european media management association
DESCRIPTION
Presentation of Ricardo Leiva, member of the Media Management Department of the University of Navarra, in the Summer School of the European Media Management AssociationTRANSCRIPT
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The Value of Economic Information:
Business Models to Sell Online Contentsand the Image of Spain in WSJ and FT
Ricardo LeivaUniversity of Navarra
Pamplona, Spain
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1. The economic nature of information2. Two alternative business models: WSJ and FT 3. The experience and the value of WSJ and FT for Spanish readers
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•Information is a commodity desired and acquired.•Information can be an appropriable commodity with suitable legal actions (Arrow, 1962).
2. THE INFORMATION IS A VALUABLE RESOURCE
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•Whatever the price, the demand for information is suboptimal (Arrow, 1962).•Property rights support inventive activity, but they lead to an underutilization of information.
1. THE ECONOMIC NATURE OF INFORMATION
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•Samuelson (1967): TV broadcasting is a public good, but consumption may be restricted. •To exclude people from knowledge: costly and inefficient, but it depends on the case.
1. THE ECONOMIC NATURE OF INFORMATION
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•Stiglitz (1999): Knowledge should be free.•It may be appropriable but it is a public good.
1. THE ECONOMIC NATURE OF INFORMATION
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•Picard (1989): information is public or private depending on the media.• Information is the public good, the paper and ink are private (Compaine, 2000).•Online information = public good.
1. THE ECONOMIC NATURE OF INFORMATION
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3. AN ATTENTION GOOD
• Information is an attention good.•The cost is incurred by the recipient (Simon, 1971).•Consumption of informational content ocurrs on the consumer level (Albarran, 2002)
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3. AN ATTENTION GOOD
•Media market is a time market (Nieto, 2003)
•Media industry is driven by time (Albarran & Arrese, 2003)
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4. A DUAL PRODUCT
•Media content and information compete in a dual market (Picard, 1989).
•News have instrumental, not intrinsic value. They are useful to do things (Picard, 2009).
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5. A INFERIOR GOOD?
•Online news are ‘inferior goods’: less satisfying than offline media. •Varian (1998): Information is an experience good. • Information goods are digital goods (Varian, 1998).
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1. The economic nature of information 2. Two great brands with alternative business models: WSJ and FT 3. The experience and the value of WSJ and FT to a Spanish reader
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8. ALTERNATIVE BUSINESS MODELS
•WSJ y FT: the most trusted newspapers for American and British executives.•Freemium: free and premium content. •Price discrimination strategy: hardback and paperback books.
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8. ALTERNATIVE BUSINESS MODELS
•Free version for 75% of news. Paid version for 100% of news: 103 dollars per year.•WSJ Web site continues visible and captures ads. It doesn’t canibalize print.
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8. ALTERNATIVE BUSINESS MODELS
•Content behind pay-wall: exclusive and specific financial and economic information to earn and save money. •Valuable data for brokers, investors, executives and businessmen.
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8. ALTERNATIVE BUSINESS MODELS
•Breaking news, general news and public information are free. •1.100.000 paid subscribers and 33 millions visitors of Web site. •Circulation print product: 13% in 4 years.
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8. ALTERNATIVE BUSINESS MODELS
•Metered model of the FT is popular in the telecommunications industry. •The provider measures the consumption and charges a variable price. •Metered subscription:
• flat fee for fixed number of minutes• variable fee for additional time and international calls.
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8. ALTERNATIVE BUSINESS MODELS
• Five types of metered subscription: • Free content no registration: 3/month.• Free content with registration: 10/month.• Standard subscription: all articles (less Lex) by €3.59 per week • Premium subscription: all the articles (more Lex), 5 years old archive and news in PDA by €6.99 per week. • Online-print subscription: Print and online editions by €14.09 per week.
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8. ALTERNATIVE BUSINESS MODELS
•110,000 online subscribers and 435,000 print subscribers. •Online subscribers increased 9% in 2008.•The FT has doubled the price. • If you want to read the rest you have to pay.
