DEN and Strategy

In the seminar this week we discussed strategy and how this can take place on and/or over a number of levels, from developing an individual’s skills such as training them in computer programming, to an industry wide sector change such as the uptake of digital readers across the publishing industry. We defined strategy as ‘How we move from A to B’ and interestingly it was pointed out that to make these strategies work you need to budget but that this budget does not necessarily mean money, it can instead or also mean resources such as contacts, space, mutual events etc which can help you move towards your goals. It was also pointed out that a strategy can be changed if needed because we can’t always account for variables along the way, but that your overall ‘vision’ can stay constant for what you generally aim to achieve. There were many examples of these changes in strategy at the Digital Editor’s Network event and it genuinely surprised / heartened me that I was one of the youngest people there, since it often feels older generations aren’t as worried about innovating in the digital age. But these guys definitely were, with the main focuses seeming to be on local news with Sky’s new local video news service and The Guardian’s N0tice, and also data with Greg Hadfields Open Data Cities. Both of these are innovations made possible by the internet and very exciting prospects for journalism. I think Greg Hadfield summed up the whole conference, and indeed state of journalism and publishing at the moment when he said “It’s a great time to be a journalist. It’s not necessarily a great time to be a newspaper journalist”. As we said in the seminar, I think it’s a case of holding on to the vision of being a journalist and of communicating and questioning information, but letting go of the old strategies that provided this solely through print.

SoLoMo

"We all know what SoLoMo means.." said Sarah Hartley, a guest speaker at the Digital Editor's Network, this week.  As far as I was aware, it was just the unwieldly hashtag of the day's events, but fortunately she spelled it out anyway - Social Local Mobile. 
This is the field that the publishing and journalism industries are moving more and more toward as new technology and innovations allows them to change the platform through which they connect to their audiences.  Hartley's project, n0tice, is such an example that satisfies each component of the SoLoMo idea.  An online notice board, brings together a social community, dependent on their location, which can be accessed mobilely. 
Other notable examples from the day were Sky Tyne and Wear, an online broadcasting platform servicing a much smaller, more specific area than many of the national and regional presses, and Help Me Investigate, an online community being set up to crowdsource investigative journalism. 

Interesting fact of the day:  throughout Africa, mobile phone internet has leap-frogged its stationary brother, because of a low penetration of computers on the continent.

Business Strategy

In this week’s seminar we discussed business strategy and the multiple functioning levels within any said business. These levels, starting with the highest, are Enterprise, Organisational, Business, Functional, Operational and lastly, You. Considering this model within a publishing business; the ‘Enterprise’ is either the media in which it operates or a larger conglomerate, the ‘Organisational’ level is as it suggests the organisation, the ‘Business’ level could be a publishing houses’ smaller imprint that operates as a separate business, the ‘Functional’ level is any department within that business, the ‘Operational’ level could be any current operations within that department and ‘You’ represents the individuals and their contributing skills.

We then considered where business strategy fits within a business plan cycle. This begins with ‘Vision’ – a sensible and appealing picture of the future. Following this we create a ‘Strategy’ – logic about how the vision is achieved. Then we ‘Plan’ the strategy with specific steps and timetables. Lastly, these plans are converted into financial projections and goals, otherwise known as the ‘Budget’. Finally we thought about how a strategy is formed, perhaps through PEST and SWOT analysis.

Strategy discussed at the Digital Editors Network Meeting

Both our lecture and the Digital Editors Network Meeting discussed new strategies that must be implemented for journalist and publishers to survive in the digital market. For example when newspapers and publishers use digital technology is it sufficient for them to reproduce the same newspaper articles or the same books onto their internet website and other digital media? The Digital Editors Network meeting compared the Daily Mail and the Guardian’s approach to this. While the Guardian duplicates the contents of its printed product onto its website the Daily Mail does not; instead the articles on the website supplement the printed product but does not reproduce it. This encourages the reader to read the printed product and engage in activities in digital media. This also reiterates what we discussed in our previous lecture; that in future we must engage the reader and not just see them as an audience to be lectured at.

SMEs take centre stage

In December 2011 the government announced a new Innovation and Research Strategy for Growth, which has been designed to focus on small and medium sized enterprises (SMEs). Vince Cable (business secretary) and David Willetts (university and skills minister) announced the release of ‘innovation vouchers’ and a series of prizes, to be focused in targeted innovating areas.

