The mobile digital newspaper
Business scenarios for ePaper devices
Leo Van Audenhove
Simon Delaere
Pieter Ballon
Michaël Van Bossuyt
Studies on Media, Information and Telecommunication (SMIT)
Institute for Broadband Technology (IBBT)
CONTENT
ePaper : Business Modeling
1.
E-paper project
2.
Business models
3.
Conclusions
4.
Lessons learned for the newspaper industry
2
2 - E-paper project
ePaper : Business Modeling
 Project goals
 Generate generic knowledge about the potentials of
news content on a dedicated electronic reading
device
 Iliad eReader based on eInk
 Test some common hypotheses concerning success
factors in practice
 eInk Technology
 Ink carrying a charge which can be updated by
electronics
 Paper-like high readable screen
 Look of real paper
 Ultra low power consumption
3
2 - E-paper project - Partners involved
ePaper : Business Modeling
 De Tijd
 High brow newspaper focusing on business sector
 Philips & iRex Technologies
 Development of ePaper devices
 iRex Technologies is a spin of company of Philips
 Belgacom
 Belgians incumbent telecom operator
 Hypervision / Agency.com & iMerge
 Two advertising agencies specialized in electronic
advertising
 Flemish University Institutes
4
4 - Business modeling
ePaper : Business Modeling
 Research Question
 What are possible business models for ePaper
devices in the newspaper industry?
 BUT: technology broadens scope
 Publishing industry - Print Media
 Information industry
 Starting point
 Innovation in technology offers new business
opportunities
 BUT: technology does not operate in vacuum
 Technology and business models are shaped by the
business environment and actors involved
 Complexity of innovation/product development is growing
 Created in value networks
 Often involving multiple actors
5
4 - Business modeling framework
ePaper : Business Modeling
Strategic alignment
between all four dimensions required
in order to create
viable and sustainable
business models
Four main business modelling dimensions:
• Value network
• Financial model
• Functional arch.
• Value proposition
6
4 - Business modeling - Roles
ePaper : Business Modeling
 Roles in value network
 Advertising & device suppliance
 Place depends on business model
 Service provision
 Place depends on actor taking up this role
 Related to who has contact with customer
7
4 - Business modeling - Scenario development
ePaper : Business Modeling