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1. The economic nature of information 2. Two great brands with alternative business models: WSJ and FT 3. The experience and the value of WSJ and FT to a Spanish reader
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9. THE SPANISH EXPERIENCE
•WSJ and FT between October 1 and December 31, 2008.• Spain’s GDP fell 0.2% (Q3 2008) and the unemployment rate rose to 11%.• 182 articles of FT (78%), 51 of WSJ (22%). • Positive, negative, mixed or neutral orientation.• Second objective: to know the international image of Spain.
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9. THE SPANISH EXPERIENCE
“Spain is an over performing economy with a sound fiscal position”
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9. THE SPANISH EXPERIENCE
News about Spain (Q4 2008)
FT78%
WSJ22%
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9. THE SPANISH EXPERIENCE
Most mentioned Spanish Companies Nº % Santander 39 16,7 Repsol 13 5,6 Metrovacesa 12 5,2 Iberia 11 4,7 El Corte Inglés 9 3,9 Sacyr 9 3,9 Telefónica 8 3,4 Ferrovial 7 3,0 BBVA 6 2,6 La Caixa 6 2,6 Marsans 4 1,7 Zara 3 1,3 Otra nacional 16 6,7 Otra extranjera 32 13,7 Ninguna 58 24,8 Total 233 100,0
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9. THE SPANISH EXPERIENCE
Most mentioned Spanish People Nº % Rodríguez Zapatero 26 11,2 Botín (Santander) 8 3,4 Sanahuja (Metrovacesa) 6 2,6 Francisco Franco 5 2,1 Conte (Iberia) 4 1,7 Pedro Solbes 3 1,3 Ayuso (Ferrovial) 2 0,9 Rivero (Repsol) 2 0,9 Noticia sin persona 70 30 Otro 107 45,9 Total 233 100,0
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9. THE SPANISH EXPERIENCE
Most Mentioned Topics about Spain Nº % Economic situation 57 24,5 Foreign operations of Santander 25 10,7 Repsol-Lukoil Operation 20 8,6 Iberia-British Airways 14 6,0 Metrovacesa-HSBC 13 5,6 Culture 12 5,2 Turism-gastronomy 12 5,2 Ferrovial-airports UK 6 2,6 Politics 6 2,6 Problems in Argentina 5 2,1 Others 63 26,9 Total 233 100,0
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9. THE SPANISH EXPERIENCE
Orientation of News about Spain in WSJ and FT (Q4 2008)
Neutral29%
Positive23%
Negative40%
Mixed8%
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9. THE SPANISH EXPERIENCE
• The Financial Crisis: After Years of Heavy Borrowing, Spain Is Poised for a Slump • HOUSE, J.: “The Financial Crisis: After Years of Heavy Borrowing, Spain Is Poised for a
Slump”, The Wall Street Journal, October 9, 2008, p. A4.
• Spaniards who previously shunned farm jobs are beginning to accept any work they can get and are sometimes given preference by Spanish employers.• MALLET, V.: “African workers reap bitter harvest on Spanish farms”, Financial Times,
December 24, 2008, p. 2.
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9. THE SPANISH EXPERIENCE
Orientation of News about Economic Situation in WSJ and FT(Q4 2008)
Neutral 25%
Positive7%
Negative59%
Mixed9%
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9. THE SPANISH EXPERIENCE
Orientation of News about Rodríguez Zapatero in WSJ and FT(Q4 2008)
Neutral 46%
Positive17%
Negative29%
Mixed8%
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9. THE SPANISH EXPERIENCE
Orientation of News about Spain in WSJ (Q4 2008)
Neutral31%
Positive31%
Negative35%
Mixed3%
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9. THE SPANISH EXPERIENCE
Orientation of News about Spain in FT (Q4 2008)
Neutral28%
Positive21%
Negative42%
Mixed9%
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9. THE SPANISH EXPERIENCE
•FT published 3 times more news than the WSJ. •FT publishes 5 thousands news per month. 60 articles per month about Spain. 10 free articles per month are insignificant. •Four out of 10 pieces of news about Spain were negative.