‘MEDIANOMICS’Media Audience Behavior & BusinessModels in the Digital EcosystemLecture in Marketing and CommunicationsSchoo...
Content of presentation1.	  	  Digital	  	  Ecosystem	  2.	  	  Consumer	  Behavior	  3.	  EDGE	  &	  ’MEDIANOMICS’	  Case...
Digital Ecosystem:Devices, services & applications3	  
Mobile subscriptionsSmartphones and Tablets4	  
The use of applications andtech services is risingo  Consumers appear tolike subscriptionservices•  e.g. Amazon Prime,Drop...
Consumer Behavior6	  
Mobile usage andshopping go togethero  Shopping	  on	  mobile	  devices	  has	  become	  a	  $20	  billion	  business 	  	...
Generation Y & ZSocialGen X ~ BoomersIndividual Copying ”the real world”Generation X(born 1966 - 1976)Baby Boomers(born 19...
Gen X ~ Boomers&	   + /	  	  Young Elderly +Spotify iPod & iTunes CD’s / VinylSharingOwnershipGeneration Y & Z9	  
Age is not the only criteriafor consumer behavior:Attitude, personality and social networks play in10	  
EDGE stands for…11	  ROWTH	  ESIGNVOLUTIONNTREPRENEURSHIP	  TRANSFORMATION. BEHAVIOUR. INNOVATION. RENEWAL. IMPACT. 	  BUS...
Research within EDGE1  Media consumption patterns aiming at describingconsumers’ Personal Media Day (PMD), i.e. how doFinn...
MY PERSONAL MEDIA DAYWhat?	  How?	  How	  long?	  Why?	  When?	  Simultaneous	  use?	  A_`udes?	  ConsumpKon	  (€)?	  
EDGE Consumer Researcho  Exploring the Personal Media Day through diaries (2012)o  Electronic diaries by 95 respondents fo...
Print Newspapero  48 % have a print newspaper subscription, 9 % a digital subscriptiono  Newspaper subscription (print & d...
Print Newspaper  Newspapers are typically read for 15-30 minutes during a day  Men spend more time on reading print news...
EXPENDITURE ON PRINT MEDIA(Newspapers, Magazines & Books)  Senior and retired people spend much more money on printmedia ...
Computer usage  Younger people prefer computers for News, TV & Music  Students and unemployed
Smartphone usage  56% have a smartphone in use, women 52%, men 58%  Having a smartphone in use decreases with age:  and...
Tablet usage  19% have a tablet in use, women 16%, men 21%  No notable differences concerning age and having a tablet in...
Time spent on differents types ofonline media  Age is a important indicator in how much time is spent on differentonline ...
Digital media platforms on a typical day  The computer is mainly used during working hours and athome in the evening  Th...
PEW Research CenterNews Consumption Survey 201223	  
PEW Research CenterNews Consumption Survey 201224	  
’MEDIANOMICS’o  Research topic:–  Media firms’approach to find newsources of revenuein the digitalecosystem; and theproces...
’MEDIANOMICS’o Definition of a Business Model:•  A business model is a concise representation ofhow an interrelated set of...
’MEDIANOMICS’Research	  Ques+on Content	  of	  Interviews	  What	  are	  the	  strategic	  implicaKons	  of	  technologica...
’MEDIANOMICS’	  Newspapers	  History	   	  	  o  Old	  Business	  Model	  in	  Publishing	  dates	  back	  to	  1833,	  wh...
’MEDIANOMICS’	  Newspapers	  Focus	  on	  digital	  subscrip+ons	  o  The	  falling	  circulaKon	  of	  the	  US	  newspap...
’MEDIANOMICS’o  A major businessparadigm shift isunderwayo  Key Drivers of Change:–  Consumer Behavior•  time spent on med...
’MEDIANOMICS’o  75 interviewsconducted with MediaExecutives in Finland,Sweden, U.K. & USAo  Interviews withinternationally...
DIGITAL	  FIRST	  DIGITAL	  TRANSFORMATION	  PRINT	  &	  CONSOLIDATE	  PRINT	  FOCUS	  +	  ePaper	  ALMA	  ALUEMEDIA	  +	 ...
Svenska Dagbladet33	  o  The first Swedish premier newspaper toswitch to tabloid format (2000)–  New content and lay-out i...
Västerbottens-Kurireno  Cultural change initiated byinsight for becoming aware ofneed for changeo  Management with a passi...
The Economisto  Established in 1843o  Focus on international affairsand tradeo  160 years to 1 millionsubscribers, 9 more ...
