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Value of content

By on January 24, 2010 in Uncategorized

ny times

The NY Times announcing that it is moving to a paid for content / subscription model is a bold move and probably about time. Will it work? I have no idea. One thing it will answer is what is the value of their content and if anything start to bottom out the answer of what is the value to written content online. I used to think the old adage of “content is king” had lost its relevancy. The majority of the biggest sites in the UK don’t have editors or even create so called content – application was king, relevancy was king, context was king … content wasn’t really up there.

I have changed my view. I recently spoke to a natioinal TV station who gave an insight into the usage of their video-on-demand service (super big), the sell through levels of the advertising (it was all sold) and the yields being achieved (I reckon they must have been getting yields 4 – 5 times that off your common gardenal natioinal newspaper site). The point being they were nailing it. The reason being it was great content. TV shows that people wanted to watch again. The thing that was raised eyebrows was the amount of archive footage that was generating plays and carrying these valaubale ads. From the ARCHIVE.

Janey L Robinson – Chief Executive of Ny Times, was using the iTunes micro payment model as proof that perhaps the market was ready to pay for content. I’ll be honest I think this is perhaps a stretch too far. The nature of the contrent is very different, but it made me think of the archive word again.

My thinking is, would the creator of content archive it and would someone then come along and pay for that content. I think that this is  the model at the moment, in markets where it works. Music, video, financial even porn. Succesful paid for models. Perhaps they are selling the freshness of the content of the stories – but will people pay for that? Especially with the explosion of free media services, national funded broadcasters and wire services.

The saying of “Good strategy is about sacrifice” stands here. The papers really need to think about the type of content people may pay for and for now I kind of like “The Archive Test”. Fingers crossed they need a break.

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Digital and Regional

By on December 30, 2009 in Uncategorized
blue
“Digital or regional” – that was the view given about 5 years ago to me by an outgoing chairman of one of the large media agency networks. If he had to start again now – that is where he would put his money? No prizes for dropping the “D” word, but going regional? leaving Soho, Noho, Madison Avenue, Charlotte Street etc? Urghhhh

“They make a shed load of money. No one sees them coming. Low cost base. Less churn of good people” – was the longer response.

I recently read a book called Blue Ocean Strategy. In a nutshell the authors look at how you can grow a business by nailing what is called your “Value innovation”. Innovating to increase value to your customers while also innovating within your own business model to reduce costs.

If you can have one proposition that does both. BINGO!!! Change the rules vs. compete within a finite market.

Anyone that has been involved in an online unit within an agency or publishing business will at some point have been “thrown in” as value on a pitch or deal. Crass, but if anything it solves the big issue of “How do we charge for our digital thinking?” or “Are we willing to have the conversation with the client about how we need to charge for our digital work”.

Interactive digital work (I’m not talking digital radio or TV) is labour intensive and can’t be charged on historic execution percentages. If positioned correctly it can be a higher value proposition as well higher margin for the agency. It also provides a counter balance to the commoditisation of print, TV or radio buying (planning traditionally be paid as % of what was bought).

Media agencies have been worried about the commoditisation of the industry for years. It is seen as real threat to their pricing. Finally a non commoditised, higher value, product comes along in online media …… and it’s used to plump up the commoditised side of the business. Something has gone wrong.

So, back to the start. As I read my book, I wondered how the agency world has really innovated with its own value model and there it was …. “Digital and Regional” – 2 sides of the same value coin.

It begs the question – why are the agencies based in central London? Most advertisers aren’t the media owners are, as they need to be near the buyers. But why the agencies? If we started again would we choose central London? In the 80s – when media was probably taking about 4% on the gross spend and people in the industry were driving read Ferraris, it made sense. How many big (offline) accounts are now on sub 1.5%? How many have moved out of central London?

You sense that moving out of town would never be seen as an “innovative” agency move, yet I sense the time is to be honest about what we are and what we do? Treat our high value products correctly and treat the lower value products accordingly and both will flourish.

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