the mobile digital newspaper business scenarios for epaper devices leo van audenhove simon delaere...

The mobile digital newspaperBusiness scenarios for ePaper devices

Leo Van Audenhove Simon DelaerePieter BallonMichaël Van Bossuyt

Studies on Media, Information and Telecommunication (SMIT)Institute for Broadband Technology (IBBT)

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ePaper : Business Modeling

CONTENT

1. E-paper project

2. Business models

3. Conclusions

4. Lessons learned for the newspaper industry

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2 - E-paper project

Project goals Generate generic knowledge about the

potentials of news content on a dedicated electronic reading device

Iliad eReader based on eInk Test some common hypotheses concerning

success factors in practice eInk Technology

Ink carrying a charge which can be updated by electronics

Paper-like high readable screen Look of real paper

Ultra low power consumption

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2 - E-paper project - Partners involved

De Tijd High brow newspaper focusing on business

sector Philips & iRex Technologies

Development of ePaper devices iRex Technologies is a spin of company of Philips

Belgacom Belgians incumbent telecom operator

Hypervision / Agency.com & iMerge Two advertising agencies specialized in

electronic advertising Flemish University Institutes

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4 - Business modeling

Research Question What are possible business models for ePaper

devices in the newspaper industry? BUT: technology broadens scope

Publishing industry - Print Media Information industry

Starting point Innovation in technology offers new business

opportunities BUT: technology does not operate in vacuum Technology and business models are shaped by the

business environment and actors involved Complexity of innovation/product development is

growing Created in value networks Often involving multiple actors

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4 - Business modeling framework

Four main business modelling dimensions:• Value network • Financial model• Functional arch. • Value proposition

Strategic alignmentbetween all four dimensions required in order to create

viable and sustainable business models

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4 - Business modeling - Roles

Roles in value network Advertising & device suppliance

Place depends on business model Service provision

Place depends on actor taking up this role Related to who has contact with customer

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4 - Business modeling - Scenario development

Scenario method Why: largely prospective research Based on 2 basic uncertainties Identified on the basis of:

Desk research Interviews with actors involved Interviews with actors in the Flemish Contexts

Basic Uncertainties1. Aggregation versus disaggregation

Extent to which newspaper content is offered as an editorial product

2. Open versus closed Extent to which the device is open to content

from multiple players

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4 - Business modeling - Scenario development

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Newspaper-Model: Scenario Outline

One content aggregator offers service Based on its own content e.g. Newspaper Making use of new capabilities of technology

Regularly updating content Offering information aimed at specific

segments Personalizing content Integrating personalized advertising

Close to current ePaper project De Tijd as leading newspaper

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Newspaper-Model: Value Network

Newspaper Integrates content production, aggregation and

platform content aggregation Device manufacturer

Keeps certain control through configuration device/software components

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Newspaper-Model: Value Network

Service provision Logical that newspaper will put service in

market Has a good customer relationship Has content for which customers want to

pay Have certain market intelligence

Third party content Content from the mother publishing house Content from outside

Expected to be complementary Direct competitors unlikely to support

platform

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Newspaper-Model: SWOT

Strengths WeaknessesNewspaper have good customer relationshipNewspapers have strong brandsStrong potential for market developmentEasy monitoring of readers

Difficult to attract content from third partiesUnder usage of technical potentialMight be far from user expectations

Opportunities ThreatsLimited amount of players in value networkRapid deployment possible

Boycott by other content providersSmaller market for advertisers

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Newspaper model - Examples

Yantai Daily Media Group (China) Offers since Oct 2006 all its newspaper

titles on the Iliad eReader PCM Uitgevers (The Netherlands)

De Volkskrant, NRC Handelsblad, ... End of May 2007

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Kiosk-Model: Scenario Outline

Intermediary offers integrated service Access to aggregated content

National and international newspapers Magazines, Comics Books, etc.