The Financial Timeso  125-year old Financial Times has its largestreadership ever–  FT has a combined print and online ave...
The New York Timeso  ”Print is Dead: Long Live the NewYork Times”–  reporter David Carr in ”Page One:Inside the New York T...
Magazine	  trends	  Next	  Issue	  (US)	  and	  Readly	  (SE):	  Spo+fy-­‐like	  subscrip+on	  models	  ’all-­‐you-­‐can-­...
Cosmopolitan	  Print	  and	  Tablet	  pla`orms	  are	  separate	  ”price	  points”	  o  John	  Loughlin,	  General	  Manag...
Sports	  Illustrated	  Mul+	  pla`orm	  strategy	  including	  Print,	  Mobile	  and	  Tablet	  Apps,	  SI.com	  Website	 ...
NEW	  PLAYERS	  IN	  PUBLISHING:	  AGGREGATORS	  AND	  CURATORS	  Flipboard	  2.0:	  50	  million	  users.	  Now	  you	  c...
New	  media	  concepts	  Made	  in	  Finland	  Teknari	  o  Tablet	  App	  +	  TV	  program	  on	  MTV3	  o  Freemium	  Bu...
User	  experience	  alone	  really	  does	  not	  ma`er.	  	  What	  ma`ers	  is	  the	  combinaKon	  of	  relevant	  cont...
Q’s & A’so  For more information–  Blogger:timoketonen.blogspot.fi–  Email:timo.ketonen@abo.fio  Website: edge.abo.fi44	  
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Business Models and Strategic choices in Publishing

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Lecture in Marketing & Communications. The updated keynote includes the description of Strategic choices by Publishing firms and new case studies (Cosmopolitan, Sports Illustrated, FT, The Economist and The New York Times, as well as Svenska Dagbladet and Västerbottens-Kuriren from Sweden). New media concepts presented based on interviews in Finland, Sweden, the UK & USA.
Updated April 30, 2013 (added fresh newspaper circulation figures from the US).

Published in: Education, Business, Technology

Business Models and Strategic choices in Publishing

  1. 1. ‘MEDIANOMICS’Media Audience Behavior & BusinessModels in the Digital EcosystemLecture in Marketing and CommunicationsSchool of Business and Economics,Åbo Akademi UniversityTimo KetonenApril 2013
  2. 2. Content of presentation1.    Digital    Ecosystem  2.    Consumer  Behavior  3.  EDGE  &  ’MEDIANOMICS’  Case  studies  of  Strategic  choices  
  3. 3. Digital Ecosystem:Devices, services & applications3  
  4. 4. Mobile subscriptionsSmartphones and Tablets4  
  5. 5. The use of applications andtech services is risingo  Consumers appear tolike subscriptionservices•  e.g. Amazon Prime,Dropbox Pro, HuluPlus, Netflix, Pandora,Spotify etc.5  ”Once  locked  in,  consumpKon  becomes  painless”    
  6. 6. Consumer Behavior6  
  7. 7. Mobile usage andshopping go togethero  Shopping  on  mobile  devices  has  become  a  $20  billion  business    –  70%  of  U.S.  smartphone  owners  make  purchases  on  their  mobile  devices  –  80%  of  tablet  owners  make  purchases  from  their  tablet  o  RecommendaKons  are  vital  e.g.  Amazon  Source:  Javelin  Strategy  and  Research,  2012  
  8. 8. Generation Y & ZSocialGen X ~ BoomersIndividual Copying ”the real world”Generation X(born 1966 - 1976)Baby Boomers(born 1946 - 1964)Generation Y(born 1977 - 1994)Generation Z(born 1995-2012)”Diginatives” ”Immigrants” ”Tourists”Young Elderly +Young Elderly(65-74 years)Senior Citizens(75+)8  
  9. 9. Gen X ~ Boomers&   + /    Young Elderly +Spotify iPod & iTunes CD’s / VinylSharingOwnershipGeneration Y & Z9  
  10. 10. Age is not the only criteriafor consumer behavior:Attitude, personality and social networks play in10  
  11. 11. EDGE stands for…11  ROWTH  ESIGNVOLUTIONNTREPRENEURSHIP  TRANSFORMATION. BEHAVIOUR. INNOVATION. RENEWAL. IMPACT.  BUSINESS MODELS. SERVICE DESIGN. STRATEGY. BRANDING.  RESEARCH. ENGAGEMENT. IMPACT. MEASUREMENT.ANALYSIS.  MOBILE VALUE SERVICES. TECHNOLOGY.CREATIVITY.  
