A group project when studying in HKUST, on the topic of the eCommerce model of Online Publication, analyzing the model from the perspective of consumer, producers and the community, with successful and failure stories studied. Also commenting on the future trends of the industry.

1. ISOM 5320 eCommerce
Spring 2013 – Project
News Publications
Cliff Cheung Jason Yeung Joseph Man
Matthew Tam Wonsky Chan

2. Newsweek – What Happens?
On 19Oct2012 Newsweek announced that 31Dec was
be their last printed issue. Since Jan 2013, the 80-years
old magazine becomes online only.
 What happen to the news and publication
industry?
 What are the forces in the industry that drive this
traditional news magazine gave up the print copy?
 Any change of the business model from the
conventional news publication industry since we
enter the digital era?
 What are the latest trends?
http://www.bbc.co.uk/news/business-19989346
http://www.bloomberg.com/news/2012-10-18/newsweek-to-become-online-only-after-80-years-in-print.html

3. Interesting Statistics
http://www.ask.com/question/what-percentage-of-americans-read-magazines

4. Interesting Statistics
http://www.wan-press.org/IMG/pdf/SFN_9.2_Paid_vs_Free_final.pdf

5. Publication Industry – Consumer
Consumer
Community
Publisher

6. Publication Industry – Consumer
http://www.wan-press.org/IMG/pdf/SFN_9.2_Paid_vs_Free_final.pdf
63% mobile device owners said they
used their mobile media devices to
keep up with the news.
5 hours per week on average

7. Publication Industry – Consumer Pattern
http://www.wan-press.org/IMG/pdf/SFN_9.2_Paid_vs_Free_final.pdf
 Print is read early in the day and after
dinner
 Newspaper websites are read
early, between breakfast and
lunch, and after dinner
 Phones are used steadily for updates
 Tablets are used mainly in the
evening
Physical
Newspaper
Newspaper
Website
Early Morning ✓ ✓
At Breakfast
Between
Breakfast and
lunch
✓
During Lunch
Between lunch
and dinner
After dinner ✓ ✓
Advertisement strategy?

8. Interesting Statistics - Free Versioning
http://www.wan-press.org/IMG/pdf/SFN_9.2_Paid_vs_Free_final.pdf

9. Publication Industry – Online vs Conventional
Benefit
• Improve user experience: video vs text
• Read news anywhere anytime
• Ease to search interested topics
Price to Paid
• Getting use to the annoyance of pop-up advertisement

10. Publication Industry – Online
Consumer
Community
Publisher

11. Publication Industry – Publisher
 Nearly 40% of publishers says they don’t charge
contents on any platforms
 39% of respondents choose paywalls.
 Metered paywalls, the New York Times
model, where a visitor can read a certain
number of articles before the paywall
kicks in.
http://paidcontent.org/2012/12/17/85-of-u-s-magazine-and-newspaper-publishers-have-an-ipad-app-survey-says/

12. Publication Industry – Save variable production cost

13. Publication Industry – Online Model
https://online.journalism.utexas.edu/2008/papers/Sylvie.pdf
Reference: “DEVELOPING AN ONLINE NEWSPAPER BUSINESS MODEL: LONG DISTANCE MEETS THE LONG TAIL”, George Sylvie, The University of Texas at Austin, March 24, 2008

14. Publication Industry – Publisher
Ease to access the global market
http://hong-kong-economy-research.hktdc.com/business-news/article/Hong-Kong-Industry-Profiles/Publishing-Industry-in-Hong-Kong/hkip/en/1/1X000000/1X006NW7.htm
First six months
of 2011
• 8.4% increase
• US$876 million

15. Publication Industry – Save variable production cost
Save Variable Production Time and Cost
Economic of Scale: No marginal cost for any additional copy
Collect user preference by news click rate
> First news and consequence news that you read
> Interested category (e.g. finance, sport, local news and global
news)
Tailor advertisement according to topics of consumer
preference

16. Publication Industry – Online
Consumer
Community
Publisher

17. Publication Industry – Online Model
Publisher
Consumer Consumer
Publisher
Consumer Consumer Consumer Consumer
Web 2.0
Community

18. Publication Industry – Online vs Conventional
• News can be shared thru facebook, twitter etc.
• Feedback or comment to publisher
• Everyone can be reporters
• Blogger
• Independent reporters

19. Next Media- Business Model & Pricing Strategy
• Online since year 2006
• Hong Kong’s most visited
interactive news portal.
• Average of 3.7 million unique visitors
and 148.0 million page views a month
• Versioning
• Local vs Overseas
• Free content for local
• Paid content for overseas since 2009
• Advertisement as a major revenue
• Bundling online subscription
• Single subscription for all publishing of
the Next Media group

20. Next Media – Various PublicationAnd Formats
• Web & Mobile
• Interactive Video News (Action News)
• CG Animated News Stories
• Interactive News Stories (Newsgame)

21. Next Media – Social Media Network
• Real time news via Facebook
• Attract those are on social network
• Interaction among readers
• 141,857 liked, 97,541 talked on this
channels

22. Next Media – Advertising – A major revenue
• Sell advertising space as an online publisher
• Serve adv banners via DoubleClick
• Provide advertising solutions to merchants
• Various CPM models for specific section or run of
site
• Different Ads Formats from banner ads, pre-roll in-
stream ads, keyword ads, customized campaign
site, supplement (副刊) and etc.

