Paid Content

Timehop Abe – It’s Nice To Wake Up with You


If you have not already invited Timehop Abe into your life, I highly recommend it.  Timehop Abe sends me an email each morning recapping my social activity from one year before.  Personally, I find this to be extraordinarily interesting.  It puts things in perspective to be reminded what I was thinking about and experiencing a year before.  Do I feel the same way today?  Are my observations still relevant?  Was I doing something particularly fun or interesting?  How has my life progressed?  Am I about to attend the US Open exactly one year from the last time I did so?

This morning I woke up to a quite lengthy recap of my Twitter posts from OMMA Global, which took place September 26th, 2012 – an interesting reminder on the eve of Advertising Week 2012, which includes OMMA Global.  I imagine OMMA schedules during that week in order to take advantage of the energy and the presence of those from out of town.  Unfortunately, for me, I prefer to sample the smorgasbord of Ad Week panels throughout the city vs. dedicating a day to OMMA Global, which is a shame.

In any case, as I reviewed my entries, I had two observations: (1) Most, if not all, are completely relevant today.  (2) Some are more relevant today because the topics or initiatives were just being born a year ago and have become mainstream, such as AMEX’s foursquare program, which has now branched out into other social media such as Twitter. (I see that I quoted Zuckerberg several times.  Was he there?Have I seen the great Founder in person? I don’t recall – though I could certainly look this up…)

Hence, since the majority of my observations are still of interest, I thought I would start my day by sharing them with you.  What do you think?  Are they still relevant and thought provoking?  I have added some of my own comments.

#1 This was the beginning of an ongoing – friendly – battle for mayorship of my apartment building with my doorman, several years since I created the venue.  I don’t believe that anyone else in the building has ever signed in.

#3 “Native Monetization.”  I don’t recall hearing this phrase since the conference.  However, a quick Google search does reveal some discussion:

“Native advertising is a new form of inventory that seamlessly integrates promoted content from brand advertisers into the fabric of a site itself. Native advertising inventory is content that’s part of the site experience rather than ads that interrupt users, such as pre-roll video ads or boxes, buttons, and banners on the corners of pages. Facebook’s Sponsored Stories are one of the largest bets on native advertising in the ad industry – a bet that’s consistent with the ad strategies of the dominant social media platforms such as Twitter, YouTube, StumbleUpon and the coming ad products from the next wave of internet elite like Tumblr and Spotify” – Dan Greenberg, TechCrunch

I hope this does not include those incredibly annoying and interruptive “Pages You May Like” posts on my Facebook news feed.

Whoops – I have a conference call in 15 minutes.  More later…

Capturing Value of Digital Products and Services – Guest Article


The article below is a guest posting by my colleagues at the price segmentation and strategy firm Abbey Road Associates

I have worked on several projects with Abbey Road – and find them to be brilliant.  Enjoy!

Authors: Rob Docters. Partner, Abbey Road Associates, Susan Bednarczyk Partner, Abbey Road Associates, and Lisa Tilstone, Market Researcher.

Pricing in the Digital World

Many incumbent content providers, manufacturers, and service providers view digitization as a threat to revenue and profitability. An illustration is the oft-quoted admonition not to “trade TV dollars for Internet pennies.”1 While the

evolution of content, services, and software to digital formats can indeed destroy a traditional business’s profitability– often it is poor transition pricing that is the true culprit.

What are typical concomitants to digitization? In product terms, there tends to be at least half a dozen changes, including:

  • Splitting of content from services, including splitting purchases by vendor and category
  • Sort products into categories and re-bundle them — Easier to embed different content and functionality — Faster service and greater transaction timeliness — Disintermediation between users, buyers, seller frontlines, and product management.

Often these changes lead to a significantly improved range of consumer and B2B choices. The expectation among product developers is that customers will be gratified with these new choices. However often customer satisfaction actually suffers due to user unfamiliarity with the digital distribution platform or vehicle (e.g. application software). Also, complai

nts may also increase because digital Millenials tend to complain more.

We find that digitization often leads to splits in the customer base, between technology- savvy and tech-resistant market segments. Some of this is partly due to user attitudes, but often management forgets that a move toward digitization is often not a cure-all or even an improvement that will satisfy all customers. For instance, most readers (of any age) still read about 20% to 30% faster on paper than on screens2, and complex digital systems can under-perform physical or analog goods in quality or reliability. For instance reliability is why Boeing continues to allow pilots to override digital “fly by wire” controls of the aircraft—Airbus design does not, which has triggered extensive discussion about safety.3 A final example: most audiophiles recognize that vinyl LP records out- perform CD recordings — and certainly outperform MP3.