This strategy is a result of the government’s want to make the most of the strengths of the UK, for example; universities, research institutes, small businesses.

Willetts stated that, “A new innovation landscape, combined with continued investment and collaboration with business, will ensure that the UK is a world leader in innovation.”

When reading about this new strategy, I felt that this was an excellent example of what we were discussing is our lecture on Monday.

The government is constantly changing their strategies and goals as they go along. This new strategy is a direct response of a consequence (the recession), which is aimed to help the UK continue to grow and be a leader of innovation.

Read more: http://www.theengineer.co.uk/news/news-analysis/uk-innovation-strategy-means-smes-take-centre-stage/1011174.article#ixzz1nIcCo6uu

Strategy

In our lecture on Monday we focused upon strategy.  We defined strategy as not just planning what you are going to do and how you are going to do it, but as thinking about other people’s moves and the possible actions and consequences of those actions.

We looked at how strategy can work at different levels of within companies – from enterprise level right down to individual level, and how strategy relates to the vision, plans and budgets of a company.  Next, we saw how different levels of strategy affects different sections of the company – for example, enterprise level will affect stakeholders, the corporate level will affect the financial aspect of the company, business strategy will be marketing oriented, etc…

Finally, we looked at strategy in relation to the media industry, and saw that media players must compete in three different markets – consumers, content providers and advertisers.

Strategy and innovation

In this week’s lecture we looked at strategy vs. a strategic plan and vision.

We analysed strategic management and the notion that a vision may stay constant, but strategies can change, particularly as the world in which publishers operate is experiencing massive social and economic change.

In turbulent times plans must be adjustable in order to create value and as a result, in our own business plans it will be essential to devise a flexible plan and consider built-in review points. This will enable us to make adjustments to the strategy and the plan if necessary.

Different levels of strategy were examined from a wider enterprise level that could be stakeholder oriented, to a potentially individual operation level. When analysing these levels we looked at areas where disconnection might occur, for example when an individual’s function differs to a corporate or business strategy leading to ‘office politics’.

We also looked at the extent to which ‘priority publics’ such as customers, consumers etc. are considered within a strategy. As Peter Drucker states, “The only function of business is to create customer value and to innovate.” Publics are extremely important, since to create value for them, a company must first be able to understand what they value, and this directly influences their ability to innovate.

A Successful Business

There are a lot of different ways of setting up a business, but each of them starts with a vision. To turn it into a reality one needs strategies that will lead to the creation of a plan. The strategy can be considered on various levels from enterprise to operational. No matter how great the idea and how detailed and plausible the strategy is, nothing will work if one does not have resources. It is not only money that is required but people, skills and desirable attitude. Money should be what comes as a result of a business, not be the business itself and it should not be the only goal for a company. Furthermore, one lives in the era of huge changes within the media industry. Hence, there is no point of creating fixed long term plans for a business. Most of the strategies that people undertake do not work due to constantly shifting conditions on the market. The enterprise ought to be flexible. It means that sometimes one has to set up a new strategy to achieve their vision. It does not imply that the organization has overestimated its chances for a good business, on the contrary it shows its ability to adjust. Business is not a static framework but a problem-solving game. It has to rely on its customer base. Being ahead of the competitors whilst providing all of the customers’ needs is where business success lies. Especially in a time with constant technological advances and demands getting bigger, making a successful business is only half of the battle as keeping it successful is perhaps the more important challenge.

Daddy can I have a POD printer for Christmas?

One of the most exciting innovations in publishing in my opinion has been in the field of print production and the introduction of print on demand (POD). This has meant that the entry level costs for new publishers has come down drastically and for the first time it has allowed many of the smaller publishers to take greater risks to publish books which before would have required a huge investment.

Another huge barrier for the smaller publisher in the past was the cost of distribution. With increased fuel prices and prohibitively expensive insurance on shipping and air freight it has been difficult for publishers to move their stock around from country to country. Now publishers can simply email a pdf to the other side of the world and have it printed locally with virtually no distribution costs at all!

