History, Trends and Digital Changes in Media

Digital Music News have taken RIAA data and produced an interesting animated graphic of the changes in music purchases over the last 30 years. We strongly recommend that you view this as it shows how transient some technologies are and how it’s not just the technology that changes but how people buy and relate to media.

It would be great to be able to step forward and predict what will happen in the next twenty years but many of us would be struggling to see further than the next five years.

What is interesting is that the base content hasn’t radically changed, a song is a song and a recording is a recording and music made decades ago now lives comfortable alongside that made yesterday. In some cases the technology actually impeded the quality of the recording and forced the extremes to be toned down to fit.

The other interesting thing is that emerging music format technologies cannibalised their predecessors. 

Cassettes replaced vinyl, CD replaced cassettes, downloads replaced CDs and now streaming is replacing even downloads. We are moving to music on demand which is either paid for through other means, or is on subscription. This changes the question of ownership, collections, sharing and of course the reward earned by musicians, writers and producers. It also can change how we protect or identify usage rights and copyright ownership and some would suggest that the new technologies are more secure than all the belts and whistles of the early music DRM days.

If we produced a similar graphic for books, newsprint, film, tv they all would be different and we need to understand why and what similarities there are. Film and TV are probably the closest to music in the technology step changes, but differ in many other upstream ways. Interestingly the original formats of books and to a degree newsprint aren’t going away and it is easy to see books as the most resistant to technology.

However, all bar newsprint, show very similar patterns to the consumer trend from ‘buying to own’ to ‘subscribing to access’. Yes, the sectors are often moving at different speeds and even different directions but the trend is clear. DRM as we know it today is transient and past its sell by date and will become increasingly irrelevant in a streamed world where it happens albeit less obtrusively.

Therefore some would suggest that the challenge for book publishing is not the latest tablet, ereader, smartphone, app, enhanced ebook, but how we accommodate subscribing to access alongside the traditional buy to own, enabling both to flourish and appeal and importantly reward creators.

   

Bezos Enters Newsprint World

Jeff Bezos has thrown down the gauntlet to the newsprint world and is acquiring the Washington Post for $250million.

The questions as to why and what he intends to do with the newspaper are speculation today but the news itself is a significant step to expand Amazon’s reach to all and potentially change the way newsprint operates.

Does this mean Bezos intends to be the new Murdoch and build a media empire? Probably but we would suggest that unlike Murdoch he will not need to buy up the individual presses but merely exploit and expand the one he now has and build a brand that is local, international and importantly individual and this could also involve classifieds and further complimentary purchases.

Forget the rhetoric that will prevail over the next few days, the move is a significant one when you view it alongside his portfolio of offers and his ability to effectively cross subsidise services and offer bundles of books, films, audio, music, technology, marketplace, community and delivery services etc on a truly global manner. Amazon was built on a global brand, vision and offer and that is what differentiated them from many pretenders in many of their propositions.

It is easy to envisage Amazon Singles now expanding in a logical and different direction and this was evident with their latest news piece last week. Their ability to customise the news alongside your tastes and interests in other things, your location and serve them up over Whispernet and their cloud services is formidable and not one that others will easily replicate. However the interesting thing is that Bezos steps in and buys the basics unlike his main competitors who merely offer a marketplace to all. It is this commitment to get involved in the core business that truly differentiates him from the others.

It is going to be an interesting time for newsprint, journalists and classifieds and one where many will now have to look over their shoulders and watch change as it happens.

The story from the Washington Post

image David McNew/Getty Images

Newspapers and Paywalls

We wrote only this week about the poor figure The Times had since their paywall went up and now sister papers, the Sun and The News of The World, appear to be moving towards implementing their own paywall policy in October. Some would say why not and better to get the cash in the door than give it away free. Others would point to the poor figures from the Times paywall and ask, is it wise.com?

The material in the Sun and The News of The World isn’t highbrow or necessarily intellectually stimulating and therefore it could be said that advertising would be a better route to get revenues. However, if readership numbers online tumble, the adveristing will surely follow in the same direction.

Some believe that the video and celeb trash stories will still generate readership and after all the Sun and The News of The World have lived on the back of this for ever.

It appears the Murdoch is determined to erect his paywall.

