Vale the Newsprint Media. My Last Reflection….

Some time ago I wrote about the problems of generating income under the internet business model due to the difficulty in controlling property rights. For example, with music and movies/DVD the marginal profit is zero because the only one copy needs to be sold for it to be freely available to all consumers. As such, many elements of the music and film industries as they were historically structured are being forced to reinvent themselves into new viable business models.

Well it seems recently, that the online news market is now thrashing around with the realisation that giving it away isn’t a necessary going to pave the corporate hallways with gold. The historical business model for printed news has been to generate income partly from a product fee and partly from advertising – particularly classified advertising (houses, motor vehicles etc.). But on the net, generally there has been no charge and the advertising revenue is insufficient to pay the rent and the journo’s.

So the solution according to some news providers is to charge people to view it. One option is to charge intermediary services who aggregate the news on the web. Another option is to charge the consumer, for example, per article or a service access subscription fee.

First of all, the internet model for printed news was really a pretty poor business model.  It merely transports on to the web what was once printed on paper.  It looks pretty much the same on the web as it does on paper. The only real value is that news is delivered to the consumer a bit more quickly, and lets you vent your spleen (but does anyone really care).  It never really leveraged any greater value from the web than it provided on paper.

The end of newsprint on the web is coming because  the news market has both privately and publicly funded competitors. So if the privates start charging, unless the publics follow suit the news will still be available for nothing. Furthermore, the average day to day news item is typically highly substitutable, not just between online providers, but also other media mediums – television and radio for example. So if I can’t get news for free from company A, I can probably get it from company B for free.   The only reason I would pay for something from company A is if their value proposition provided something unique that I really wanted and couldn’t get anywhere else for free.

The solution is far from clear.  Are you and I going to pay for it, or are there too many other options to get the same information?  Even the idea that news providers could charge the intermediaries is only viable if they can make a buck out of it.

The newspaper owners and defendants argue that there is no solution then the the old privately owned news print providers are on a crash course with market failure.  And if the privates fail and leave only the publics, then who owns the publics?  Governments of course.  And do we want governments controlling and filtering the news we get – NOT.

More pertinent is the fact that the news market is a lot more than printed news in this day and age – in fact both public and private  newspapers compete with a mass of 24 hour television news services not to mention the radio news services available across the globe on the internet and twitter and blogs which report first hand in moments from the heart of the latest global catastrophe.  In this context, the death of newsprint is really like an aged grandfather; admired and loved but past their prime.  Struggling to grasp a world which is evolving beyond their grasp.

Of course, much of the news print media is filled with garbage fed to us by those who can afford the  cost of running publicity strategies.  Police reports, government reports, companies trying to flavour their public perception.  It’s all stuff which forms the background of  the day, to which we pay little attention, which we forget almost as we hear it and which has no real impact on our own lives.   We can surely fill that space with other more invigorating stimuli – a novel, some music or idle chat with another person?

Defendants also emphasise the history of investigative journalism uncovering  some corruption or fraud vital to the ongoing stability of our society.  Alas – we listen and watch this on TV now – reports, debates and analysis until our minds are boggled with information.  Maybe that’s the issue.  When something’s written down in front of you logically – you have time to think about it (if you make the time).   Perhaps that will be the major loss.  The unique value of the written news report – the opportunity for reflection.

Perhaps what we need is is a new business model to reflect on complex issues in our society.

You Need a Substantive Value Proposition to Fight the Big Bear

As we have seen (yet again), greed – the achilles heel of the rational market – works its dark tricks perpetuating the bull into a rising spiral of economic mayhem.  Then, as the big bear spies the precariousness it seizes the opportunity to feed malevolently on scurrilous lechers  who grab hopelessly onto their sinking business carcasses.  So it goes….

Of course, after the mess is cleared the businesses which survive are those who have a truly competitive value proposition.  In my work I come across companies who struggle with their value proposition.  Poor value propositions often survive in the undisciplined  buoyancy of a bull market, but when the pennies are tight, buyers start to scrutinize their suppliers to see where the can cut and save.  To survive this, sellers need to ensure that their buyers are really clear on two things:

1. They know what they are getting for their money  and how they are better off from the purchase.  
2. They can’t make a better purchase from a competitor.

The problem so often encountered by sales and marketing is distinguishing between the widget (be it a service or product) and the value it creates.  The widget in itself has no value.  The value is determined by what the widget allows you to achieve.  Hence, a mobile phone is merely a piece of metal and plastic which hooks up to a telephone signal.  The value attached to the phone is that it allows you to communicate with friends or business contacts, access information from the internet or amuse yourself listening to music or playing games.  The value proposition is about what it adds to your lifestyle or business opportunities. How it makes your life or business better (if thats what you”re into).

Of course value per se is a subjective concept in the eyes of those who have a need or see a purpose.  In order to focus a value proposition, you need to identify the needs of your customers.  What is their perception of  the world  and how could they use your product to improve their circumstances.  Your value proposition isn’t about what you think your product can do for people, it’s about what they think it can do for them.  

A common error is for sellers to define the value of their product from their perspective rather than from the perspective of potential customers.   If you define the value, your placing limitations around your market (common in insurance and banking).  The alternative is to listen to your customers (or potential customers), to understand their needs and aspirations and then how your product/service could help them solve the problem.  If you can solve these questions the market is your oyster.