Welcome to Market Revolution's blog

Thank you for visiting Market Revolution's blog.

We live and work in exciting times - revolutionary times. Technology continues to recast the media industry.

The extraordinary advance of affordable personal digital technology and the stellar rise of social networks are both distrupting and transforming the media market making this a unique moment to be involved in the convergence sectors we focus on.

This is also our place to ruminate and comment on the world as we see it, we hope you enjoy and please join in.

Thursday, 28 May 2009

Newspapers - a news medium like no other

I don't know whether you've been to see the movie State of Play starring Helen Mirren and Russell Crowe but I just have and I was reminded how important the role of newspapers is.

Its not that its a great film it isn't but it does make the point that newspapers serve an important social function. It deals with the newspaper versus blog debate really well. It illustrates the importance of quality reporting, the significance of evidence gathering and fact checking. And crucially it reminds use of the power of newspapers to break the big and important 'public interest' stories.

Not that we need Hollywood to reiterate the importance of newspapers. The Telegraph's handling of the MP's expenses story has been exemplary. There is just no way that online channels alone could have found the audience and created the impact that the newspaper has. I doubt that any other media channel even TV could have landed the punches, provided the critical detail and held the MPs to account like the newspaper has.

I am not as worried about the life expectancy of newspapers as many other commentators are as I know that newspapers serve a big and important purpose for millions of people every single day and they will adapt and flourish.

Its high time that newspapers found they mojo and came out fighting. This is not the moment to surrender its the time to fight. There is no doubt that the public will continue to pay for quality, evidence based journalism at the news stand and yes online.

As someone really smart said recently the problems facing newspapers aren't the result of a circulation recession they are the result of an advertising recession. The problems are financial and the issue is commercial. The newspaper industry can and will work it out.

Wednesday, 27 May 2009

Russian Firm Invests$200 Million in Facebook

Facebook has had to search far and wide for this investor. There were no shortage of willing investors closer to home but none at the $10bn valuation Facebook were set on.

Even at this eye watering valuation it still represents a 30% discount on what Microsoft bought in at only a couple of years ago.
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Thursday, 21 May 2009

DMGT in the red

Daily Mail & General Trust said Thursday that it swung to a net loss for the six months ended March 29 of 172.9 million pounds from a profit of 58.5 million pounds a year earlier as revenue for the period fell 7% to 1.09 billion pounds. Adjusted pre-tax profit fell 47% to 77 million pounds, but was still ahead of the consensus forecast of 67 million pounds. The group said its business-to-business operations were resilient, helped by currency gains, but that the overall results were badly affected by the impact of the recession on its consumer media advertising revenue. The group said it expects results for the year to be in line with the market consensus and said its focus remains on delivering revenue and cost initiatives, which are now expected to be around 150 million pounds

(source: Marketwatch)
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Wednesday, 20 May 2009

Former Telegraph owner granted hearing into bid to overturn fraud conviction

Conrad Black, the disgraced press baron convicted of embezzling more than $6m by a Chicago jury in 2007, is to have his appeal heard by the US supreme court – an extremely rare distinction granted to just 50 or 60 of the 10,000 people who petition for a hearing every year.

Monday, 18 May 2009

thelondonpaper - unsustainable losses?

News International published results for its free London afternoon newspaper thelondonpaper last week.

Compared to the first 10 months of operation (September 2006 - June 2007) the paper lost less money in the next 12 months....

It lost ‘only’ £12.9m against £16.8m in the first 10 months.

How long can James Murdoch sustain these losses?

Well one thing is for absloutely sure, he isnt publishing out of love and a desire to entertain the commuting London public! He is prepared to sustain these losses for now in the hope and expectation that NI are successful in their bid for the lucrative and strategically critical morning distribution slot (currently held by Metro).

James wants and needs the slot to defend The Sun and The Times in London. Its a classic defence strategy. If they lose the bid (or its just too expensive) then I dont think the paper has a chance. Its toast.

Independent News & Media signs standstill deal

Independent News & Media has signed a standstill deal with its banks and bond holders and has secured another 15 million euro of working capital.

The deal ends on June 26.

That effectively means 3/4 weeks to get something hammered out and finalised with bond holders.

These are nervous times for the Indie. While the Indie frantically tries to find salvation its competitors (whilst they don't wish to see a fellow title go down) relish the chance to provide a 'home' for homeless Indie readers and bolster there own flagging circulation. Plans have already been drawn up and are ready to be executed.

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Wednesday, 13 May 2009

More eyeballs don't equal more revenue either.....

The average person in the UK watched 17 hours and 24 minutes of commercial TV a week for the first quarter of 2009, according to the Broadcaster Audience Research Board. This represents a 1.1% increase in commercial TV’s share of total broadcast TV to 63.5%.

Sounds like great news for the beleagured commercial TV sector, larger audiences must mean more money? In the same way that newspapers have never been read by so many people in their history before, thanks to digital, more eyeballs just don't equal more revenue.

Channel 4's merger with BBC Worldwide moves ever closer we hear, more to follow on that when the picture clears

Why online don't add up

Fascinating interview with Rob Grimshaw FT.com publisher on paidcontent.org

Here's an extract that brings home the realities of online advertising

"If you're aiming to make $50 million a year from your online advertising business, which is not massive, you're going to need 833 million page impressions per month at CPMs of $5 a time. If they drop to a dollar, you need 4.1 billion!"

Basic point is that online publishing operations are unsustainable in its current form. They need additional revenue streams.

2 options:- charging for content and monetizing customer relationship through direct sales of goods and services

News Corp are leading the way on pursuing both these options. Rupert has very pointedly and publicity stated that his organisation will start charging for content. And his newspapers in UK have formed a new department to drive up ARPU (average revenue per user).