Management and project teams should keep three principles in mind as they develop and tweak pricing strategy to make money in a digital world:

  1. Segmentation needs to reflect market evolution in a realistic manner. Digitization is usually not a revolution; rather, it is an evolution. Almost every company over-estimates the rate of change and spends insufficient time and attention on the lagging non-digital segment. Ironically the lagging segments are often the most profitable. In legal publishing industry, for instance, the legal book business contributed more margin dollars than the electronic side of the business until the early 2000s—far longer than publishers expected.
  2. For the digital world, the “unit of charging” must change. So instead of dollars per mile/per book title/per movie/device etc. the units of charging need to shift to dollars per digital event, or per application, or per user, or per use, or whatever fits the digital market. For instance, a new manufacturer of retinal eye-scan devices changed the playing field by pricing its start-up digital analytic product on a per-use basis, while traditional film-based eye scan incumbents continued to focus on selling and pricing entire devices.
  3. The cart can come before the horse. Where there is a multi-element (sophisticated) sale, changing the lead element can make all the difference. A new school textbook entrant, for example, successfully entered the market by giving away teaching guides before the textbook adoption contest, which built awareness of and teacher loyalty to a new brand. This strategy enabled the new entrant to sew up the school adoption contest by the time buyers started formally reviewing and evaluating at the actual books. Free is more often an option in the digital world due to lower incremental costs, and so add-ons can precede the main product.

Management may have concerns about digital pricing because often pricing has eroded with digitization. Will your digital prices go up or down? The answer depends partly on supply and demand, and partly on management’s execution. We often find that management does not consider supply-and-demand factors and market evolution before making investment decisions. When the right factors are considered, the resulting roadmap can provide valuable strategic insights, as in the following example.

In a 1996 study, we considered two dimensions that were likely to affect a cable client’s core business — how the advent of digital content creation would impact content pricing and how network development would impact distribution pricing. Our results accurately foretold our client’s actual margin results for the next decade. As digital technologies made video content production easier and cheaper, the supply of content expanded. Relatively slower growth of fiber networks and conventional content distribution mechanisms (e.g., movie theatres) meant that demand grew slowly. The prescription of higher supply and lower demand of content foretold lower video content value and margins.

This forecast was in fact realized in the fortunes of content producers. Movie studios, networks and music producers, who were minting money in the late 1980s (e.g. Viacom, Paramount, BMG, and EMI) saw declining margins over the next decade. At the same time, content distributors, such as cable companies, saw margins grow throughout the 2000s. Newspapers, who faced increasing competition/substitution for their content, combined with a medium in decline, suffered the most.

Although this was the state of play in the ‘90s/early 00s, the future looks different. Many sectors that have already shifted toward digital production of content will no longer experience the same increases in content. Conversely, the number of distribution channels is what is expanding. Most major content providers have established digital footholds and have reallocated resources toward branded on-line sites, social media such as Twitter and a mobile presence in addition to their traditional distribution channels. (An interesting question is how much “content” will be generated by the new social media —is social media a net plus or minus to content versus distribution? The answer depends on the market sector.)

We suspect that with the rise of Internet video distributors (e.g. YouTube and Netflix), collaborative sites such as Wikipedia(4), and social networking sites, the supply/demand balance will shift again as Internet distribution proliferates. If distribution continues to expand, we would expect the value of most distribution channels to fall over the next few years. Flat supply and increasing demand (distribution) means that the value of content may rise again.

Managing digital segmentation in this evolving digital world can seem like a simultaneous civil war plus world war with competitors. Internally, typically there are two camps: one that sees digital products as the future, and the other camp which continually reminds the other that the lion’s share of earnings still depend on traditional products. Depending on the stage of evolution, one side of this civil war usually succeeds in killing the other, to the detriment of shareholders. The winning approach is to avoid putting the both camps within the same chain of command. Bell Canada, for example, found many of its acquired digital businesses (e.g., GeoCities) systematically hamstrung by management after they were subsumed within the more traditional, higher margin Yellow Pages line of business. In contrast, Microsoft separated out Xbox management from the traditional computer side of the business, and grew both.