23. Next Media - Financial Performance
 Sales of news papers / books & magazines are declining.
 Advertising income from conventional channel are the major revenue source.
 Internet advertising income has significant growth from $11M to $47M. Not yet a major
part of the income source, but could this be the future trend for this company?
• Is it a right direction?
• Switch from print to web to mobile
• Switch from reading text to watching video news

24. iSunAffairs – Network Effects
 A new magazine starts in 2011.
 News magazine targeting the Chinese
community globally.
 Editors and reports from the southern
weekends.
 Major focus on the Chinese political
news.
 Printed copy at convenience stores,
book stores and mail delivery.
 Paid Android, iPad, and online version
 Gain popularity thru social media
including facebook and twitter
 Viral marketing
 Connected consumers
 gain noises & reputation thru reporting of
several political events.
 Global Long Tail
 Niche Product

25. iSunAffairs – Not successful yet
 Suspense in Jun and switch to online
version only in Sep 2013.
 Monthly loss of HKD 500K from insider
news.
http://www.am730.com.hk/article.php?article=155995&d=2052

26. The Daily – Features and subscription fee
iPad news apps by News Corp.
BACKGROUND
• The world’s first iPad-only digital news-paper launched on
February 2011 by News Corporation
• Pure digital news paper for iPad without hard copy release
INVESTMENT
• 100 staff
• Initial investment: US$30 million
• Running cost: US$26 million a year
SUBSCRIPTION MODEL
• US$0.99 per week
• US$3.99 per month

27. The Daily – Contents
FEATURES
- The content will be delivered to subscriber device every morning
- 100 pages content including six areas: news, sports, gossip and
celebrity, opinion, arts and life, and apps and games
- Include Interactive features with HD video
- Popular games like Crossword and Sudoku

28. The Daily – Outcome
http://allthingsd.com/20121203/news-corp-shutters-the-daily-ipad-app/
 Seems very attractive and eye catching
 This business turn out to be unsuccessful.
 Why failure?
 High cost
 Not the preferences of target readers
 Free alternatives for the same contents

29. Bloggers – A Different Business Model?
 Blog – Free conversation, broaden the marketplace of ideas by allowing more
people’s voices to enter the discourse
 An example of CROWDSOURCING
 Blogger is NOT a journalist
 Journalistic objectivity - truthfulness, accuracy, objectivity, impartiality, fairness
and public accountability
 If false fact was reported, the newspaper has the responsibility to post a
correction in public
 CANNOT put bloggers and journalist into same category yet
http://www.sysomos.com/reports/bloggers

30. Can view in
different platforms
Variety of interests
Blogger that has
good reputation
Localized ad

31. Bloggers – So why people write blogs?
 Express their own opinion
 Share their expertise to public
 MONEY !!!
• Advertising – showing ads to readers in blog
• Affiliate sales – referring customers to other businesses
• Donations – persuade the readers to contribute and
support
• Getting famous – this includes consulting assignments
and speaking engagements
• Reputation – Serve as a marketing tool
• Get new position – gain recognition and hope to be hired
by an organization

32. 75.20% 74.80%
57% 56.60% 56.30%
46.40%
0.00%
20.00%
40.00%
60.00%
80.00%
Ad networksFreelance / contract workPrivate ads Sponsored postsEvent sponsorships Affiliate sales
Blog Revenue Source
http://katywidrick.com/2011/08/31/bloggers-in-depth-how-much-do-we-make-and-where-does-the-money-come-from/
Blog – Where are the money come from?

33. Top 20 Earning Blogs
http://onlineincometeacher.com/money/top-earning-blogs/

35. Top 20 Earning Blogs
http://onlineincometeacher.com/money/top-earning-blogs/

36. http://visual.ly/16-social-media-blogging-stats-2012
http://www.go-gulf.com/blog/online-ad-spending/
Will merchants spend more money online / blogs or printed
newspaper / magazine?
Money spent on blogs and online
media are effective.
More ad spending will shift from
traditional news publication to
online.

37. Future Trends – Yahoo! and Google buys News App
 News are free!!
 Both Yahoo and Google buys News App.
 Collect consumer preferences.
 BI and tailor advertisement.
 May arouse further concerns on privacy.
http://www.huffingtonpost.com/2013/04/24/google-wavii_n_3143116.html

38. Trends - Sales of Prints are Dropping
http://stateofthemedia.org/2012/magazines-are-hopes-for-tablets-overdone/magazines-by-the-numbers/

39. Trends - Readers are Maturer and Richer
http://stateofthemedia.org/2012/magazines-are-hopes-for-tablets-overdone/magazines-by-the-numbers/

40. Will Digital News Publication be successful?
http://paidcontent.org/2012/12/17/85-of-u-s-magazine-and-newspaper-publishers-have-an-ipad-app-survey-says/
http://online.wsj.com/article/SB10001424127887323335404578444651439460188.html
 New York Times shows success on online
generated revenue and profit growth.
 Seems this is the trend of success in the
industry, even no guranteed.

41. The World is Evolving…

42. Q&A