Digital Reading: New Partners, New Opportunities

THE SOUND HORIZON

BOOKS 2.0: NEW PARTNERS

NEW OPPORTUNITIES

Dominic PrideE-‐Media Forum 25 January 2011

Some of our Clients:

March 19, 2010 Dominic Pride. The Sound Horizon 2011. Some Rights Reserved.

ABOUT THE SOUND HORIZON

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Where Insight Meets

Execution

Dominic Pride: Founder / Managing Director

•Strategic Change •Innovation Management•Mobile / converged service development•Service Marketing•Partnership Development


TODAY’S SESSION

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Making sense of the new digital order for publishers today and tomorrow

2. The digital ecosystem

3. Your new partners

5. Your change agenda

4. New world new models

@thesoundhorizon#EMForum

1.Getting to grips with

digital reading

1. INSIGHTS: GETTING TO GRIPS WITH DIGITAL

READING

25 January 2011 Dominic Pride. The Sound Horizon 2011. Some Rights Reserved.

READERS ARE TAKING THE TABLETS..

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2010 saw significant adoption of standalone e-readers and multifunction tablets with almost 28m (1) units shipped worldwide

IDC:

10.8M e-‐Readers Shipped in 2010

IDC:

17M Tablets Shipped in 2010

The enabled base for digital reading is already spreading beyond early adopters

(1) Source: IDC Worldwide Quarterly Media Tablet and eReader Tracker. http://ow.ly/3IIqr

http://ow.ly/3IIqr

http://ow.ly/3IIqr


• While 100+ tablets prepare for launch in 2011(2) including:

..AND WILL SOON BE ADDICTED

• Forester: 1/3 of U.S. consumers will own a tablet by 2015 (1)

•

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Key analyst revises “conservative” forecast upwards as tablets become “must-have” CE devices

Moto XOOM

BlackBerry PlayBook

Tablet devices represent a significant opportunity for publishers

(1)Forrester Blogs http://ow.ly/3JX12(2)BBC News - CES 2011: Tablets do battle at Las Vegas show http://ow.ly/3IIe9

http://ow.ly/3JX12

http://ow.ly/3JX12

http://ow.ly/3IIe9

http://ow.ly/3IIe9


E-BOOKS: A KEY GROWTH AREA

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Publishers are already creating new structures to exploit this expansion

0

1.0

2.0

3.0

2010 2015

$2.80Bn

$0.97Bn

Global E-Book Revenues 2010-2105 ($Bn)

Source: eBook Buying Is About To Spiral Upward - Forrester Research: http://ow.ly/3IH3T

AAGR 38%

While physical retail contracts, analysts agree on upswing in revenues from digital book sales

http://ow.ly/3IH3T

http://ow.ly/3IH3T


SO WHY IS THE SKY FALLING?

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DIGITAL CHALLENGES LIE AHEAD

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Perpetual, accelerating pace of innovation Competition for

audience and revenue in “reading” category.

Growth potential for reading beyond e-readers

Digital behaviours established by other services

Pricing and margin in digital environments

VCs and disruptive startups targeting

reading

Competition for authors’ content from

other media.

Disintermediation by self-publishing platforms

Digital will not offset the decline in retail

DRM Consumer backlash

2.TO THE DIGITAL ECOSYSTEM


UNPRECEDENTED CHANGES AHEAD

"The next decade of opportunity.. will be about …helping customers create an "intelligent economy" on top of this mobile, virtual, and social technology platform. In 2011 cloud-based solutions, mobile devices and apps, wireless broadband, virtualization and converged infrastructure, social networking, smart devices, and "big data" analytics — move from early-adopter status to the beginnings of mainstream adoption.”

