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Panpa Bulletin : February 2010
Opinion IF newspapers had ploughed 10 per- cent of their profits into research and development during our boom years, where would we be now? That's 10 percent on R&D -- not on buying other media businesses, or upgrading existing printing presses, or redesigning pages, or buying off- the-rack software to make productiv- ity improvements. I'm talking about real research and development like that of Google, which famously gives its staff one day a week to work on their own projects (it pays them for that day, by the way), and then uses the best ideas as the basis for its phenomenal business growth. Or of Apple, which redefined how we listen to music because it thought that the existing digital music players of the time were "big and clunky or small and useless", then revolution- ised what we believed telecommuni- cations could do with the iPhone and created a whole new "app" industry, and now threatens even greater up- heaval closer to our emotional home with its launch of the iPad. Would -- could -- newspaper com- panies ever be the creators of a next big thing like Facebook, or YouTube, or the digital camera? "Hah!" you might be thinking? "Why would we want to?" Well, you'd want to because most newspapers these days brag that they are "media" companies, not just newspaper companies. All the innovations outlined above are media innovations. Better than that, they're media in- novations that have revolutionised or dramatically changed how we live. And they're all media innovations that now chew up time many of us previously spent reading print. Sure, we're holding up. We've re- structured. We've tightened our belts. We've adopted the best bits of the new thinking. We're attracting strong readership through our websites, even if the advertising is not follow- ing as deeply and richly as we'd like. Hell, some of us have even launched a couple of iPhone apps! But we're not leading. We're follow- ing -- at a safe and secure distance. And we get mortified when people tell us we're a crusty old industry. The difference between the inno- vators and the newspaper industry, is that innovators see not what is, but what could be. Newspaper companies tend to see what could be done a bit better, and call that innovation. But true in- novation requires an investment in ideas with a view to the longer term, of pulling crazy concepts out of the cloud and turning them into dynamic businesses. True innovation requires an un- derstanding that failure is a risk -- but there are times when you need to em- brace it -- and feel the fear anyway. Kenji Kobayashi, the head of Can- on Australia, said in a recent edition of the Australian Institute of Manage- ment magazine, Management Today, that understanding customer expecta- tions was the key to successful R&D. "Without knowing a customer's ex- pectations, we cannot create value," he says. "For us, it is very important to continue to innovate in the technol- ogy field because our customers are expecting new technology." Canon puts 10 percent of its an- nual profit into R&D. It pays off for them -- for the past 17 years, Canon has ranked among the top-three US patent recipients. Its customers don't necessarily know what Canon is going to invent but they know the company will give them something new . . . something that will excite, surprise and delight them. Similarly, there is a reason why people queue up and even camp overnight outside Apple stores whenever the company launches a new product. Apple customers can't wait to see -- and pay over the odds for -- when the latest innovation hits. What do newspaper customers -- our readers and our advertisers -- value? They value our integrity and trustworthiness, our independence and authority, and our ability to at- tract audiences and provide quality information. These must be the starting points for the next generation of newspaper innovations. To sideline in our thinking eve- rything else we have done over the years would be an enormous cultural leap. Are newspaper companies capa- ble of this? If the answer is no, you might have to hope that your CEO and board have put that 10 percent elsewhere -- investing perhaps in telecommuni- cations carriers, software and mobile phone manufacturers who have a vision -- and are fearless enough to take media into the future. SALES & MARKETING ADVISORY GROUP COLUMN Kylie Davis is the chief of sta of the Sun-Herald newspaper in Sydney Prophets find profits in the future www.panpa.org.au Canon is one of the greatest supporters of the world press . . . here is the awarding winning photo of its World Press Photo 2008 competition Readers value our integrity and trustworthiness, our independence" " DIGITAL BUSINESS ADVISORY GROUP COLUMN Hugh Martin, General Manager, Online, at APN News & Media IF you stand still at the moment, you'll get bowled over in a rush of new dig- ital applications and products. It's never been more breathtaking, exhilarating and scary -- especially if you