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The traditional subscription service has also been replaced by in-direct subscriptions, where consumers subscribe to Stack rather than the publication itself.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

Marketing: Planning and Delivering

In the webinar on Monday we discussed marketing and marketing strategy. The marketing perspective is producing and promoting a product that reflects the customer and the customer’s needs. Without identifying a customer and a need, the value proposition cannot be delivered well. However, importance must be placed on marketing planning.

Marketing planning ensures that sub-divisions of a company (ie. A Publishing company) tie together their strengths with the market needs and takes into consideration the existing and expected competitors. It also involves analysing their own organisation (eg. Size, diversity of company operations, finances, resources) and skill sets to ensure all bases of the process are covered.

However, an issue with the publishing industry today is that publishers are too focused on selling products to an already established market (ie. readers) rather than establishing a value proposition for non-readers and cracking this market. With this, they miss opportunities and risk innovating and expanding the market, which is, in my opinion, what they should be doing. However, the logic is understandable; book lovers are guaranteed to buy what publishers produce, however publishers could risk their reputation and finances on developing innovative content and products targeted at a non-reading market to increase their interest (and expand the company’s market), which could fail and hit the company hard.  

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.