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.

Monday, 31 August 2009

Making up for lost time

Its been well documented that news organisations have been asleep at the switch when it comes to digital.

This fact was brought home in no uncertain terms by recent research report by the publishing insight firm Outsell who found that news organisations' digital revenues were just 11% of their total revenues compared with 69% for the broader information industries which includes legal and financial data providers such as Reed Elsevier and Bloomberg.

The good news, however, is that the news world is finally shaking off its apathy and galvanising. Tough decisions still need to made, innovation must be allowed to shine through and critically the end-user\consumer must be foremost in decision makers minds.

There is much lost ground to be made up and lots of new ground still to be broken but I can't help but feel there is much to optimistic about.

Wednesday, 26 August 2009

Channel 5 revenues down 35%

Busy day in media world today, with Channel 5 reporting a 35% drop in revenues and a £44m loss in the first half of the year. We've given ITV a lot of focus in 2009, so it's interesting to see how the smaller of the terrestrial channels has performed in these tough times.

As the number 3 in the market (out of 3) Channel 5 was always going to be hit hardest as the recession took hold. However, it made me think about the last time I actually watched anything on Channel 5. And I couldn't remember anything, apart from maybe some of a UEFA Cup (as was) footy game last season.

Content is King, whether print, digital or broadcast, and while it's stating the obvious, if you don't give me a reason to watch, then I won't - there's just too few hours in a week and too much better choice.

INM agree another monthly stay of execution

Sounds like INM have agreed another month of standstill in their fight to sort out their debts and continue as a viable business, having lost 80% of their value in the last 12 months. This makes it the 4th month in a row that they have managed to postpone the release of the guillotine blade.

18 months ago, the talk was all about the struggle between O'Reilly and O'Brien, and much was made over the very public fight to gain control of the business. Seems to me that if the Board had been more focused on the external environment and its effect on the numerous businesses, rather than on the internal power struggle, INM may have been in better shape than it currently is, as they look down into an empty basket with all the hairs on the back of the neck standing up.

In the meantime, the Indy continues to lose circulation in the UK, making it less and less attractive on a daily basis for any potential purchasers. I wouldn't buy it now, too much damage has been done in a very unforgiving market.

WPP report 47% fall in profits for first half of 2009

No cheerful news from Sir Martin today, reporting a 47% fall in profits across the WPP Group for the first six months of the year. Tough times across all territories, with like-for-like revenues down 8%.

WPP is a good barometer for the marketing services sector worldwide given its size and breadth of businesses, so it's a good reflection of what's happening to marketing and insight budgets in 2009. Interviewed this morning, Sir Martin said that the year had been tough and disappointing, but next year would show an improvement.

With budgets being squeezed so tightly, smart planning, targeting and effective measurement of investment become ever more important. And this separates the good Marketing Director from the average. There's no room for average in 2009, as many businesses are finding out the hard way.

Monday, 24 August 2009

Life without technology

I've just returned from a week away on holiday, where my iPhone reverted to its most basic functionality - voice and SMS, and non-internet connected Applications.

Things I didn't miss - hundreds of emails a day.

Things I did miss - sports updates, internet access, real-time mapping, Facebook, Twitter, Linked-in, weather updates, google searches, the world at my fingertips.

Life, and technology, has moved on so far in ten years. It was quite odd to be unconnected to the rest of the World - a properly "switched off" week away.

Sad, or a fact of life in the Brave New World we live in?

Friday, 21 August 2009

Trinny and Susannah do America

Congratulations to the hardest working girls in show business Trinny and Susannah who are in the US whipping up a media storm promoting their new network television show on TLC.

Here is todays New York Times Style Section.

Now we have a bit of an interest in this as we are the girl's business partner and we have just redesigned their website which launches tonight and we will soon be re launching them as an online 'recommendations' brand.

Watch this space.

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thelondonpaper closure creates ripples in the market

So what would you do if you were Associated Newspapers in response to the news News International are to close thelondonpaper?

Well the very first thing you would do (once the celebration is over and the hangover has subsided) would be to close London Lite, their loss making free newspaper immediately. Yes you would and with a great sign of relief

Or would you say to yourself the demise of the competitor means more ad revenues for London Lite? You might, but you would be foolish to expect spike in ad revenues. It just doesn't happen like that.

Or you would rebrand and run Metro in the afternoon as well as the morning? This is an interesting thought. It leverages a strong consumer brand and gives advertisers the opportunity to get 2 Metro impact hits a day. Readers get improved content coverage from a trusted source (altho inevitably there will be story duplication/repetition)!

I think that London Lite will close - not immediately but soon. And not for the reasons stated here but because I suspect a deal was done between Associated and NI to cease the expensive and non sensible free newspaper hostilities by closing one and then the other.

