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Archive for the ‘Internet Business Models’ Category

Low-Hanging Fruit and the Re-Ordering of the Value Chain

In Internet Business Models on January 18, 2011 at 12:43 am

Source: Jamescapp02 on flickr

Outtakes from my post yesterday on The Scholarly Kitchen:

The machines of scholarly research and content dissemination require monetary input at some point(s) in the process in order to run. Despite this reality, many mission-driven organizations are uncomfortable acting as (or, in some cases, are ill-suited to be) commercial survivors.

Quoting Joe Esposito’s comment to Phil Davis’ recent post on OA competition between PLOS and Nature:

What fascinates me is that the governing boards of prestigious journals are interfering with the necessary moves to counter these developments. Author-pays open access is growing in strength but conservative boards do not always understand the competitive circumstances that their operating staff bring to their attention.

In open access journal publishing, more submissions + more acceptance + less/different forms of payment + increased use + varying levels of peer review translate (one hopes) to high impact factor = success. Volume (of content and use) are key drivers of success, but money is not absent from the process. Ultimately, it cannot be.

Another excerpt, further along:

Kent [Anderson] recently re-posted a round-up of “10 business models that rocked 2010“. Most of the models involved first building audiences and then working levers to generate financial wins (a re-ordering of old-school models in which a product was produced and marketed to audiences that were built over time, through sales).

The mechanisms for commoditization in these new-school cases included:

  • Selling customer data
  • Crowdsourcing ideas
  • Upselling high-volume audiences
  • New storefronts and cloud-based points of purchase

What strikes me as remarkable about these examples is how unremarkable the core transactions (what is being exchanged by whom) really are. The tools and re-ordering are new, but the commercial exchange of goods is very basic, ancient even. The more things change, the more they remain the same.

One of the big overarching differences is the reversal of the ordering sequence. Rather than if you build it, they will come these models conform to if you get them, you can build it (and ultimately sell it).

Read the entire post on TSK.

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Higher Education: Turning a Painful Reality Into a Thriving Digital Business

In Innovation, Internet Business Models on November 1, 2010 at 8:00 am
The Chronicle of Higher Education recently released an interactive tool, Tuition Over Time, 1999-2010, which utilizes data from the annual “Trends in College Pricing” reports from the College Board and allows users to compare tuitions and fees on an institution-by-institution basis back to 1999.

From the introduction to the College Board’s 2010 report:

The recession has pushed large numbers of people who would otherwise be working full-time at secure jobs into postsecondary education. . . . Trends in College Pricing 2010 describes the unwelcome increases in published college prices these circumstances have generated and adds the more encouraging information about how much students actually pay after considering increases in available grant aid.

Image by Fibonacci Blue on flickr

The rise in prices is uncontested, and the National Center for Public Policy and Higher Education (NCPPHE) argues that, despite increases in financial aid, affordability of higher education is now in decline. According to Patrick M. Callan, NCPPHE President:

Student financial assistance from all these sources has increased to $45 billion, or an increase of 140% since 1991. But these increases have not been large enough to keep pace with the increased costs of college attendance, particularly not with tuition. . . . Between 1991 and 2005 Federal Pell Grant funding increased by 84%. But the average Pell Grant currently covers only 48% of tuition at these institutions, a decline in purchasing power despite increased federal investment.

Notwithstanding the complex socio-economic and institutional challenges this raises, the situation can be summarized in simpler terms through a business lens:

Increased social need for access to high-quality post-secondary education to support social well-being and global competitiveness + Declining affordability which further limits access to education and achievement, particularly for low-income populations = opportunity

Community colleges can play an important role in unlocking this opportunity, along with for-profit partners.

On October 5, the White House held its first “Summit on Community Colleges,” led by Dr. Jill Biden — wife of Vice President Joseph Biden and a community college instructor for 17 years. Opening remarks came from President Obama, who described his plan to foster an additional 5 million community college graduates by 2020 and emphasized the role that two-year institutions can play in developing the U.S. work force of the future. The President also introduced “Completion by Design,” a competitive grant program funded by the Bill & Melinda Gates Foundation designed to improve community college graduation rates by making a five-year, $35 million investment in multi-campus community college systems in nine target states with large low-income populations (Arizona, California, Florida, Georgia, Ohio, New York, North Carolina, Texas, and Washington).

Financial strategies for using community colleges for costs savings and as a stepping-stone through which to earn a four-year degree are well established. From a 2008 piece in the Community College Review entitled, “Save $80K by First Attending Community College“:

Families are turning towards the financially savvy decision of starting on the higher education path first at a two-year community college. Many universities, both public and private, have articulation agreements with local community colleges. Therefore, attending a community college for two years before transferring to a four-year institution can save significant amounts of money.

This bricks-and-mortar strategy gains further traction in the hands of digital entrepreneurs. Schools for online learning have adapted this concept by building out national networks that connect associates programs — which benefit from flexibility, geographical range, and cost efficiency in a digital environment — to four-year completion tracks in students’ locations, with pre-negotiated acceptance for those perform to acceptance criteria.

Read the rest of this post on The Scholarly Kitchen.

Leading Your Content to the Money — A New Equation for Selling Content to Consumers

In Innovation, Internet Business Models, Social Media on August 4, 2010 at 7:00 am

The notion that information wants to be free is absurd when the delivery mechanism is making a fortune and the creators are getting what amounts to zilch. – Peter Osnos, “Will Google Save the News?

