Nov
22
An Open Letter to Monty
Filed Under Blog, eBook, Education, eLearning, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, Search, social media, Uncategorized | Leave a Comment
Is that an early Christmas Carol of Consolidation and/or Consolation I hear in the air. As CBS/Simon and Schuster Books prepares to surrender to the breathless embrace of that ardent wooer, Rupert Murdoch (Harper Collins), the UK is entranced by the appearance of David Montgomery as the saviour of the regional press. Despite the remarks made here in “Monty’s Flagging Circus” two weeks ago, it seems only fair to warn the brave man of the possible pitfalls that lie ahead and give him any advice and guidance that may be available. Media casualties help no one, and people like me who have spent a lifetime in media should do more than hop up and down on the sidelines prophesying doom. So here goes:
Dear David (everyone, me included, seems to call you Monty without ever asking, so I will try to be more correct in future),
Congratulations on the launch of the Local Worlds business, and upon your statement re-emphasizing your belief that people will always want local news and information. I have written about your intentions since they were first rumoured, but since those statements might be seen as a bit negative, I wanted to write to you publicly to say that I wish you every success, and would like to contribute something of my own amongst the more tangible contributions of your other stakeholders. You see, in 1996 I played a role as a strategic consultant in helping Trinity, Newsquest and Northcliffe to establish a joint web branding for local content called “This is…”, and, experimentally, and based in my own offices, began work on developing a service for concentrating all of the regionals classified advertising called ADHunter, directed by Marlen Roberts of Northcliffe. A year or so later this was relaunched in Hammersmith, by a brilliant manager called Jonathan Turpin, as Fish4…Homes, Cars, Jobs etc. It still exists, owned now by Trinity Mirror. From its inception and for the next four years, I was its non-executive chairman, refereeing a board of directors comprised of the CEOs of each of the major UK local newspaper groups, who were the shareholders and content contributors. Johnston Press joined twice – but also left twice. Sometimes the CEOs did not show: how well I recollect a substitute turning up for one of them, and volunteering, just after the minutes had been signed, “My mandate for this meeting is to say “NO” “!
I rehearse this escapade on the nursery slopes of British attempts to get the media to respond to a networked world simply to say that I have some knowledge and sympathy for the world through which you are now moving. But I started this letter to offer 5 points of advice. Here they are:
1. Investors. They are your worst enemy. Having investors who want a return and don’t mind how you get it is one thing: having investors who want results, but not results that deteriorate the quality of their other businesses is really tough. Is London Local as far as your investors are concerned? Will Trinity Mirror compete with what you do? Boards that cannot make decisions make chaos, and then, if you could get Newsquest or even Johnston, or Archant, to invest in you, compound the rivalry, suspicion and eventual stalemate.
2. Editors are a real liability when it comes to change. They are above all committed to the “push” world. They want to select and define. But you cannot let that happen, since, online, you cannot define “local”. Do you mean my village, this town, this suburb, this county or, indeed, this region? People define local for themselves, and “pull” it to their access point. While I agree that we all want local news and information, you have to provide an interface through which they can focus – on a smartphone, or a tablet, but certainly not primarily on paper.
3. Journalists are too expensive. Many, if not most, of your stories will cover local football , the Women’s Institute meeting or the town council. Look at the way in which excellent artificial intelligence software is now formatting and templating factual input and archived recall to create the news: a prime example is www.narrativescience.com which builds automated stories for newspapers and B2B magazines. Save your journalists for so-called investigative reporting where you can make an impact; once the editors have gone and the journalists diminished and printing severely cut back to a national centre you may come by a cost base that suits the circumstances in which you now find yourself.
4. Relaunch as an online service. Call it LocalWorld if you like. Allow users to set their own limits, by content subject as well as geography. Make it a content experience that people will pay for and add their own content to it – and they will – not an advertising experience that delays and distracts them. Make it Local Google with no ads: and, as Google gets into predictable difficulties as a local provider, use your increasingly trusted pure content brands (I know you will use the old newspaper brands in the background to suggest this trust) for lead generation and customer referral. Get it right and you could end up with a local community presence, under the radar of Facebook. Make local a place to go for education, or to recommend (and then) buy eBooks or music if you like, but not for conventional click-through advertising. But your investors must give you time to sort this.
5. Watch the winners and losers. At the moment Axel Springer and Schibsted are gaining ground with a pure digital classifieds play. Could work for you, but Trinity wouldn’t like it. Keep content and classifieds apart though – they represent different channels in a networked world. The terror to be avoided at all costs is trying to drag the newspaper online and make it work in trad business model terms. Time to turn off the life support systems: people do want local news – but they want it on their own terms.