Thursday, 20 August 2009

Fashion Magazines - ad decline snapshot from US

Scary report card from top US fashion magazines. Look at the size of the year on year declines. Its particularily scary as 2008 was a poor year in its own right.

So whats happened to the advertising money? Are these declines simply due to budget constraints or is there something else at play? Well, the answer is, we believe, a bit of both. There is no doubt that ad budgets have shrunk (september's normally bumper issues are looking decidedly thin) but these numbers also reflect advertisers desire to find harder working channels. Lifestyle sites are the main beneficiaries. We hear, for example, that Glam Media who has a network of sites delivering 110 million unique monthly visitors are doing very, very well right now

Video Ads in Magazines

Pepsi break new advertising ground in the US next month with a full motion video ad in the magazine Entertainment Weekly.

Made possible by a wafer thin video screen built into the page supplied by a company called Amerchip the technology works much like the moving pictures of the Daily Prophet newspaper seen in Harry Potter films.

The cost of all this is prohibitive right now (estimated to be low seven figures for 100,000 copies) but soon(ish) such advertising strategies will be common place when electronic paper is the order of the day. And that time is coming.

Wednesday, 19 August 2009

More pointless babble?

More intriguing comment on Twitter released today by Pear Analytical, a US based Market Research company who, after constant analyses of tweets, found that 40% of all the messages on the website were deemed to be ‘pointless babble.’

This, it is fair to say, is utterly staggering for two reason. Firstly the way the analysis is presented in the media suggests that the 40% in question is far too much, which begs the question what is a tweet? Surely the whole point of the website is to constantly talk ‘pointless babble.’ Indeed my overall impression of the twitter experience is that the most interesting tweeters tend to be those with verbal diarrhea who simply don’t know when to stop talking; sometimes I do want to know that Bumble is having a pint or that Scoffe is listening to his ipod. This has to be the point of it all. It is certainly not designed for insightful political comment or encouraging democratic debate, it is unquestionably supposed to be humble and simple mumblings and musings.

Which brings us very neatly to the second reason; if only 40% is ‘pointless babble’ then what on earth is the other 60%? Is the research suggesting that the other 60% of tweets on the site are of value? If this is the case then is Twitter actually becoming a media tool? One would suspect not nor should the site have any pretentions to become one. If it is to survive then it should do so by the sheer weight of people’s interest into the everyday and mundane of normal life rather than by the media hype it courts and develops.

Ryan Kelly of Pear Analytics sums his opinions of the twitter phenomena by saying it is ‘a source for people to share their current activities that have little to do with everyone else.’ For some that is unquestionably what makes the site so interesting.

Tuesday, 18 August 2009

Readers Digest files for bankruptcy

The Readers Digest is the latest media deal struck at the peak of the credit fuelled buy-out market to head into bankruptcy.

Launched in 1921 the Readers Digest is one of the world's largest publishers with 94 titles and a claimed global readership of 130m in 78 countries.

Private Equity investors led by Ripplewood Holding loses their entire $600m investment. Ouch

So what went wrong?

Ad recession didn't help - revenues had fallen 18.4% last year and a further 7% in the first six months of this year. But the business had stabilised since with Group revenues down just 2% this year.

But the real killer was the weight of debt, a wopping $2.2bn taken on by the private equity buyers to make the acquisition and as cash flows came in less than they forecasted it struggled to meet its $27m interest payment.

We look forward to the Reader Digest emerging from its voluntary bankruptcy stronger and better able to deal with the new economic reality. We hopeso as we know and like this business. Interestingly the RD is one of the pioneers of direct marketing, a big believer in market research to shape content that readers want and it from the beginning it understood what other publishers are only now beginning to get their arms around namely the value of reader relationships.

Here in the UK the magazine was for awhile edited by our friend Sarah Sands (now Deputy Ed at the Evening Standard).

Get the debt under control and get back to publishing a great read that is beloved by many millions across the Globe.
Toby Constantine
Director | Market Evolution Ltd

Research | Analysis | Insight | Advice | Action

Sent from my handheld

Monday, 17 August 2009

Financial trouble is very much in vogue.

The ‘worst advertising recession in a generation’ has now affected previously untouchable high end magazines with the news that Conde Nast, the publishers of Vogue and Vanity Fair amongst others are having to make dramatic cutbacks and financial improvements in their housekeeping. A commissioned report by management consultants McKinsey and Co has found that the publishing giant fritters money away needlessly on parties and expense accounts and that cutbacks are to be made if the profit margins are to remain in the black.

The news has caused quite a stir in the American office of Vanity Fair US and an urgent sense of frugality has enveloped the ethos to such an extent that the previously heavy spending editor, Graydon Carter, who has a justified reputation for daily lunching in the more fashionable restaurants of New York has recently reportedly been frequenting the Office Canteen with alarming regularity.

