Posts from — November 2008
Convergence can refer to previously separate technologies such as voice (and telephony features), data (and productivity applications) and video that now share resources and interact with each other, synergistically creating new efficiencies. (wikipedia)
A typical media group: press, radio, tv, magazines, etc. was producing content for particular “channels”.
Today, we convert audio into text, text into audio, images into animations… so we have different ways of doing the same: statements (thoughts) exchange. We now live in an multiplatform imperative and content is used by consumer in a variety of free ways. Traditional media, when they are online, are just “content” no matter they were before a radio, a tv or a newspaper.
I know journalists used to create content for a given channel and contents were always optimized for just one channel in the past. Today, if we were to optimize content for a given channel, that channel is pretty unclear.
We can perfectly say that content at the end of the day is something material. Digital content is made of numbers, of a binary code, although very complex, stored in some hostings and transmitted through cables or waves. Content is just compressed code that can be transmitted and reproduced in many different ways. It is the final user who decides how he prefers to access contents. Audio, video, text, images, finally contents are a flux of numbers that can be transmitted and read in many different ways.
Technological convergence brings media convergence and so, media groups coming froma legacy of separated channels need a holistic approach in order to maximize synergies with the new information systems. We have sustained previously in this blog that it is necessary to minimize content creation to maximize aggregation, organization, analysis, and many other derivated value creations around contents (either it is coming from inside or outside our organization). Separating a media group into business units just because in the past they used radio, tv, or press to spread their contents does not make sense any more. When coming digital, our approach have to unite powers and competences.
We are allowing content aggregators to aggregate (and profit from that aggregation) while we are not aggregating our own content (!!!). Of course, if we do not give our content that necessary aggregation, someone else will do (and that is blessing for a media group because that way we will be reachable at the end of the day).
Internet is about network economy, about critical mass, about being findable, approachable. In order to maximize the possibilities of being found and to completely exploit our competences, we have to keep a strategic union to transform our content into multiplatform useful resources. More than ever, with new techonologies our size will bring us strength.
For big media groups challenges will come from the necessary flexibility and brand differentiation, but this would be a different topic. Adding up content is adding value and retaining audiences around our networks. More than ever playing in a connected way will make us stronger.
November 30, 2008 Comments Off
Talking with Juan Ignacio on his project ivoox I just can get back to the two opportunities I believe media have: licensing and concentration. Ivoox is another distributor playing in the field of licensing content paid on commision. Personally, I have a completely positive idea on these kind of businesses and I do believe we have to prepare our contents to being distributed by them. We may need auditors to check that rights owners are properly paid, but we have to firstly have our contents ready. I do believe aggregators, distributors, are what we, media, need right now.
A content distribution business that pays media based in commission is not a new idea, we got many people trying it already. What is new is that ivoox is dedicated to just audio (it is a kind of youtube just for audio but with an intention of respecting copyrights from the begining) and that it is very well executed apparently. Intercom is backing this project, so, it will probably succeed.
I would like to have a list of content marketplaces as complete as possible in order to follow their evolution. If you find content marketplaces or distributors that are out of this list, please, let me know so we can have a comprehensive list if possible. It will be very intersting to go through these sites trying to analyze what they do:
I have no doubts that right owners will be very soon easily rewarded by the revenues they generate and as content marketpalces mature, we will see that some players will win and a concentration on demmand and supply in a few marketplaces. I do think that following the evolution of content marketplaces is a way to understand where are we moving in terms of intelectual property rights management not just within Internet, but in any available platform.
November 28, 2008 2 Comments
Having a sustainable business is not always about growth, but it is always about change; adapting to a changing demand. A business has always two sides: supply and demand, and, in the long term, they will tend to be equal. What we have now is simply a lowering demand, and thus, supply must adapt because the market is asking us to allocate fewer resources into content production. The fact that newsrooms have to reduce costs and adjust to the new situation is something already assumed by media companies (we are just listening how hundreds of journalist and other media workers end up to be unemployed every month passing). It is a hard reality.
