E - readers - battle hots up

We are following the e-reader debate very closely. We are big fans as we see the e-reader as heralding a life saving revolution in publishing.

We are pleased to see a number of newspapers participating in Amazon's Kindle. We still believe that the economics stack up to give free readers with subscriptions although to our knowledge no-one has gone for that radical model as yet.

Clearly, there are issues holding back adoption. To become mass market prices will need to fall. E-readers are too expensive and so are the books - today, but inevitably that will change

Here is a short Reuters video on the latest device to hit the shops from Barnes & Noble and look out for Plastic Logic's Que reader with launches in January 2010.

Twitter costs UK business £1.8 billion

I love these reports that always accompany the rise of popular media - ba humbug

UK businesses are losing £1.83bn in productivity because employees are using social networks such as Twitter at work.

In a survey of 1,460 office workers, commissioned by IT services firm Morse, 57% of respondents said they use social networking sites for personal reasons during work time.

The report reveals that workers spend on average 40 minutes a week on the sites. Some respondents believe that some colleagues spend about one hour a day on these websites.

Nokia versus Apple Patent Dispute

Finnish mobile giant Nokia filed a lawsuit against Apple on Thursday on grounds that the iPhone maker has used Nokia’s mobile technology without permission.

The case is filed in the Federal District Court in Delaware and alleges that Apple has used 10 Nokia-patented technology standards in the iPhone since its 2007 launch, relating to wireless data, speech coding, security and encryption.

In its release, Nokia complains that it’s spent €40 million billion ($60 billion) on R&D in the last 20 years and that its licensed its tech standards to manufacturers in 40 countries worldwide.

Nokia’s VP for legal & IP Ilkka Rahnasto is taking no prisoners: “By refusing to agree appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation,” he says.

Now we are are very interested by this as we have our own patents in the mobile technology space so its very relevant stuff for us.

On the surface we, of course, have sympathy with Nokia but I'm sure Apple will counter claim and the lawyers will get rich. We don't think this action is entirely motivated by the stellar rise of the iphone and the huge loss of Nokia market share. Also I'm sure that Nokia's move will open the flood gates for other patent holders to take a legal swing at Apple. Either way we will watch this one carefully and share all developments with you.

ABCe: guardian.co.uk hits record unique user number of 32.9million

Reported on mediaguardian.co uk this morning:

"The Guardian News & Media's website network which includes content from the Observer and MediaGuardian.co.uk, attracted 32,953,433 unique users, up 23.62% from August and an increase of 36.25% year on year, according to the latest figures from the Audit Bureau of Circulations Electronic published today.

Emily Bell, director of digital content at Guardian News and Media, said: "Breaking 30 million users is another milestone for guardian.co.uk. We are delighted to see a healthy interest in online news across the board and to have smashed the 30 million barrier with well over 32 million unique users to set a new record for guardian.co.uk and online newspapers.

Both our global and UK success can be attributed to our sustained investment in web content. The newly launched environment site attracted a significant number of new users and our new TV site, offering user-friendly listings, has encouraged repeat visitors and increased engagement."

Must make those £90m a year losses feel much better as the cold winter nights start to draw in.

Newspapers may have the largest audience reach in their history, but size of audience is not related to the commercial reality of right now. Engaging those customers in a profitable relationship is much harder than good old SEO. Time to stop blowing that trumpet and get someone to pay for the performance.

Thought for today - customer relationships

'The value lies in managing your relationships with your customers and that is where you should put your effort'

Mia de Kuijper, author Profit Power Economics

Post from America 2

Couple of snippets from the US roadtrip worth mentioning.

Firstly the New York Times are running 50% off subscription offers using TV ads, presumably alongside in-paper comms. Interesting that they feel that they need to bolster the in-paper space with TV, presumably endorsing the view we have that newspapers need to work more closely with other media channels to maximise ad revenue opportunities. On the back of the US vs UK NMA ads shown below - which are quite strikingly different - are the NMA looking at what's happening on this side of the Atlantic?

Secondly, following up on the Twitter based backlash towards Jan Moir's Gately article. The Burlington Free Press (daily broadsheet, 75cents cover price, 16 pages, some colour) carried the story on page 2 today, showing just how small technology has made the world become. Stephen Fry was mentioned as the instigator behind the backlash, wonder how many of the locals knew who he was, let alone Stephen Gately.

