the mobile digital newspaper business scenarios for epaper devices leo van audenhove simon delaere...
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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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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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ePaper : Business Modeling
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/