Remember when iTunes was released way back in January 2001? Really, do you remember? At it’s launch Steve Jobs was confident. He knew what he was giving us and how it might transform our music listening and buying habits. At the unveiling at Macworld Expo Jobs said: “iTunes is miles ahead of every other jukebox application, and we hope its dramatically simpler user interface will bring even more people into the digital music revolution.” With that straight to the point statement the landscape for the music industry and other associated creative industries changed.
These industries didn’t know what lay ahead. Ten months after iTunes was introduced, on October 23rd, Apple released the iPod. Eighteen-months later in April 2003 – while the music industry was doing battle with file-shares, Apple opened it’s iTunes store. And within six years Apple had 70% of worldwide online digital music sales, making iTunes the largest digital music retailer.
Steve Jobs was hailed as a saviour of the music industry. He had a vision and made it work. Today, the news, media and publishing industries are crying out for a saviour that can help rescue them from the catastrophic situation that they find themselves in. Sales down and advertising at an all time low.
Some have tried, amongst them Amazon’s Jeff Bezos, who in November 2007 launched the Kindle, a popular eReader that gave Amazon customers in the US access to an initial catalogue of over 88,000 digital titles. Today, there are more than 300,000 titles, including subscriptions to newspapers.
The Kindle has hype. It sold out quickly and had the support of Rupert Murdoch. Yet, the Kindle and it’s successors didn’t have the magic that Apple had, nor the practicality that is designed into every Apple product.
In the background though, Apple and Amazon are facing the monopolistic might of Google – a true online mammoth, which is looking to digitise the world’s books and create a vast online library. With a court hearing in New York next month, Google is hoping to legally confirm a deal signed last year with US authors and publishers. In the deal, Google would set up a Book Rights Registry and position itself as a PRS-style (ASCAP to our US readers) entity for writers and publishers. Some believe that this should not be allowed.
Yet this deal has forced many in the news, media and publishing industries to really have a look at how they operate and how they must make the most of the internet.
Yes, the Google Books deal would allow people to search books through it’s search engine, but it would also set up a model for making money from publishing, possibly through eReaders and the like. It might also create new income streams for the news and media industries, which have been suffering since customers started to switch online, where news has available free for years because publishers wanted a slice of the online advertising pie. Sadly, as I said in my previous post, they set themselves up for a tough time, dependent on advertising income, which plummeted when the current recession hit.
And why is this Google Books deal relevant to news outlets? Well, Google has reached a settlement with book publishers in the US and news and media companies might be hoping that the online giant will hear their talk of paywalls. What they need is for Google to play ball and start paying for listing their headlines and first paragraphs through its very popular Google News aggregator.
And it appears that Google is willing to play. In an eight-page response to the Newspaper Association of America request for paid-content proposals, Google revealed that it was developing a micro-payment system for paid-for-online content.
In the document Google outlines its vision for a “premium content ecosystem” that includes subscriptions across multiple news sites, syndication on third-party sites, accessibility to search and various payment options, including small fees for access to individual pieces of content (known as micropayments).
Google says that: “While we believe that advertising will likely remain the main source of revenue for most news content, a paid model can serve as an important source of additional revenue. In addition, a successful paid content model can enhance advertising opportunities, rather than replace them.”
It confirms a Google’s vision for “a premium content ecosystem includes the following features:
· Single sign-on capability for users to access content and manage subscriptions
· Ability for publishers to combine subscriptions from different titles together for one price
· Ability for publishers to create multiple payment options and easily include/exclude content behind a paywall
· Multiple tiers of access to search including 1) snippets only with “subscription” label, 2) access to preview pages and 3) “first click free” access
· Advertising systems that offer highly relevant ads for users, such as interest-based advertising”
The payment system, which is described as being in production, would help and confirm News International’s plans to charge for access to it’s content online within the next 12 months. Or at least it gives us a clue of how paywalls might work.
Currently most news outlets only make money online from advertising, while print makes it from both from sales and advertising. The exceptions here being titles such as The FT, The Wall Street Journal, as well as other online subscription based outlets. The industry is starting to see how valuable it could be to have committed subscribers accessing their content.
Publishers meanwhile are starting to stand firm against Google’s News aggregator. In Italy, the Italian association of daily newspaper and periodical publishers, claim “members news sites receive no compensation for the news picked up by Google News Italia and if they do not appear on a Google search they are denied access to thousands of potential ‘visitors’ who generate advertising income. ”Google argues that it helps newspaper websites make money through online advertising and does not misappropriate content.”
With its Google Books operation and details of it’s plans for a micro payment system using Checkout, one has to assume that Google is looking to safeguard its position and transform the news, media and publishing industries just like Jobs changed the landscape for music. After all, “Google’s mission is to organize the world’s information and make it universally accessible and useful. This applies to all information – paid and free.”
