by reader insight a n d a b l e to c r e at e a n d e x t r a c t va l u e at l e s s t h a n t h e c o s t o f c r e at i o n . the the reuters gawker economist young breaking turks views fox news mashable mumsnet financial channel times
  • 53. business model: u n d e r s ta n d r e a d e r s . w o r k o u t h o w to c r e at e va l u e f o r t h e m a n d e x t r a c t va l u e f r o m t h e m . what we’re prepared to pay for things is extraordinarily subJective and incredibly contextually determined. [ rory sutherland, chair, the ipa, uk ]
  • 54. business model: the rebirth of paid content amazon customers buy 3.3 times as many books a f t e r b u y i n g a k i n d l e — a f i g u r e t h at h a s a c c e l e r at e d i n t h e pa s t y e a r a s p r i c e s f o r t h e d e v i c e f e l l . [ wall street journal, august 2010 ] m o r e t h a n a q u a rt e r o f a p p u s e r s h av e pa i d f o r n e w s o n t h e i r ta b l e t, c o m pa r e d with just 5% of browser users. o f t h o s e w h o pay t h e va s t m a j o r i t y ( 8 6 % ) g e t n e w s o n t h e i r ta b l e t d a i ly a n d 5 3 % spend more time with news now than they d i d b e f o r e t h e y h a d t h e i r ta b l e t (versus 30% of all news users). [ s o u r c e : p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 55. not a zero-sum game: 75% 25% 50% 25% 0% with the launch the economist other people of the app i is interested in my household consider my in the needs read the subscription of its economist g r e at e r va l u e readers on my for money ipad/iphone [ source: fox insight july/august 2011. base: 1,204 ]
  • 56. not a zero-sum game: global mobile app + advertising revenue = $12 billion in 2011e revenue, up 17x in 3 years $15 billion mobile ad + apps spending $12bn $10 billion te ra h wt gro al nnu da oun $5 billion mp co 3% 15 $0.7bn 2008 2009 2010 2 0 11 e mobile advertising mobile apps [ s o u r c e : g a r t n e r , 2 0 11 . n o t e : a p p l e h a s pa i d > $ 3 b n t o d e v e l o p e r s a s o f s e p t e m b e r 2 0 11 , i m p ly i n g g r o s s a p p m a r k e t r e v e n u e o f $ 4 b n i n 3 y e a r s ; g o o g l e i n d i c at e d d u r i n g c q 3 e a r n i n g s c a l l t h at i t e x p e c t s $ 2 . 5 b n m o b i l e a d r e v e n u e i n 2 0 11 e ]
  • 57. not a zero-sum game: reaching new audiences previous experience of the economist by digital subscribers: print cancelled/ never had lapsed print subscribers suspended/ a print subscribers at p u r c h a s e not renewed subscription 6% 4% 77% 12% 77% of digital subscribers are new to us and 12% are lapsed. [ source: economist group customer database, august 2011 ]
  • 58. not a zero-sum game: time spent with news now compared with before owning a tablet 4% spend less time 65% 30% spend spend same amount more of time time [ s o u r c e : p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 59. not a zero-sum game: circulation growth economist circulation volumes – september digital: 1,800 27% increase 1,600 1,400 volumes (‘000) 1,200 1,000 800 600 400 200 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 0 11 print d i g i ta l the right app has unlocked digital revenues for the economist.
  • 60. not a zero-sum game: develop mobile commerce % used mobile device to purchase the following: 18% 16% 14% 12% market % 10% 8% 6% 4% 2% auction bank credit electronic financial online stock sites accounts cards pay m e n t s news/stock r e ta i l trading quotes uk us jp [ s o u r c e : c o m s c o r e m o b i l e n s j a n 2 0 11 , m pa ]
  • 61. not a zero-sum game: develop mobile commerce of tablet users: want the ability to buy d i r e c t ly f r o m a d s s tat e d t h at t h e y wa n t to b e a b l e to purchase products and services d i r e c t ly f r o m e d i to r i a l f e at u r e s . t y p i c a l ly e n g a g e w i t h d i g i ta l m a g a z i n e a d s [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 62. business model: changing the economics of distribution in print we struggle to deliver for t h e w e e k e n d i n m a n y pa rt s o f t h e w o r l d . p o s ta l d e l i v e ry i s e x p e n s i v e a n d i n c r e a s i n g ly u n r e l i a b l e .