“Welcome to the New Mainstream” : IDC Chief Analyst Frank Gens,

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Source: IDC: Welcome to the New Mainstream: http://ow.ly/3JnLP

http://ow.ly/3JnLP

http://ow.ly/3JnLP


FROM PHYSICAL VALUE CHAIN …

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Actor

Role

Activity

Create work

Maximise revenues

Manage riskMarket book

Sell bookDeliver book

•Wri8ng•Revising•Promo8on

•Finding / developing / placing talent•Royalty collec8on

•Edi8ng•Prin8ng / Binding•Product Marke8ng•Release management

•Store mgmt•Billing•Customer service

•Storage•Transport (incl. returns)•Account mgm.t


Authors

Agents

App Stores

Consumer Electronics

MobileNetworks

Auto-‐mo8ve

ISPs

Consumers

Analy8cs Providers

VCs

Portals

Agencies

Developers

Brands

Digital Retail

Social Networks

Content

…TO DIGITAL VALUE ECOSYSTEM

13



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Authors

Agents

App Stores


MobileNetworks

Auto-‐mo8ve

ISPs

Consumers

Analy8cs Providers

VCs

Portals

Agencies

Developers

Brands

Digital Retail

Social Networks

Revenue


Authors

Agents

App Stores


MobileNetworks

Auto-‐mo8ve

ISPs

Consumers

Analy8cs Providers

VCs

Portals

Agencies

Developers

Brands

Digital Retail

Social Networks

Attention /Engagement


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WHAT IT MEANS FOR YOU

• You are connected to everything– You are exposed to disruptive innovation

• Control will be impossible– Finding niches, collaboration and symbiosis become important

• You will have different models for partners– Each channel has specific needs and drivers

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3. DIGITAL ECOSYSTEM PARTNERS


YOUR NEW ECOSYSTEM PARTNERS

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What do they need and what can you expect in return ?

Digital Retail Agencies and Brands

Access Partners


•Volume•Margin

•Differentiation•Brand Loyalty•Support retail proposition

•Acquisition •Retention•ARPU

•Inventory•Audience•Engagement

They need

You need

Your business models and proposiMons will change depending on partner

•Volume•Margin

•Distribution•Placement•Activation

•Distribution•Activation•Billing

•Data share•Conversation•Feedback

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Your new partners are

selling

•hardware

•access

•inventory

They need services.

What’s the future of

your products in this

environment?

THE SOUND HORIZONTHE SOUND HORIZONTHE SOUND HORIZON

4. NEW WORLD, NEW MODELS


BOOKS TO E-BOOKS: 1.0 to 1.1?

[publishers should] turn from the disruptive innovations of ebooks and ereaders to the creation of sustaining innovations that improve those technologies. Ania Wieckowski -‐Harvard Business Review Feb 2010

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“the ebook [doesn’t] really have that much to offer consumers over a physical book”

Digital content is not a format or a replacement for a physical

product.

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SERVICES NEED MORE THAN CONTENT

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Community– Bonds with friends

– Social capital– Wisdom of crowds

Context– Time

– Device / Environment– Location

Content– Media

– User-‐generated– Metadata

Three “Cs” are needed to make compelling services and apps

SOCIAL READING IN ACTION

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@Eleanorjb has just got to the wedding bit, but she’s reading a paper book. LOL!

Should be revising Bronte but halfway through #Eclipse instead. Just got to the bit where they kiss. hYp://bit.ly/df

•Content•Context•Community

•Audience•Awareness


CLOUD SERVICE – WHY NOT READING?

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• All my reading in the cloud

• Optimised for all of my devices and locations• and therefore

reading styles!• My reading comes

with me when I change devices

• Personal Investment rewarded by recommendations

Mobile / Handheld

E-reader

In-Car

Tablet

Shared

Syndicated

Netbook


API MODEL: LEARNING FROM TWITTER

• 60K+ applications / services use API

• “Firehose” now for commercial customers

• Usage enabled by open platform, not service

• Why not a books API?

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5. YOUR CHANGE AGENDA


PHYSICAL AND DIGITAL READING RISK

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Risk and credit management will be crucial as publishers engage new partners

Risk Physical Digital

Non Payment Y Y

Unsold Inventory Y

Bankruptcy Y Y

Physical Theb Y

Fraud Y Y

Data Theb / Breach Y Y


YOUR ROLE IN THIS TRANSFORMATION?

• C -‐ Collaborate– Enable and prepare for new partnerships

• Control and ownership will not be possible

• I -‐ Innovate– Recognise and enable “open” innovation

• Manage the associated risks

• A -‐ Anticipate– Plan for permanent change

• Plan to recognise new generatives

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Innovation will take place with or without you

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Thank You!

[email protected]

slideshare.net/thesoundhorizon@thesoundhorizon

#books20#EMformum

Books 2.0 Group

http://www.thesoundhorizon.com





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Digital Reading: New Partners, New Opportunities

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