In consumer markets, we find that poor segmentation often exacerbates pricing, particularly when products are sold internationally. Price levels differ by country due to differences in income (demand) and the number of competitors (supply). For a mobile telephony application, we found that prices ranged from an index of 100 in the US, to 122 in Germany, to 89 in Italy.(5) In less developed countries, the index fell to the teens, yet some global vendors fail to vary prices to the optimum of local price. (Of course there are limits to variance due to re-import “gray goods”, but the price tools can optimize that trade-off also.) Nor was the problem of price variation limited to global marketing. Within the US, similar mobile telephony price differences were apparent between college campuses and working Millennials– again reinforcing the need to segment via price structure. Such optimization is not conceptually different between digital and other types of goods; digital merely changes the thresholds.

How should a digital transition and segmentation be managed? We believe that the unit of measure for a digital product is the core pricing question – one that management often glosses over. Management must ask: what changes have occurred to what people are buying? A good example of creating new digital value is NBC News took old news archives and monetized them as educational video content. The measure of value changed completely, however: from viewers and ratings to per classroom licensing.

To succeed in the midst of digital evolution, pricing and product management should be joined at the hip. In the pre-digital world, communication, interaction, and understanding among product management, pricing specialists, and consumers was never perfect, but imperfections were rarely fatal. Each player could “kick the tires” (understand the product) and it was clear to all what was being sold. Today, that is not possible, often because the value of the product is set by its role in work flow.

For instance, the evolution in digitization of avionics (instruments for an airplane) has changed with digitization. In the past, the altimeter, navigation, communications, and other components would be evaluated by their individual accuracy and reliability. Today, these individual components have been replaced by avionic systems — integrated cockpit information systems, whose components are more similar in accuracy and reliability than ever before. Differences among systems lie in the sophistication of the package and numerous features (e.g. 3D synthetic vision, situation evaluation, error correction, etc.), which are not as easily compared in best-of-breed dimensions. Accuracy and reliability measures, which drove older instrument prices, eventually gave way to new dimensions linked to observable features (e.g. screen size, graphic capabilities, and backup). Equally, competitive contests were often determined by how well the overall system helped pilots fly their aircraft.

Increasingly, pricing changes in the evolving digital world are not feature-driven; they are context-driven. Our work for a leading financial information provider, for example, revealed that information was worth twice its normal value when it was fed directly into a portfolio trading program, versus when it was distributed to analysts and other human users.

Similarly in the B2B digital environment book prices are less and less decided on the basis of the book (hardcover/soft cover, length, etc.) but rather on how the information in the book relates to alternative media. In our work we have found that the better way to price, say, a $100 business reference handbook is to split the value of its content from the physical media (the printed volume). This suggests that B2B publishers and educational publishers:

  • Sell the content separate from the bound book. Example: if you are selling 100 copies of a technical publication at $100 to a large firm for $10,000 ($100 x 100 = $10,000 total), sell the content for $8,500 and the books for $15 each (100 x $15= $1,500.) This initially produces the same total, but we find it sends an important message resulting in additional sales. The message is: “The content is what is valuable, not our printing press.” Also, when companies seek electronic versions, they do not need to be re-educated on the value.
  • Charge on the merits of media. If you offer a value-added platform, charge for that value add. Often we find that supposedly “value add” platforms actually offer little value add (e.g. complex work platforms lose to simple mobile applications), and companies fool themselves where value lies. Hiding content value in an amorphous bundle with media usually destroys value; separating it out often liberates value—customers will punish vendors who appear to be “force bundling” elements. A 15-40% price penalty exacted by customers from unwanted bundling is common.
  • Don’t insist on the same unit of volume! Digitalization liberates you from selling by the book, the integrated software package, the record album, the cockpit instrument, or the TV spot. Clients are often afraid that this unbundling will reduce revenues, but often we find the opposite(6). The prerequisite to revenue gains are, however, solid understanding of market price drivers and bundle configuration.

Thus, whereas books, news feeds, and periodicals were all previously sold on a stand- alone basis, they should now be viewed increasingly as part of an overall content/media price structure:

Price drivers, of course, must be reflected in any execution plan to adapt the traditional business to the new. A key digital pricing question (related to choice of unit) is “scaling.” In the pre-digital world, scaling often took care of itself—that is, when information buyers needed twenty tax guides, they bought twenty tax guides. In the digital world, many users can make do with a single electronic feed. Thus, the question is: how can the feed be priced so that you capture the value of many users? Again, this should lead pricers to shift their pricing focus from the product (“How much is a tax guide worth?”) to the buyer context (context being: “How many tax professionals are being supported? Are they senior or junior practitioners?”) Poor scaling decisions have destroyed value among many service and information providers, including tax software, computer networking, maintenance and repair, and news gathering.

