Newspapers - time to co-operate?

If magazine publishers can get together and cooperate why can't newspapers?

At this infection point it has to make sense for newspaper publishers to work collaboratively on setting standard models for content charging, digital access and a united front in debate with content aggregators.

Doesn't it?

In the magazine world the greatest names in publishing Hearst, Time Inc, Conde Nast and Meredith will next week launch an independent digital consortium supported by News Corp, to develop a digital news stand. Last week Hearst with support from others launched "Skiff", a standard technology platform and planned electronic reader, promising to give publishers more control of their digital fortunes.

"For the first time the publishing business are way ahead of the trend" says Mark Ford, Time's publisher.

There are so many great minds beavering away inside newspapers trying to figure out the way forward - alone and isolated from the rest of the industry. Surely its time for the newspapers greatest names to swallow their pride and cooperate? To work on the problems and opportunities together. To develop and execute a cohesive plan to together. To emerge from this crisis stronger and ready for the digital era.

Alas it won't happen. There will continue to be a collectively hand wringing and tub thumping at newspapers industry get togethers like the recent World Newspaper Congress in Hyderabad, but self interest will keep the titles and their businesses apart. And the industry will suffer longer than it needs to as a result. The frustrating thing is that standards will emerge eventually they always do, but not for awhile longer.

Ironically I think the industry might coerce (rather than cooperate) around an 'no charge' for content position. There will be publishers that will choose not to rally to Murdoch 'pay walls' battle cry choosing to wait it out and see whether they benefit from a customer upswing away from paid sites to their free sites. I wonder whether this is driven by a desire to ‘get Murdoch’ or a genuine strategic position. Additionally, I foresee publishers coalescing around the aggregators (especially Google and Yahoo) with some like Murdoch choosing to fight and others like Germany's Axel Springer choosing to work together to create a “one-click marketplace solution” for their online content.

Resurgence in sale of Vinyl

Sales of vinyl albums have been climbing steadily for several years, proving its a trend not a fad.

Through end of November, more than 2.1 million vinyl records had been sold in 2009, an increase of more than 35 percent in a year, according to Nielsen Soundscan. That total, though it represents less than 1 percent of all album sales, including CDs and digital downloads, is the highest for vinyl records in any year since Nielsen began tracking them in 1991. Rock on.
Toby Constantine
Director | Market Evolution Ltd

Research | Analysis | Insight | Advice | Action

Sent from my handheld

£850 billion bank bailout

LONDON (Reuters) - The price tag for bailing out UK banks has hit £850 billion pounds according to the independent National Audit Office (NAO)

No further comment ..............

Facebook hits 350m users

The incredible growth of Facebook has taken us all by surprise. It gone from 150 million to 350 million in less than one year trouncing its competitors (including the once mighty MySpace) in the process..

Google blink first in battle with Murdoch

Mr Murdoch's aggressive stance against search engines and news aggregators seems to have paid off (abit). Google appears to have conceded (alittle)

LONDON (Reuters) - Google is offering news publishers a way to attract paying subscribers without having to remove their content from Google News search results, after some media companies accused it of profiting from their online news.

The Web search giant said it would adapt its so-called First Click Free program to prompt online readers to register or subscribe to a news provider's site after reading five free articles from that publisher in a day.

Previously, the user's first click on any article would be free for an unlimited number of articles, provided the user did not click through any more links from any article.

Newspaper's digital device

I hadnt seen this so thanks for our friend Lopo (www.wahanda.com) for sharing.

Its amusing, but its also restates the case for why newspapers are relevant in this digital world

Quote of the day

"Producing journalism is expensive. We invest tremendous resources in our project from technology to our salaries. To aggregate stories is not fair use. To be impolite, it is theft.

Rupert Murdoch, the chairman and chief executive of News Corporation, in an address to US media regulators

Quote of the day

"We were promised that eyeballs meant advertising, clicks meant cash. Free costs too much. News is a business and we should not be afraid to say it."

Les Hinton, the chief executive of Wall Street Journal publisher and News Corp subsidiary Dow Jones, at the first session of the WAN-IFRA World Congress of Newspapers in Hyderabad.

Read the whole speech here. Its well worth it

Big Companies blow up start-ups

I thought this article was interesting and worth a read. Its all about how many great start-ups have been acquired and ruined by the hugh tech companies (Yahoo, Microsoft, Google etc)

Its well worth a read

Its also a lesson to big companies everywhere - acquiring smart young companies isnt the answer to future proofing. Its like daddy dancing at the disco!