(This failure would be perfectly avoidable or reduced with an appropriate professional re-conversion)
With decreasing newsrooms, we have to increase economies of scale and specialization. In order to be sustainable, media business need to decrease the cost/content, cost/audience, because with growing competition, news are becoming increasingly a commodity and commodity prices tend to minimize marginal profit and it is difficult to add value (margin) in a commodity. Ok, yes, we know that some companies sell water at the price of expensive wine, but we all cannot do the same and customers able to pay for water the price of wine are a minority.
We have 2 complementary ways to reach economies of scale in content production:
- Increased Media concentration among channels and countries, in other words, some media companies merging with others so they can all share contents further exploiting them. If we got a huge group, journalists can specialize in some fields while exchanging contents in other fields. In fact, nowadays, media producing is more efficient in a big well managed communication group.
Since it has much political relevance, multinational integration has proved to have some limitations so far, but it is necessary to continue concentrating in order to adapt to the new situation.
- Empowered and more fluent licensing marketplace. We are talking of a b2b content licensing market. Of course, platforms like youtube, or integrated advertising platforms such as doubleclick or tradedoubler in a different way are already b2c solutions for content rewarding, but there is room for b2b content exchange tools. One difficulty of this approach is the lack of consensus on online media audience metrics as well as the complete lack of information systems integration in the different media companies. As Internet progress and audiences and content sources get fragmented, a healthy marketplace is definitely a growing need.
Business developers have a responsibility in getting a fluent licensing exchange to allow reducing content costs while increasing licensing revenues, but there are some established taboos coming from the content side that also need to be removed.
Developing a media marketplace is a kind of dream that some companies share and a growing need to adapt to the new situation of even smaller self-production of contents. New media can only be competitive if change its focus to: a bit of production and a lot of licensing. That is, we have to empower economies of scale; otherwise, content producers will be just buried by content aggregators. We do not need to become aggregators, because this is not our core and it would just be insane, but we have to change our focus becoming content producers, and content qualifiers, so we minimize the cost per unit of audience without reducing, but increasing, our quality standards.
Licensing exchange is nothing new; it has existed for decades and we carry a heavy legacy in that area. Therefore, this is not a matter of new development but of change management. It is in the hands of media to suffer a disruptive change and be out of the game (what seems to be happening so far) or to lead this change in its on favour.
1. We need to reduce cost/unit of audience
2. Solution A is to merge media globally so we arise economies of scale. This solution crashes with political interest but it will continue to be important.
3. Solution B is to empower licensing exchange so we can re-focus from purely content producers to producers+qualifiers.
A fluent licensing marketplace is a business development or a content issue? Nowadays, it is strategic for media companies as whole, and so, let’s make it happen working together.
November 16, 2008 1 Comment
In an article called The Web: Alarming, Appealing and a Challenge to Journalistic Values we find a study made with a survey and an analysis.
The financial crisis facing news organizations is so grave that it is now overshadowing
concerns about the quality of news coverage, the flagging credibility of the news media, and
other problems that have been very much on the minds of journalists over the past decade.
In other words, journalism sustainability is a key issue between jouranlists community.
Overall, 16% of national journalists – including 26% of those working
in print – cite the current business model for journalism, or the specific challenge of making a
profit from web journalism, as the most important problem facing journalism.
Despite of Internet being a “threat” to media status quo, journalist recognize how positve it is for communication. Jouranlists now embrace new technologies, they have no choice. They are able to work in multiple platforms and they recognize new information technologies as a chance to build more complete stories. BUT losing control in final product is a challenge for both: journalists in one side and media companies in the other. So, we are in front of a wonderful communcation tool that is a threat to today’s status quo.
Journalists tend to call control “quality”, because they join quality to control even they do not intend to do so. For them, seeing how so many people come to publish content online is a loss of quality (i. e. control). It is hard to accept and so, there is a conservative barrier that is difficult to jump for many. Here it comes where a media company should make a clear definition on what is business and where our newsroom begin. We cannot build up sustainable communication enterprises purely based in “quality” (in control), and, in fact, journalists are so scared with new realities that they know it. But, in the other hand, journalists do not accept easily allowing business people to get into what they consider their territory. At least, we cannot build up media business based in hard control, we have to move on clearly to soft control, soft power. (An this is something that other online business like eBay, which I knew from inside did from the begining).