One source of revenue leakage is Digital Piracy, an interesting challenge. Some entertainment, business information, and educational publishers face an 80% or more loss of volume to illegal copying and distribution in certain markets and geographies. Such losses are often avoidable. Pricing can often play a role in combating illegal copying. How? To begin with: give users what they want. Several business-to-business information providers (e.g. energy, construction, legal) have found that simply allowing all customer employees use of information through enterprise pricing immediately eliminated cheating—and provided the information provider with an immediate uplift in revenue.

Another mechanism to eliminate illegal use and re-publication of digital content is to create a price mechanism that offers some elements of the product for free, but links other elements to a more defensible for-pay environment. The strategy is to make it less worthwhile and harder for users to cheat sellers out of revenues on higher-value elements of the product.(7) In the consumer market, an example is the two-level pricing for Microsoft Xbox Live where the Silver level of play is free, but to get to the more desirable (and harder to pirate) Gold features, payment is the easier option:

Another consideration that is crucial to pricing success — or at least a way to avoid a pricing disaster – is to make sure that product management and pricing proceed in parallel, an approach we consider a best practice. Pricing is often a reaction to product plans, therefore if the product management team is overly optimistic about digital adoption the price will be wrong.

Many companies estimating revenue from the new digital offer frequently over-estimate digital volume, and therefore set the price too low. Occasionally, for companies that link price to cost, the lower price may be appealing due to management’s belief in the myth that digital is lower cost. This is almost always wrong: our studies have repeatedly shown that in many cases digital is more expensive than legacy product when you include all costs.

To compound the digital product pricing error, sometimes management handicaps legacy product pricing. Annoyed with the burden of maintaining both digital and traditional products, management either cuts support for the old product, and/or raises its price materially to “harvest” that product (and perhaps to pay for new digital development). The result? Material under-performance of the digital product, due to premature release and inadequate support– and fatal harm to the traditional product line.

Unless your company has matured as a digital product developer, the better approach is to let the market decide, and to separate the price and product development on your existing product lines. Give both digital and non-digital products their best shot. This approach actually requires less effort than reorganizing all the resources to emphasize the new digital product. Typically, established products run on longstanding momentum. You don’t need to kill the old to optimize the new– the market will do that when (and if) it wants.

In some sense, digitization has changed none of the fundamental rules of pricing— pricing should always reflect market price drivers. However, the penalty for maintaining “business as usual” pricing has grown with digitization. Price structures developed over decades to fit an older generation of products cannot be relied upon to perform in the new digital world. Digital price drivers (i.e., factors in the market that shape the structure and level of digital offer pricing demanded by customers) will penalize companies who do not think through the logic.

“Price benchmarking” and trying to apply rules from other companies whose strategies and value offerings are different from your own is not usually a substitute for understanding digital product workflows. Sadly, many digital pricing benchmarks can be behind the times, or focused on a different kind of market segments with different drivers. Digital requires understanding of your consumer needs and business customer context.

SIDEBAR TO GO NEAR BEGINNING OF THE ARTICLE:

Scope of digitization

Digital native Wikipedia defines digitization as “the representation of an object, image, sound, document or a signal (usually an analog signal) by a discrete set of its points or samples.” This definition further notes that the benefit of digitalization is allowing “information of all kinds in all formats to be carried with the same efficiency and also intermingled.”

True, but we would go much further: digitalization goes beyond information to decision logic and automated actions. Although the more publicized impacts of digitalization have involved information, digitalization has also revolutionized devices, manufacturing, tools, and services.

Direct impacts of digitization include many physical operations. Temperature controls, program trading, alarms and controls, professional services and logistical management have all been transformed. For instance, trucks and tankers are programmatically redirected as a result of electronic energy trading; building temperature controls have moved from stand-alone mercury thermostats to integrated computerized systems. Even already-computerized devices, such as telephone company central office switches, are now commanded via distributed digital networks that react to user needs automatically.