Blackberry watch?

We've blogged before about phone watches so we are excited by this one that says its a Blackerry watch. Not manufactured by Blackberry but designed to be fully compatible with Blackberry nevertheless. And primarily intended for showing incoming calls/message.

Works for me!

Newspaper Associations ad campaigns

US (NAA) and UK ( NMA) newspaper trade associations hit back with new advertising campaigns promoting the power and reach of papers.

Here are a couple of examples of the ad treatments being rolled out. You will notice that the NAA treatment is harder nosed and in our opinion more arresting and effective:

PCC - You've been Twittered!

Yet another example of extraordinary power of twitter to act as a voice and as a crowd motivator - the Press Complaints Commission got more complaints (21,000) in a single weekend over Jan Moir's Stephen Gately article in the Daily Mail than the regulator has had in the past five years.

Newspaper news by Telephone

The Telephone Newspaper Company of America announced last week (October 6th) that it will offer news of general interest, political happenings, sport and other current events by telephone to subscribers.

Great new newspapers service?

Yup - but actual date October 6th 1909 not 2009.

So much for innovation.

As said before phones, web are simply distribution and access critical element is content itself.

Busy bees

With over half the UK population creating and sharing content according to recent research commissioned by First Direct this rather clever infographic caught my eye.

Bloomberg acquires Business Week

What's Bloomberg thinking buying Business Week?

BWs a struggling, loss making weekly in a content area that Bloomberg have well covered.

Very Strange.

Or maybe not?

More on this when we have formed our opinion.
Toby Constantine
Director | Market Evolution Ltd

Research | Analysis | Insight | Advice | Action

Sent from my handheld

Post from America

US Customs and Border Protection Officer:

"What do you do for a living?"

Me:

"I have a business working with national newspapers in the UK"

US Customs and Border Protection Officer:

"You still have those over there?"

True story.......

Paranormal Activity - demand it!

Many of you will remember the movie Blair Witch Project. I never saw it but I remember the hype and what turned out to be one of the most effective viral marketing campaigns of all time.

Well here come another.

A film in the US called 'Paranormal Activity' is being marketed using crowd sourcing. The movie is using popular demand to take it from limited screenings to national distribution.

And it seems to be working - the movie took in $6.5 million from only 159 theaters, and is set to open in wide release on October 16.

This is clever stuff. For the studio its a way to market the movie (very cheaply and very effectively) and to evaluate demand on a city by city basis enabling a cost effective distribution.

Ive become one of 1,850 people in the UK to 'demand it' come here to the UK. Not that I want to see it as it looks very, very scary ( !).

Newspapers begin fight back - finally!

The Newspaper Marketing Agency (the body representing the national newspaper industry) is launching a high-profile campaign to battle the "unremittingly gloomy" view of the newspaper advertising market and win over belt-tightening marketers.

The campaign, starts tomorrow and will ultimately comprise six ads that will run across the national titles of most of the major newspaper groups.

HOORAY. About time.

We've been saying for months and months that the newspaper industry needs to get positive and fight back. We've scratched our heads for months wondering why the industry cheerleader (the NMA) has been so quiet, so invisible and as the war rages around them.

Lets hope this is the beginning of a thoughtful, well designed and continuous cross media marketing programme to remind advertisers of the unique benefits of newspapers. Lets hope it isnt just a one off 6 treatment ad campaign run for a short while in national newspapers!

NPR on Jeff Jarvis

This NPR piece on Jeff Jarvis is well worth a listen. As many of you know JJ a leading thinker on the future of media and someone we rate and we follow. Have listen and once you have read his blog.

Alex on the iPhone

Congratulations to Telegraph Media Group for the Alex cartoon app on the iPhone.

59p well spent, it's creative, engaging and does exactly what it says on the tin.

Good example of monetising content on the iPhone, positive step towards making digital more commercially sensible.

Check it out if you haven't already, it's got a thumbs up from us.

We're measuring user engagement with iPhone apps in the UK at the moment, we'll add this to the mix.

Stylist arrives - what's the verdict on issue one?

At the heart of all good research are three key factors, "ask the right questions, to the right number, of the right people".

I'm not the target audience for Stylist, there's only one of me, and I'm asking my own questions, but I'll have a go at a first edition critique.

