Media disruption

The May issue of Maxim, the US men’s magazine will be mobile-enabled according to this report from MediaPost.

Newsagents carry anything from two to six luxury travel magazines and as I’ve noted here before, it’s a segment experiencing a significant fall in sales. No wornder if you consider the report from the folks at Yahoo Search Marketing who say that 87% of people who go on high-end vacations use the Internet to shop for travel.

Mark Glaser has an excellent blog post about personalised news sites – a ‘holy grail’ of some playing online.

Bill Gates made some fascinating comments about the future of media yesterday as published in The Independent. Consider this quote from the article:

“The tablet is the place where it can all come together,” he says. “I definitely see the tablet, whether it’s textbooks going digital or the newspaper going digital or magazines going digital, I see the person with that very, very thin, – we don’t have it yet today – very inexpensive, high-bandwidth, wireless device… where a lot of the print and video consumption will take place.”

News Corp. is planning to give its website for The Sun in the UK a huge traffic boost by connecting it with its popular MySpace.com community. More here at The Guardian Online. This is the start of what I’d expect to be deep connection of News Corp’s older brands and its recent online acquisitions such as MySpace. Thinking locally, this is why the Fairfax purchase of Trade Me in New Zealand cannot result in a separate operation. Trade Me opens Fairfax to new consumers and new strategies which it could leverage in Australia.

In another story, Rafat Ali, Publisher and editor of the excellent PaidContent.org has posted an MP3 of an interview he did in London with Zach Leonard, Digital Media Publisher, Times Newspapers UK. The interview is interesting because of the discussion of the synergies between the News Corp. acquisitions and their traditional brands. There is also some valuable discussion on mobility.

These two items present a response to the questions posed in an article in The Age today by Shaun Carney. Carney asks what’s big online and how media is likely to change as a result of the media changes proposed by the government. What is going on is generational change. The regulatory changes announced by the government this week don’t even attempt to keep up with the rate and scope of change. We’re already years behind. They pander to proprietors and ignore the small business end of media distribution and product sales. But that’s a discussion for another time.

What people consider to be news and entertainment is changing dramatically as is how they access this. The moves by News Corp., while smart, can only be considered as transitional. News Corp. will be a totally different company ten years from now and the link between The Sun and MySpace will be barely a line entry in the company’s history.

PSPMagazines.com is a site that enables punters to download magazine “snippets” and load them on your PSP. They have content from a ton of magazines – all available free.

It’s fascinating reading some of the spin newspapers publish about Craigslist. The latest is from Saeed Shah in an article at Independent Online. According to Saeed, Craigslist is a newspaper killer. It also infers that Craigslist has just arrived in the UK. It’s been there for ages just as it is in Australia. Despite these attacks the folks at Craigslist remain calm and focus on the community service their site provides. Classified advertising is expensive and the commercial sites are controlled by a few. Craigslist at least offers a free option even if it does have some warts. Journalists and editors need to get a grip. Online classifieds are here to stay and their strength, in part, is due to Craigslist. Articles like this one from The Independent do nothing for the newspaper cause.

“Societies or companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail and fall.

That applies as much to my own, the media industry, as to every other business on the planet. Power is moving away from the old elite in our industry — the editors, the chief executives and, let’s face it, the proprietors.

A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it.”

Rupert Murdoch delivered the 2006 Livery Lecture two days ago at the Worshipful Company of Stationers And Newspaper Makers, a City of London livery company. The full speech is here at Times Online. This speech will be as quoted as his speech on April 13 last year to the American Society of Newspaper Editors. It is a well crafted call to arms to all content creators and publishers and visionary in its outlook.

Rupert Murdoch gets it! He gets that people want content yesterday, no matter where they are. he gets it that people want the content they are interested in and not necessarily everything a publisher produces. He gets it that consumers are in control.

News Corp and the local incarnation, News Limited, gets it. While newspaper sales are strong in Australia, compared to overseas, News is evolving, ached of the wave of disruption. They are setting the agenda in many areas.