Digitization also has indirect impacts. The digital solution often competes with pre- digital solutions – the new applies pressure on the old. That competitive battle requires competitive pricing. For instance, new digital analysis of geophysical sub-surface structures has allowed a new generation of oil exploration analysis. However, older techniques in use by major exploration companies will not go away instantly as these incumbents offer more complete exploration services (e.g.: drilling of exploratory wells.) Both sides in that contest must adjust to the digital advance.

Bios:

Rob Docters is Managing Partner at Abbey Road Associates, a leading price strategy consultancy. Rob is author of Winning the Profit Game: Smarter Pricing, Smarter Branding (McGraw-Hill, 2004), a leading book on price strategy. Rob teaches pricing classes at Columbia University School of Business. He can be reached at robdocters@abbeyroadassociates.com or on 203/972-0000.

Susan Bednarczyk, also a Partner at Abbey Road Associates, has consulted to media companies, telecommunications providers, and large multinationals on successful pricing strategy, product development, and customer segmentation in new ventures and emerging media.

Lisa Tilstone conducts Market Research on consumer insights and trends. She performs market research in the publishing/periodical industry. Lisa graduated Cum Laude from Ithaca College with a degree in Organizational Communications Learning & Design.

Footnotes:

1. Variously attributed to Rupert Murdock, head of News Corp, and to James McCaffrey, Chief Strategy Officer, Turner Broadcasting. The comment has also been rephrased as “paper dollars to digital pennies.”

2. Dillon, A. (1992) Reading from paper versus screens: a critical review of the empirical literature. Ergonomics, 35(10), 1297-1326

3. The Federal Aviation Administration (FAA) of the United States RTCA/DO- 178B, titled “Software Considerations in Airborne Systems and Equipment Certification.”

4. For instance, 1.8 people learned of Michael Jackson’s death via Wikipedia within hours of his death—well before traditional media broke the story.

5. See Rob Docters et al. Winning the Pricing Game. Smarter Pricing, Smarter Branding. McGraw-Hill 2004. Pages 208-210

6. Rob Docters et al. “Bundles with Sharp Teeth,” Journal of Business Strategy, vol. 27, No. 5, 2006.

Abbey Road Associates, August 2010 Page 12.

7. Ibid. Also see Rob Friedman, Leandro Mule, “Relationship Pricing: The Next Revolution in Retail Financial Services Marketing,” The Journal of Professional Pricing Society, 2nd Quarter 2010, vol. 19, No. 2, page 13.

Abbey Road Associates, August 2010

The Disruption of Book Publishing – This Too Must Change


Digital technology is disrupting long-standing business models across all sectors of media, entertainment and information including, of course, book publishing.

Traditional book publishers are finding the competition for leisure time increasingly intense as digital entertainment options and adoption skyrocket.  Even those who continue to appreciate the value of reading a good book are consuming books in new ways including eBooks; Kindle, iPad and Nook readers; and other mobile devices.

The definition of what a book is and is not is in flux as publishers experiment with multi-media and interactive offerings such as Fourth Story Media’s Amanda Project.  This collaborative fictional mystery for girls is told across a variety of different media including an eight-book series and interactive website where girls can become a character in the story and contribute to the books.

A second example is the recent collaboration between Hyperion Books and ABC Television.  Hyperion Books is a general-interest book publisher within the Disney-ABC Television Group. Cognizant of opportunities and imperatives to redefine traditional publishing models, Hyperion has had several successful initiatives.  These include a highly successful integration with ABC’s Castle television series in which a mystery novel by the show’s protagonist was published serially online before being printed and distributed via traditional channels.

In the non-fiction realm, Flatworld Knowledge has developed a highly disruptive model that allows students and educators to define the way in which they would like to consume and interact with textbook content and do so in accordance with their individual budgets, study habits and other preferences.  And then there is the market for self-publishing and publishing on demand.

The pace of change is picking up speed as Digital Natives, who are used to a “where I want it, when I want it, how I want it” lean-in participatory and social media experience mature – and as the general population becomes more digitally immersed.

During a discussion at the WIMIFuture of Publishing” conference, I asked one of the panelists whether the impetus for creating these types of innovative solutions had created a need for people with less traditional publishing backgrounds and more digital expertise and insight.