Scenario method




Why: largely prospective research
Based on 2 basic uncertainties
Identified on the basis of:
 Desk research
 Interviews with actors involved
 Interviews with actors in the Flemish Contexts
Basic Uncertainties
1. Aggregation versus disaggregation
 Extent to which newspaper content is offered as an
editorial product
2. Open versus closed
 Extent to which the device is open to content from
multiple players
8
4 - Business modeling - Scenario development
ePaper : Business Modeling
9
Newspaper-Model: Scenario Outline
ePaper : Business Modeling
 One content aggregator offers service
 Based on its own content e.g. Newspaper
 Making use of new capabilities of technology
 Regularly updating content
 Offering information aimed at specific segments
 Personalizing content
 Integrating personalized advertising
 Close to current ePaper project
 De Tijd as leading newspaper
10
Newspaper-Model: Value Network
ePaper : Business Modeling
 Newspaper
 Integrates content production, aggregation and platform
content aggregation
 Device manufacturer
 Keeps certain control through configuration device/software
components
11
Newspaper-Model: Value Network
ePaper : Business Modeling
 Service provision
 Logical that newspaper will put service in market
 Has a good customer relationship
 Has content for which customers want to pay
 Have certain market intelligence
 Third party content
 Content from the mother publishing house
 Content from outside
 Expected to be complementary
 Direct competitors unlikely to support platform
12
Newspaper-Model: SWOT
ePaper : Business Modeling
Strengths
Newspaper have good customer relationship
Newspapers have strong brands
Strong potential for market development
Easy monitoring of readers
Opportunities
Limited amount of players in value network
Rapid deployment possible
Weaknesses
Difficult to attract content from third parties
Under usage of technical potential
Might be far from user expectations
Threats
Boycott by other content providers
Smaller market for advertisers
13
Newspaper model - Examples
ePaper : Business Modeling
 Yantai Daily Media Group (China)
 Offers since Oct 2006 all its newspaper
titles on the Iliad eReader
 PCM Uitgevers (The Netherlands)
 De Volkskrant, NRC Handelsblad, ...
 End of May 2007
14
Kiosk-Model: Scenario Outline
ePaper : Business Modeling
 Intermediary offers integrated service
 Access to aggregated content
 National and international newspapers
 Magazines, Comics
 Books, etc.
 From different content providers/aggregators
 Analogy with newspaper stand
 Newsstand, Zinio
15
Kiosk-Model: Value Network
ePaper : Business Modeling
 Intermediary plays important role
 Integrates two markets 1) readers; 2) information providers
 Causes network externalities, especially online
 Advertising possible at two levels
 Can cause friction
16
Kiosk-Model: Value Network
ePaper : Business Modeling
 Service Provision: two options
 Through intermediary
 Newspaper looses costumer relationship
 In analogy with purchasing paper in newsstand
 Intermediary (different from device supplier)
 Will favor open standards
 Will try to publish on different devices
 Will be forced by content producers to protect content with DRM
17
Kiosk-Model: SWOT
ePaper : Business Modeling
Strengths
Larger selection of content
One platform for all content
Newspaper retain editorial function
Weaknesses
New initiative so:
Higher start-up costs
Need for individual marketing and branding
Newspaper might loose costumer relation
Opportunities
New platform for digital news
One open standard
Threats
Conflict over revenue sharing
Conflict over advertising
Intermediary risks to become dominant
Intermediary shifts towards role of content
provision
18
iTunes-Model: Scenario Outline
ePaper : Business Modeling
 Intermediary offers integrated service
 Access to disaggregated content
 Single articles from national and international
newspapers, Magazines, etc.
 Comics, Books, etc.
 From different content providers/aggregators
 Service only available on specific device
19
iTunes-Model: Value Network
ePaper : Business Modeling
 Intermediary plays central role
 Integrates two markets 1) readers, 2) content providers
 BUT ALSO device suppliance and service provision
 Content on single platform and on only one type of device
 Disaggregation of content
20
iTunes-Model: Value Network
ePaper : Business Modeling
 Service Provision (disaggregated content)
 Through intermediary
 Newspaper looses costumer relationship
 Newspaper looses part of editorial function
 Intermediary and device supplier same actor
 Might favor proprietary standards
 Will favor compatibility with own devices
 Will be forced by content producers to protect content
with DRM
 Intermediary might shift to content provisioning
 E.g. audible
21
iTunes-Model: SWOT
ePaper : Business Modeling
Strengths
Higher selection of content
Single platform for all content
Strong personalisation possible
Strong compatibility between service and
device possible
Might be in line with changing user
experience
Opportunities
New platform for digital news
Possible high market penetration of single
device
Weaknesses
New initiative, so:
Higher start-up costs
Need for individual marketing and branding
Newspaper looses costumer relation
Newspaper looses part editorial function
Threats
Conflict over standards possible
Conflict over revenue sharing possible
Conflict over advertising
Intermediary might become dominant
Intermediary might shift towards content
provisioning
22
iTunes model - Example Sony Connect
ePaper : Business Modeling
Sony - e-Reader and website (http://ebooks.connect.com)
23
Web-Model: Scenario Outline
ePaper : Business Modeling
 Device as gateway to the web
 User can access all content
 Web, blogs, newssites, egov applications, etc.
 Might be supported by push elements, e.g. RSS
 User can upload own content
 PDF, Word, etc.
 Still possible to procure paid content
 Using different open and proprietary standards
 Costumer becomes aggregator in terms of own
selection
24
Web-Model: Value Network
ePaper : Business Modeling
 No integrated service concept
 Device supplier central in scenario
 But integrates no other central roles
 Might control platform provision through software
 Newspaper role more marginal
 In competition with online content/information
25
5 - Conclusions
ePaper : Business Modeling
 Newspapers
 Remain in a rather unique position as mass medium
 Have strong costumer relations
 Have shrinking market but willingness to pay
 ePaper allows for more constant monitoring of
newsreaders
 Believe in value of editorial function
26
5 - Conclusions
ePaper : Business Modeling
 For newspapers kiosk possible scenario
 Most Flemish actors seem to prefer this scenario or
variant on it
 BUT strong competition between large groups
 iTunes model possible scenario for print & ebooks
 BUT most online examples rely on long tail
 Newspapers have short tails
 Time and Uniqueness
 Scenarios might co-exist
 Could gradually shift from I to IV over time
 Path dependency might be possible pitfall
27
6 - Lessons learned
ePaper : Business Modeling
1.
2.
3.
High potential of the device vs. Importance of look ‘n feel
 Positive on screen quality and size
 But look ‘ feel of newspaper
 48,9% of test panel would consider buying an eReader
(if fully operational)
 Reading device (vs. All in One)
Old habits die hard
 No change in reading pattern
 Strong link with printed newspaper
 Navigation
 Content (trust, aggregator,...)
 Representation
Substitution or complementarity?
 In this stage, the device is not ready but it provides users
with some additional options (time, place)
 Strong competitor for printed paper in the long term
28
6 - Lessons learned
ePaper : Business Modeling
4. Control of the user: choice/complementary: AND &
AND story



Personalised & full
News of today (breaking news) &. News of yesterday
Payments: fee & free
5. Newspapers as aggregators

Brand as trustmodel
 Offer
 Certified, trusted & authentication
29
Contact
ePaper : Business Modeling
 Leo Van Audenhove
 Leo.Van.Audenhove@vub.ac.be
 Simon Delaere
 Simon.Delaere@vub.ac.be
 Pieter Ballon
 Pieter.Ballon@vub.ac.be
 Michaël Van Bossuyt
 Michael.Van.Bossuyt@vub.ac.be
 Websites
 http://smit.vub.ac.be/
 https://epaper.ibbt.be/
30