  12. 12. Research within EDGE1  Media consumption patterns aiming at describingconsumers’ Personal Media Day (PMD), i.e. how doFinnish people consume media during the day andbetween weekdays. This task was started inSeptember, 2011 and will be concluded Q2/2013.2  Disruptive Business Models (DBM), focusing onissues related to open innovation and finding newsources of revenue in the digital ecosystem. Makingsense of ‘MEDIANOMICS’. Project started inQ4/2011 and will be concluded in 2014.3  Mobile Value Services (MVS), aiming at exploringnew solutions for innovative and personalized mediaexperiences in the mobile and digital landscape. Newproject started in January, 2013.School  of  Business  and  Economics  at  Åbo  Akademi  University   12  
  13. 13. MY PERSONAL MEDIA DAYWhat?  How?  How  long?  Why?  When?  Simultaneous  use?  A_`udes?  ConsumpKon  (€)?  
  14. 14. EDGE Consumer Researcho  Exploring the Personal Media Day through diaries (2012)o  Electronic diaries by 95 respondents for 1 – 2 weeks:o  ”The typical media day is fragmented into smaller pieces, consisting ofseveral types of media on different platforms. The media consumptionpatterns are, however, very much characterized by routines.”o  Survey study of nearly 1,000 Finns’ media consumption (2012-2013)o  Electronic surveyo  982 respondents , 15-80 year-olds from all over Finlando  Analysis ongoing, some results shared as followsSchool  of  Business  and  Economics  at  Åbo  Akademi  University   14  
  15. 15. Print Newspapero  48 % have a print newspaper subscription, 9 % a digital subscriptiono  Newspaper subscription (print & digital) is growing with age, education,household size and incomeo  Digital newspaper subscriptions are higher and the share of printnewspapers is lower in Uusimaa compared to other regionso  28 % prefer newspapers on print for newso  Preferring newspapers for news increases with ageo  For instance, only 13 % of 15-24 year-olds prefer newspapers for newswhen 41 % of 65-74 year-olds do soSchool  of  Business  and  Economics  at  Åbo  Akademi  University   15  
  16. 16. Print Newspaper  Newspapers are typically read for 15-30 minutes during a day  Men spend more time on reading print newspapers and time spent alsoincreases with age, education and income  Newspapers are mainly readwhile having breakfast
  17. 17. EXPENDITURE ON PRINT MEDIA(Newspapers, Magazines & Books)  Senior and retired people spend much more money on printmedia during a year  Higher educated spend more money on print media  Expenditure on print media increases with income
  18. 18. Computer usage  Younger people prefer computers for News, TV & Music  Students and unemployed
  19. 19. Smartphone usage  56% have a smartphone in use, women 52%, men 58%  Having a smartphone in use decreases with age:  and increases with level of education andincome  Smartphones are more common inUusimaa and Länsi-Suomen läänithan in other regions  60% use apps on smartphones, typically 3-5 apps regularly  50% have paid for smartphone apps  1. Weather 2. Map services 3. News 4. Social media
  20. 20. Tablet usage  19% have a tablet in use, women 16%, men 21%  No notable differences concerning age and having a tablet in use(+55):  There is a positive correlation between having a tablet in use and income  The share of tablet users is highest in Uusimaa  68% use apps on tablets, typically 3-5 apps regularly  64% have paid for tablet apps  Over 80% read through tablet apps, being by far the mostpopular activity followed by  Weather, Social media and TV
  21. 21. Time spent on differents types ofonline media  Age is a important indicator in how much time is spent on differentonline media, the older the less time is spent on online media  Women clearly spend more time on social media and blogs  Students spend more time on online video & TV, music and socialmedia and browsing the web in general
  22. 22. Digital media platforms on a typical day  The computer is mainly used during working hours and athome in the evening  The smartphone is used throughout the day and the tabletmainly in the evening at home and during weekends
  23. 23. PEW Research CenterNews Consumption Survey 201223  
  24. 24. PEW Research CenterNews Consumption Survey 201224  
  25. 25. ’MEDIANOMICS’o  Research topic:–  Media firms’approach to find newsources of revenuein the digitalecosystem; and theprocess of openinnovation.25  