Firstly, good to see a new print product in the market, we like people who try and make things work, and actually get things done.

Five key elements that will make Stylist a success for readers and advertisers (sample of 1)

1) Good paper quality, to display the ads, and ink that doesn't come off on your fingers when you read it.

2) Quality content, which is interesting and engaging to read.

3) Good environment to host the ads.

4) Enough to read to make me want to come back for more next week.

5) Engaging use of digital to build the brand, the relationship and the habit.

So, how's it looking so far?

1) Paper quality is OK, not great, but obviously constrained by the business model (which is entirely sensible). I now have inky fingers though, and if I've learnt anything from over 12 years in newspapers, it's that women are way less forgiving than men when it comes to inky fingers. That's going to be a big issue going forward that they need to solve, or do a promotional tie-up with a wet-wipe/hand cleansing brand to give away a free sample with every copy.

2) Quality interesting content - doesn't do a lot for me personally, but looks well written, it's varied and I'd give up an inky thumbs up.

3) Good environment for advertisers - the proof is in the pudding, but the first edition is never the one to judge. Issue 5 and 6 will usually be a better barometer, but as they fall in the Xmas season they should also be pretty full. Anyway, on the basis of issue 1, we have Selfridges, Amex, M&S and Clinique - so looking positive.

4) Enough to read to bring me back next week? I think so.

5) Good use of digital? Just an e-reader on the site at the moment, which is the bare minimum. I'd have launched with more than this, particularly trying to identify some readers over the next few weeks, but maybe budgets were just not there. If it's a success, I'd expect to see this grow smartly from Q1 next year.

Overall, 7 out of 10, so a good launch edition. Needs to sort the ink out quickly though.....

Crowded At The Top

This is a direct lift from Seth Godin's blog. Seth is a very clever guy and his well respected blog is well worth following.

In the 260 weeks from 1966 to 1970, there were only thirteen musical acts responsible for every #1 song on the Billboard charts.

In the 260 weeks that accounted for the first half of the 1970s, it was 26. (hat tip to John Marks for the stat).

Sometimes, we define a golden age in a market as a time of stability, when one or a few giants capture all of our attention. AT&T telephones, Superman comics, Beatles records, IBM computers, The New York Times... and now Google. Choices are easy, the market grows without a lot of effort and we marvel over the ease of success. Ironically, the success of these winners attracts quixotic entrepreneurs, people who set out to challenge the few who are winning. While we might root for these underdogs, it turns out that they're not the ones who usually change everything. The powerful are still too powerful.

The real growth and development and the foundations for the next era are laid during the chaotic times, the times that come after the leaders have stumbled. Harry Chapin didn't trip up the Beatles, but the breakup of the Beatles allowed Harry Chapin his chance. The next golden age of journalism, of communications, of fashion, of car design--those are being established now, in a moment when it's not so crowded at the top.

The very best time to launch a new product or service is when the market appears exhausted or depleted. There's more room at the top and fewer people in a hurry to get there.

Farewell to the Evening Standard

On October 12th, the Evening Standard will drop its current 50p cover price, and go free in London, as Lebedev and his fellow shareholders desperately try to find a way to drag the London title into the realms of profitability. A surprising announcement to say the least.

Let's re-wind 3 months. London Lite (estimated annual losses of £10m) battling head to head with the LondonPaper (estimated annual losses of £12m) sucking the shallow puddle of London advertising revenue dry. The Evening Standard (estimated annual losses of £12m) has run its "We're sorry" brand campaign, the re-design is bedding in, and the Eros card has been consigned to the bin to be replaced with the pre-payment Standard card. By the way, we like the strategic view that giving customers a card allows you to engage in a proper two way dialogue, it's fundamental to a successful media business we fervently believe.

2 free papers, up against a paid for title with a maximum 50p cover price, all losing money. When Murdoch closed the London Paper, we felt that a deal had been done behind the scenes, allowing the London Lite to be withdrawn at a later date, removing the ongoing exposure of Associated to the annual losses. We didn't however think that the Standard would go free, this hadn't entered into our consciousness.

