Publishing special - Publishers innovate to survive

1) IT could hold the key to the future of publishing 2) Case Study: The Guardian harnesses social and mobile apps 3) How publishers are reacting to the iPad

Publishers such as Guardian News and Media are already using the cloud to mitigate growing pressure on their IT infrastructure

1) IT could hold the key to the future of publishing

Changing patterns of content consumption and falling print advertising revenue are prompting publishers to focus on IT innovation as a means of generating new business.

As volumes of information rise dramatically, use of technologies such as cloud computing are becoming the norm for companies unwilling to own and operate their own infrastructure and assume the associated risk and cost.

“Building flexibility into everything publishing companies do is essential as they need to be able to take up different business models quickly. Their IT should not be tied to any particular model,” said Tom Turcan, principal at media-focused firm Runcat Consulting.

Publishers such as Guardian News and Media are already using the cloud to mitigate growing pressure on their IT infrastructure.

Other technologies that enable agile development are expected to become a standard in the publishing world, says Turcan.

“Agnostic” content management and digital asset systems that can be integrated with web services and platforms such as Facebook Connect are also among the core focus areas for publishing businesses. These systems comprise a set of development APIs that allow users to bring their identity and connections into new web platforms.

Publishers are also collecting increasing amounts of information about their customers, and Turcan believes this year will see the re-emergence of customer relationship management (CRM), which will allow better management and monetisation of multi-channel offerings.

Free paper Metro, for example, will not charge for its content, but will create products and services and “aggressively” sell them to its already active online audience.

“We will not be able to use pay walls, but will create brand extensions for services that are not available in the paper,” the paper’s head of digital, Jamie Walters, said at an industry event last week.

According to Turcan, the changes taking place in publishing will see a fundamental change in how technology is managed.

While technology will not save publishers from declining revenues, Turcan said that IT can be used to close the gap between a company’s aspirations and their realisation.

“The role of technology staff has changed. IT directors no longer just provide desktop services and back-office functions but have become platform strategists, much more involved in business risk management and more open to innovation.

“This means companies must work with their technology staff in an enlightened way and not just treat them as an internal supplier,” he said.

2) Case Study: The Guardian harnesses social and mobile apps

Improving reader engagement across web platforms as revenues increasingly move from print to online is a key priority for Guardian News and Media (GNM) this year.

To that end, the publisher is working on ways to capitalise on and enhance service to its customer base of about 36 million unique users a month by logging their location and analysing their behaviour online.

“We need to obtain [a better view of] user segmentation and deepen our relationship with consumers to tailor services and the device platforms through which we will deliver them,” said Mike Bracken, GNM’s technology director.

According to Bracken, his firm is interested in “social graphs”, where information that users have already made public when using other web services – such as their connections in networking platforms such as Facebook – can be utilised.

“We want to make it easier for users to give us information about them and in return, we will provide them with customised content,” said Bracken.

As part of that process, the publisher wants to make web registration simpler and is now looking at different standards that will allow users to log on to different online services with the same digital identity. One of these standards is Open ID, which uses a single login at a trusted provider to automatically allow access to other web sites and has Orange, WordPress and Google among its main adopters.

Mobile is also an area the Guardian is planning to take further advantage of. This year, its successful iPhone app will be revamped to improve features such as offline reading.

“There are many interesting new mobile phones out there, but it is not economically viable to create device-specific platforms for all of them [given that] many do not yet have fully fledged development environments and application programming interfaces we can use,” said Bracken.

At the back end, Bracken believes that cloud computing will play a key role in making publishers more responsive to market changes. The Guardian is a keen proponent of the technology – it used the cloud for its MP Expenses application and rolled out Google apps across the business last year.

“Using the cloud-based approach provides advantages such as not having a lock-in like in large infrastructure contracts, which can be restrictive in terms of innovation,”
said Bracken.

With so many projects to manage this year, Bracken says that dealing with increasing complexity is one of his main challenges.

“We will need to manage the speed of growth, as well as continue to innovate and navigate the path of social networking platforms, devices and formats, which can be very messy at times.”

How publishers are reacting to the iPad

The emergence of potentially disruptive new platforms such as the iPad has been a key area of concern for publishers reassessing the future of print.

According to research from analyst Gartner, worldwide consumer spending on e-books for consumer titles is forecast to reach $2.3bn (£1.5bn) by 2013, while sales of physical books generated $72bn (£47.5bn) worldwide in 2008, down from $73.7bn in 2007, according to PricewaterhouseCoopers.

While adoption of tablet computing is still being debated by sector firms, some publishers are already gearing up for the launch of the iPad – a leap forward from existing e-readers, with games, movies, browsing and document management features in one device – and another wave of change in media consumption habits.

Condé Nast, for example, will have an iPad app for its titles Wired and GQ – which already have an iPhone version – as well as three other magazines by the time of its launch in April. The publications will be sold in Apple's iTunes store.

The publisher’s chief executive Charles H. Townsend was quoted as saying that his firm feels confident enough that consumers will want content in tablet format, so it will commit the necessary resources to be there.

And Penguin Books also sees that the iPad could redefine publishing, the firm’s chief executive John Makinson told delegates at the Financial Times Digital Media and Broadcasting conference in London this week.

Penguin is currently experimenting with the tablet format, which works particularly well with children’s literature as it brings an interactive experience to the traditional book.

Makinson told delegates at the FT conference that Penguin will be embedding audio, video and streaming into everything it does.

The boss at the publishing house also said that the model of 30 per cent commission that Apple normally charges for app usage is better than the print agency model, in which retailers keep 50 per cent of sales.

One of the main takeaways for publishers attending the various sector-focused conferences taking place in London earlier this month was ‘content is king’, while arguably ‘distribution’ is the prince.

Gartner research shows that while publishers are not suffering as badly from file-sharing as the music industry has, managing the transition from physical products to online distribution while maintaining profitable and consistent business models is as hard for both sectors.

The analyst added that content sales through channels such as iTunes represent chief new growth opportunities for media sectors including book publishing.
“The future [of media] rests on the sector’s ability to build and grow its online distribution capabilities.

“A better set of delivery options exist, along with a marketplace of consumers who are much more attuned to and comfortable with online transactions, as well as a growing number of devices,” says the study.

Gartner predicts that worldwide tablet sales will reach 10.5 million units by the end of 2010, the iPad being the best-selling device.

The launch of Apple’s new device will prompt renewed interest in e-book readers, according to the research, with Amazon, Sony and Apple competing more fiercely.
“Publishers must experiment with a variety of distribution models to the iPad, and will have to liaise with Apple as well as members of the competing e-book application supply chain,” says the analyst.