Innovation and Stack (Independent Magazines)

In a fast-pasted media environment, organisations have to adopt or develop new business approaches in order to stay current, competitive and retain advertisers and consumers. The recent technology developments and change in the economic climate has caused consumer behaviour to transform and thus created a ripple effect in how advertisers are engaging with them. 

Figure 1. Stack business model

In the case of Stack, they have successfully created and implemented a new business model which eliminates the need for third party advertisers as well as meeting the needs of their target consumers. Through a two-sided business model they rely only on independent magazines who wish to attract a wider readership and consumers who wish to read a different publication each month. This model is cost effective and appealing to small independent publications as they are only have to produce the required number of magazines pre-paid for by Stack subscribers and do not need to consider marketing or distribution as this is also fulfilled by Stack.

The subscription method has been traditionally used by newspapers and magazines for decades. However, while other publications (who adopt the traditional business model) usually offer consumers the choice of single-sale or subscription, Stack only provides the latter. This means while Stack reap the advantages of the traditional model, including; a predictable and constant revenue stream, reduced uncertainty and also higher levels of brand loyalty, it also makes a more financially viable business model as publications are only sourced and purchased from independent publishers based on a predetermined quantity.

The traditional subscription service has also been replaced by in-direct subscriptions, where consumers subscribe to Stack rather than the publication itself. This is the main revenue for the company and also develops brand loyalty.

Stack magazine also have added ‘value’ and innovation to the product through applying expertise in sourcing independent publications as well as their own in-house marketing and distribution process. This process has created an emotive response as the publications change monthly, making it a surprise to readers. The publications are also described as thought provoking and engaging (Stack, 2012) providing the reader with new information and ideas.

References
Aris, A. and Bughin, J. (2009). Rebalancing the Media Value Chain. 2nd ed. Chichester: Wiley pp. 13-81
Blythe, J. (2009). Principles and Practice of Marketing. 2nd ed. South Western: Cengage Learning pp. 629-35
Kolter, P. (2008). Marketing Management: International Version. 13th ed. Pearson. pp. 63
Kolter, P. (2008). Principles of Marketing. 3rd ed.
Kung, L. (2008). Strategic Management in the Media: theory and practice. London: Stage pp. 47

The Book Publishing Evolution - Can we keep up?

The book publishing industry is currently teething its way through a massive change. Changing attitudes towards reading, in addition to the rising prominence of digital publishing has given the industry a lot to react to.  A PEST analysis reflects these changes.

Politically, the rise of digital publishing has raised new issues. These are apprehensions concerning copyright and piracy. Issues such as this may cause confusion over ownership and rights. It has been known for the publishing company to own the rights to the printed work, whilst the author keeps the rights to the digital version of the work, thus allowing the author to self-publish an electronic edition. Piracy and protecting digital copies of the book are also prominent concerns.

Piracy also raises the question of the economic factors. With digital media being so easy to replicate, ownership and rights will need to be considered differently. On a separate economic thought, the rise of self-publishing may also bring economic implications for the publishing industry.  

In Strategic Management in the Media, Kung relates that; due to generational shifts in attitude towards reading, books are being read for pleasure less often, particularly within the 18-24 age range. This declining market is, of course, a threat to the publishing industry. However, new products with new technology may entice lapsed readers.

Reading was usually a solitary pastime; however, there is an increasing social aspect evolving. The Goodreads website allows readers to socially interact with other readers, and even the authors themselves in a way that were never possible before. Similarly, Wattpad produces a social dimension to the writing process; readers can communicate and interact with the text and the writer, their feedback helping to shape the text as it is actually being produced.

The environment of change may spark new ideas, innovations and markets, or just improve existing systems. As digital media rapidly changes the industry, we need to ensure that we evolve with it. 

Issues impacting the business of the media

Issues impacting the business of the media.

Political- One of the Political issues that has affected the media is the pressure to be more economically friendly. Reading a book or magazine on an E-reader or tablet saves paper and the costs of actually paying for and producing the book (although digital publishing execs say it is just as expensive to produce an E-book). But apart from saving trees it has also lead the media businesses to be innovative which has resulted in great advances in technology and has made people realise how beneficial owning a tablet, smartphone or laptop etc. can be for consuming media in an environmentally friendly and convenient way.  

Economic- Today’s economy is not great and people have very little money so what impact does this have on the Media Business? Well the best way media companies are going to make money is if they make as much content and products accessible to as many people as they can for as cheaply as they can and then throw loads of advertising all over it. By offering a product like an E-book at half the price and embedding it with advertisements, say two 30 second adverts at the end of each chapter, or every 30mins the reader would be happy to sit through these if they paid £5 instead of £10 for the book.     

Social- Today people have greater expectations of the business media than ever before. Information must be readily waiting at any given time. News must be immediate and books and magazines have to be more than just artifacts to be read; they must be interactive and engaging. In a world where nobody waits, readers demand the ability to at the click of a button have instant access to a book, a magazine a movie or music.

Technological- Technology has had a huge impact on the business media in recent years. The internet has allowed innovation to take a great leap for example Wikipedia has not only replaced the encyclopaedia but it has surpassed it in terms of usefulness, quality, timelessness and convenience (Mod, Craig (2012) “Post-Artifact Books & Publishing”.http://craigmod.com/journal/post_artifact/). Amazon changed the way we buy books, music, films etc. E-readers and tablets have changed how we access them. Facebook, MySpace and Twitter have changed as how a society we interact which in turn has created a grand place for advertisers to reach a global market, all without anyone leaving their desks. 