I also brought to his attention the work of Campfire (www.campfirenyc.com), a Triple Play Client founded by the producers of The Blair Witch Project. Campfire has applied that kind of interactive storytelling to the marketing space, creating multi-faceted narratives that inspire consumers to proactively unravel stories.  Examples include the “Art of the Heist” and “Beta 7.”  While these programs were developed as marketing campaigns, the interactive mindset provides a good stimulus for creative thinking about the opportunities facing book publishers.

Disaggregation & Correlation Optimization – How Print Media Can Be Saved


Print publishers need to start looking at their business in a new way. Rather than maintaining the print versions of their magazine and newspaper publications as they are, and then deciding what form of walled garden, paywall, metered, micropayment and/or freemium model to implement online, they need to unbundle and redesign what they offer – which is news and information, not a printed magazine or electronic replication with enhancements.

Right now, a consumer has no choice in what they get in terms of a print publication. There is basically one version. You may read only a few sections of the New York Times but, too bad, you get it all, and now you need to deal with disposing of and/or recycling what you don’t read or need. It’s like saying to a shopper at Costco: I know you came in for diapers, but you also get motor oil with that purchase – for free – because they are bundled together. Well, that motor oil just makes the “bundle” worth less to me. I’d rather have the diapers alone or, perhaps, bundle them with pureed vegetables.

So it is with published content. I might like to have a print copy of the Sunday Arts & Leisure and Style sections as well as daily podcasts of the front page and daily e-mail news alerts about anything having to do with social media. So disaggregate what you offer and rebundle it in a way that is valuable to me. I might be willing to pay more for that combination than I currently pay for the printed publication.

Now I understand that the NYT may not want to create hundreds of thousands of customized product combinations. However, it may be the case that most people who read the Arts & Leisure section also follow social media. Through correlation and cluster analysis, I can get a sense of what individual elements tend to “go together” and then create a portfolio of options that appeal to different consumer segments. Remember that phrase, “consumer segmentation?” Personally I think it is one of the most powerful concepts that can be garnered from a $100,000 MBA education. I’m emphasizing it to you for free! So please don’t waste it.

While the New York Times does not seem to have used this disaggregation & correlation optimization approach in designing their new tiered/metered content approach, I’m getting the sense that some other print publications (I won’t mention them by name) may be exploring this kind of more sophisticated pricing. I think this could be the answer to much of what ails traditional media – from newspapers & magazines to books to interactive television. Executives have to be willing to take apart their current assumptions and create something that is bigger than the whole. As mentioned in previous blogs, I think that Flatworld Knowledge has done some interesting things in this space. And, based on a pricing strategy engagement I completed – with my colleagues at Abbey Road Associates – for a major equity research company, they also are tapping into the power of this kind of analysis.

Don’t miss out. It’s powerful stuff. Not easy, not to be done without expert pricing supervision but well worth the effort.

If you’d like to learn more about how Triple Play can help you with this type of pricing strategy development, send me a note via LinkedIn, Twitter or Facebook or leave a comment for me here.

When You Think “Add” Also Think “Reduce”


Something dramatic happened in 2009. Something that might not surprise you today but would have been unthinkable back when I walked the carpeted hallways of Hachette, Hearst or Conde Nast Magazines just a few years ago. Internet advertising revenue surpassed magazine advertising revenue.

Based on ZenithOptimedia estimates, magazine revenues fell from $24 billion in 2008 to $19 billion in 2009, and Internet revenues grew from $18 billion to $20 billion – despite a decrease in total ad revenue across all categories. The line in the sand has officially been crossed, and I can not imagine that it will be reversed. (In fact, Zenith estimates an increased gap in 2010.) While magazines may experience a partial rebirth with the birth of the iPad, their role as a top 3 medium is no longer.

Now, while TV and Newspapers seem to be holding their own, this stability does beg a question for me as follows: Are the interactive ad revenues associated with newspaper websites and tv websites included in the newspaper/tv bucket or the interactive bucket? My most recent perusal of a Veronis Suhler report revealed that these calculations are far more complicated than they may seem. As integrated advertising and media offerings have become more real, bookkeeping has become more surreal. In fact, the strength of TV and newspaper revenues reflects, in part, the strength of their digital offerings, particularly in comparison to the somewhat late-to-the-table magazine industry.

Last night, I sponsored a talk by Bob Seelert, Worldwide Chairman of Saatchi & Saatchi, author of the book “Start with the Answer” and creator of a short article featuring a list of the “10 Things To Do When Leading In Tough Times.” #9 on the list reads as follows: “When you think ‘add;’ also think ‘reduce.’ When you think ‘create;’ also think ‘eliminate.'”