Meanwhile the New York Times still is to implement its promised paywall but it apparently testing a paywall on the Telegram & Gazette in Worcester, MA. The paper hides certain local content behind the paywall and gives the rest away. The theory obviously is that local content is valuable. Interesting thought in today's internet world.

News Magazines

As news magazines such as Time and Newsweek struggle this is an interesting interview with Michael Hirschorn by The Atlantic. It discusses how The Economist in a global world has succeeded where others have struggled with a parochial world and offers some interesting thoughts.

Like pulling a Car With a Horse

Mike Elgin in Computerworld offers six reasons why people will next year drive e-book reading to levels that will surprise just about everybody. They are interesting and logical and we have summarised these with our thinking. To read the full article; ‘Here Comes the eBook Revolution’

1. The economy. In the current economic climate people will turn to devices such as the Kindle which pays for itself after the purchase of 20 or 30 books and offers savings on books, magazines and newspapers.

This is not a sound argument as how many people today read 20 to 30 books? The kindle itself demands upfront investment which people will be reluctant to do. Finally the readers now have to compete with smart phones. We believe the economy will drive consumers to look at alternatives and bargains but question the Kindle logic. However we believe that ebook appeal will grow in this climate.


2. The environment. ‘Interest in protecting the environment just keeps growing and growing. The idea of getting a daily newspaper or a weekly or monthly magazine on paper seems incredibly wasteful to the point of decadence. Environmental consciousness will drive e-book acceptance.’

We fully support this logic as it is clearly visible today and the newsprint and magazine sectors are in deep pooh today. However books are not as environmentally unfriendly in themselves only in the sale or return practices, over production and poor inventory management. POD is starting to get the eyeballs as a solution but we must also beware the electronic equipment is not friendly when we strip it down.

3. A publishing revolution. ‘The book publishing industry is one of the most backward, musty, obsolete businesses in our economy. While every other kind of information moves at the speed of light, the process of publishing a book is like something from the Middle Ages.’

Does this drive ebooks or simply change the publishing value chain? It’s a chicken and egg debate. We agree that the old model is under serious pressure and new ones such as self publishing and digital production are challenging the old ways. Ebooks, digital content, digital marketing, pod, digital workflow are all parts of the solution but ebooks by themselves are not the major driver.

4. The rise in aggressive e-book marketing. ‘Like the move from silent pictures to "talkies," the transition to electronic publishing will prove fatal to laggards. Those aggressively pursuing and developing e-books will rise to take control of the publishing industry. Part of this revolution will happen in e-book marketing.’

Digital marketing is not about ebooks and here we seriously differ in our opinion from Mike. We believe that digital marketing offers a huge opportunity for all but also it offers this for both physical and digital content. The biggest potential change that publishing faces is moving from basic information to rich contextual information that unlocks that which today is often hidden or disjointed. The impact will be greater than at any time and everything you ever wanted to know will be simply a click away. Some will say that tying this to eBooks is naive.

5. A rise in books written for electronic reading. ‘The shift from print to electronic will change the nature of the book itself. Many books will be shorter. They'll be more timely and culturally relevant. They'll be more colourfully and engagingly written. And they'll go after young readers like nothing before’.

Here we must fully support Mike. The idea that books must be 75,000 words and 256 pages is no longer relevant. It was more out of an economic model that was based on paper. The challenge is to not merely migrate books written for paper, break the jacket and convert them to ebooks. This is like expecting the first cars to be pulled by horses!

6. The decline of the newspaper industry. ‘And, finally, the newspaper industry is dying. …Newspapers that embrace e-books will survive. Those that don't, won't.’

Newsprint and magazines are not ebooks and this where the logic falls apart. Newsprint will migrate online and still has to find a way to do that economically but it is not a book. The argument is like saying everything we digitally read will be an ebook- it won’t and the question it raises is , what is an ebook? But more on that later.


We believe that Mike may get the result but the game and issues will be different but clearly the game is getting serious and is in play.

Is it Wise.Com - newprint on demand?

Imagine going into your local newspaper shop and being offered 890 newspapers from around the world, some 81 different countries and 38 languages. Today’s cosmopolitan society can read their own paper, not a day later, or shrunk to a foreign edition, but today and in full.