Looking At The Bigger Picture - A PEST Analysis on the Media Industry

Businesses in the media industry have straight forward value chains.  However, the digital revolution is allowing them to reconstruct.  This process is allowing businesses to become more innovative.  But how do they do this? 

Publishing digitally is growing.  Different platforms and devices are being introduced constantly, providing consumers with a new way of reading.  Communities are being created online, allowing people to engage through books, magazines, blogs and long-form journalism. 

The digital distribution of books creates engagement with readers.  Books can reach a much larger audience, which brings in more revenue. 

Inevitably, the continuing growth of the e-book (for example, Amazon's kindle) in this industry will mean the death of the printed book.  The threat lies in innovation – how do publishers think of new ways to attract readers?  Publishing houses are consolidating to reduce operation costs, but if the money still isn’t growing, more rationalising has to take place.

In the music industry, CD sales are decreasing.  People are looking for ways to share music, which allows businesses to be innovative and create new ways for this to happen.  However, they also need to find a way to attract people and make money.  If there is no new talent, there is no money.

Newspapers have also realised how beneficial an online presence is.  This provides them with an opportunity to carry a range of content to appeal to a range of readers.  The key, again, is innovation.  Simply, if there are fewer advertisements, there are fewer pages in the newspaper; therefore making it less value for money and less attractive to readers. 

Then we have magazines.  People spend an equal amount of time reading print as they do online.  They have endless opportunities to expand.  However, there is still one major downfall.  If the internet is ever growing, what does this mean for magazine sales? 

For international businesses, their problem is the decline in print advertisement revenue.  In order to compete, they would need to build on their online advertisement revenue and their content revenue. 

Digital is taking over.  There’s no stopping it.  Businesses need to be innovative and aware in order to build, grow and succeed.

Holly Sutton 

PEST Analysis for Media Journalism

By carrying out a PEST Analysis into the current Media Journalism sector, we are able to gain an in-depth understanding of the current industry, highlight new opportunities and also threats or problems and how these can be over come.

The Internet and advances in digital technology has changed the model of mass communication and has had a major impact on the external environment of the newspaper and magazine industries, gradually substituting traditional print media. Digital media has also increased competitiveness within the market and with low capital cost and global accessibility of resources, this has been a threat for many established prints publications. Many existing newspapers have therefore had to compliment their daily prints with online version and further updates throughout the day, instead of waiting for updates till their next publication to be released.

The current economical climate also means that people may be less likely to buy a newspaper or magazine when they could access this information free online - either via newspaper websites, independent websites, blogs or forums. This has had a knock on effect for companies who may have previously used print promotion to reach consumers, as their target consumers might be struggling to buy products, they may have smaller marketing budget or may be choosing to spend their budget on other promotional platforms.

The current economical climate has also led to the public becoming less trusting of the government and therefore, it is easy for consumers to avoid certain publications depending on their political standpoint. With developments in technology and an increased access to resources and information it also means that the public are more likely to investigate news stories themselves - allowing more transparency and angles to a story.

Socially peoples needs are also changing in the way readers access information. More people are accessing digital and social media and by going online, newspaper and magazines can offer their readers multimedia and interaction - something which was not possible only a few years ago.

Media Industry - PEST Analysis

Political, Economic, Socio-Cultural, Technological Factors – These will help make sense of the bigger picture.

Political – The Digital revolution is expanding yet has many issues to combat. One of which is the number of lawsuits it has faced due to copyrighted content. This has led publishers to take an extra precaution as they need to avoid future lawsuits. They demand that freelancers sign away electronic rights or risk not being published electronically. (Cunningham B. Who owns that story now? Columbia J Rev. 2000; 38(5):11). The threat here is piracy, where people will copy content free of charge.

Economic – The pressure is rising to sell more books. Profits on e-books are not as high and this means that authors are not able to make enough revenue. Technology has undermined the economics of book publishers and authors. On a positive note, e-readers help the economy because e-books as a supply inventory chain control saves trees in the long run. Digital editions of magazines are also creating an attractive environment for advertisers.

Socio-Cultural – New publishing strategies create engaged community forums, for example Goodreads.com is a digital and social networking library which allows people to chat about books and creates awareness about niche books. This builds an opportunity for promotion of products which would not only help authors but also help publishers. A threat that social networking may impose is bad reviews and therefore have the opposite effect. The audience now have just as much access to media distribution as publishers do. E-marketer has reported that CEO's within the media and entertainment industry are leaning on social media to encourage growth and build future customer connections. (www.Fipp.com)

Technological – The media market place is not simply about technology. But technology does in fact play a huge role. Convergence of media is making boundaries harder to decipher. Where do books end is one main question and another medium begin.  The rise of e-books meant numerous platforms were created as a marketplace for books. One example is when Steve Jobs announced the launch of the iPad iBooks, which created a huge opportunity for publishers. A problem with technology is that it is forever changing and media companies must always look at innovative ways to lure back those lapsed readers, with the added pressure of other competing technologies. The good thing about the discovery of new media devices is that it is transforming magazine media audiences, whilst print remains just as important.

 Fipp has researched into how

 “The remarkable strengths of tablets, websites, smartphones and social media in presenting magazine content, and consumers enthusiastic acceptance of these new means of 

delivery, means that for publishers there is a dramatic and continuing shift in profile towards digital audiences without necessarily reducing print audiences. All in all, this indicates a very healthy future for magazine media is one of the conclusions drawn in the book.”

By Saima Omar