Newsagents, the distribution and retail channel established by the publishers in the 1800s need to get “it”, they (we) need to adapt or die.

The Wolrd Association of Newspapers website has a good wrap of news from their Advertising conference in Paris last month. Here are a two highlights:

Jim Chisholm, Strategy Advisor, World Association of Newspapers
The migration of classified advertising from print to the internet is accelerating, according to preliminary results of the third annual World Association of Newspapers survey on the migration trend.

“We are seeing fantastic growth in online classifieds, but it is not enough to make up for the money lost from print classifieds,” says Mr Chisholm, who advised newspapers to put more into their online strategies, and to do it quickly.

Vin Crosbie, Senior Associate, Borrell Associates,USA
The United States is “the epicenter of a seismic shift in the newspaper business from print to online,” says Mr Crosbie.

And the lesson from the USA is this: “speed is of the essence in this shift. Newspapers must serve online advertisers as soon as possible, or forever lose the classified advertising business, plus other forms of online advertising, to ’pure play’ internet competitors,” says Mr Crosbie.

And for some spin?

Gavin O’Reilly, President, World Association of Newspapers, Chief Operating Officer, Independent News & Media, Ireland
Newspapers are competing far more effectively against the rise of digital media than broadcast. “My sense is that traditional newspaper companies first ignored the Internet, then over reacted to it, and then concentrated on the supposed threats it posed (without ever truly embracing it). That is history. That has changed. It is the opportunities – which are numerous – which all newspaper publishers are singularly focused on these days.”

In the last 24 months, more new, innovative newspaper products have been launched than over the prior 30 years.

According to a report by Peter Zollman of Classified Intelligence Report (a paid newspaper industry newsletter), MySpace is moving aggressively into classified advertising. They have already introduced a Classifieds link on the main navigation bar, and classifieds categories for several cities including Melbourne and Sydney. This move by News Corp, owners of MySpace, considerably extends the social networking site into a classified advertising engine. While classifieds are free, there is a revenue stream being chased here. It’s a clever move by News.

Connect MySpace with TrueLocal, Realestate.com.au and the various other News online offerings here in Australia and overseas and you have a powerful business model.

This is a race. In Australia it is between News, Fairfax, PBL and Telstra. While many expected the Internet to lower the barriers to entry for many start-ups, acquisitions and strategic moves by the big four media companies have protected their offline brand investments in the online world.

In the past, advertising was about noise to get noticed because the advertiser and the owner of the medium never knew what those within range were interested in. The search engines changed all that and they continue to change that. Follow this link to a list compiled by ResourceShelf of advertising and search related patent activity for Tuesday March 7. Beyond this one day the list is huge. Knowing what people want or are interested in is the big thing in online advertising. Those who do it right should achieve higher sales for a lower spend. This is why we’re seeing some companies shift considerable chunks of their advertising spend online and away from mainstream media.

While every major newspaper and magazine supplier to Australian newsagents has, over the last year, invested significant sums in online businesses, newsagents have not made any similar investment. While some have developed websites to enhance customer service, none has sought new revenue streams online. In my own case we have started Inkfast to sell ink and toner online. But we’re not a typical newsagency since we have the resources on my IT company behind us. (Inkfast is now 7 months old and selling more ink and toner in a week than my retail store sells in all stationery in a month.)

Publishers are buying online business to extend the reach of their brands. I’m convinced newsagents must do the same. More interest in traditional newspaper and magazine content and lottery product will be satisfied online and this poses a considerable threat to the traffic which has been central to the performance of newsagencies over the years.

While some newsagents are successfully diversifying at the store level, the channel itself is not and I see this as a significant branding problem for all who trade under the shingle of newsagent.

I’m involved in an online start-up (more on that another time) which will actively partner with newsagents but even that will not go far enough in gaining for them a sufficiently viable connect with consumers who live online such that it replaces revenue they will lose elsewhere.

Companies like Fairfax, News Corp, PBL and Pacific are doing what they must do and I have no qualms with their online push. It is that too many newsagents remain oblivious to this which concerns me. Their associations need to educate and advise yet they remain silent.