What vision of the future has the Standard glimpsed to make them take such a dramatic step? Yes, they had already been giving about half their print run away through variable "pricing" after 6pm. Yes, their audience reach had shrunk making them less of a mass market advertising vehicle, but by concentrating on a "quality" positioning and maintaining a positive purchase decision through a 50p price point, they had a differentiated advertising sale solution reaching a discerning upmarket audience.

The outcome? All circulation revenue sacrificed in an attempt to double or treble audience reach, putting them head to head with London Lite (part owner still of the Standard), and making the new Standard card redundant before it had begun to deliver value. Moving to a mass market free model, when all around us, we see free newspapers gasping their last gasps? Why didn't they take a 10p cover price position (it worked so well for The Times in the 1996 summer of sport that daily Monday sales topped the million level) and retain some income from this stream?

What they actually have done is bet the farm on making up all the revenues needed from display (and classified??) advertising, in a market where there remains consumer and advertiser choice, and a market which has a poor recent track record of being large enough to deliver the volumes required at the requisite prices. And they've abandoned their one-to-one relationship with paying customers on the Standard card, which could have built knowledge and thrown off third party goods and services revenues going forwards.

It smacks of going over the top at dawn, or ignoring the arrangements of the deckchairs to concentrate on a welcome party for the iceberg. If anyone knows who has advised them "strategically" we'd love to know, and would welcome (and publish here) their thinking behind the decision, to shed some light on this last roll of the dice.

We think this is idiocy of the highest order, and fear that 2010 will see the closure of the Standard. We hope we've missed something really obvious here, and the title will thrive, and will of course keep up our dialogue and commentary over the next few months.

Digital Switchover

The UK has had to retune all Freeview boxes, those households who didn't would be unable to watch Channel 5, ITV3 and ITV4.

I've got a little TV with built in Freeview in the bedroom (more detail than usually needed, but an integral part of the story). There's no obvious way to retune it on the remote control, and being a bloke, I have no idea where the manual for the TV is having bought it earlier this year.

So, I currently have no C5, ITV3 or ITV4.

Haven't missed any of them yet. Wonder how long it'll take until I start missing them.

Watch this space.......

Mad Men Ad men Muppets

"Sesame Street" temporarily renames itself the Emotional Movie Channel for a parody of Mad Men the US smash hit based on the Ad Industry

US Media M&A

Image via CrunchBase

Comcast, the US leading provider of cable, entertainment and communications products and services, is in talks to buy the entertainment giant NBC-Universal from General Electric.

The deal at a purchase price of $35 billion was negotiated at a meeting among bankers in New York on Tuesday. Comcast denies a deal is done, but does not deny talks.

Only 5% will pay for content in UK (so says research)

In a Harris Interactive Poll conducted for PaidContent:UK, researchers found only 5% of newspaper site readers in the UK would be willing to pay for interactive content.


74% of respondents simply would go to other sites if they were required to pay for access to the news they now get for free.


As for the balance of the respondents, 8% said they would take advantage of any free headlines on the news sites and 12% said they were unsure. The poll was published here this week.


The other interesting finding in the poll is how little readers are willing to spend to read the news. Fully 72% of respondents said they would not want to pay more than £10 per year.


Let's not panic. As we know only too well being a research company price research is notoriously fickle. Consumers don't like to say they will pay at all, let alone very much (especially when they have had something for free).

I remember very clearly researching BskyB in the early days and nobody when asked said they would pay for TV (after all it was all free way back then).

If the publisher has the brand and valued content and its priced sensibly and presented well then consumers will pay. And those consumers will in turn be valued by advertisers.


Toby Constantine

Research | Analysis | Insight | Advice | Action

A definition of a banker

Every now and then you stumble across a quotation that just nails it. This one does just that.

A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain. Mark Twain

It's Wednesday, must be more happening at INM

It sounds like the INM Board will not be bowing to Denis O'Brien's demands for a number of resolutions to be passed at an EGM.

Reports suggest that a deal is close to refinance the existing bond through a debt for equity swap, and there is another 4 week stay of execution on the bond's repayment about to be announced.

The paragraph below caught my eye. If true, then someone has been taking a few too many happy pills. Anyone who thinks the UK Independent titles will move into profitability by 2011, in the current advertising (and circulation) market, while number 4 in their market, without changing the fundamental dynamics of the business or the newspaper, is in my humble opinion, an idiot. The titles have been "2 years away from profitability" for over a decade, why on earth would they be moving any closer at the moment? They either take the hit now, or let the losses continue over time. It's pretty obvious why they can't take the hit now, and it's nothing to do with impending profitability in 2011.

