Jun
29
Quis custodiet ipsos custodes?
Filed Under B2B, Blog, Education, eLearning, Industry Analysis, internet, news media, online advertising, Publishing, social media, Uncategorized, Workflow | Leave a Comment
Who guards the Guardians? The Latin tag I learnt at school applies in a very general sense to the ability of a free press to survive in a digital age, but I want to address it very specifically to the Chief Executive of the Guardian Media Group as he enters his second year of guarding the Guardian at a time when many reasonable, progressive and liberal minded people in the world wonder whether such an institution can long survive. As one who started reading it as a student in 1960 and who treasures it as much today, I wonder too, so I decided to write to Andrew Miller with some thoughts on possible strategies:
Dear Andrew, Congratulations on surviving Year 1, and please do not be affronted by this letter of advice. You and I have never met, and I have no conflicts of interest with GMG, but I do have a great sense of engagement, and want the good that the Guardian accomplishes in the world to go on in some form or other in our digitally networked world. When I was a boy The Guardian was a voice in Manchester, then the UK and now globally. Sustaining it using the conventional business models of failed newspaper publishing is not going to work so we are going to have to think more laterally. Since you are a not-for-profit Trust-owned institution the issue is not one of returns to investors, it is simply one of survival . But sustainable survival is vital, and that, I shall argue, means creating a new mix of old business models.
Lets look first at the exemplars of survival in our own times. Two stick out immediately. DMGT have created a B2B empire around data which, alongside their interests in Euromoney and events, surpasses the newspaper side of the group in both revenues and margins. This is the story of 15 years of activity, with the man who painstakingly collected and backed the data acquisitions in areas like environmental checking and property now running the whole group. This “solution” repairs group results to a great extent, but it does not extinguish the slow leak of market and margin at Northcliffe (unlike GMG, they stayed regional when they should have sold) or Associated. Even the discovery of global success for the Mail as a celeb voyeur vehicle digitally does not do that. You have wonderful global usership too, and you can’t seem to monetize it either.
The other critical exemplar is Hearst. Here they are playing two games at once. Diversification is represented by Hearst Business, now a world leader in healthcare and medical diagnostic information (including the UK’s NHS). Moving within the value chain is represented by the iCrossing acquisition, which allows them greater control of ad markets, and, now that they have bought Hachette Fillepatchi’s US interests, gives them greater inventory in which to deal. So here is a huge endorsement of the “old” magazine model – provided that you are bigger in a diminishing market and can exercise greater control/derive margins from the syndication of advertising. But I am really sorry, Andrew: neither of these models offers a solution to you.
What, short of re-inventing the newspaper, does? Lets look at some strengths and weaknesses. It is surely useful, though it must appear troublesome at times, that you have an asset like EMAP and an asset like Trader Media. On the latter we will have to bow to your expertise, since you were instrumental in creating it in its current form. The last financing deal with your partners, Apax, seems like a good way in a bad year to liberate some cash, but this asset remains your landbank, the place where you turn in a rainy day for a cash injection. But like all these things, when your need is great TMG’s value will be low, and every move has to be agreed with your co-investor. When both of you are agreed, ie now, then exit beckons. I would take it.
Which leaves EMAP, a troubled asset if ever there was one. The ability to sell this successfully now is, in my view, nearly nil. You will be forced to put in new management and restructure, close more and more print and try to rationaize a portfolio vehicle in markets where the focus has gone digital and vertical. In EMAP’s main verticals it does not have a complete workflow solution (areas like construction and automotive), while elsewhere only in fashion does it have standalone digital environments. This is a break up, the lateral thinking starts here, and somehow you have to persuade your friends at Apax, whatever the complications of their fund structures, that this is the case.
In the digital world the foot print of the Guardian looks viewed from my seat, like this: strong UK community environments amongst educationalists and teachers, social services and policy, government workers and the media industry. All of those, with the exception of UK civil servants, have natural extensions into global markets. GMG has started down the track of investing these communities with content (though all have been hit hard by recession). Given its strong branding in these areas, surely it makes sense to push forward with networked services for these communities , and services that have a real impact on their workflow and working lives. Have you noticed how TES Connect (the former Murdoch Times Educational Supplement, affected like you by the collapse of teacher recruitment advertising in the UK) has developed a very successful service helping teachers to exchange lesson plans and learning resources? Where are your equivalents of these in education (you may have to use that TMG cash to buy TES!), or in social services or in media? Unless you are digitally plugged into the network lives of your principal groups of users, and unless you offer yourselves as the branded, trusted means of them communicating with each other, I fear that you will lose your grip on them. Unfortunately I cannot tell you what the next “newspaper “will look like, but I can tell you that it will be invented by users themselves in these networked communities.
So how can you speed up that verticalization of the Guardian? Raid the EMAP cookie store. EMAP owns BETT, the leading educational technology fair in Europe, it owns Local Government Chronicle which is the only other thing that many of your local government readers use, it owns a raft of media properties including BRAD (and you could even sell CAP to TMG and add value through investing the used car value chain). Some of this will not fit and will have to go, but other properties will increase the speed with which you can deepen and concentrate Guardian Professional and really make an impact on the working lives of your major readership/classifieds groups. In other words, the strategy is “use the brand and authority, and the accident of acquisition, to move from B2C to B2B to a service environment that has news, opinions and networks at its heart as it goes global”.