Oh, yes. And keep having lunch with that nice Ashley Highfield chap over at Johnston Press. When you get a technology focus which does for local news what his iPlayer did for Broadcast television, then you and he will want to proliferate it as widely as you can across the localities of Britain, and shared tech investment makes more sense than competing standards. All this can be done, but not of course if the business plan is to simply cut costs and reheat the margins of existing newspapers ahead of their eventual obliteration. The newspaper at Manassas Junction shuttered last week, despite being saved by Warren Buffet, no less. Lets make local work, but lets make it work on the terms that local people want.
Best wishes for your new venture.
David Worlock
Oct
26
Wider Still, and Wider, Shall Thy Bounds be Set
Filed Under Blog, eBook, Education, eLearning, Financial services, Industry Analysis, internet, mobile content, Pearson, Publishing, Reed Elsevier, Thomson, Uncategorized | 1 Comment
Today’s announcement of talks on a merger between Penguin and Random House has provoked a storm of pseudo-analysis of the “well, the big players must get bigger because they have to fight bigger battles with ever more powerful device manufacturers or online suppliers etc etc…” variety. I find this fairly unsatisfactory, and since the shrunken corpse of the UK retail book trade will undoubtedly seek to have this deal referred to the Office of Fair Trading on the grounds that the new combine will have a 25% market share it may be a good thing to think if there are better arguments for defending size other than negotiating power with Amazon or Apple. Here are a few:
* Most of the books published by both of these companies are agented. There is therefore no question about author access to markets here. The selectivity question comes down to who can pay the level of advances demanded and still market enough bestsellers to stay in business.
* The new driver in terms of author development is likely to be self-publishing, a remarkably democratic development in which huge progress is being made by start ups like Eileen Gittin’s amazing www.blurb.com, and by Amazon, but where neither of these players have much market share at all.
* The trend in media marketplaces seems to be towards size, clustered around the old market model, supported by shoals of start-ups, of which only a small percentage survive. If the key to survival for the old market model is cost-cutting and making infrastructure services work better and more cost effectively, then size is vital. And compared to the size of Apple, all of the so-called Big 6 consumer publishers would still seem fairly puny even if they were all lumped together.
* There is no brand loss here. Random House has little by way of consumer-recognizable brand, and Penguin, though it has a distinctive resonance for an ageing demographic who, like me, recall it as our Adult Education Institute, has little of that left in bestseller markets, where the real money is made.
* Other information and communication markets have survived consolidation. Law is the domain of West (Thomson Reuters) and Lexis (Reed Elsevier), yet a determined venturer like Michael Bloomberg has been able, via BNA, to get into the magic circle. And there is no real indicator that consolidation or the expansion to admit more major players has been good or bad for users, except that law has become a very advanced marketplace in terms of user technology and changing working practices.
* If this merger goes ahead it is likely to be followed by others. If this one is blocked in the UK does that mean that, for example (purely fictitious thought) the future merger/purchase of Hachette by Harper Collins/News as News Corp seeks to make sense of the media businesses that it has now cut adrift from the film/TV/music mothership is also impossible? I doubt it.
* What is the alternative to merging these weakened businesses whose margins are in decline and who seek to blame the new world for being unfaithful to the practices of the old? They will decline further, there will be fire sales, redundancies and eventually closures. Pearson know all about this. Their focus is education, where they have a pre-eminent global position. Behind them trail the three remnants of the former Big 4 of the textbook world of 1990. Harcourt are now with Houghton Mifflin, just moving out of Chapter 11 protection and still with no answer for the future, and McGraw-Hill Education, despite some good initiatives, is cast adrift by its owners into a separate company so that its margins do not pollute perceptions of McGraw’s bid for survival via financial services. Do Pearson bid for these ageing relics? Certainly not – no one has seen them buy a textbook for many a year. They buy cutting edge, tech progressive companies in growing markets with expanding margins. And they are very good at it indeed.
Here then are some of the arguments which I would present to the regulator, albeit in a rather less direct format. Then, during the coffee break, I would take him aside and remind him that book readers are a small proportion of human kind, though hugely vocal and opinionated (I, for example, am an avid book reader). This does not mean however that their marketplace should be immune from the pressures being felt elsewhere. Why, I would ask him, were these players not experimenters in the early days of digital change? Penguin bought Dorling Kindersley, the only publisher who could have been said to have followed the clues to multimedia in pre-internet days but threw away the learning experience. Both are now Johnny-come-latelys to the digital marketplace which they point to as a disruptor. Please, Regulator, let them have their way. Unless they discover Plan B they will deflate, separately or together. Do not stand in the way of market forces in very small markets.
And should this be a merger? Pearson should not neglect, obviously, the huge power of consumers as buyers of self education or of educational materials for children. But I doubt if this merged venture is a vehicle for that. Pearson may have a residual feeling of responsibility for the Penguin brand, which is the best there is outside of OUP in the sector. But sentiment should not stand in the way of liberating capital which can be used in further global educational developments. That is something for the Brits , who have few global brands as resonant as Pearson is in education, to relish, and could be worth a shaky chorus of Land of Hope and Glory…!
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