Category — Interesting Readings
The gap that separates the theory from the pratice is something that we assume as business managers. We know that all those things they taught us in our business school are very difficult to implement straight away when landing in an organization. For this reason, if someone keeps on reading theory, white papers or state of the art technological developments and is not the final decision maker but just, and, at most, a “middle manager” then either it is completely frustrating or it is like watching Sci-fi movies. For the sake of our mental health , for sure the dozen of readers of this blog are middle managers at most (if not, we would probably be ”too busy” to read anything) we should adopt the latter attitude.
Reading the PDF behind this form I had again the experience of how obvious it is what is said in that white paper, and how hard is our daily life. We got resources, talent, even money to be closer to the best practice, but we are so far from it. Below, I am just going to copy my summary of ENTERPRISE INFORMATION MANAGEMENT: Strategy, Best Practices & Technologies on Your Path to Success.
EIM (Enterprise Information Management) is the effort to build up an organizational coherent information management so that information is delivered when, how, and to the person who need it. Benefits of EIM are:
EIM is an answer to the unorganized data management that is suffered in many organizations. Middle managers are those who realize it at the beginning because they are using the systems and they are the ones being pushed by objectives. Top management is in a different battlefield. Therefore, it is a middle management responsibility to push this topic in the agenda of top management. Fortunately, some companies have a top management that is able to quickly understand the importance of adopting correct data governance; some others are not.
Before having an EIM strategy there must be a vision. EIM strategy responds to a concrete vision and objectives and change with them, it is also flexible and adpatable. In order to get EIM done it is important:
- IT/Business collaboration, understood as regular and constant communication and cooperation.
- Trusted information. If the information delivered is not trusted, EIM would just be a failure.
- Enterprise-wide standards. Everyone has to talk the same language and use the same tools.
- Data Governance, a corporate agenda for data.
Apart from that nowadays information management must be:
- SOA support. Service Oriented Architecture is a middleware becoming an standard between data and interface applications.
- Centralized data management.
- Complete functionality (it should serve all organizational goals)
- Seamless integration. For each functionality there are world class applications that are able to inter-operate through SOA.
- Easy of use
On the other hand, without data integration it is not possible to build trust.
The purpose is to get information from business processes and to load it to a master data management system. For this, ETL (extract, transform and load) process is key, together with a data quality infrastructure that should come together with your EIM strategy. To ensure data quality it is necessary to manage metadata (data about data). At the heart of data integration is MDM (master data management) which is more than software, a system of practices policies for data collection.
September 9, 2009 Comments Off
A netbook? A tablet PC? Does it matter? asks Sarah Rotman Epps from Forrester. For those doing business right here (media) right now (april 2009) it matters.
Sizing the ereader opportunity, Forrester expects its penetration to begin doubling YoY from 2010 reaching a 4,5% penetration by 2012. In this presentation there is not much information on how piracy could affect content providers with the spread of these devices. MP3 players are now very popular but music providers are not in a very good situation.
It is a good document to recap the ereader situation and what we can expect to happen in this area.
Where I disagree with this presentation is when inisists in the widely discussed idea of ereaders not being ereaders but PDAs. For many, in order to be competitive, ereaders need to include a touching screen, audio and video capabilities, wireless connectivity, etc.
This is not the competitive advantaje of an ereader. An ereader has an approach that we may call: technological austerity. What is important in an ereader is that you don’t need to worry about charging its battery and you can store lots of plain text. No pluggins, no software, no colour, no touching screen, etc. It’s just a way to approach texts in a more static and profound way. And, therefore, that is why personally I cannot see the future of newspapers flooding into ereaders (not totaly, but partially for sure yes), because news are dinamic and constantly changing and updated. Ereaders are, in fact, a response moving backwards to what is important for so many: contents built on words. For contents built on audio or video, no worries, we got other much better devices already.
Most of times, this criticism to ereaders comes from people who are in fact not yet heavy users. I combine my ereader with my pda, then I still have some books, and for some other things I still use my laptop. If my ereader battery couldn’t last weeks (or months), if it got hot, and it was aggresive to my eyes, I would just leave it and use more my PDA. If e-ink can progress into a kind of pda with a different (more efficient) process, then we are just talking on a new PDA generation, but, most experts in e-ink admit that this is, by far, science fiction at the moment. And, if that is the case, why should I have 2 PDAs? In that case, there is no point to develop theory, because ereaders would just be the future of PDAs and so, business side, what we do in PDAs we would do in ereaders; i.e. there would not be a different business case nor such a different product.