like things the way they were and had just got used to sending attach- ments in your emails. Google has just launched Buzz into its Gmail application, and already the question is being asked in some quarters: is this the end of Facebook and Twitter? The answer is most probably, no. But after only one day, who can make any really accurate predic- tions? What we can say, though, is that digital communication tools are proliferating and journalists have to stay ahead of the curve. Google Buzz, for example, allows a user to integrate a whole host of Google applications, from Picasa and YouTube, Blogspot, Google Talk and Maps into Gmail -- where it automati- cally connects to your list of contacts -- as well as other tools like Twitter. And it gives you the option of mak- ing all of your communications via this channel either public or private. Why is it important for journalists to keep abreast of these developments? Because the networks we're con- nected to are constantly updating, commenting on and sharing infor- mation in real time. So, if you think news has been breaking fast in recent years, strap in and hold on. It's get- ting faster. As publishers, we need to under- stand this trend presents significant implications for a number of distrib- uted advertising models, particularly mobile. So while we may be looking for ways to value subscription and direct payment models, we also need to keep our eyes on the fact that display advertising is going to remain our bread and butter for some time yet. What do we need to do to maintain the value we deliver for clients? One of the most interesting, and threatening, prospects in Google's Buzz release is the integration with Maps. It opens the way for what many in the digital publishing indus- try have been dreaming of for years -- a means to provide mass, relevant, geo-targeted advertising at a micro level. It will present a real opportunity to target consumers with messages in the comfort of their own social net- working environment, and with the recommendation of trusted contacts. The details of users' likes and dislikes, their browsing and viewing habits combined with their location and previous purchasing behaviours, is real high-octane fuel for Google's advertising model. But publishers do have it in their means to compete on some levels by getting to know their consumers better. Meanwhile, Apple has just released a new product that some are hailing as a potential missing link in the paid content equation. If iPad usage takes off then a model already exists that publishers can take advantage of to extract revenue for content. The iPhone application mechanic is similar enough so that publishers who are already making income from paid phone applications could develop the same business model for the larger format iPad. There are a number of "ifs" in this, but at least one major newspaper is satisfied that the iPhone/iPad paid application model is a better strategy than fully locked down content. Editor of The Guardian in Britain, Alan Rusbridger, told Reuters re- cently, "if we get the right function- ality and design", the iPad could "produce interesting, significant revenue streams". The Guardian has had some success with its iPhone app that launched last December. By January this year, the £2.49 app had been downloaded 69,000 times. That at least shows that people will pay for news on their phone. What remains to be seen, though, is exactly where the iPad fits in the spectrum from pocket sized device to laptop (or desktop). If Apple's bet on the iPad is right, then we have a game-changer on our hands. Like Google's Buzz, it's still way too early to tell. But both Google and Apple have pretty good track records. If you think news has been breaking fast in recent years, strap in and hold on. It's getting faster" " Tech buzz becoming deafening for journalists Did you miss it? SPH launches ad network ADVERTISERS can now reach diverse, re- gional Asian audiences with the new "Asia News Network Targeted Video Commercial Network"(ANN TVC Network), launched this week by Singapore Press Holdings (SPH). This digital-advertising platform operates through an online commercial network. It is designed to allow advertisers to place video commercials on websites owned by ANN members. The network includes 21 national daily newspapers, published in 18 Asian cities, although the number of members in ANN is expected to grow. Fairfax fury at broadcaster MOVES by a publicly-funded broadcaster to set up websites in potential competition to newspaper and digital publishers has been criticised by a leading chief executive. FairfaxMedia'sBrianMcCarthyattacked the establishment of taxpayer-funded websites by the Australian Broadcasting Corporation (ABC) in rural Australia. He said in a statement the ABC initia- tive "threatens to undermine the viability of the excellent service commercial media organisations, such as Fairfax Media and Rural Press, have provided to regional and rural Australia for decades". The PANPA Bulletin | MARCH, 2010 | 23