It is pleasing to see that even the high end branches of the media are suffering the same effects of the recession and it will be interesting to see how, with the digital evolution taking shape for magazines, the luxury market recovers its advertising from companies who are in turn suffering from a down turn in profits and prioritising of finances.

Friday, 14 August 2009

Evolution within the market

With all the talk of paying for online content filling various media outlets it seems a good time to have a slight reflection on what consumers actually pay for online and what they may be tempted to pay for. Accepting that the face of the internet has changed dramatically in the last five years it is fair to assume that within the next five years it will change even further. This therefore brings to the fore a whole new range of internet consumers who are still in their teens, regular surfers but not yet regular purchasers . These are the constant Facebook users, MSN addicts and Social networking junkies.

One might presume that the youth of today do not use Facebook as much as regular office workers tend to, but that would be an easy mistake to make. Whilst “Pay as you Go” mobiles are cheap, contracts are only available to those over 18 and so most social interaction for teenagers is on the websites of Facebook or MSN. If either of these sites were to start charging in the near future, which indeed they may, many youngsters would still continue to use them for a small fee, undoubtedly cheaper than a mobile and with potential free SMS included, then the internet will be creating a whole generation who are already used to, and indeed expecting to, pay for content. Evolution within the market.

Charges are coming and will be around for a very long time.

Unlimited travel for $599 on Jet Blue

Much akin to an all-you-can-eat buffet or an all-you-can-read digital magazine subscription, New York-based airline JetBlue now offers customers a month of unlimited travel for USD 599.

Announced yesterday, JetBlue's All-You-Can-Jet offer lets anyone buy a pass that's good for unlimited trips to any of the airline's 56 international and domestic destinations between September 8 and October 8 of this year. Pass holders will have access to every available seat on every flight—no limits on seats, and no blackout dates—and they can book travel up to three days in advance of their trip. The only requirement is that they sign up for the airline's TrueBlue loyalty program before booking flights; buyers of an All-You-Can-Jet pass will also be awarded 35 TrueBlue points for their purchase.

Maybe BA should consider something similiar in the UK given its dwindling passenger numbers and flagging revenues?

Tuesday, 11 August 2009

The Economist - one-issue subscription

The Economist has launched a single copy subscription service that allows readers to order just one copy of the magazine for home delivery the next day.

The Economist Direct allows UK readers to place an order online or via text message for a single copy of the latest issue of the weekly publication.

The service does not require readers to commit to subscribing to the magazine for any period and the cost of the magazine is £4 — the same as the newsstand price.

"We think Economist Direct presents an exciting new route to market and a fundamental shift in how we think about more casual readers," said Isaac Showman, marketing nanager at the Economist.

"The service offers an amazingly straightforward and convenient way to buy The Economist in the UK and is, we believe, the first such service offered by any newspaper or magazine.

"Economist Direct also allows those who don't want the commitment of a weekly subscription to have The Economist delivered to their door."

Thursday, 6 August 2009

Reason for optimism

Newspaper Web sites attract 70.3 million unique visitors in June, representing about 36% of all Internet users, according to a new Nielsen Online study commissioned by an American Association of Newspapers.

I wonder whether there isn't still a kind of audience vanity that continues in newspapers today?

These high volume audience figures look nice but the audience doesn't pay at all and the advertisers don't pay enough.

We know that charging will reduce the size of audience but surely a smaller fee paying audience is more sensible and viable than a large free one.

Time to bite the bullet and get on with charging?
Toby Constantine
Director | Market Evolution Ltd

Research | Analysis | Insight | Advice | Action

Sent from my handheld

Monday, 3 August 2009

Twitter - standalone value, or an enhancement?

Regular readers of the blog will have spotted that we're a little shizophrenic here about the value and potential use of Twitter. Waste of space, or a service with a little nugget of value buried away there somewhere? We've been undecided.

As I write, the England cricket team is currently warming up at Edgbaston, aiming to pull off a very unlikely victory against the under pressure Aussies. In this interconnected world of ours, I've been following the game on the iPhone, using the ECB app and the BBC's cricket text service. I've also been using Twitter to follow the thoughts of Bumble, Aggers, Tuffers and Jason Gillespie (who is in need of a nickname. A proper one, not the epithet given to him by the Hollies Stand on that Saturday in 2005 when I was there).

I'm enjoying hearing regular updates from the team, and it's working for me. Some of it is banal, but a lot of it is actually quite interesting, and it's a definite enhancement. Would I pay for it? Maybe a small amount. And that's a "maybe" more than I would have said 3 months ago. Would I miss it if it wasn't there again? Yes, I probably would. The jury is still out, but the debate isn't dead yet, there could be something in this Twitter thing after all.