Unfortunately, as advertising agencies seek to enhance their digital capabilities, they find a reduced need for those with print expertise. A smart organization will see the need to make this tradeoff, and a long-time print professional had better see the need to stay a step ahead – or at least catch up!

On July 10, 2007, I wrote my very third blog entry. It was entitled, “Don’t Do It” and strongly counseled a colleague to diversify out of print and into digital. I hope she heeded my advice:

“Don’t do it,” I told her. A colleague from my magazine days took me to breakfast to ask for career advice. She has 11 years of magazine experience and is reentering the work force after a maternity leave and a quick detour into non-profit. “Don’t go back into pure play print,” I told her. If you do return to magazines, make sure you have digital responsibility and interaction.”

My colleague didn’t think she had enough online knowledge to enter that world. “I don’t know about search and all that,” she said. But my feeling is that she needs to get up to speed on the lingo, the players and the trends. I suggested that she attend some industry breakfasts such as iBreakfast and NY:MIEG and directed her to paidcontent.org and eMarketer. She has more digital experience than she thinks as she oversees the redesign of her non-profit’s website. I like to think that I earned my pancakes.

I Want My Allman B – And I’m Willing To Pay!


How unreasonable is the idea of getting paid for your digital content or services? Let’s see who’s doing it:

Moogis: Video streaming of Allman Brothers concerts – $125 annual subscription, $15 for individual concerts. Moogis offers subscribers streaming video access to entire live concerts, both in real time and on-demand from its archives. Moogis.com provides a gathering place for subscribers, a social website where fans can create their own profiles, join discussion groups, hang out with like-minded folks and “share the communal experience that music inspires.” Quote from one subscriber: “I was able to get an early bird discount of $100 when it first came out. It was the best $100 I’ve spent.” Clearly, people will pay for value and for things about which they are passionate. (June 2009)

Flat World Knowledge: Offers free online college text books and charges for premium options and services. Students can review the books for free or pay as little as $20 to print out a tome or $30 to download an iPod-ready audio file. Other paid services include open source student-generated study aids fueled by creative-commons licensing. Teachers can also customize text books for a fee. As of October, the company had signed contracts with 29 authors to write some 20 books. It recently raised $8MM in venture capital funding. Keep your eye on this. It’s extremely exciting and disruptive. (June 2009)

ESPN Magazine: Put everything behind a paid wall as explained here – “ESPNTheMag.com and ESPN Insider Merge: ESPNTheMag.com has hooked up with the folks at Insider to create a sports content supergroup, where Insider’s traditional next-level analysis is paired with ESPN The Magazine’s unique storytelling and insight. As of Friday June 5, ESPNTheMag.com ceased to exist as we know it, but the site’s signature pieces and voice continue to live on the Insider page.” Existing Magazine subscribers can upgrade to ESPN Insider at no extra charge. Non-Magazine subscribers are invited to, “See what you’re missing at ESPN Insider.” (June 2009)

Guide to Trekking Locations in the U.S. (Gorp?): $50 per year – I am told that a printed guide book turned out to be more helpful (e.g., finding hiking trails that are dog-friendly). Only benefit to online subscription is being able to print out a few pages rather than carrying or photocopying book. Also, info about other regions of the country, but that was not relevant because the hiker I spoke to only hikes locally. Net, net, it wasn’t worth it for her. It’s all about execution. (June 2009)

20 Minute Yoga Download Podcasts: Voluntary micro-payments via paypal go to charity (May 2009)

Weight Watchers: Weight Watchers Online is a customized online weight loss plan that you follow step-by-stop completely online. You manage your results at your own pace, on your own time. It (a) includes a set of interactive tools to help its members stay on track, (b) manages weight loss daily and (c) provides customized sites for men & women to meet individual needs. There is a sign up fee of $29.95 and a monthly fee of $16.95. (June 2009)

Teri’s List and Grocery Game: Teri’s list provides “rock bottom” prices on a range of grocery products each week and matches them with the manufacturer coupons to help the user get the best savings at the user’s local supermarket. The Grocery Game utilizes databases that track manufacturers’ coupons along with weekly sales and specials, both advertised and unadvertised. It then presents this analysis in a quick reference format on the Internet each week. Members log in to access and print the info and offers. Here’s an explanatory video. (June 2009)