  • 63. ma r k e t i n g
  • 64. marketing: the five p’s reimagined: product: t h e d e m a n d f o r i n t e l l i g e n t, i m m e r s i v e l e a n b a c k i s a b s o l u t e b u t t h e p o t e n t i a l f o r l e a n - b a c k d i g i ta l to deliver an enhanced experience is still to be explored. price: r e a d e r r e l at i o n s h i p w i t h c o n t e n t b e i n g r e d e f i n e d and there are few price-point benchmarks. place: we can be everywhere, but how much power should we allow d i g i ta l s a l e s c h a n n e l s , s u c h a s i t u n e s a n d a m a z o n , t o e x e r t ? promotion: t h e pa r a d o x o f i n f i n i t e c h o i c e m e a n s s o c i a l i s a k e y d r i v e r and in an age of media consumption as a form of social e x p r e s s i o n , h o w d o w e s tay r e l e va n t a n d a s p i r at i o n a l ? people: m a s s i n t e l l i g e n c e i s a g l o b a l m a r k e t, but how do we serve them?
  • 65.
  • 66.
  • 67. advertising: opportunity or time spent consuming media vs % of advertising spending, usa 2010 50% time spent 43% 43% advertising spend % of total media consumption time 40% or advertising spending 30% 27% 25% a $20 billion opportunity 20% 19% in the us 16% 11% 10% 8% 8% .5% print radio tv internet mobile [ s o u r c e : k p c b / e m a r k e t e r , m a r c h 2 0 11 ] tablet users tend to be more highly educated, employed full-time and have a higher household income than the us population overall. [ p e w r e s e a r c h ( u s ) i n a s s o c i a t i o n w i t h t h e e c o n o m i s t g r o u p, o c t o b e r 2 0 1 1 ]
  • 68. advertising: Will need: n e w c r e at i v e s ta n d a r d s new measures new skills new market
  • 70. conclusion lean-back 2.0 is not the end. i t i s t h e l at e s t W av e o f d i s r u p t i o n . everything old is neW again. b u t d i f f e r e n t. and it is different again from the Web, Which means it should be Just as scary for neW media brands, With no eXperience of delivering l e a n - b a c k c o n t e n t. but it is not a Zero-sum game. s u r v i va l a n d p r o s p e r i t y m e a n reimagining our business... ...all over again.
  • 71. conclusion the big questions we ask ourselves (and you might too) Will the medium change media? W i l l t h e r e l at i o n s h i p W i t h customers/readers change because of neW intermediaries? W h at W i l l a d v e r t i s i n g b e l i k e ? Who could steal our lunch? can We change far and fast e n o u g h — a n d W h at i s s to p p i n g u s ?
  • 72. conclusion disruption is an occupational hazard: the internet was not the first radical change t o h i t t h e m e d i a i n d u s t r y. s i n c e t h e 1 9 8 0 s t h e r e h a s b e e n w av e a f t e r w av e of technological change. m o s t h av e a d a p t e d . s o m e h av e d i e d . m a n y m o r e h av e ta k e n t h e i r p l a c e . m e d i a h a s p r o l i f e r at e d . T h e e c o n o m i s T h a s b e n e f i t e d f r o m a n d c a p i ta l i s e d o n f av o u r a b l e w i n d s o f c h a n g e : — globalisation —spread of the english language —the era of mass intelligence a n d W i t h l u c k t h i s i s t h e l at e s t …
  • 73. the i(deas) pad: designed for the age of mass intelligence.
  • 74. lean back 2.0 andrew rashbass, chief executive the economist group n o v e m b e r 2 0 11