Large capacity POD machines are still huge beasts but “Expresso” POD machines are now only a little bigger than a full colour photocopier. One of the more exciting predictions to look forward to is the possibility in the not too distant future of POD machines being no bigger than a desktop printer. Not only will you be able to download your ebook onto a kindle or iPad5 in the future but you will also be able to print off a hard copy within 10 minutes of hitting enter! Imagine the social impact that this would have on literacy and personal development not only here but in the remotest areas of the third world. The children of the future will no longer be asking for a box set of the Harry Potter series (or the blockbuster book of the day) but they’ll ask, “Daddy can I have a POD printer for Christmas?” and bookworm in Zimababwe will be able to go to the town library and print off the complete works of Shakespeare!
Jamil Chishti

Disruption and opportunity

In this week’s lecture we attempted to deepen our understanding of business models and discussed the inclination for some companies to do what they are already doing, but better, when in reality, such companies should be doing things differently altogether. For example, companies may automatically continue producing a product with traditional characteristics or performance dimensions, rather than embracing the potential to change that product either to make it low cost or simplify its user interface.

This is one of the reasons that successful companies miss new waves of opportunity.

We also discussed the idea that innovations which businesses must respond to can be disruptive. Disruption can occur throughout the value chain and in a complex and shifting market, those who can help consumers make decisions are those who enjoy success. Businesses like Kodak that did not recognise the disruptive properties of digitisation, and its potential to destroy their value proposition, are those that have suffered the most.

For publishers, such disruption has implications for the value chain with effects across the whole of their business, including resources, costs, branding, technology and more, but there are some that continue to flourish through a view of the consumer as a community.

As Michael Skoler advocates, the idea of community is a powerful and emerging business driver. Some publishers have recognised this and have used their core capabilities and activities to create communities, and as a result, new client segments. An example of this is Bloomsbury Publishing PLC’s launch of Bloomsbury Institute that hosts “literary salons, lectures and book clubs, as well as providing sessions for unpublished writers” (Williams). This innovative venture enables the publisher to access the reader events market in addition to its existing market, however, it has also necessitated the cost of additional specialised staff in the form of Claire Daly, as the Bloomsbury Institute events manager, who previously acted as Festival Co-ordinator for the Soho Literary Festival.

Williams, Charlotte. ‘Bloomsbury Institute enters reader events market.’ The Bookseller. 09 Dec. 2011. Web. Accessed 16 Feb. 2012. <http://www.thebookseller.com/news/bloomsbury-institute-enters-reader-events-market.html>

Byliner and disruption of business models

In Monday's seminar we looked at the repeated pattern of new entrants disrupting the operations of the incumbent businesses in various markets. Francois explained that new start-ups are dismissed at first by the dominant parties as 'not our competition' or 'not as good'. Eventually, this attitude is replaced by an acceptance of the need to compete or even co-operate.


Whilst reading the Winter 2011 Nieman reports, I have been considering the application of this pattern to the profiled businesses. Byliner, for example, could be said to be disrupting the operations of both book and magazine publishers. Its original, commissioned articles might easily have been dismissed by publishers of books and magazines because their length of 10,000 to 30,000 words put them in what John Tayman calls "publishing's dead zone" (Nieman reports, Winter 2011).


Byliner's first ebook, 'Three Cups of Deceit', became the bestselling ebook in the Kindle Singles store, with 70,000 downloads in the first 72 hours after its release (when it was free). With sales figures such as these, publishers might start to pay attention. If that many people are reading Byliner's ebooks, then their time and money is being diverted away from the existing offerings of book and magazine publishers. This is the point at which the traditional publishers might choose to compete or co-operate with Byliner. Or, alternatively, to buy it.

Community Business Models

Skoler’s article examines the issue of building new digital business models for the media industries, arguing that whilst we “search for new business models that involve paywalls, more video, the iPad, and wealthy donors…the most powerful emerging business driver in the new economy is community.” The Social Side of the Internet (a study published in 2011) found that 80% of internet users participated in group activity, (Skoler ,2011).This is a telling figure which demonstrates how technology has opened up new avenues of social interactivity and how positively society has responded. Skoler says that, “The companies flourishing in today's digital, social culture provide more than valued content to people. They deliver valued connections.” News organisations are encouraged to work towards offering the same value connections in their industry, not thinking of themselves solely as creators of news content, but as supporters and curators of the gathering and sharing of news through social streams. Such community models can then be monetised through display advertising or even perhaps, subscription fees. In the book industry one such interesting and innovative enterprise is the social networking group entitled Good Reads, which works along the same principles. Launched in 2006 it has become a hive for book discussion and recommendation between users. Readers are back in control and making use of recommendation tools that pick up on reading history, friend recommendations and opinion based reviews rather than sales figures. The site is experiencing continual growth and has 4.4 million registered users as of 2011, and it currently makes money offering targeted advertising opportunities to publishers and authors. With an impressive amount of users heavily invested in the site, Good Reads has a lot to teach the rest of the book industry about developing an enhanced, social reading experience for readers and building brand loyalty.