Another iPhone football app

The Sun's new iPhone app - allowing Dreamteam owners to run their teams on the go - has just launched into the crowded app market.

We applaud the thinking, we helped launch a mobile based version of the Telegraph game about 4 years ago (which proved to be somewhat ahead of its time) but we're watching this space closely to see how this now develops.

Looking forward to seeing the next football gaming developments coming to market shortly. It's a great way to cement engagement with this audience

INM completes debt restructuring - finally

The Indie publisher has—finally—put an end to its debt restructuring saga. The company won shareholder support for its finance package at an EGM in Dublin on Thursday and has already secured bondholder support. The sale of South African advertiser INM Outdoor was also approved.

Market Evolution oversees NSPCC Campaign

Our thanks to our friends at uber cool ad agency (Beta) for their help in making this wicked TV ad campaign for the NSPCC's Dream Auction 2 fundraiser. The ad below is one of 3 TV treatments.

The campaign encompasses TV, cinema, radio, print and online.

All time, production, media space and creative input has been donated free. So thank you to all involved.

Dream Auction 2 starts on Dec 1 and runs for 12 days. Bid Now

Murdoch pitches his tanks on Google's lawn

The ongoing saga into how KRM will move towards charging for online content continues apace, with the Microsoft talks to tie-up revenue for content apparently moving along nicely.

Mr Murdoch appears to have decided he will not lose very much by ditching Google traffic and even a fairly small payment from Microsoft would compensate.

We like the sentiment, as a gazillion unique users has always been a flawed business model, and it does make more sense to make at least some money out of content, than continue giving it away for free. However, it's not usual for Mr Murdoch to be cast in the role of the under-dog, fighting the bigger beast of Google is a step back 20 years in time.

Will he make it work? Arguably if anyone can, he can. But we can't help but think that Google won't actually be that bothered. Will they retaliate? Not sure they will, they have bigger fish to fry.

And that's the most eye-opening thought about Google's dominance at the moment.

Daily Mail feels the full force of social media

Have a look at this clip on YouTube.

Its an extremely potent example of the power of social media and its consequences for brands.

News snippets

Some odds and ends to highlight this morning.

More pain at the Guardian, with another 100 jobs being chopped in the light of continued increasing losses. The Observer is going on a crash diet usually only seen in the 3am pages of the Mirror, slimming down to a four section package, with main news, sport, review and the magazine. Business, which I personally thought was the best section in the paper (and in the market), is being swallowed up in the main section, which is a shame. Like all re-launches, slimming it down and keeping the £2 cover price may well prompt a consumer reassessment of value, so expect the ABC's to show a slight decline into Q2 next year.

Trinity Mirror have reported better than expected ad revenue figures, with the nationals holding up better than the regionals. No need to comment here, those of you who know us well know we have a vested interest in the performance of TM.

Timesonline looks likely to introduce a paywall in Q1 2010, as KRM's crusade away from free content continues (note to self, see how that expensive acquisition of myspace fits into that strategy...). Free to Times+ subscribers we're assuming, chargeable to everyone else. But micro-payments or subscription? More research out today saying that people may consider paying to read specific columnists, but only in increments of 10p or less. Put a 10p charge for 500 digital words from Jeremy Clarkson into the context of £2 for 13 sections, 8 inches of height and two dead trees worth of Sunday Times, and I know where I'd rather spend my hard earned pennies. Give me the dead tree version anytime.

Social time

An interesting statistic released by Nielsen Online today states that the average person who uses Facebook has spent over 70 hours on the site during the last year. This is a simply staggering amount and highlights just how social networking has become an invaluable addition to everyday life for users.
The report also states that 80% of all British internet users visited one or more social networking sites during September 2009. This seems to suggest the desire for Facebook, Twitter and other such sites is increasing. With the advent of Real-Time search engines and the demand for change in the way we view the internet it is clear Social networking is not a fad that is going to pass but a fast developing fundamental part of the digital age.

Google to buy AdMob

Google said this evening that it will buy AdMob, a mobile display ad technology provider, for $750 million in stock.

Surprise, surprise.

For Google owning ad search/placement on mobile is above all else the most critical strategic and commercial play.

The purchase of Admob is a significant step toward this singular aim. And they are paying in stock ie its cheap!