A holistic approach to media management, in fact, has to approach media independence as a consequence and a reason (at the same time) to generating healthy revenues. What is at the service of what? Is revenue generation serving independent business, or is an independent business serving a considerable revenue stream? For sure, it is imposible to know what comes first. If there is something we know is that without final customers -both, readers and advertisers- private media are simply not sustainable.
Talking on united or separated newsrooms online/offline is a very hot topic among journalists these days. Not so much has been written on how revenue generation and newsroom should be related in a modern media business. Newsroom should concentrate in “soft power”, in values, leaving for revenue generators organizational and product management. Journalists concentrate in building and keeping long term credibility and business developers should concentrate in building financial sustainability.
I do not like to read dark statements when I go to personal blogs, and so, I am not going to be unclear: media business can only be sustainable if cost structure is decided AFTER we know how, and how many revenues we are going to generate. Demmand, i.e. audience and advertisers have to drive content creation and aggregation; it is not possible any more to drive content generation based in purely editorial criteria (top-down). At least, in the short term. In the long term, sustainability is based in a trustable, easy to recognize and solid editorial and credibility. It takes years to build credibility and it is impossible to do so by just a business sustainability focus.
A modern media business need to be based in long term editorial core values that cannot be changed and must be decided by journalists and editorial top management in an independent way. Those values have to be powerful and they have to move all the company. After those values are clearly settled and directed, everything else have to be decided with a business perspective by business managers who decide with a view in roi maximization but always taking values as their axis in decision making. As long as there is a clear core of values understood and judged with editorioal criteria, everything else is business.
This suggested division is what can allow us to be fast moving while capitalizing credibility. We have to move fast on managing our business this way or we will be soon eaten by those who are already doing it, and they are not exactly media (or content) business in a traditional way.
November 11, 2008 2 Comments
After testing many sites out there for music: from searching songs in youtube to Pandora, musicstrands, deezer, last.fm, and some more niche music sites for jazz or classical music like radio swiss or sintoniza.net ( ) spotify seems the best project for legal music in the market. In my opinion, this product has the potential to become a winner of the upcoming revolution to music markets.
I have worked in the music industry myself (music publishing) and I am a music lover (I was going to be a musician myself). New technologies are not a threat but a huge opportunity for musicians and record companies, they just need the right tool to get to final customers. Spotify converts music in what it is: a service. It is not a product where you end up purchasing a record or a concert ticket, it is a continuous service relationship: and this is it, no more, no less than that. Then, you will get customers intersted in having a higher or lower level of relationship around music, but, anyone should find quickly good music. Spotify does it very well, just a simple and really good search engine and easily get to the music you are looking for. Really fast and to the point.
Deezer was so far the best solution I had seen together with naxosradio (only classical music and restricted to a relatively limited catalogue without capacity to go on demmand to what you want to go). The truth is that some options are difficult to compare with each other because some are trying to be more social, some other more commercial tools, or maybe they try to focus in different attributes to be different.
Spotify is a kind of deezer with superior sound quality and a quicker response. My opinion is similar to some others I have found like the one of Erik Turnquist. I have to say that deezer is also a great music solution. These are some of the reasons that made me think that way:
- quality, quality, quality. Get good raw material (good information, good data, many data) and a good or reasonable good sound equipment, and you will enjoy music. I know many people that demmands a minimum quality in order to listen to music. Spotify quality is the best I found so far, close to perfect.
- deep catalogue in many categories. I have found their music catalogue is wide and it covers quality music in jazz, modern, classic and tratidional music. It does not have everything, but I have found most of my relevant musicians there. Maybe I am too lucky
- really easy to install and to use. Well, I don’t like to install applications to my computers constanly, and in my office. I had a very bad experience with musicstrands a few years ago. I found it quite aggresive software getting into conflict with many applications in my computer. It was even difficult to uninstall. Personally, I don’t trust aggresive software solutions. In the other hand, I don’t like companies that get your information without telling you (even on music taste). It seems to me that policies applied by spotify in those terms are user-respectful.