  26. 26. ’MEDIANOMICS’o Definition of a Business Model:•  A business model is a concise representation ofhow an interrelated set of decision variables inthe area of venture strategy, architecture, andeconomics are addressed to create sustainablecompetitive advantage in defined markets.  (Morris et al, 2005 p. 727)26  
  27. 27. ’MEDIANOMICS’Research  Ques+on Content  of  Interviews  What  are  the  strategic  implicaKons  of  technological  change  with  respect  to  the  Media  Industry,  individual  firm  and  consumer  behavior?  Individual  and  professional  approach  to  the  digitalizaKon  of  society  and  everyday  life,  and  its  implicaKon  for  the  Media  firm?What  implicaKons  do  those  changes  have  on  firms’  abiliKes  to  generate  new  revenue  streams  in  order  to  sustain  their  profitability?  Journalism  –  the  value  of  content  and  how  to  get  paid  for  journalisKc  quality?What  are  the  specific  requirements  within  a  firm  to  create  the  innovaKve  new  Business  Models,  and  how  is  this  leadership  organized  to  ensure  profitability?  The  approach  to  innovaKon  –  how  to  drive  innovaKon  in  an  “old”  industry?Measurement Do  Media  firms  measure  reader  engagement,  or  just  the  number  of  readers?Measurement How  do  Media  firms  measure  KPI’s  relevant  to  the  Business  Model(s)?27  
  28. 28. ’MEDIANOMICS’  Newspapers  History      o  Old  Business  Model  in  Publishing  dates  back  to  1833,  when  ”The  Sun”  went  on  sale  on  the  streets  of  New  York  o  Business  Model  originally  based  on  adverKsing  to  keep  the  price  of  the  newspaper  down  and  circulaKon  up  o  In  Finland  approx.  49%  of  Newspaper  income  is  derived  from  subscripKons  and  51%  from  AdverKsing  revenue  (2011)  Adver+sing  revenue  (USA)  28  
  29. 29. ’MEDIANOMICS’  Newspapers  Focus  on  digital  subscrip+ons  o  The  falling  circulaKon  of  the  US  newspapers  has  slowed  down:  –  Daily  circulaKon  in  the  six  months  to  March  fell  slightly  by  0.7%  compared  with  the  same  period  a  year  earlier  o  Digital  ediKons  now  account  for  20%  of  subscripKons  o  Total  circulaKon  jump  by  12%  at  WSJ  and  18%  at  NYT    Top  US  newspapers  Q1/2013  29  
  30. 30. ’MEDIANOMICS’o  A major businessparadigm shift isunderwayo  Key Drivers of Change:–  Consumer Behavior•  time spent on media andhow media is consumed–  Cost of Print & Distribution•  particularly the cost ofphysical distribution–  Disruptive Technology•  the new ‘ecosystem’ withtablets and smartphones–  The Change in Advertising•  mass marketing vs. targetedcontent marketing30  
  31. 31. ’MEDIANOMICS’o  75 interviewsconducted with MediaExecutives in Finland,Sweden, U.K. & USAo  Interviews withinternationallyacknowledgedresearchers in Mediao  22 keynotes andwork shops to dateo  EDGE Media seminars31  ’The  Sense  of  Urgency’  is  defining  how  aggressively  Media  firms  are  building  new  Business  Models.  Jonas  Bonnier,  CEO  
  32. 32. DIGITAL  FIRST  DIGITAL  TRANSFORMATION  PRINT  &  CONSOLIDATE  PRINT  FOCUS  +  ePaper  ALMA  ALUEMEDIA  +  STRATEGIC  C H O I C E S  Digital  Print  New  Current  technological  focus   technological  focus  resource  dependence  resource  dependence  Strategic  choices  in  Publishing  
  33. 33. Svenska Dagbladet33  o  The first Swedish premier newspaper toswitch to tabloid format (2000)–  New content and lay-out in April 2013–  SvD in print has 435,000 readerso  ”SvD’s quality journalism has its largestreadership ever” says Editor-in-Chiefo  SvD.se reaches 1.5 million unique webbrowsers each weeko  Mobile is increasing fast – approx.480,000 persons are using mobile webevery week–  Up by 420% compared with 02/2012–  10% of traffic from tabletso  ’Insikt’ was a trial for a digital magazine–  Available only on the iPad; visual design–  Ended in August, 2012o  Soft ’paywall’ introduced in April–  Focus on mobile services
  34. 34. Västerbottens-Kurireno  Cultural change initiated byinsight for becoming aware ofneed for changeo  Management with a passionfor development–  new talent from other industrieso  Structured approach forfunnelling news ideas intoprojects for commercial launcho  Focus for next 3 years ondevelopment of:–  A new Business Model foronline publishing–  The development of ’TotaltUmeå’ weekly–  A unique mobile serviceplatform34  
