Digital Services & Goods Purchasing Trends

Pew Internet, a division of Pew Research, asked 1300 smartphone owners across the country whether or not they had purchased any of 16 different types of digital content.

Here is the breakdown of what they paid for, with 75 percent saying they have bought multiple items:
33% internet access
33% software
21% apps for cellphones
19% digital games
18% newspapers, mags or journals
16% videos, moveis or TV shows
15% ringtones
12% digital photos
11% members-only premium content
10% ebooks
7%  podcasts
5% tools or materials to use in video or computer games
5% cheats or codes for games
5% have paid to access particular sites such as online dating
2% adult content
6% misc other content

Who Buys
There are not a lot of surprises here. Men and women behaved similarly in buying -- with the exception of men outdoing women in purchasing software. The most prolific purchasers are those 30-49, with a college degree -- and in the higher income brackets. The average monthly spend was $47 -- however most spend about $10 a month.

Disintermediation: Opportunity & Analysis

"The Media should charge for content," so sayeth pundits about news sites.

Should is such an interesting verb that stretches from mandate to polite suggestion. The Merriam-Webster Dictionary offers (in order): to express condition, obligation, futurity, what is probable or expected, and finally, to "express a request in a polite manner." The pundits no doubt are more than suggesting, and are obliging that the media must charge for content.

Really, I would venture that media companies are not actually adverse to charging for content, but since most haven't since their initial foray onto the web, can't figure out how to do so without committing suicide. (At the recent min summit, Forbes.com CEO Jim Spanfeller was urging his fellow publishers to lock up their content behind a paywall!) Despite that, Rupert Murdoch is said to be establishing a strategic team to figure out how he can charge for his print properties. And The New York Times is toying with a few different ideas. Of the two mentioned (metering content consumption and charging for overage vs. creating a membership community) I am partial to the community idea which is the model used by museums.

My friend Michael Chwastiak sent me a link to Jason Pontin's prescription for saving publishers. I have read and re-read his (long) missive several times to cull the best points: you can charge for content that is uniquely intelligent and editors, nay, publishers, need to re-examine the needs of the audience. As I have written before, editors forget that as one generation passes the next generation may not have the same values and needs. Indeed, one fundamental change that has occurred is disintermediation. As readers can freely communicate with each other and vendors -- the role of media as gatekeeper has diminished from its historical role. But that does not mean the role of journalist/editor has ceased to be important.

Rather the role has evolved to be more of an analyst than merely story teller. With hundreds of comments and opinions at the ready, the new value is in interpreting that data. Synthesizing the thoughts of bloggers and commenters into content "reports" would provide more value than merely regurgitating another wire story.

This is the monetizable model that works for business intelligence companies and this is a model that should work for many media companies.

So Look Who's a Publisher Now

Content marketing guru Joe Pulizzi joined me on a webcast I hosted for Nstein in early month on a burgeoning marketing sector: content marketing aka custom publishing. The webcast was part of the monthly Double-Down on Digital series Nstein is offering this Spring on how publishers can tap into new revenue streams -- providing they have an agile digital content supply chain.

Content marketing is a subject that fits this blog so perfectly as it answers the question of "so just who is a publisher?" The answer is: anyone. Anyone with a story to tell and a means to tell a story. Case in point, the uproarious viral video series by JetBlue targeted at corporate big wigs whose wings have been - ahem -- clipped. The series is clever, timely and positions the company beautifully.

More conventionally, brand advertisers rely on print for custom -- which has now extended to newsletters and the Web. Some do it up big, like Proctor & Gamble's teen site Being Girl. The site is loaded with frank, age-appropriate content geared to girls entering puberty and through their teens. Launched in 2000, the site receives more than 3 million monthly visitors from around the globe and is customized for 44 different countries.

I spoke with Bob Arnold, the global being girl digital marketing manager for BeingGirl, and asked him about the site, his audience and the content. Arnold said the site seemed like a natural fit, given the company's depth of knowledge on FemCare. The entire site is produced in-house by P&G staffers and the "editor-in-chief" role seems to fall on the shoulders of Iris Pregger, PhD in women's health studies. She and her team scope and write the age-appropriate content for girl. Indeed Pregger has a column "Ask Iris" that Arnold says "receives a couple hundred questions a week."

The articles are informative, although obviously tilted toward product. I asked Arnold how hard it was to navigate the balance of information versus corporate stewarship. "For us, we wanted to make sure we provided a value -- and shape business behind that," he said. "If you make consumers first, ultimately they will reward you." The real eye-opener for Arnold, who does not portend to be a publisher, was that this market was so under-served. The other issue was dealing with a seemingly day-to-day morph of his audience. "In this day and age [teens] attitudes and tastes change rapidly, and it challenging to keep up with that," he said.

BeingGirl's success doesn't surprise Pulizzi who sharpened his teeth in custom publishing when he was head of that division at Penton Media. His mission was to corral the advertisers who wanted to communicate directly with its customers through entertaining or informative content and bring them into the Penton Content Supply Chain.

