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The traditional subscription service has also been replaced by in-direct subscriptions, where consumers subscribe to Stack rather than the publication itself.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

Pottermore: Innovative Distribution Process

'Pottermore' is the unique collaboration between the Harry Potter creator and Sony to develop an innovative website that aims to enhance and expand the readers’ experience, and, more importantly for the publishing sphere, act as a distribution forum for the eBook versions. This new website aims to complement the novels and provide backgrounds to minor characters, act as a community for fans to discuss and explore the literary phenomenon, including the opportunity to 'role play' as a 'Hogwarts' student, and exclusively purchase the sought after eBook versions of the seven stories. The opportunity to purchase the eBooks exclusively from the site has caused uproar in the publishing sphere, with bookstores being removed from the equation and resenting the missed opportunity to profit from a series of books they worked hard to promote.  In addition to this, the eBooks, although supported by e-readers, cannot be bought on websites that support the hardware (eg. Kindle users cannot purchase the eBooks from Amazon, which is a first for eBook purchasing!) ‘Pottermore’ acts as an example of a business model that may find itself being increasingly implemented by publishers globally as a way of removing the costly distribution process from the equation. 

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)