Interesting times but its great to see newspapers so actively pursuing growth strategies.

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Wednesday, 6 May 2009

New York Times To Offer Kindle-With-Your-Subscription Deal


We forecasted this way back when on this blog and finally a publisher is giving it a go. Giving subscribers a free reader and the content over the air is brilliant and is the future. It will not only save money (yes it will - no more trees, print, ink, wholesalers, newsagents, vans etc) but it will enable NYT to reward subscribers with added value offers etc.

Welcome to the future and the beginning of newspapers return to form.

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Tuesday, 5 May 2009

NMA - making things worse for newspapers

My colleague Craig in his post below asks for comment on the performance of the Newspaper Marketing Agency (NMA)

The NMA is front line defence of the newspaper model and front offence in articulating newspapers' attractiveness. The NMA is doing a very poor job at both.

For starters it's all important press advertising campaign is old and totally ineffective. Quite frankly it would not persuade me (and I'm an advocate) to consider\reconsider newspapers for my ads. In fact, it would harden my views that the medium is old and out of ideas.

Surely the NMA can dream up something that captures the power and influence of newspapers as an effective advertising medium.

Moreover, the NMA seems completely mute in the PR battle. There is actually lots of good news out there that isn't getting out. Why do we, for example, hear about Google and Twitter and never ever about the reach of newspapers? Why are the only voices negatives ones?

The Newspapers publishers (who run the thing) should demand a complete clear out at the NMA. Replace everyone there. Boost the energy. Boost the competitiveness. Boost the creativity. Boost the thinking!

Problem is - I suspect - that certain influential members of the Board are not hugley motivated to promote the attractiveness of newspapers per se preferring to push their own titles and watch as industry numbers shrink. In USA they call this the 'last man standing' strategy.

Monday, 4 May 2009

Boston Globe update

As suggested in an earlier post the decision to close the Boston Globe was brinkmanship between owners and Unions.

Latest is that New York Times Co. has postponed its threat to close the paper in 60 days after reaching tentative agreements with several unions.

Not sure this spells the end of this spat rather the end of round one. Much more to come as the Globe fights for its life.
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Boston Globe

The Boston Globe will shut in 60 days, The New York
Times Co. announced today.

You may remember that management was seeking $20m in concessions from the Unions which were not forthcoming.

Now the decision is reversible so one imagines (hopes) this high stakes brinkmanship.

The clock is ticking..........
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Sunday, 3 May 2009

The Sunday Times Business section remains a must read for us on a Sunday morning. Three things worth a thought today.

Setanta in financing struggle isn't new news, but reminds us how hard it is to challenge a dominant player with much deeper pockets, without enough killer content. It doesn't look good for them right now, bad time to have lost so many Premier League games going forwards.

Second thing is the page 6 article on US newspapers and their rate of print closure. Again this isn't new news, either on this blog or the wider media. It is good to see though the thoughts of Gordon Crovitz, former publisher of the WSJ, making the point which we strongly believe in. Newspapers have given their content away for free online, and find themselves unable to realize sufficient ad revenue alone to make it pay. His view, which we endorse, is that technology like the Kindle and iPhone allow a new distribution channel which can be charged for in future. Not an easy task, but it is an opportunity to reverse the free content drain.

The article, which has a distinct tone of newspapers are dying, and print is becoming anachronistic at a rapid pace, sits next to an ad from the Newspaper Marketing Agency, strapline "Newspapers Deliver". Hmm. If I was sat in NMA's office right now, not sure I would be that happy with the placement of their good news message. However, the value of the NMA should be at its absolute peak right now in these desperate times for the industry. Is it? I'm not sure, can anyone shed light on their performance recently?

Brown on Youtube

Gordon Brown's YouTube video of him picking his nose has been watched 630,000 times and the video of the Tory MEP Daniel Hannan haranguing him in the European Parliament has attracted more than two million hits.

These of course are unofficial uploads. It seems he does rather less well when using the channel formally. For example, his now politically infamous video message on MPs' expenses has been watched only 4,000 times.

Now rather disgracefully the PM has ordered the Number 10 tech team to disable the comments function. In doing so the public have been denied their right to free speech and feedback and Gordon has demonstrated his lack of understanding of the medium.

We say stick to press interviews Gordo.
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Friday, 1 May 2009

Saddest sight

One of the most graphic illustrations of the dire state of the newspaper industry greets me every morning as I head in to work.

Stood outside the remodelled Hammersmith tube station is a newspaper vendor. He is selling The Times. He is there whatever the weather from 630am. Same guy everyday. He presses tube goers to buy with energy and conviction. "Morning Times, Morning Times".

Now you would have thought that having a persuasive and committed sales agent pitched in front of one of the Capitals busiest transport hubs would make for good sales performance. Sadly not. I pass everyday and have done for months and I've seen one copy bought. Me and my fellow passenger shuffle by avoiding the sales gaze. Now maybe most people have bought their daily paper before reaching the concourse there are many newsagents from which to do so. Maybe but unlikely. My observation is that the majority choose Metro, a magazine, a book or nothing preferring to play with phone or ipod. This morning for example in a carriage of 18 travellers there were no paid for readers; 9 Metro; 3 Magazines and a book.

Anyway back to the valiant Times vendor...this morning I saw him briefly show his frustration as he slapped his newspapers back down on to the rack. Not surprising really this guy has a hard and thankless job. He should be rewarded and rested.

Roll on the day when those that want a daily newspaper are given an electronic reader and the content comes to them. It might spell the end of the vendor but the beginning of a modern vibrant newspaper sector that distributes its product in a way people wish it to receive it.
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