According to Pulizzi, most companies don't take the P&G route of creating this content inhouse. "They really don't want to be pubishers, they don't have the will, the expertise or the knowledge," he explained. Advertisers are looking for help, and publishers are uniquely positioned to provide it. "At Penton, we were really good at telling a story and we wanted to grab a slice of that content marketing pie," he explained. At Penton custom publishing brought in about 20 percent of annual revenues. "Advertisers are going to get this done -- the question is who will get they turn to?"

Tips to a Prosperous Digital New Year!!!

What a year we are closing out! With 2009 just hours young in some parts of the world, I am going to go out on a limb to say all of us digital publishers out there are on the precipice of prosperity.

No, I haven't started the festivities early. I am serious. Undoubtedly there are a few hurdles to overcome, but if you are still in business when dawn breaks in the morning, then you have a very good chance of having a ground-breaking new year. Not yet believing?

It's a given, 2008 was wretched. After years of gorging on hubris and debt, we were forced to see our silhouettes in the mirror to see nothing but fat and sloth. We’re closer to rigor mortis than to agile. But at least we are still alive.

Former General Electric guru Jack Welsh once said, “change before you have to.” Okay, we missed that boat, so let's his words to “change -- before everyone else does.” Start dropping the ballast and abandon the traditions that have kept you moored in place. And start reinventing the processes that will allow you to take advantage of the incredible fire-sales that are sure to start happening shortly.

Been in the print business for over a century? Okay but remember you are not in the print business, you are in the news business, and news is channel agnostic. So hug a tree and shed the paper. Go slowly -- maybe a few days a week like Detroit – or go all in like the CS Monitor.

Author Robert Fulghum realized that much of what he learned in kindergarten applies to him today, so channel your inner 5-year old and learn to share. As Arturo Duran, CEO ImpreMedia Digital says, with the web we don’t own eyeballs any more — we share them. It’s a big world, so find some folks you like to work with and figure out away to share. You’ll reduce some overhead while you're at it too.

Stuck on yourself because of your ability to turn a phrase? Well lots of us can write, but mortgages and kids and snot having someone to subsidize an apartment in New York forced some of us into different careers. Now blogs and comments are our outlets! Figure out a way to sift through the cacophony and add value to the voices.

Want to think bigger? So let's talk about increasing your market share. Plenty of publishers will be looking to stop banging their heads against a wall (unless they are truly insane – and stay away from them) and will be looking to unload some titles that have underperformed. Some even will be idiotic enough to not realize that six years worth of archives are actually worth something – and will just abandon their property outright. Be ready to pounce!

The key capitalizing on any of these opportunities is to be digitally agile. The analog world was all about being rooted and routinized. Digital means flexibility, playing with others, and being able to adapt on a dime. Doubling down on digital after years of ignoring the future is not going to be easy. But if you play your cards right, it will certainly yield high payoffs!

Cutting Web Staffs, Prelude to the Titles Themselves??

What a mind-boggling development according to The New York Observer. Perfect-bound mags who finally got around to building their web teams - are now laying them off to bolster their struggling print gorillas. It's a head-shaking turn of events, I know. But not totally unexpected. The magazines referenced, Condé Nast's Portfolio and Time Inc.'s Fortune, were facing steep cutbacks -- and the web staffers were seemingly the most expendable.

Allegedly a publisher at Condé Nast was heard to opine: “You’re never going to get the traffic that really matters. So it’s a traffic thing, but also, how do you monetize the traffic that you have? It’s impossible.”

Impossible. Monetizing content is impossible. My second head-shaking moment. Is monetizing content on the web really impossible? See, call me an optimist but I don't think so. I just don't think these publishers have found the right mechanism to monetize their goods. Or maybe their magazines don't really add that much value. When you think about some titles, they are a nothing more than a collection of glitzy ads between glossy covers. In that case, yes, i think monetizing on the web is going to be difficult.

I was reading the comments to this article (an occupational hazard these days, as more vision and thought seem to exist in the comments than the stories themselves), and the rabble didn't let me down.

Skyrocketing eyeball numbers are great, but when there is no meaningful revenue attached to it, it's a parasite. As long as aggregators can take all that work for free and sell search ads - the only type that are working - the environment will not improve. -- Anonymous


Publisher's like Time Inc have no solid digital strategy. They are all mostly analog players lead by analog CEOs, in a digital world. -- Shines

This is very shortsighted. I can't tell you how many print magazines I have become interested in because of their online version. -- Anonymous

There are several issues at play here:

1. There are just too many magazines to sustain the number of readers: an allt-time high of 26,140 titles in the US and Canada according to a 2006 Print Council Study
   
2. Newsrooms are still circa 20th Century: having unique staff per dissemination channel. Guilds, culture and an unified infrastructure are to blame. Anyone heard of a single newsroom to serve multiple channels??
   
3. Monetization stagnation. The banner ad. Sheesh what a cliché. Can not any of these big properties figure out how to derive value with their content besides a banner ad? Maybe they need to stop navel-gazing and see how their content actually helps their industry. If it turns out it doesn't .... well, maybe you need to rethink your content model.
4. It may be that the can monetize their content -- they just can't motivate their sales forces.

My New Year's predictions are a tad early, but I foresee a great reduction in titles. And for you bargain shoppers, there should be some great content at firesale prices -- since those publishers don't really see much value in their assets.