Convergence Conversation

Publishing 2.0: Conversation Starters

1.       How will “newspapers” solve the problems of declining circulation, changing consumer habits and declining revenue growth?

a.       According to the World Association of Newspapers, Global circulation grew 1.3 % in 2008, (up 8.8 % from 2003) but dropped 3.7 % in North America & 1.8 % in Europe.

b.      1.9 billion people read a paid daily newspaper every day and newspapers reach 41 %  more adults than the world wide web – WAN, 2008

c.       2009 saw 105 US newspapers closed; 10,000 newspaper jobs lost; Q1 revenues down 30%.

d.      UK national dailies circulation fell 7% (avg) between Jan 2009 – Jan 2010 (ABC)

e.      News Consumption trends (Pew Research 2006-08, USA) à

f.        Global online news consumption increased 16% in 2008

g.       January 2010 online readership trends for the UK

Jan 10, UK	Daily unique visitors (in millions)	Monthly unique visitors (in millions)	Month-on-month change	Year-on-year change
Mail online		35.9	13.52%	56.8%
Guardian	1.9	35.9	2.3%	20.6%
Telegraph	1.7	32.4	7.69%	25%
Sun Online	1.3	21.3	4.11%	-2.88%
Times Online	1.1	21.4	9.9%	-6.7%
Mirror Group Digital	.5	10.7	9.61%	60.56%
Independent	.43	9.7	6%	-5%

h.      ABC (US) has altered definition of digital magazine to include editions adapted for new readers such as the iPad, iPhone and iPod Touch, to be included in circulation figures.

 

2.       Will free dailies, funded wholly by ads, work as a model?

a.       Global circulation fell 12%, from 42 million in 2008 to 37 million in 2009

b.      Asian and USA free dailies showed their first ever circulation decrease (3%)

c.       European circulation of free dailies fell 5% in 2008, 18% in 2009.

d.      Trends indicate fewer dailies with lower circulation, and tie-ups with paid newspapers to create monopolistic markets (Metro UK, Metro Sweden, 20 Minuten in Switzerland)

e.      Closed free dailies in Europe: UK (12), Sweden (2), Denmark (2 national, all local), Spain (20), Switzerland (5), Germany (12 of 12). Exceptions: France, Belgium  & other small countries.

 

3.       Will future news & media organizations blur the differences between publishing, broadcasting and technology companies?

a.       Star-Ledger in New Jersey, USA, nominated for seven local Emmys for its video work.

b.      The Telegraph contracts with video management software Ooyala for its websites

c.       Association of Online Publishers predicts 90% growth in online video revenues in 2010. 33% of 82 member organizations surveyed believe this is a priority investment area

d.      New York Times experiments with RFID, etc. to deliver content

e.      AOL hires > 500 full-time journalists, many of them veteran reporters and editors seeking refuge from the business implosion in print journalism. AOL also buys material from more than 3,000 freelance contributors. (Business Week)

f.        US breaking news sites in 2009 led more often by technology companies (AOL News, Yahoo News, MSNBC News) than news organisations (NY Times, CNN)

 

4.       How will news organizations generate revenues? How will consumers, long used to free online content, be persuaded to pay?

a.       Pay-walls for WSJ (for several years, and now all of News Corp’s content), FT (February 2010), Times Online (May 2010), NY Times (January 2011)

i.      FT.com’s subscriber base grew 15% to 126,000 in 2009, as revenues dropped 12%, and profit 47%.

b.      Modularised content (different payment schemes for different sections)

c.       Slabs / flat-fee content

d.      Charging for convenience: Apps

i.      The Guardian’s iPhone app costs ₤2.39, as against free online content, but has been downloaded a record 70,000 times (Jan 2010)

e.      Advertising on circulation

i.      Metro circulation figures grew 3X since it became a free paper;

f.        US advertisers to spend $119.6bn (£80bn) on digital advertising compared with $111.5bn (£74.6bn) on print in 2010 because of the cost-effectiveness of the channel (Outsell). Of US brands’ collective $368bn (£246bn) 2010 ad budget, 32.8% will be spent online compared with 30.3% in print.

 i.      Successful online only models: Salon.com, Slate.com

 

5.       Is the eBooks Reader / Device market convergent, or divergent? Why does it still not have uniform global standards?

a.       ~35 eBook devices in the market, from ~ 18 manufacturers (full list: http://en.wikipedia.org/wiki/Comparison_of_e-book_readers)

b.      ~ 7 proprietary, non-open-standard devices

c.       No universal standards for eBooks or devices. Best known, “.epub”, doesn’t work well with some formats

 

6.       What are the key gaps that have prevented consumer adoption of eBooks?

a.       Lack of standards – lack of clarity, usability, longevity of devices (similar to DVD Vs. Blu-Ray)

b.      The rights conundrum –

i.      eBooks can’t be read across all available devices – lack of universal standards

ii.      extracts copyright restricted across devices  (contrast to the iTunes / EMI model)

iii.      Consumers expect to be able to do as much, if not more, with eBooks as they can with physical books.

c.       The pricing conundrum:

i.      Amazon – Kindle – Macmillan 2010 – different margins for Amazon & Apple

Amazon model		Agency model
List Price	29.95	eBook list	15.99
Discount 50%	(14.98)	Agency fee (30%)	(4.80)
Paid to publisher	14.98	Paid to publisher	11.19
Net to Amazon	(5.03) (based on sale price of 9.95)	Net to Apple	4.80

ii.      Lower prices  increase uptake, but cannibalise sales of physical books. Consumers expect lower prices for books without a physical form. (iTunes model)

 

7.       What’s the impact of electronic readers on the printed word? What’s the impact on publishers?

a.       Digital products accounted for 31% (£1.7bn) of Pearson’s income in 2009.

b.      Condé Nast, Hearst, Meredith, News Corp. and Time join to create digital standards that will allow a wide variety of devices to display their articles properly – December 2009

c.       March 2010: 27,000 books available as apps on iPhone, compared to 25,400 games.

d.      How many publishers are focused on digital strategy? What business are publishers in?

 

8.       What Is The Future of Libraries?

a.       The British Library “holds 14 million books, 920,000 journal and newspaper titles, 58 million patents, 3 million sound recordings”

b.      Is the library replaced by the Internet? Or will the library provide the best catalogue to the Internet?

c.       How will Google’s digitization project (and earlier attempts like the Guttenberg project) impact libraries and the sales of physical books?

How will copyright and royalties be managed in the digitized-book world?