And Google is planning to replicate the model that Apple develop with it’s possible initiative with news, and possibly Book. Hidden in the document Google confirms that a revenue split would be comparable to “Apple’s models on iTunes and AppStore and consonant with experiments being currently conducted on YouTube.”
The question is, with rumours of an Apple Tablet, could Jobs undermine what Google might be planning?
Apple has done it before and it has the infrastructure to do it again and be the knight in shining armour for a beleaguered set of industries.
The media landscape is changing, and it’s changing fast.
Newman stated that what we are currently seeing in journalism is a, “quiet revolution.” Between 2007-2009 there’s been an explosion in participation, ‘driven by user-friendly internet tools, better connectivity and new mobile devices. Social Networking and UGC have become mainstream activities, accounting for almost 20 per cent of internet time in the UK and involving half of all internet users. This dramatic change has forced traditional news organisations to take note.’ And news outlets have reacted by abandoning attempts ‘to be first for breaking news, focusing instead on being the best at verifying and curating it.’
The Changing Business Culture – Reacting To Consumers And Social Media
Wednesday, December 23rd, 2009It has been an interesting year for public relations. The recession has affected how businesses communicate. Reputation and issues management have been the watchwords as companies throughout the world battled to safeguard their image and reputation during what could be described as the first major downturn in this globalised era. And it has taken no prisoners as it spread across sectors and continents, highlighting how interconnected we all are today.
What’s been interesting is that while the recession was causing havoc around the world, consumers became better connected. Issues that once might have only affected reputations in a small geographic region spread like wild fire thanks to social media and networking. Media outlets across the world wasted no time in reporting issues that were trending online.
While this was happening companies continued in their monologue culture, dictating at consumers while they engaged and networked online – sharing feedback and their experiences through websites, blogs and real-time platforms such as Twitter, Facebook and YouTube
And that is the point. Social media and networking has empowered consumers. It has given them a platform through which they can share knowledge and experience. It has also raised their expectations with regards to what they want and how they want it. They expect good service and that expectation crosses sectors. Today, if you have outstanding service when buying a car, you expect the same level of service when dealing with your bank or utility company. Social media has unified the expectations of people and it is now up to companies to realise this.
The fear that the business community has is that it isn’t able to control the conversation. Entering into a conversation with current or potential consumers on a digital platform “entails considerable risk” as the Accenture report says. Risk because if your levels of service do not meet the expectations of your empowered audience, said stakeholders will amplify their displeasure and share it with others, may others. In fact, the Accenture says that “one-quarter of respondents have used these channels [digital] to relate their negative experiences to others.” In fact, nearly nine in 10 consumers globally told the people around them about their bad experiences. And this is not what businesses want during an economic recovery.
You just have to look at how Eurostar created a rod for its own back by behaving in such as detached way from what was affecting their customers. A lack of empathy and the use of corporate language only helped turn an issue into a crisis. Such was the reaction to horrendous customer service that customers turned to Facebook and other online sites to vent their anger at how they were treated.
And let’s not forget how Rage Against The Machine became the UK’s Christmas Number 1. Tired of being fed ‘pop-tastic’ fodder, people joined a Facebook group that attracted over 1 million supporters who wanted to break the monopoly of X-Factor. People power at it’s best.
So, what should businesses do in order to meet the ever-increasing expectations of consumers? Accenture rightly says that companies should dump the ‘one-size-fits-all’ customer service model and “embrace a service model that provides differentiated service experiences based on the expectations and requirements of individual—and closely understood—customer segments.”
Businesses in the so-called emerging markets have become more vulnerable to the power of people. One could argue that it’s because consumers are keener on making the most of their new found wealth, while customers in mature markets are more patient and will only as a last resort take their business elsewhere.
For quite some time consumers have had customer service that’s been designed for them rather than with them. With the speed at which the public can create a backlash it is going to be essential that businesses learn to listen and start developing models that can be customised by customers. Collaboration and prompt attention and the understanding that each consumer is unique will help businesses succeed as the economy climbs out of recession. This culture and philosophy will work to turn consumers into advocates, turn people into an invisible word-of-mouth and online sales force.
I believe that 2010 will be a year where public relations forces businesses to take note of what customers want. A year where cultures will need to change, because if they don’t and consumers ever increasing expectations are not met reputations will suffer. Businesses will start noticing that their customers are now critics that will make their opinions known not just through word-of-mouth but online, to a much wider audience.
In 2010 consumers that share their positive or negative thoughts and experiences will attract cult following. Of course on issues such as banking we already have this with MoneySavingExpert.com’s Martin Lewis. Just think of what he’s achieved and wonder what others could do in sectors in which they are customers.
We are witnessing a change and social media is the platform through which consumers will fight for the service that they expect.
But as Niccolo Machiavelli said, “whosoever desires constant success must change his conduct with the times.”
Tags: accenture, blogging, business, communications, consumer, customer, customer service, eurostar, facebook, networking, online, pr, public relations, reputation, social media, social networking, twitter, ugc, user generated content
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