"The company is also expected to reiterate its view that closing the UK titles would be more expensive than running them through to profitability – expected sometime within the next two years. It will point out that the board, which includes three people appointed by O'Brien under an abortive truce with O'Reilly clinched in March, has agreed upon the current strategy, which includes retaining the titles."

A final thought, best of luck to Simon Davies, former Ad director of the London Evening Standard, who is leaving to be the new commercial director of The Independent and The Independent on Sunday. A brave move, no matter how you look at it. Frying pan and fire are the two phrases that spring to mind, but you just never know in this industry do you. I don't know Mr Davies, but he must be a man who thrives on a challenge.

Axel Springer & Metro International join forces. Sign of things to come?

Metro International and German publisher Axel Springer, will join forces in the Hungarian press market.

Springer publishes regional newspapers in Hungary as well as a Sunday paper, a business paper and magazines. Metro International owns free daily Metropol (290,000 copies). Together the publishers aim to reach 1.3 million daily readers in Hungary.

Is this a sign of bigger things to come?

Axel Springer is the giant of European publishing (over 150 newspapers and magazines in over 30 countries).

Metro International is 'worlds largest newspaper' read by 17 million people a day in 18 countries.

Springer is acquisitive and Metro is for sale.

Watch this space as we feel sure that if Hungary works out then Springer will pounce.

.

How much has JK Rowling made per word from her books?

JK Rowling has made £526.54 per word written in the Harry Potter books. She’s worth £576m in total and is the world’s biggest selling living author.


Source: AQA

ITV - you couldn't make it up. Goodbye viewers, goodbye advertisers?

Regular followers will have noted our on-going fascination with the slow motion car crash that has been ITV over the last few years. A national broadcaster who wants to be a global media brand, a digital business happy to write off £150m+ on Friends Reunited, a confused proposition to the consumer - we've been discussing our observations over the last 18 months or so on this blog.

This however, leaves us almost (but not quite) speechless. In a market where any media business should be loving their advertisers to the point of an almost unhealthy obsession, this ranks up there with forgetting to take the binoculars up to the crow's nest when iceberg spotting, and going over the top at dawn on the Somme.

Quoting directly from mediaguardian: "Evidence has emerged from the Competition Commission's inquiry into the Contract Rights Renewal (CRR) mechanism that ITV may have misled clients over the effectiveness of advertising on the network. ITV told us that this research was only undertaken for marketing purposes, that it had significant methodological flaws and that ITV used the results that are most favourable to ITV. ITV submitted that many of the results of its research in fact showed that, when compared with other commercial channels, ITV1 did not have a more engaged audience nor was there any specific sales uplift attributable to ITV1. Further ITV told us that ITV1 did not fare well in terms of 'water-cooler' moments as viewers who strongly like ITV1 are also least likely to say that TV gives them something to talk about."

So, basically, the real story is that advertising on ITV doesn't work. It's official, and it's from the horse's mouth. Don't know about you, but I wouldn't want to be sat in that insight/ad planning team today. When all you can see is darkness, apart from a small circle of light way up above you, it's time to stop digging.....

Obama considers newspaper bailout

The Hill reports that President Obama said he's "happy to look at" bills that would offer tax breaks to news organizations that restructure themselves as nonprofits.

What chance Gordon Brown of adopting similar 'open ears' stance?

thelondonpaper RIP

Today, Friday September 18, the last edition of thelondonpaper was published. RIP

Twitter worth $1bn?

Twitter close to finishing a round of funding which would value the social-network micro-blogging site at $1 billion, according to the industry site TechCrunch. In February, an earlier funding round led by Benchmark Capital valued the company at $250 million. The site reached 44.5 million visitors in June, 15 times more than it reached a year prior. Read it at Reuters

Shortlist starts multiplying.....

First up, a small pat on the back for Shortlist, the free men's magazine picked up over 510,000 people every week. It's matured well and now looks like a good consumer offer, with a nice range of content with some appropriate advertising. In a market where free (and local) newspapers are vanishing faster than guaranteed votes for Gordon Brown, it's good to see a print business expanding rather than shrinking.

