Category — Business Cases

The Nieman Journalism Lab found a very interesting internal document from The New York Times that can give us a very quick and complete idea on all issues ar0und their worries and work progress in business sustainability. (I would love to access that document monthly ).

I would firstly like to point out a sentence that is really significant of a view on media sustainability,  and it is just the fact to assume our two sided business:

The end result must be that we serve the high expectations of our customers, both readers and advertisers.

It is a simple but clear statement and reminds us who pays our salaries, that’s all.

The document reviews:

- How they did  capitalized american elections. This part is just an ABC on how they: sold more printed newspaper, increased their online audience, spread their social networking, and empowered their heavier users by an event.

- What is going on with top advertisers

- The New York Times Store will sell grow around 30% to 40% YoY based on: memorabilia, fine arts, and also Obama merchandise. It is very helpful to understand their focus in The NYT Store by having a look to their spot: ( you can get the file here)

It is unusual to find internal documents on business execution in media companies and that is the reason why it is interesting.

Again talking on New York Times.

Their extra, added today in beta, is just a great step forward to becoming an agreggation axis.  Combining the power of automatic and manual aggregation with an editorial line, from my point of view, is the future of Internet because we simply got too much information and the problem is not of volume but of quality information.
I am every day more convinced that New York Times is right in combining their brand with their future.
The key to contents online is not reading, watching, enjoying contents but searching. If media gets to the core of finding information, they will go back to being central in communications, and this is why this is not tactical but strategic.
This tool is just easy to use and it does not need installation. It offers a different navigation for a different user profile and if you prefer the traditional mode, you may just switch back to the “old” nytimes.com. This is offering more features to those who want more while keeping a “traditional experience” for those who prefer it.
I am really happy to see them clearly leading the way because I feel they are a mirror for many other media. Hopefully, they will speed all media so much and we should all be grateful to what they are doing.
When you are a brand like The New York Times, taking riks to innovate and progress is much more exposed to criticism. Great job again and hopefully they will continue offering ways to access not just “any” available content online, but any quality content. I think that difference  is huge because our time is gold and we got no time to waste so much in finding and selecting sources all the time on our own.
I think today is going to be a new beginning. I know many people may think I am over-reacting to this, but I think this tool just confirmed what I think about The New York Times, they know what they are doing and they are being brave to innovate.
If you also think that aggregation tools used by humans can be key for the future of communication, then go to reading this post:  new journalists for new information flows

It is widely maintained around techonology blogs and analysts that traditional media companies are not aware of our changin landscape. I personally believe that the complex nature of media companies makes it uneasy to lead the changing world, but top executives in some media business know what they are doing.

Having a look to a PPT of New York Times in Bear Stearns 21st Annual Media Conference (March, 2008) is helpful to see a media company situation nowadays. It states 3 challenges.

1. Protecting the brand and maintaining journalistic excellence are paramount

2. Capitalizing on opportunities in print while improving productivity and improving our cost structure

3. Growing our Internet businesses organically while making smart acquisitions

In other words: we want to continue being a reference brand in terms of quality (differenatiation), we have a cow that is decreasing and that is why we got to reduce structural costs, we have Internet to grow both: organically and through acquisitions. So, we got: brand + current cash generation (print) + future cash generation (online).

It is nice to see such a clear statement and assumption of reality. The document as a whole goes around those statements. It is a transitional strategy, a change management problem:

The document quickly focuses in online development. And, concretely, they more concentrate in analysis and business development than in content production. I believe this is a very realistic approach that is completely different to the one taken by some “native” companies that first try to concentrate in product development and content production and then try to work how to monetize it (mobuzz, or lycos may be example of the later, and even some business units in Google). In fact, most failures in Internet are happening in new ventures of pure players, we rarely saw a “traditional” media failing in their Internet operations. There is a pragmatic view coming from offline that is going to change the way to develop business online.

That is business sustainability, caring on how will we monetize our service. 500 MM $ investment in a clear direction: reinvigorate growth within Digital businesses. But also, selling businesses in TV, radio and print (worth 700 MM $). So… aren’t they going in the right direction?

I see them betting hard, and I think they are already transforming their business. For sure, they are going to be a winner also with new technologies.

We may well critizise “traditional” media when they are slow movers, but we have to recognize that this is not always the case.

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.

In a document from Newspaper Association from America we find two business cases of small newspapers facing business transformation from print to mixed models (print/online): Times-Mail and Shakopee Valley News . Its title is very descriptive: How Two Smaller Newspapers Energized Their Web Strategies.

Both of them were newspapers with certain credibility and integration within their communities that were passing a critical time for their offline business.

This document tell us about the concrete transformation that took place, and it nowadays may look basic and obvious in practical terms, but there is something really not obvious for bigger companies:

1. Top management must be convinced that the change has to be pushed in a centralized (often top-down) way and taking the picture as a whole, both, in terms of contents and in terms of revenues. Revenues have to also be integrated in decision making so decisions are adopted taking into consideration impacts in both sides.

2. Workforce needs to be qualifed to really transform their skills otherwise they would be just a heavier weight in the mid term.

3. An out of the box vision and leadership may be very helpful in order to transform a media.

4. Community is a key factor, and as community leaders, we have to change the way we interact with our readers

5. Technology is not core to our business in a media company, it’s an instrument, a commodity, and it’s has to be at the service of the organization, and it cannot be a bottleneck. Of course having strong technology in-house remains an important factor but more in terms of know-how that when talking on execution. Technology is really important as rotaries were in the past (but not more than that).

These are my own conclusions from those very simple business cases and these conclusions are a kind of basic philosophy on how to transform a media. I find media companies losing their focus and goal because they believe they are something else. They believe they are a technology company, a software development company, a service provider… In other words, if we lack management consciousness, workforce qualification, out of the box visions, community interaction and technology aligned and at the service of our goals, it will be much more difficult for us to run a sustainable business.