  35. 35. The Economisto  Established in 1843o  Focus on international affairsand tradeo  160 years to 1 millionsubscribers, 9 more years to1.5 million–  9.5 million monthly visitorsonline–  631,000 active weekly appusers (unique devices)o  Bundled subscriptions untilrecently, now unbundled–  New price points introduced asof April across the worldo  70% of readers pay for digitalo  Focus on developing mobileplatforms, including audio
  36. 36. The Financial Timeso  125-year old Financial Times has its largestreadership ever–  FT has a combined print and online averagedaily readership of 2.1 million peopleworldwide–  a combined paid print and digital circulationof more than 600,000o  Digital content and advertising account for30% of FT’s total revenues–  A higher price for the premium package fordigital subscribers boosts profitability–  Mobile devices account for 1/3 of FT.comtraffic and 15% of digital subscriptions–  App usage is growing particularly fast in theage group 25-34o  Measurement of audience behavior withregard to what you read–  My FT – more personalization features–  Analytics tool Deep View’ offers data intoadvertising campaigns36  
  37. 37. The New York Timeso  ”Print is Dead: Long Live the NewYork Times”–  reporter David Carr in ”Page One:Inside the New York Times and theFuture of Journalism”o  Quality journalism is not for free–  ’Paywall’ since March, 2011o  Revenue from total subscriptionsovertook advertising in 2012o  Circulation up by 18% in Q1/2013–  Total circulation 1.87 million–  Digital circulation 1.13 million +32%o  Focus on R&D, new innovationsand new media platforms–  including mobile and Google Glasso  Looking for more ”price points”–  Planning new lower-priced digitalsubscriptions for certain content–  Niche topics like food and travel37  “Magic  Mirror”  and  Google  Glass    
  38. 38. Magazine  trends  Next  Issue  (US)  and  Readly  (SE):  Spo+fy-­‐like  subscrip+on  models  ’all-­‐you-­‐can-­‐read’  Wired  magazine  was  one  of  the  first  print  magazines  to  crack  50%  ad  revenue  through  digital  38  
  39. 39. Cosmopolitan  Print  and  Tablet  pla`orms  are  separate  ”price  points”  o  John  Loughlin,  General  Manager,  Hearst  Magazines  at  Swipe  2.0:  –  "One  of  the  first  things  we  need  to  do  is  reset  our  value  to  the  subscriber  -­‐  charge  fair  market  value  for  the  magazine  content.  We  are  asked  why  the  higher  pricing  by  digital  users?  –  Its  because  they  are  first  to  the  get  the  issue,  they  receive  added  content,  and  video  and  audio  and  interacKvity.  They  get  immediate  saKsfacKon.  They  get  to  complete  the  impulse  -­‐  to  read  and  share  and  can  even  archive  the  content."  New  Tablet  App  features  free  preview  of  content  (to  enhance  sales)  39  Digital  circulaKon  254,751  (+37%)  Total  paid  circulaKon  >  3million  Cosmopolitan.com  >  10  million  unique  visitors  per  month  
  40. 40. Sports  Illustrated  Mul+  pla`orm  strategy  including  Print,  Mobile  and  Tablet  Apps,  SI.com  Website  Iconic  ’swimsuit’  issue  is  an  example  of  specific  content  driving  revenue:  Mobile  App,  Tablet,  SwimDaily.si.com  ,  Social  Media  and  TV  on  the  Travel  Channel    40  
  41. 41. NEW  PLAYERS  IN  PUBLISHING:  AGGREGATORS  AND  CURATORS  Flipboard  2.0:  50  million  users.  Now  you  can  create  your  own  magazines.  Rockmelt:  Social  Internet  browsing  and  explora+on  on  your  tablet  or  smartphone.  41  
  42. 42. New  media  concepts  Made  in  Finland  Teknari  o  Tablet  App  +  TV  program  on  MTV3  o  Freemium  Business  Model  originally  based  on  adverKsing  o  One  of  the  most  read  magazines  on  the  tablet  and  online  o  Priced  at  €1.79  per  issue  as  of  April  Long  Play  o  Long  form  journalism  o  Start-­‐up  by  independent  journalists  o  Priced  at  €3.99    per  issue  
  43. 43. User  experience  alone  really  does  not  ma`er.    What  ma`ers  is  the  combinaKon  of  relevant  content,    user  experience  and  business  value  =  Customer  value  Customer  value  defines:  1.  How  much  the  customer  is  ready  to  pay  2.  How  o5en  he  is  willing  to  buy  3.  Does  he  recommend  the  product  or  service  in  ques>on.  Conclusion: Media as a ServiceSource:  PALMU  Service  Design  agency  
  44. 44. Q’s & A’so  For more information–  Blogger:timoketonen.blogspot.fi–  Email:timo.ketonen@abo.fio  Website: edge.abo.fi44  

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