How are business models being disrupted?

A prime example of business model disruption can be seen in high street bookseller, Waterstone's (with an apostrophe!). Customers are going in store and using QR on books to then shop online. They are experiencing the books in store but buying elsewhere. All of the money Waterstone's have invested in sales and marketing equipment is wasted; although it may be working, they are not making a profit.

Various ways in which these models are being disrupted in terms of resources are as follows:

Information - With an increase in digital purchases, we can no longer rely on Nielsen Bookscan to provide accurate sales data. We must consider the marketing implications of this.

Cash - Simply, the ratio of outgoings vs. income. Where does the next investment lie? Newest software, is there then ever a good time to invest with new technologies arising so rapidly after one another. This leads to...

Equipment - keeping the hardware up to date. Owning the newest piece of hardware available on the market is now essential for publishers to test, examine and learn from. These can be...

Products - across different media platforms.

Technology - It isn't just the hardware, but the software used is also something that is constantly being updated. Newer versions, i.e. ePubs.

People - Employees are a vital resource in a business, and with new technology and software there is a new skill set that is needed, namely - digital.

Brand Loyalty - Consumers used to look to Booksellers and Authors for branding, and while many still do, it is now the publishers that are building their brand.

Disruption

In our seminar we discussed business models in greater depth, and the disruption of traditional business models from aggregators such as Amazon and Google.  Companies try to stave off such disruption by ‘being better’ and improving their value proposition. However, many companies end up exceeding customer expectations rather than meet them (Kodak, for example), and thus fail in their attempts to be at the top their game.

Disruption from companies such as Amazon has other ramifications for publishers: for example, in terms of their resources, process and values and the business models that regulate them. Publishers are now having to invest in digital editions and co-editions, in training or hiring staff for digital roles (such as product developers), in new software and in other technological developments.

There are, however, new opportunities for businesses due digital ‘disruption’. For example, there are new and more efficient channels for marketing; external display, video advertising (internal commercial messages), sponsored links, solus-email marketing, Real Simple Syndication (RSS) feeds and so on.

Business models and disruption

This week we talked about business models and particularly how these are developed within an existing market. It’s important to question why you are developing or innovating in a certain direction. Sometimes people don’t want more, sometimes they want something different. You may exceed their expectations when actually if can disrupt the current market place with something new, the fact that it is different will make it ‘good enough’ to win you custom without it necessarily being ‘the best’. We also talked about how collaboration can be key in this disruption for example the open source models being used by companies such as Facebook to link with companies such as The Guardian Group. Our communication is evolving to be more social, with social networking, so it is perhaps natural that this becomes a viable business model too, or as Michael Skoler calls it: “Connection as a strategy.” (Skoler, 2011)

Disruptions to Business Models

In our seminar on Monday we discussed businesses models.  We looked the disruptions that some media business models have gone through in the past few decades, and how come businesses fail as they do not realize just how disruptive these changes will be.  We then looked disruptions to the book publishing model, using the following frameworks: resources, processes and values.  For example, the disruption of digital means that companies may need new staff, or they will need to train existing staff.  Technology, hardware and software need to be constantly updated.  Publishers need to ensure that their brand had a solid web presence.  The better a company’s web presence, the more involved the consumer feels in the company.  This gives the consumer a better value proposition and makes them more likely to continue using the business.