Stylist launches on October 7th with a print run of 400,000 copies across London, Brighton, Manchester, Glasgow, Birmingham and Leeds. Aimed at Britain's "style-savvy women" it's launching into a highly competitive market, up against weekly and monthly womens' glossies, and the weekend newspaper supplements, but you have to assume Shortlist Media have run the numbers and feel confident they can deliver a differentiated audience to advertisers. Print quality will be all important to make the mag a success for those lovely creative executions, so we wait to see how well it all hangs together.

Facebook books a maiden profit?

Facebook, the social networking powerhouse turned its first profit in the second quarter of 2009, it announced Tuesday.

The profit is actually ahead of schedule: Though the company has been engrossing its users for years, it hadn’t planned on making money in 2010. Advertising Age notes that the most significant aspect of the news is that Facebook has accomplished its goal without “a fully developed advertising business.” The company is still tweaking how it advertises to its millions of users, and its virtual gifts products are still in the early stage.

Read it at Advertising Age

Mariah Carey brought to you by the Bahamas Board of Tourism!

It's no secret that record labels are searching for new ways of doing business. Earlier this year we spotted Groove Armada's distribution partnership with Bacardi. Now Mariah Carey is joining in, orchestrating several sponsorships for her latest album, 'Memoirs of an Imperfect Angel'.

Carey recorded the album in the Bahamas, so sponsorship by the Bahamas Board of Tourism was a natural fit. As was Elizabeth Arden, which sells Carey's Forever perfume. Other sponsors include Métier De Beauté beauty cosmetics and Angel champagne. Sponsorship comes in the form of a small booklet that accompanies the album, filled with glossy advertisements that promote a Mariah Carey-esque lifestyle. The content of the 'mini-magazine' will be written by Elle's editorial staff, and the magazine will be distributed to the first 1.5 million buyers of the CD, which comes out later this month. According to an article in The Sunday Times, the sponsorship reportedly covered the cost of making the album (GBP 4 million) album.

The initiative has great potential for sponsors. “We sell records to people who buy lots of other stuff,” says Antonio Reid, chairman of Mariah's label—Island Def Jam Records—in The Sunday Times. “My artists sell two, five, eight million records, and people hold on to them for years. Most magazines are not that successful.” The label says it’s now ready to try out sponsorship with a few other 'commercially-minded' artists like Kanye West and Bon Jovi.

While this level of commmercialism will no doubt be viewed as selling out by many artists and fans, a considered and appropriate approach makes it a model that could work for other performing artists

Product Placement arrives - will consumers actually notice?

Commercial Broadcasters look likely to be soon able to develop new revenue streams from product placement in programming, as the Government relaxes rules to bring the UK into line with the USA and elsewhere.

This will provide some solace to the likes of ITV, C4 and C5 - who are in desperate need of some good news going into Q4 2009. Will it make up for the current shortfalls? No, very unlikely - there's a lot of programming that no self-respecting brand would want to be paying to be in, but there's certainly some opportunities for smart selling and smart buying to be had next year. The big question is actually whether this will cannibalise existing revenues or grow the market? What's the point in paying for centre-break for a brand message, when the tea is being made, when you can get screen presence, with a chosen character or environment built over a period of time?

But what do consumers think about this? Will they notice? Do they already think it's happening?

We've been covering this on our community sites for a couple of our clients this week, and the view is mixed. For some "it's about time, TV should reflect the reality of real-life" and for others "they've been doing this for years, Emmerdale is always featuring new cars".

There's a lot of work to be done to properly understand the true effect of product placement once it does happen. Our view right now is that placement+social media+word of mouth = brand effect and ROI - but measuring it will be a tough challenge.

We're working on it though - understanding the nuances of consumers and interactions with brands is right up our Street.

Google saviour of newspapers?

How ironic is this - Google Inc. has proposed a micro-payment system that could be used by online publishers to charge for content, according a document posted Wednesday by Harvard University's Nieman Journalism Lab. Have a read.

With so many big brains and big budgets trained on cracking the content charging challenge one has to imagine that a (universal) payments solution is near but the much bigger question is not so much will consumers pay and partic young consumer, but how to get them to pay! Crack that and its in the bag! Payments is a technical challenge, the consumer aspect is much more complex and not solved in a R&D lab.