Friday 13th - Unlucky for some

The fat lady is warming up and a long way down the red carpet already as London Lite moves into its last week of publication.

Friday 13th November will see the last ever edition of the paper, leaving the Evening Standard with a clear run at attaining a profitable advertising revenue stream with its new free-for-all business model.

Not a lot of point reflecting wistfully on London Lite's greatest moments, or how hundreds of thousands of loyal readers will shed a number of tears, it's just not that sort of newspaper.

Instead, it'll be unlucky for the editorial team who wrote it, the hand distributors who braved the weather to hand it out, and the other associated people who earned money from the business overall. Anyone with a major contract with London Lite will be feeling the pressure bigtime already, but Friday 13th will certainly be unlucky for them.

Now to see if the Evening Standard can rise like a Phoenix from the ashes of the London newspaper market. We're not convinced it can do, but we watch with interest.

News International continues to retreat from "free"

News today that NI are going to stop bulk sales of its newspapers, though this will only impact The Times and The Sunday Times. Hot on the heels of the closure of the LondonPaper, this is another step towards implementing KRM's dictate that all content is paid for, rather than given away.

Bulks have been a bolt-on to the actual sales number for too long now, and previously we've always argued that they have little real value as we've never seen any evidence that the trail they generate ever converts into purchase.

However, in the current market and climate, where the number of people actually reading (and buying) print copies of newspapers is decreasing so rapidly, the time could actually be right for bulks to have more of a value. Previously, it was all about converting print buyers from competitive titles - give them the paper for free and they might switch over. But now, it's more about keeping print buyers in the habit of buying and reading print newspapers. There is an argument that bulks would work better to re-inforce or re-start the print readership habit - particularly on the right flights and in the right hotels, where people have time to read and remember the value of a good old fashioned dead tree.

An alternative point of view I concede, but it's got some merit. It's no longer about trial, it's about protecting existing print buying behaviour.

Anyone have a point of view?

Books bigger than games on iPhone

Games have been the No. 1 app on Apple’s iPhone for a while. That was true every month from August 2008 to August 2009. But in September and October, books surpassed games as the No. 1 category of new apps released, according to analytics firm Flurry.

The chart shows how books have surged in the past four months and how new book releases exceeded new game releases in September.

The World of Apps

I have just spent the last 2 weeks immersed in the world of Apple and its’ apps on behalf of a client and have found some simply staggering results. The pace at which the app market has exploded has undoubtedly taken the technology world by storm, within the 2 and a half weeks I have been actively researching the market the number of apps within the store has grown from 85,000 to over 100,000.

Obviously not all of these applications are going to be top quality, and without doubt many of them are free and pointless but the sheer volume of them suggests that there is profit to be made within the industry. Having done case studies and detailed research into many apps it has become clear that the majority of creators and sellers are very small businesses who have little if any means of mass marketing and PR, this suggests that when bigger companies do put resources behind apps the consumers spend freely on purchasing the new ‘must have’ app. At the moment few big corporations have mass produced or promoted apps but with the news that Smule, creators of the popular ‘I am T-Pain’ app, have garnered a $3 million profit on their product we suspect more companies will be further flooding the market shortly.

It has also come to our attention that not many companies are significantly monitoring and tracking the usage and marketing of apps and it is an area that MarketEvolution are now going to further specialise in, the industry is fast growing and quickly developing and we believe the lack of consumer insight in this area is something that we need to change.

Done Deal - London Lite to close

So here it is news that the London Lite is to close (the news delivered somewhat ironically in the Evening Standard).

Its a shock but not a surprise (to followers of this blog).

The axe fell on the title not today but months ago in a 'you axe yours and we'll axe ours' arrangement between Associated and News International.

We forecasted the double header here and we took some industry stick for doing so and now its come to pass.

The conclusion is very sensible by the way. The losses were unsustainable and the money is far better spent on the upholding the quality of their respective National titles rather that butting heads in the London market.

This leaves the London afternoon slot completely competition free and open for the recently turned free Evening Standard. Some of you might be justifiably suspicious that the Standard might themselves have been in on the deal and that they had prior knowledge that the field would open up for them giving them the courage to give up of £75k a week cover price revenues in pursuit of extra (free) copies and ad revenues. Who knows?


Very tidy arrangement all round (unless you happen to be an employee of either of the closed/closing title)

Suppose the one remaining question is will Lite and Standard merge? Perhaps that was always on the cards. I think yes but we'll see.

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.

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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