There is a clear trend towards convergence also in devices but this is not something we will see in a very short term in terms of e-ink/PDA merge. Making business plans or predictions taking that device convergence for granted is for sure interesting for academic and longer term strategic purposes but is of little value for business managers that need to build up solutions (revenue streams) today. Even more, if such a convergence came after 5 years, we got 5 precious years ahead we couldn’t lose to gain competitive advantage over our competitors. Business leaders in media right now cannot wait to potential convergences in order to make decisions around devices, and so, decisions must be taken with market conditions today: PDAs and ereaders are (today) different products.
April 6, 2009 Comments Off
As we develop into an increasingly virtual world, our lives are definitely moving into a “virtual reality” that is complementary to our physical life. (In philosophy, in fact, would be not so clear which of our existences is the complement, but this is not our topic now).
Virtual goods made 2.1 billion US $ compared to 16.9 billion revenues in advertising in 2007. In other words, virtual goods are worth watching closely since any digital player may get a share of this market in a coming future incorporating new revenue streams. If online games managed to create virtual objects that are worth real money for their audience, it may be the case that we, online media, may find a similar response. In fact, if I am typing this letters right now is because I am sure that media can create virtual goods within their communities of influence.
Virtual goods (summarized from Lehdonvirta’s excellent work: Virtual item sales as a revenue model: identifying attributes that drive purchase decisions.) are not information goods (a mp3 file) but “simulations” of material objects that sometimes do not have a material counterpart with 3 key characteristics: mutually excluding (their usage by one person excludes the use of a different person), persistency (it has to exist for some length of time) and interconnection (must not exist in isolation).
Virtual purchase drivers are:
1. Functionality: goods that improve performance, new functions or gameplay options.
2. Hedonism: aesthetic attributes
3. Social drivers: like facebook gifts that sometimes got artificial scarcity
“Virtual goods are more suited to creating and maintaining social distinctions and bonds because of their built-in rivalry and scarcity.”
Therefore, virtual goods are, at the end of the day, not that different to “real” goods. As we buy a Gucci bag, or a BMW, we are not just buying the physical object (its functionality) but the social, hedonistic part… how this object differentiate us from the others by its brand, design, etc. We are defining ourselves in society by acquiring some goods are not others. Physical goods have a great “virtual” load in their attributes.
World of Warcraft, Habbo Hotel or Second Life may appear that have nothing to see with online media, but, there may be rules of their business model we should be watching because they are making money. Online media will probably be soon a major supplier of “virtual goods”.
March 30, 2009 Comments Off
In a fresh report from Newspaper Association of America there are a couple of original revenue generation initiatives for newspaper that seems to make sense at least for the shor term:
- St. Petersburg Times is handling 16 to 20 consumers’ shows a year with a great profit margin (45 to 65%). They are trying to lead the market in counsmer events. This is an extra activity of their promotions team. For each show, they have made a dedicated website.
It is a complementary market that can make more complete our service to both, advertisers an audience. Having events is increasingly important as offline newspapers disappear, because through this event is where our audience and advertisers will continue in physical touch with our brand. Community events with audience are a great way to continue building up a newspaper brand.
- Morristown is developing a hyperlocal strategy by launching weekly paper targeting hyperlocal communities. Advertisers want to be seen as par as the community. They call it the “print version of facebook”. The model is simple: (only good news) of user generated content (40% of the content) and pictures, with hyperlocal ads. People want to see themselves in the paper and their neighbours, the same curiosity that drives social networks may push this kind of content that is entertainment. They may also cover hyperlocal sports events from schools with user generated content.
Similar to the case before, Morristown demonstrates how a printed paper can leverage on an online community to build up brand, entertainment contents, and a further user generated content flow.
Concept of bringing online contents to print is being used in other initiatives and it makes sense as a short term tactic.
These kind of initiatives may not transform a business model, but are a proof of dynamism and reflect a proactive approach to making more things in offline newspapers.
Full report is here.
January 15, 2009 Comments Off
1. they may need some additional revenue streams
2. information storage costs are increasing
3. “Average revenue per user for some of the largest new media sites is measured in just pennies per month, not pounds.”
4. Concretely twitter and facebook did not make nearly any revenues yet.
5. More concentrated in growth, facebook cancelled a plan to allow employees selling shares
Social networking, for the moment, did not find a way to be sustainable. They are, for sure, working on building revenue streams to continue providing their service, and, if they do not find it soon, they will be in trouble.
January 6, 2009 1 Comment
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
PWC is now presenting its Global Entertainment and Media Outlook 2008-2012. Manuel Martín Espada partner and responsible for Telecom., Entertainment & Media in Spain points the “windows fragmentation” and the fact that “content is king”.
Not getting into the concrete figures -they are just a reference that will be soon invalidated- main growth drivers in the period are:
- DVR. C3 and Live+7 (viewing of contents 3 or 7 days after broadcast). In fact DVR was born with the purpose of avoiding advertising. (The study here seems to give not much importance to this fact, but the possibility to watch contents without advertising with DVR is in my opinion another threat to online media sustainability as we understand it today).