Sheth, manager of Zyn s News & Cigar on Greenwich Ave. Connecticut has embarked on this interesting print on demand venture last spring. NewspaperDirect, a Canadian company headquartered in Vancouver, puts the papers on its Internet system and then sends them to dealers such as Zyn’s.

Sheth's printer cost $30,000 to $40,000. A printout of a weekday newspaper costs approximately $3.50 to $6, while the charge for a weekend paper ranges from $7 to $10 and are based on the number of pages printed. It takes up to 15 minutes to print copies on both sides and to the paper’s format.

Customers can subscribe, call ahead, request colour and request back as far back as one year.

Given the technology investment and the low cost of the newsprint the capacity constraints and also community demand it makes us wonder at the wisdom of the approach.

Harnessing the Publishing Network

The new market challenge is not traffic but turning networks and their traffic into money. Anyone can dream up a new service, or feature, but making it pay its way can often be hard. People often think that business models will remain the same or similar and those sales will grow expediently to accommodate all. The reality is that change brings new challenges that often confront the existing models.

What was the result on the music sector from the changes that the many P2P players such as Napster and Kazaa brought? Not only did their change the format, delivery, the breadth and range of tunes available and price perception, but ask where all the High Street music stores are today? When iTunes entered they found a way to channel sales and collect money. iTunes succeeded not because of the iPod but because Apple understood how to make money out of the latent demand for tracks. It joined the dots between consumer demand, an aggregated online repository and download service and an iconic device – simple but the best are always that!

When we look at newsprint we see new entrants in the form of the Internet news alerts, news aggregated services such as Google , the emergence of advertising options such as Craigslist and the new reporter - the blogger. Some newspapers will stand on the shore line watch the incoming tide and close their eyes. They can’t envisage the world without the authoritative watchdog journalist, printed copy and the profits they previously enjoyed. But the Internet doesn’t respect tradition it can democratise news and enable it to be not one way but a two way experience.

People now demand ‘my news’ tailored to meet their needs and tastes and they can do it in a heartbeat. Although the online subscriptions lights continue to flicker it’s only for a few who can command a price, for what is in the main, public domain news. The trick newspapers failed to do was to offer a customised service across newspapers and newspaper empires, but if network collaboration wasn’t in their dictionary it was in Google’s and Craigslist’s.

The Internet is about money and finding ways to make money from it is the game. Google was not the first search engine nor necessarily the best at the start, but what it understood was networks and how advertising revenues could be driven from people’s searching habits. It helps consumers find stuff on the web they could never find on their own and advertisers buy traffic. Simple, yet so difficult.

We now have to ask ourselves how we prepare for change, who will be the potential winners and who will be the potential losers. It’s not good enough to sit on the fence and watch, you have to participate. The hardest challenge is to get competing forces to recognise what they compete on and to start to collaborate on the rest in order to make a new offer that is different because of the collaboration. One of the best examples in publishing was the Crossref initiative and organisation one of the worst examples is the rights registry giveaway to Google. Collaboration is very difficult for most organisations, with every employee seeming to have ‘we know best’ running through their genes. Harnessing the huge publishing network offers the biggest opportunity, operating individually offers the same opportunity to others.

Newsprint Futures?

World Digital Media Trends 2nd report, which was compiled by 71 research groups was released last week at a meeting of the World Association of Newspapers. It reported that:

- the digital platforms of newspapers are growing at a double-digit rate worldwide
- mobile advertising revenues are expected to increase to about $150 billion worldwide.
- the number of wireless device subscriptions is expected to increase to 3.4 billion
- the mobile telephone customer base has increased from 945 million in 2001 to 2.6 billion in 2006.

Has the printed tabloid, which is some 100 years old, had its day?
Will newsparint now loose out and Internet which in term will become the primary news and information source over the next few years? Will newspapers migrate their ad funded business models to the Internet markets or will the dominant search engines take the advertising revenues?

Newspapers and journalism work today in the printed form but as the market shifts will the relationship continue or will it change? We all assume that life cycles remain with the same players merely adapting to the change but that is not always the case. The next decade will be an interesting one to watch in newsprint both it terms of the delivery of the news to the market, the relationships between the journalists, editors and owners, where the advertising spend goes and the business models that develop.