Facebook told to get in the ring.

It has been announced today that the WBA light welterweight champion, Amir Khan, and his promoter Frank Warren are taking on the giants of social networking, Facebook. The pair have become concerned with what they believe to be ‘racist and highly defamatory’ images and material that appears on the site in connection with their names.

The duo are fighting to make Facebook more accountable for its members as there are many registered users who create pages using the official celebrities names but contain images which would be defamatory if they were published in magazines or newspapers.

Kahn and Warren are instructing their lawyers to force Facebook into abiding by its own Terms and Conditions which state that content which is deemed to be ‘threatening, abusive, hateful or racially or ethnically objectionable’ will be removed.

Forcing social networking sites to take responsibility for their members could create waves in the industry and cause considerable time and effort for the sites to monitor more effectively the content they are publishing.

This could be the start of the larger internet sites accepting that they have the same responsibilities as other channels of the media.

Old age tweet

The Telegraph reports today that ‘Twitter’ has been around for far longer than anyone really imagined and has survived and evolved accordingly. A study by Lancaster and Manchester Universities has shown the Edwardians used postcards to send ‘tweets’ to each other on a regular basis.

The researches calculated that almost 6 billion postcards were posted in Britain between 1901 and 1910. This works out at an average of 200 per person. Like the Twitter of today size restrictions meant ‘tweets’ were short and sweet and language was shortened significantly. The Telegraph quotes an example of Edwardian text speak, ‘A postcard sent to a Mrs. Rowarth of The Lamb Inn begins: ''A P.C. from you this mg. is it tomorrow or next Sat. the opening. if tomorrow it is decidedly off with me. & I am afraid it would be the same next week.''’

The same concerns regarding the corruption of the English language were expressed then as now but it appears that some good ideas will always remain, all be it in different mediums.

Re-arranging deckchairs continues at INM

Thanks to The Guardian for another update from the mad, mad, mad world of Independent News & Media. The infighting continues at pace, with the Board now rejecting O'Brien's demands for an EGM to vote through closure or sale of the Independent and IOS newspapers, as closure would result in "significant costs".

The losses racked up over the years on the two British Independents can only be described as "significant", so you can see O'Brien's point of view. At some point in time, you have to take your medicine, but maybe there simply isn't sufficient money in the business given the debt refinancing problems to close the titles right now, even if they wanted to?

While Gavin O'Reilly has trotted out the standard company line about the titles being profitable within a two year horizon, which has been a constantly moving deadline since the turn of the Century if not before, we don't share his optimism. The market dynamics remained stacked against the Indy, and unless they do something to change those dynamics, then the performance will not improve. Simply putting a paper out into the shops every day is not enough to grow revenues and reach break-even.

We're not seeing any evidence of smart marketing, recognising and rewarding their loyal readers, locking in their cover price revenues or selling their audience in a new and smarter way to advertisers. We're not seeing anything at all.

It is though, merely a symptom of the overall situation at INM. The Indy isn't going to bring down INM, the size of the debt will do that unless the Board can come up with a plan to keep all the banks happy.

Videos return to YouTube

It has been announced today that Google, the parent company of YouTube and PRS Music, the trade body responsible for collecting music royalties, have a peace deal to allow the website to unblock music videos. The 6 month wrangle has fundamentally unsurprisingly revolved around payment with Google claiming PRS were charging exorbitant payment terms and therefore denying the British public with access to music videos.

The deal now shows the possibilities that exist with compromise. Whilst it is all very well that Lord Mandelson is promising to stop internet connections for users of Pirate websites many within the music industry, including Damon Albarn, Sir Paul and Sir Elton have gone on record to suggest that this is not a solution, merely a costly and ultimately futile attempt to control the problem of piracy.

The fact that YouTube and PRS have struck a deal gives hope to many inside the industry that similar deals can be struck with pirate companies making music accessible to all and yet still allowing the members of PRS to get paid.

Skype sold by eBay

Image via CrunchBase

Online auction house eBay has sold a 65% stake in Skype to an investment consortium that includes the founder of Netscape, in a deal that values the internet telephony group at $2.75bn (£1.9bn).


The value placed on the deal is $350m less than eBay paid for Skype

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.

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.

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?

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.

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.

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.

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.

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

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.

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?

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."

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

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.