Just four months after their first sell-out digital magazine conference, the Magazine Publishers of America are hosting a second event: Magazines 24/7: Profiting in the Digital Age. The scheduling of this event so soon after the first demonstrates the importance of a digital strategy for magazine publishers. If I were a publisher I would have been riding the digital wave for some time now since it’s where the growth is – especially in the special interest area.

Here in Australia only a handful of titles are playing actively in the digital space. I expect many more to enter this year. Digital magazines pose a threat to newsagents beyond the loss of sales. In the period of transition, while consumers migrate from over the counter to online, newsagent display of the title helps the publisher. Newsagents cannot cut the titles because of contractual obligations so they have to carry them even if loss making while publishers build new revenue models online.

The fair approach would be to recognise that at the non mainstream end of the marketplace especially titles will migrate online. This should lead to newsagents being paid for providing access to low cost real-estate to maintain presence. The only other option for a newsagent for these bottom end titles is to return them immediately and short pay the distributor account. But that only ends in tears.

MediaWeek this week reports the exceptional success being achieved by the Vogue magazine website. Half the traffic is generated by their forums – the social interaction side of the site. Social networking is a key driver of traffic for MySpace and others. That the publishers of Vogue have achieved extraordinary traffic is a relatively short time will be of interest to other publishers – especially those with readers who are likely to enjoy the social interaction. There will be a tipping point between revenue from the website versus the physical magazine.

Newspapers Next: a project aimed at helping newspaper publishers find disruptive innovation. A project of the American Press Institute this looks like a valuable practical project. Disruption has happened and will continue to happen in publishing. Joining the game in this way helps publishers find a wave to ride. It sure beats publishing stories in your pages that all is well in newspaper land.

Seattlepi.com reports that, Smilebox, an online greetings start-up, has secured US$5 million in funding. The story is three weeks old, sorry. Like any start-up story there is plenty of froth and promise. What makes this interesting is that it’s in the greetings space which hae been largely ignored in online plays in recent years. I’m interested because greeting card sales are important to newsagents. I’ve seen data suggesting that our retail channel has round 40% of greeting card sales in Australia.

Check out What’s Up? by Jeroen Wijering. As he says, it’s an indespensable tool for the global news junkie. It’s thin on Australian news but isn’t everyone? Source: MicroPersuasion.

FOX News yesterday, on the Fox & Friends TV show landed some punches on Craigslist, even calling the free classified site Craigslust. It didn’t matter that the comments were ill-informed. Balance was almost non-existent in their discussion except for a brief glossed-over comment acknowledging a response from Craigslist founder, Craig Newmark. The ‘story’ was that prostitutes used Craigslist’s free advertisements to promote their services. Hmm, and News Corp. has never allowed such advertising; News Corp. has not used breasts to promote newspapers?

It’s one thing for a media company to comment on another, however, such comment ought to be fair, factual and balanced. The Fox & Friends spray was none of these things.

Craigslist has come in for other sprays in mainstream media recently: Boston Herald, New York Times – to list just two.

Craigslist is a tiny company causing significant impact on the classified advertising business. Media companies ought to respond to this competition through their offerings to consumers and not through biased stories.

Jeff Clark is a marketing graduate using the Net cleverly well to find work. Ihiredjeffclark.com is a success already thanks to viral way word of Jeff’s pitch is spreading. I heard about it from Seth Godin’s blog. It sure beats a paid ad using more traditional media.

Alan Moore has posted an exceptional article at Masternewmedia.org. In Brand Experience Replaces Broadcasting: Online Communities And User Engagement Are The Access Keys, Moore covers plenty of ground, all of it compelling for anyone interested in media, marketing and or advertising. The following paragraphs, at the end of the piece, offer an excellent take-away:

The revolution of engagement is built upon the power of the meritocracy of ideas, and the strategic combinations of different media to propel that idea into the world. But more fundamentally than that, it is about connecting large or small communities with engaging content to a commercial or social agenda.