From different content providers/aggregators

Analogy with newspaper stand Newsstand, Zinio

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Kiosk-Model: Value Network

Intermediary plays important role Integrates two markets 1) readers; 2) information providers Causes network externalities, especially online

Advertising possible at two levels Can cause friction

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Kiosk-Model: Value Network

Service Provision: two options Through intermediary

Newspaper looses costumer relationship In analogy with purchasing paper in newsstand

Intermediary (different from device supplier) Will favor open standards Will try to publish on different devices Will be forced by content producers to protect content

with DRM

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Kiosk-Model: SWOT

Strengths WeaknessesLarger selection of contentOne platform for all contentNewspaper retain editorial function

New initiative so:Higher start-up costsNeed for individual marketing and branding

Newspaper might loose costumer relation

Opportunities ThreatsNew platform for digital newsOne open standard

Conflict over revenue sharingConflict over advertisingIntermediary risks to become dominantIntermediary shifts towards role of content provision

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iTunes-Model: Scenario Outline

Intermediary offers integrated service Access to disaggregated content

Single articles from national and international newspapers, Magazines, etc.

Comics, Books, etc. From different content

providers/aggregators

Service only available on specific device

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iTunes-Model: Value Network

Intermediary plays central role Integrates two markets 1) readers, 2) content providers BUT ALSO device suppliance and service provision Content on single platform and on only one type of device

Disaggregation of content

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iTunes-Model: Value Network

Service Provision (disaggregated content) Through intermediary

Newspaper looses costumer relationship Newspaper looses part of editorial function

Intermediary and device supplier same actor Might favor proprietary standards Will favor compatibility with own devices Will be forced by content producers to protect

content with DRM Intermediary might shift to content

provisioning E.g. audible

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iTunes-Model: SWOT

Strengths WeaknessesHigher selection of contentSingle platform for all contentStrong personalisation possibleStrong compatibility between service and device possibleMight be in line with changing user experience

New initiative, so:Higher start-up costsNeed for individual marketing and branding

Newspaper looses costumer relationNewspaper looses part editorial function

Opportunities ThreatsNew platform for digital newsPossible high market penetration of single device

Conflict over standards possibleConflict over revenue sharing possibleConflict over advertisingIntermediary might become dominantIntermediary might shift towards content provisioning

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iTunes model - Example Sony Connect

Sony - e-Reader and website (http://ebooks.connect.com)

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Web-Model: Scenario Outline

Device as gateway to the web User can access all content

Web, blogs, newssites, egov applications, etc. Might be supported by push elements, e.g. RSS

User can upload own content PDF, Word, etc.

Still possible to procure paid content Using different open and proprietary standards

Costumer becomes aggregator in terms of own selection

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Web-Model: Value Network

No integrated service concept Device supplier central in scenario

But integrates no other central roles Might control platform provision through software

Newspaper role more marginal In competition with online content/information

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5 - Conclusions

Newspapers Remain in a rather unique position as mass

medium Have strong costumer relations Have shrinking market but willingness to

pay ePaper allows for more constant monitoring

of newsreaders Believe in value of editorial function

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5 - Conclusions

For newspapers kiosk possible scenario Most Flemish actors seem to prefer this

scenario or variant on it BUT strong competition between large groups

iTunes model possible scenario for print & ebooks BUT most online examples rely on long tail Newspapers have short tails

Time and Uniqueness Scenarios might co-exist Could gradually shift from I to IV over time

Path dependency might be possible pitfall

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6 - Lessons learned

1. High potential of the device vs. Importance of look ‘n feel Positive on screen quality and size But look ‘ feel of newspaper 48,9% of test panel would consider buying an eReader

(if fully operational) Reading device (vs. All in One)

2. Old habits die hard No change in reading pattern Strong link with printed newspaper

Navigation Content (trust, aggregator,...) Representation

3. Substitution or complementarity? In this stage, the device is not ready but it provides users

with some additional options (time, place) Strong competitor for printed paper in the long term

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6 - Lessons learned

4. Control of the user: choice/complementary: AND & AND story Personalised & full News of today (breaking news) &. News of

yesterday Payments: fee & free

5. Newspapers as aggregators Brand as trustmodel

Offer Certified, trusted & authentication

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Contact

Leo Van Audenhove [email protected]

Simon Delaere [email protected]

Pieter Ballon [email protected]

Michaël Van Bossuyt [email protected]

Websites http://smit.vub.ac.be/ https://epaper.ibbt.be/

the mobile digital newspaper business scenarios for epaper devices leo van audenhove simon delaere...

Documents

business modeling framework

business environment

possible business models

sustainable business

new business opportunities

newspaper content

newspaper industry slide

customer slide