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
Feb
27
Touch – Pause – Engage
Filed Under B2B, Blog, eBook, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, Uncategorized | 1 Comment
This invocation, spoken by the referee to initiate a scrummage in the English game of Rugby Union, has been echoing through what remains of my mind in a weekend where, as ever in my place at Twickenham, I have watched England eke out a gritty victory against the French. American readers may jump a paragraph if they will at this point, or join with me in wonderment at the glories of time transfer (my son and I came home to analyse the game in painstaking detail using slow-mo on a previously recorded version, and then spent this afternoon joyously alternating between coverage of Scotland v Ireland from Edinburgh and India v England at cricket, live from Bangalore). Masters of Time and Distance, and only beholden to the Laws of Commerce (I was unable to see previous games in the US since ESPN hold the rights for excerpts and summaries!). But when this wonderful sporting escapism shrugs off the constraints of territoriality and becomes a live factor on my Tablet the dynamics of daily life change again (phone call from my daughter at university this evening: unable to complete essay because too much distraction on time-lapse internet TV). We must bear in mind that it was sports coverage (in the soon to end days of geographical exclusivity) as much as anything else that built the House of Murdoch, so this is no trivial subject matter. Nor is my concern that my children may never qualify for anything at all if they have to shrug off a barrage of media possibilities and temptations never made available to me.
And this is a futuristic conversation in another sense, and perhaps I should now make an alarming confession. I do not own an iPad. I can defend this and increasingly often have to do so, by saying that “I never buy before 6.0” (makes one sound smugly superior instead of poor and outdated) or, even more often “I am waiting for the HTC Flyer”! This usually throws the inquisitor off the scent – either he does not recognize the Taiwanese industry wunderkind, whose smartphone is so readily promoted by Google at present, or he has heard of the Flyer, due to launch later this year, and can debate with me on the merits of having a 420 gramme machine (same weight as a paperback, half the weight of an iPad), on which you can draw or write as well as use touch screen access. By this time I have covered my tracks on the ownership issue, and we part agreeing on how clunky the iPad really is. Until next Wednesday, that is, when Apple unveil iPad 2.0 and the pressure mounts again for me to come aboard.
I have been having some excellent debates in recent weeks about this unrefereed scrummage which is technology innovation, and its impact on the rapidly moving world of business and professional information. At the moment so many of our preconceptions are built around the consumer uses of the tablet world and around the access advantages that the devices provide in business and elsewhere for travellers, that we are not yet tuned into the impact that this mobile computing power could have on our workflow activities and the integration of still separate elements of our intranet and extranet worlds. In my view, carrying your connectivity on a Tablet will place renewed pressure on improvements in voice-text transliteration, and at last begin to move machine language translation from the esoteric to the standard. Words spoken will need to be stored and subject to textual analysis, as well as being copied to third parties. Documents exchanged will need to exist multi-lingually where necessary. And nothing will be stored that cannot also be heard. All of this will ready the tablet to its eventual role, as portended by the laptop releasing us from the desk, as the complete personal assistant – the PDA comes to fruition at long last. Then I will discard my Blackberry, throw out the Netbook that loyally travels thousands of miles with me and embrace the Future. But, since you ask, I am currently at Pause, and not yet Engage.
Finally, some updating of previous efforts here. In the first instance it is always good to remind ourselves of past worlds and where we came from, and the trading statement of Yell, the yellow pages publisher who named itself after its online service but never really invested in it does that splendidly. Pre-tax profits in the nine months to December were halved and revenue was 11.8 % off target. In its UK businesses print revenue went down 22.3% and online went up 1.8 %. Recovery is proving worse than recession. Like much of the newspaper world, this advertising sector is now dead wood, in my view. While it remains interesting to see who can recreate in digital services the hyperlocal environments that once gave rise to local newspaper publishing, the heirs to classified advertising directories are now fully entrenched in network marketplaces. Time to write the history here.
And can the same be said of consumer book publishers? Not quite yet, perhaps, but since I wrote about Ms Amanda Hocking (26 year old care assistant from Minnesota with 4 paranormal romances in the USA Today bestseller list last month), other evidence of successful self-publishing comes to light. This time it is British thriller writer Stephen Leather. Although an established conventionally published author, his latest novellas were rejected by Hodder and Stoughton (Hachette) as being too short. So he published them, like Ms Hocking, on Amazon. One, a gritty everyday tale of a serial killer in New York, has topped the Amazon bestseller download list for 7 weeks, and his other works have been at the top, he estimates, for 90% of the past 3 months. He claims in interviews to sell 2000 books a day, and to be earning £11,000 a month from this activity, but this is not what interests me most. Like Ms Hocking, his works are short, and sell for $0.99 /£0.70. I smell a trend – short enough and cheap enough to read on the train! I don’t commute and don’t have an iPad, but I do see that survival as a publisher may mean moving one’s focus to where the buyers are going. Or is that just old-fashioned consultancy talk!
« go back — keep looking »