Rather than boiling everything down to a unique selling proposition, engagement marketing is able to create bigger ideas that emotionally engage its audience. Rather than focus on the single proposition that would result in a manufactured communication strategy, engagement marketing is built upon the fundamental notion of shared and co-created experience, something which ‘interruptive’ communications cannot do.

If as a brand you are not also a provider of a valuable experience – go home – hang up your boots and retire. In this new world the key to commercial success is to make your customers successful – understand your customers needs – involve them – engage them – develop strategies that by holding their attention willingly, you can also have a commercial relationship

As a practitioner of cross-platform engagement strategies – I see more and more and more requests for ‘big ideas’ – cross platform strategies. Terms used are of engagement, creative content strategies, which we have advised on a few. Customers you see, embrace the world holistically – funnily enough where-as we marketers like to chop chop chop, everything down into little tiny pieces.

IF ONE THINKS THAT AT THE POINT OF PURCHASE YOU HAVE JUST MADE THE FIRST STEP – WHERE DOES THAT TAKE YOU?

Remove the notion that marketing is ‘adversarial’ and you start to get into a really interesting place – that can be tailored and enhanced by new digital technologies – one in which you can create and co-create value in so many ways.

Customer base is replaced with customer community – all brand interaction should deliver an experience that actively links customers, media and brand in relevant and meaningful ways.

Brand experience replaces broadcasting in its broadest sense.

It is these shared, co-created experiences available to consumers online that we in the bricks and mortar world need to somehow embrace. The MySpace generation are enjoying creating this thing and one only has to see how they wield their power over the ‘owners’. The generation wants more control than the traditional retail offers today. Just as eBay has trained people to negotiate and be prepared to wait.

Moore’s message on engagement resonates on a variety of levels.

Paul Beelen has written an excellent white paper about the future of advertising. Paul works in a creative role for Leo Burnett Santiago, Chile. He discusses the impact of technology on advertising and in particular discusses contextual advertising, the phenomenon of online social communities, blogging and the blogosphere and new language of the age. He also talks about what we used to consider PR as being part of the advertising mix in the online world. The paper is well worth reading.

The World Today on ABC radio yesterday ran the first part of a two part piece on the issue of cross media ownership. The transcript is at their website along with an audio file of the story. It’s well worth a listen.

Any change to the cross media ownership laws must serve Australia and Australians above all else. If the changes serve the traditional media companies, their suitors and or the new entrants in this rapidly changing space so be it.

In my viewwe need are lower barriers to entry, a framework which promotes diversity of coverage and delivery platform.

Further to my August post about the then just announced Playboy digital edition: Christie Hefner, talking about her company’s fourth quarter earnings this week said that they now have over 16,000 subscriptions to the digital edition of Playboy and that new subscriber growth of 50 to 100 a day. That’s a very successful digital magazine launch. No wonder adult magazine sales continue to fall in newsagencies. (Access to the transcript of the Hefner conference call courtesy of medisstockblog.)

The New York Times reports (subscribers only) that the Sports Illustrated swimsuit issue will be simultaneously released on multiple platforms. Content is being tailored from each. This is a good move for their brand and it won’t end there – there are more platforms savvy publishers can use to sell their branded content.

As a retailer I’d like to be able to sell online access and or download tokens with the product – this would at least give me a clip as readers crossover to become viewers. Okay so it may speed the crossover but I think not.

The new Macquarie Radio online video service takes the radio network further online by offering regular news updates for download and playing in iPods and similar devices. While the video casts are pretty basic at the moment, they are a start. With some better video content and some funkier production values this could achieve their goal of connecting with a new audience. It will be more interesting if they use this new medium for chasing a new audience for their existing programs – beyond the current podcasts for Alan Jones et al.

More media companies will embrace online by releasing previously packaged content for per story purchase and download. I’d expect magazines especially to look at the Macquarie move and consider making their best stories available for download. Punters who love Angelina and Bard, for example, will be able to buy all the stories about the two rather than buying a whole bunch of magazines.

The stories want to be freed.