- it is legal. I know this is of little importance for many people. I insist, I don’t like aggresive software and I am not going to be out there fighting in p2p to get good music. I am convinced that one of the key reasons for p2p to succed was availability. p2p was simply the only way to reach certain contents on the net. it was not p2p competing with a good alternative, it was p2p or nothing. A solution that costs 10€ a month is really cheap for music lovers: a complete bargain.
With a product like spotify working properly, in future, it would just be nonsense to store music at home. And this is the trend in Internet, we go to services in everything and I believe our information storage at home will be minimum in just a few years.
In the negative side I have to say that not having good solutions to carry the music wherever I go in my mp3 player (not ipod ) as well as the necessity for Internet connection limit this product but we know wireless radio are already a reality (I have tested them) and there will be a growing number of devices making it possible to carry your music even when it is hosted in your service providers.
Other aspect I don’t love (maybe I am not using their product properly) is that my streaming stop after a number of songs. (saving bandwith ¿?) I understand it to some point becauseit could be just a waste of resources if I forget it on the whole day, but maybe it cuts too quickly for me.
This small post on spotify is not a very academic analysis on the product but only a first sight opinion. Ok, why to talk about this in a blog on media sustainabilty?
- Products like spotify make it possible for contents to be fairly monetized. We are definitely travelling to a more secure internet and it is just a matter of time that one company in this sector will become a winner on this sector. With this product spotify may (must) well be this one. They are a kind of b2c mochila (see mochila.com to know more on this company). In other words, they could allocate revenues on artists depending on their audience in a fair and transparent way.
- They show a typical freemium strategy. Simple, either you use it for free (with limited functions) or you pay. I do not know whether they will monetize their free version on advertising, or it will just be a platform to acquire subscribers.
- But they are not (as far as I know) a producer or a media, they are a platform, a marketplace. So, they are just an information company, that means: a money making machine (potentialy, at least).
In other words, great product and a sustainable business model from the begining, as simple like that. I think this product, if managed properly, will succeed.
From what I have seen, and I believe what I have seen so far is nothing at all, spotify looks like probably the most powerful project around music. I am really happy to see it and I really wish them all the best for the sake of music.
Wellcome spotify, and show must go on!
Update. Just seen their mission statement. I am surprised to see how their mission statement and product are aligned. I really like this statement:
We want to connect millions of people with their favorite songs and create a service that people love to use. We believe music should be easily accessible and that listening to music will make people live richer lives. We want to create a win win situation for people who love listening to music and people who love creating music.
November 7, 2008 6 Comments
3 really concrete ways to reaching online media sustainability:
1. Broad reach.
2. Demographic targeting.
3. Endemic advertising opportunities.
The original post of these ways is really interesting, and the comments made there give interesting views. A really complete approach to audience monetization.
November 2, 2008 Comments Off
- Lower barriers to entry
- Younger people reading less print newspapers anymore
- Advertising budgets moving out from print media
- Promotions working well only short term
- Decreasing CPMs (in other words, traffic grow faster than revenues)
Main challenges and recomendations:
- converting audience into revenue. Start pushing new revenue models such as CPC or CPL (cost per lead). Acquire companies in online classifieds. Improve behavioural targetting (together with a focus in CPC/CPL would increase audience profitability). Work on sections sponsorship.
- Targetting younger groups.
- Finding an alternative to expensive promotions
Findings are not revolutionary for people who is aware of these issues but the document is a brief and nice status on where we are. It was made for the UK but it can be applied to other markets. Solutions offered on increasing revenues from audiences are already being develop by media but the problem is not the concept of paymet but the global available budget of advertisers given to online advertising. In the other hand, for example, google CPC system results in a really low CPM for publishers using adsense.
November 2, 2008 Comments Off