The attention age

According to Esther Dyson we live in the attention age. Hence, to build a successful business model we do need customers but not simply an audience and recipient of our product/service, but a community. It generates value for people and providing value is the main core of any business (Skoler 2011). Social media has become the new word of mouth for marketing strategy. Customers have much more power than they have ever had before. The publisher is still a gatekeeper and his role in the publishing process is essential but it is the reader who decides in which format he/she wants to read the content and moreover to whom he/she recommends it to (Transformation in Publishing, 2011). There is a need of changing our way of thinking to adjust to the new reality that we should not treat as a threat but as an opportunity. The more complicated the market is, the more chances people will want to find other solutions to simplify it. Doing something that we have been doing, only better will not give us different results and new results are crucial at a time when customer expectations are extending. Nowadays the publishing industry is disrupted by many factors, mostly by growth of new technologies that force an update of the whole business structure, from the resources and processes to the values. Therefore, if something new emerges on the market we should give it a serious thought. The new innovation can, in a short period of time, meet the needs of the customers that we did not think about previously. Hence, we cannot miss new opportunities for making the business grow. If we already have professional knowledge about publishing and have an established audience, we can find different ways to generate a new stream of revenue. We can invest in training, new events, or create new business relations. Rights sales can be a good example. We can go beyond our local readership and sell the translation rights to other countries. Thus, we not only gain a new partner within the industry and a bigger audience abroad but also we find a way to expand and make extra profit.

'Converting Ideas into Reality'

In Monday’s lectures we looked at the importance of the different forms of innovation within existing and emerging business models. Innovation comes in the form of the four Ps, but is innovation impressive without implementation? Innovation is needed in publishing to ensure that companies can ‘stay in the game’ and not be pushed out by competitors, or even new companies with new products or technologies. So which is more important, innovation or implementation? Actively seeing innovative ideas work emphasises innovation and/or invention but shows that it can last and is not just ‘an idea’ but is achievable. In the chapter supplied to us on Monday (‘Innovation – What it is and why it matters’, p.15) Thomas Edison is described as believing that it was not ‘coming up with ideas’ that made him successful, but ensuring his ideas were ‘working technically and commercially’. This suggests that business models should consider that innovation works best with successful implementation. 

Community not Audience

Our Seminar on the 13 February continued to look at different business modules, the disruptions that can be caused to these modules and the disruptive traps that companies can fall into. In particular we spent some time discussing the possible disruptions that we could forsee to publishers, book sellers and journalists from social media which in turn has changed the way that consumers live. As Michael Skoler notes, the companies that are flourishing in this environment view the consumer as valued members of a community as opposed to an audience. By being a member of the community the consumer can interact with others who share the same interest and organise themselves. Hence by creating this community this provides value to the consumer which in turn contributes to the success of the business.  

                                                                                                   

Nieman Reports including Community Business Model for News by Michael skoler:  http://www.nieman.harvard.edu/reports/article/102622/Community-A-New-Business-Model-for-News.aspx

Reflection on Monday's lecture

In Monday’s lecture we discussed the alchemy of business model innovation. We focused particularly on the fundamental principles and elements within business models, such as the value proposition, in an attempt to understand how they work together in order to create a profitable venture.

In his presentation on open-source economics, Yochai Benkler discusses the radical change that has occurred in the capitalisation of information production and distribution. Traditionally, information producers were forced to raise capital in order to fund such distribution and production, however, the means to carry out these processes are now in the hands of the population since there is a high percentage of the population that owns the necessary equipment e.g. a computer and access to the internet.

Whilst not necessarily affecting the value proposition, this can affect innovation within a company. Open-source economics can affect how content is produced and in the publishing industry specifically, this can be observed in the increasing trend of self-publishing.

Self-publishing has created a new set of opportunities for publishers. Benkler mentions the potential for platforms for self-expression and collaboration and some publishers have innovated precisely these tools in order to capitalise the content produced. This has taken various forms including support and advice offered by publishers e.g. Faber Academy’s self-publishing course, as well as platforms that act as communities for writers who wish to self publish. One example of such a platform is Penguin USA’s Book Country, which allows authors to ‘post their own work and receive critiques from other users’ (The Bookseller) as well as allowing them to self-publish online and in print.

However, Benkler warns that social production can be threatened by incumbent industry models and publishers’ attempts to innovate and monetise the opportunities available have led to widespread disapproval from the self-publishing author community (The Passive Voice).

It remains to be seen how this will develop, however, no doubt we will see more of such conflict, a Benkler points out, between the new model of production alongside the industrial model.

The Bookseller. ‘Penguin USA sets up home in Book Country for slush-pile.’ 27 Apr. 2011. Web. Accessed 10 Feb. 2012.

< http://www.thebookseller.com/news/penguin-usa-sets-home-bookcountry-slush-pile.html>

The Passive Voice. ‘Penguin Launches a Self-Publishing Service.’ 16 Nov. 2011. Web. Accessed 10 Feb. 2012.

< http://www.thepassivevoice.com/11/2011/penguin-launches-a-self-publishing-service/>