Fascinating article on Nieman Journalism Lab this week from the author of Newsonomics, Ken Doctor, about the Financial Times and what it’s business model has “borrowed” from internet retailing:
Internet retailing – think Amazon – seems like a very different business than publishing. In the endlessly measurable digital age, though, the parallels are striking. It’s not in what you are selling – books, electronics, or news stories – it’s what you know about your customers, their habits and wants.
(…)If we look at the emerging newsonomics under the FT business, we see how analytics are driving both of the FT’s two basic business lines, reader revenue and advertising revenue.
Reader revenue now accounts for more than half of the publisher’s income. While there are many moving parts under it, the FT’s pricing of its subscriptions, its targeting of markets, its tweaking of offers, and its valuing of paying customers are all increasingly done on the basis of analytics – not on the gut calls that have long fueled news company decision-making.
A different way of thinking as a news and journalism business – something that I’m sure has not been simple to introduce, convince and train people to, of and for. But you only have to read the rest of Doctor’s article to see the benefits.
Learning from other sectors operating online – especially technology and software manufacturers, e-commerce and internet retail – is something I’m very interested in as a journalist and part of an online-only publishing firm. The shift in editorial thinking of producing differentiated, medium-specific content for the web, rather than shovelling print, should be mirrored in a change in thinking about the business and customer service elements of the new site.
Recently Google announced the closure of its communication tool Google Wave – cue much sniggering amongst those publishers who dislike/envy Google for its success. But part of that success comes from the company’s no nonsense attitude to the component parts of its business: if something’s not working, it will kill it off.
As someone much smarter than me once told me in an interview (step forward Mr Ben Hammersley):
People have embraced an awful lot of stuff because it’s fashionable or they feel they should (…) When you actually look at the thing, you very rapidly come to the conclusion they’re not just a waste of time, they’re a waste of creative resource and money. If you’re looking for a return on investment or increasing retention, then a huge number of these social media innovations are massively destructive.
Launching digital products and projects needs a different kind of development process and management. The old ways of thinking and project managing launches of new sections, radio shows or TV channels may no longer apply. Neither will the results be measurable in the same ways. We need to learn from non-journalists when creating and implementing the digital products that will hold/distribute/compliment our editorial strengths.