Andrew, if you are still awake, two more things trouble me. Please do not go the paywall route: for my money the FT have the game to emulate, and as you turn into a service environment that model will be easier to adopt, while your news and commentary can remain free. Secondly, while David Astor’s Observer was the vehicle of my political awakening (Suez, 1956) you have inherited a very pale imitation. It will all have to go into the Weekend Guardian (but do make sure that Peter Preston keeps writing – an important sanity check for all of us!).
All my very best wishes for a very successful second year – you really do have to succeed. David
May
20
Publishing as it Will Be
Filed Under B2B, Blog, eBook, Education, eLearning, Financial services, Industry Analysis, internet, mobile content, news media, Publishing, social media, STM, Thomson, Uncategorized, Workflow | Leave a Comment
A wise man said that “Content without Technology is lame; Technology without Content is Blind”. Einstein was working his way towards this conclusion, but it was in fact Timo Hannay of Macmillan/Digital Science who came out with this formulation during this week’s ePublishing Innovations Forum at the IET in London (http://www.epublishing-forum.com/). Incisive Media, who also do the Online conference and exhibition at Olympia in December, having been doing this Spring meeting for four years, and I have been their privileged chairman for each. So I know the sea change of the past half decade, I know that change just gets quicker, and I know that Timo is fundamentally right and is one of only a handful who are doing something about it. I also see that “publishing”, if it is useful to retain the term, is almost redefined everytime we hold this meeting, and that the players making strides in solutioning (ugly term), collaboration and community seem to be mining the seams that have revenues and margins embedded in them.
The conference contained several beautifully worked case studies. Take Timo as an example. His themes are about knowledge discovery, research management and software tools (http://www.digital-science.com/). The ability today to read chemical names and turn them into chemical structures and use them to cross search literature and patent databases is a beautiful expression of what we mean when we say that we have to produce solutions that reduce costs and increase productivity. Tomorrow we will want to take this, and his ability to track and map research patterns and structures, and his investments in experiment and project management systems and roll them into career duration, compliance required Electronic Lab Manuals (ELN). Then a few of us will sit down over a beer and reflect that Elsevier sold the ELN market leader, MDL, almost a decade ago. The circularity of markets is only a wonder to those who have been swept full circle several times!
Then lets take David Craig, who came to the microphone to announce that his Thomson Reuters GRC (Governance, Risk and Compliance) division (http://accelus.thomsonreuters.com/) had the day previously finalized the acquisition of World-Check (said on the New York grapevine to be a $530m dollar deal), and was now pushing hard towards the content integration and software services needed to flesh out the complete solutioning picture around regulatory compliance in all its phases. He too speaks the language of collaboration, and now appears to prefer the term “community” to “workflow”. And the distinction is interesting and not an idle one. He does not want to build content-injected process models for the individual corporate units that severally and separately do compliance. He wants to do corporate engines that unite functions to get results, so that he is not tied to the future fortunes of compliance officers or finance departments or auditors or corporate counsel or tax advisers, but provides structures in which they all participate, share content and create outcomes. And if that argues for a different culture in the fully networked corporation, he also sees content creation and sharing between corporates, professionals and othe participants (especially regulators) which allows risk information to be shared rapidly in the network. Again, the high ground is becoming a universal solution which is so widely plugged in that unplugging threatens the health of the participants themselves.
And then take Donal Smith. The CEO of Data Explorers (http://www.dataexplorers.com/) defined what happens to this type of process in the completely satisfying niche. He showed us how certain types of unregulated content must be collected and analysed to keep markets safe from themselves. In this case the content concerns contracts to “borrow” equity against future equity movements – the activity known as “shorting”. Markets must know what proportion of a company’s equity is already committed, so Data Explorers is a venture of necessity, using user-generated content to create indices which allow markets to work efficiently. Its operating principles are ubiquity and non-exclusivity. Process? Collaboration? Its all here.
I could go on. I loved the energy in the education sector, with Cambridge University Press and Global Grid for Learning using similar models in the workload of teachers, and Microsoft, in the guise of David Langridge, their education partnerships director, coming from the other to position the new Office 365 as the vehicle for content integration in schools. And I am aware that by stopping here I ignore many excellent presentations that followed parallel themes. We did interviews and panels which enabled participants to see these trends at work. We looked at the future of the newspaper with Julian Sambles of the Telegraph and the future of the eBook with Tim Cooper of Harlequin (Mills and Boon). Adriana Lukas, coming from the user side as an advisor to major players like Johnson and Johnson, caused a run on the bar by exploring the powerful virtues of five widely used ad-blockers during the opening of her examination of social media as marketing. Elsewhere we discussed the importance of metadata and even paradata (could be my new word!) and finally Geoff Metzger of Superdu brought us down to earth by revealing marketing technology in a box – how to create instant web presence (without waiting for the IT department) to promote books and services. Back to earth, and back to books, in a voyage that began with Kate Worlock, for Outsell, defining the global marketplace, its growth, strengths and weaknesses and some of these key trends. I can now tell you how it feels to introduce one’s own daughter as a keynote speaker (Wonderful!!).
And so much more that I must apologize to those who I have omitted. I wandered away from the IET (Institute of Engineering and Technology, appropriately enough) no longer wondering why they changed their name from Institute of Electrical Engineers. Its the technology, stupid. And now we cannot do without it.
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