- IPTV and streaming: HULU (NBC + News Corporation) is an example of online alternative to DVR. In fact, DVR could be of little sense if this alternative develops quickly.
- HD (High Definition) is already growing and it will grow exponentially in 2009 as people move to digital TV. One problem could be that if other qualities are good enough, this one could be a nice technology with minor adoption.
- Unavoidable advertising in streaming.
- Hyper local and geolocalised advertising
- Advertising networks will be key facilitators and they are a strategic node
- Publishing: digitalization is key and on demand printing could finally take off
- e-books and audiobooks will grow exponentially
- Videogames. MMGOs (Massive Multiplayer Games) will impulse growth. PC games decrease although they remain to be sometimes a requirement to play online
Definitely, content and services are king. I think GEMO should have pointed out more other services, like organizing information (i.e. google) and, maybe even more relevant, qualitative content selectors (social:like digg or wikipedia; institutional: like universities or business schools). An added value could be just to give credit to what is really valuable. Providing added value services around content will be another key growth driver in the coming years.
October 27, 2008 1 Comment
Looking for information on media organizations I found a really interesting work by Ming Hang called Media Business Venturing. It is a dissertation for a PHd about “how to organize venturing and why to choose a certain organizational mode for the development of new business”. Two approaches are used in this analysis: IO (Industrial and Organizational Theories) and RBV (Resource based view).
Adapting to changing environments is crucial for media businesses nowadays, and it is the only way to profit from new opportunities arising. Corporate venturing is the concept that summarizes all related to new businesses creation in an established organization.
RQ: Given the emerging business opportunities, (1) how do firms organize their
new business venturing activities in a structural dimension and (2) why do they
choose a certain organizational mode for venturing?
We all know how media has undergone great changes and challenges from both, internal and environmental factors. Media companies are looking for new revenue streams by stretching their competitive advantages and diversifying their activities/risks. Media compete in a triple market: content, audience and advertising.
New media business oportunities: internet, mobile, webcasting, gaming, digital tv and venture capital.
“Corporate entrepreneurship is the process whereby an individual or a group
of individuals, in association with an existing organization, create a new
organization or instigate renewal or innovation with that organization.”
(Sharma & Chrisman, 1999, p.18)
This work covers several business cases in a deep analysis: Internet Business Venturing and Mobile Media Venturing in News Corporation; the New York Times Company, FiOS TV Venturing and Online Gaming Business Venturing in Verizon Communications, Mobile Distributing Consumer Media Venturing in YouTube, Webcasting Business Venturing in the China Telecom Corporation.
After this analysis, his conclusions are:
Proposition 1: when the level of ‘economics conditions’ and the level of ‘resource conditions’ are both high, the hierarchical modes will be preferred by media companies while venturing for new business.
Proposition 2: when the level of ‘economics conditions’ and the level of ‘resource conditions’ are both low, the more market-oriented modes will be preferred by media companies while venturing for new business.
Proposition 3: when the level of ‘economics conditions’ is high and the level of ‘resource conditions’ is low, the hierarchical modes will be preferred by media companies while venturing for new business, if the venturing activities are primarily driven by the direct incentives.
Proposition 4: when the level of ‘economics conditions’ is high and the level of ‘resource conditions’ is low, the market-oriented modes will be preferred by media companies while venturing for new business, if the venturing activities are primarily driven by the indirect incentives.
Proposition 5: when the level of ‘economics conditions’ is low and the level of‘resource conditions’ is high, the hierarchical modes will be preferred by media companies while venturing for new business, if the venturing activities are primarily driven by the indirect incentives.
Proposition 6: when the level of ‘economics conditions’ is low and the level of ‘resource conditions’ is high, the market-oriented modes will be preferred by media companies while venturing for new business, if the venturing activities are primarily driven by the direct incentives.
It can be a bit difficult to understand those propositions without having read the whole book before. The conclusion is that media companies show unflexibilitiy when dealing with relatively small projects (low resources and economic conditions) and when having a complex initiatives they may adopt a hierarchical mode, but not always. In other words, media companies are not good innovation companies within themselves and their business model development may happen mainly through acquisitions. In some cases (like in News Corporation) it is reflected in this book how they deliberately prefer to allow others to move first, and then jump into the market paying the acquisition of an expensive monetary cost but saving the pain of a failed project.
Anyone working in media would more or less presume that these propositions are true by having a look to their own evironments. It is no longer a feasible to keep media businesses in the long term with organizations that are not flexilbe. Media must assume that change is not just merely about how to manage and adopt new techologies but a process that wont stop. Change is our new model, we must continuously be changing, we must be changing organizations on our own, and we have to permanently adapt in order to continue offering what our consumers demand. An organization that does not embrace change, that does not love change will die today or tomorrow.
October 27, 2008 Comments Off