Monopoly by Mikael Miettinen on flickr

In order to focus their attention on big institutional content deals, publishers have traditionally relied on third-party service providers (agents and the like) to conduct business with individual end-users. However, with institutional budgets in decline, content providers are turning their attention to consumer markets as a potential source of business growth. Asserting themselves in the consumer space will require a new type of sales and marketing acumen and visibility into consumer behavior, which recognizes and responds to the many new ways that consumers are seeking to interact with vendors and each other in online environments.

The longstanding business equation in B2B publishing has been:

Quality Content + Brand Recognition + Operational Efficiency + Institutional Usage = Market Share/Financial Success

Publishers have negotiated big deals but have largely let consumers fend for themselves. This strategy will not fly in consumer markets, where visibility and demand are the primary drivers of revenue, and where methods for marketing to consumers have changed dramatically. The best approach for publishers wishing to enter the consumer marketplace is to take a step back, free themselves from preconceptions of what their business is about, and take a look at what is really working in the consumer Web. Only through entrepreneurial thinking will they have a shot at success in consumer content markets.

Consumers are constantly inundated with free content but are rapidly flocking to demand-based, interactive services and are making freemium purchases in that context. Content providers can meet this reality head-on by wrapping content in value-added service layers that address consumer needs and support collaboration …

Continue reading this post on The Scholarly Kitchen.

2010 Digital Trends and Topics: Mobile Device Applications for Reference Information

In Internet Business Models, Services, Technology on June 18, 2010 at 9:02 am

Source: myuibe on flickr

 

 A link to PDF/PPT slides I presented earlier this month at the SSP Annual Meeting in San Francisco:          

Mobile_Reference_Vance_2010    

Includes wireframes from Cultured Code and app examples from Culinate/Wiley, NASA, Zinio, Amazon, the World Bank, and Shazam plus reporting on trends, innovations, and open questions.

Data.gov: Selling the Government and Democratization of Information

In Internet Business Models, Linked Data on May 29, 2010 at 8:03 am

Read my complete post on The Scholarly Kitchen. Excerpt:               

Last Friday marked the one-year anniversary of the Obama Administration’s Open Government Initiative (OGI). The occasion was honored with a cupcake and candle on the landing page of the newly re-designed Data.gov site and a widely disseminated announcement from the White House.             

Source: Laura Padgett on flickr

   

For global publishers who have generated a significant portion of revenue building and selling databases, a requirement to make their data freely available is a mixed blessing. Despite the fact that global access and use of the data are expected to rise exponentially, balance sheets will take a hit.               

Databases are not just part of a publishers portfolio, if done right they can be the most profitable part and have sometimes carried the less profitable and declining parts of the publishing line up — namely, books. Presses being impacted by this change must quickly seek new ways to recapture publishing expense and reinvent the services they provide.               

Conversely, if a business has retooled to conceive of and build data services, it’s a golden egg.  For publishers in adjacent spaces — CQ Press,  Bloomberg, LexisNexis, Thomson Reuters, National Journal, CQ-Roll Call, the Washington Post — access to troves of free, authoritative, updated data presents a significant opportunity to create new revenue streams by developing bespoke products and services that monetize free content.               

Read more.

Money and Motivation: Will Content Survive the Age of Sharing and Collaboration?

In Innovation, Internet Business Models on March 16, 2010 at 10:00 am

Read my complete post on The Scholarly Kitchen. Excerpts:    

It’s long been an assumption that tried-and-true publishing business models might not retain their viability in an increasingly collaborative and tech-centric information environment. But as these new layers emerge, can the central aspect on which they depend — namely, content — survive?    

Image by flickrfanmk2007 via flickr

 

The detriment … is that all of this innovation has pushed the boundaries of existing publishing, copyright, and compensation models. This may, in fact, only be the tip of the iceberg — the point at which traditional publishing business assumptions are being Zamboni’d by the blade and squeegee of technological change.

Are Google and Microsoft Squaring Off Over Public Domain Works?

In Google, Internet Business Models on March 6, 2010 at 11:18 pm

Source: Inner Geek blog at umn.edu

 

Read my complete post on The Scholarly Kitchen. Excerpt:  

… Microsoft has plans of its own involving public domain materials. An article  in Sunday’s Times Online announced that 65,000 19th century works of fiction from the British Library’s collection will be made available for free public downloads this spring .  Cited as, “the latest move in the mounting online battle over the future of books,”  one wonders if the British Library’s Microsoft-backed project  may be the first in a series of initiatives aimed at reducing Google’s stranglehold on public-access materials.

Lessons from a Neighboring Industry — Demand Media’s Disruptive Impact on Journalism

In Innovation, Internet Business Models, Technology on March 6, 2010 at 4:06 am

Source: Library of Congress via flickr

 

Read my complete post on The Scholarly Kitchen. Excerpts:      

There are some who believe that if major media outlets can reinstate a paid model for online content, there will be a reversal in the market for skilled journalists—in essence, returning to a subscription or subsidized model for news will provide revenue to publishers, who will hire quality writers and editors once again, and pay them ….   

Publishing institutions face challenges — trying to overcome infrastructure obstacles and established thought patterns to embrace new ways of thinking about content creation and scholarship.  Even a progressive publishing house will find re-tooling to be expensive, painful, and slow.      

Companies that don’t have traditional models and structures have the benefit of having less infrastructure drag and can be agile enough to create niche businesses to zero in on market problems—sometimes solving them by irreverent means.  They have the added “advantage” of not embracing romanticized traditions or struggling with crises of conscience when contemplating radical change.