Taideteollinen korkeakoulu ereading Services Business Model Miniseminar 05.04.2011 Seppo Leminen Merja Helle Juho Huhtala Jari Salo Antti Sihvonen Riikka Siuruainen Mervi Rajahonka 1
Partners and their roles in the Task Business Model Research divided into three Activities, Activity 1 New product concepts and value added services Activity 2 ereading advertising Activity 3 Research metrics ereading Aalto University, School of Economics later Aalto, SE (13 person months) Task leader, research design, implementation, reporting Activity 1, 6 person months Activity 2, 5 person months Activity 3, 2 person months Aalto University, School of Art and Design later Aalto, SAD (3,7 person months) Gathering best practices of product concepts and value added services Laurea (4,4 person months) Innovation and development of new product concepts and value added services as well as advertising 2
Business Model research in 2011 Longitudinal approach on 2010 business model cases Activity 2 ereading Advertising Benchmark research on advertising opportunities in the United States, ASE Activity 3 ereading market research metrics Virtuous cycles within business model Laurea ereading Services Business Model research 2011 Modularity of digital service offering: case study Laurea Activity 1 New product concepts and value added services Benchmarking process of servitization (comparative case study), ASE Benchmarking utilization of market information during servitization process, ASE Benchmark research and literature review on Interactivity and Value Added Services, Aalto TAIK
ereading BM Team Task Leader (+ Researcher) Seppo Leminen Aalto SE Antti Sihvonen, Jerry Lindholm, Juho-Petteri Huhtala, and Jari Salo + Antti Hirvonen, Hanna Kännö & Tommi Laivuori Aalto, SD Merja Helle Laurea Riikka Siuruainen and Mervi Rajahonka 4
Activity 1: New product concepts and value adding services of ereading for books, magazines and newspapers Research team: Antti Sihvonen, Antti Hirvonen, Juho-Petteri Huhtala, Tommi Laivuori, Jari Salo, Riikka Siuruainen, Mervi Rajahonka, Merja Helle, Seppo Leminen Preliminary research questions: What does the service transformation require from the digital business model of the firm? What are the crucial points of development for the Finnish publishers to utilize the digital service oriented business model? What it is and how it can be used in transformation to digital business What it is: Modularity in traditional vs. digital service offerings How can it be used in transformation to digital business Current status: 8/10 of interviews completed in Q1/11 data gathering preplanning in co-operation with confirmed case companies Next step(s): Finishing of Q1/11 interviews (This and the next week) Gathering the data sets (Q2-Q4) Benchmarking the most prominent product concepts (Q2-Q4) Continuous update of business model cases (2010) Starting to develop service modularity and virtuous cycles within business model 5
Activity 1: Benchmark research and literature review on Interactivity and Value Added Services Realization of the previous working period (01.01-31.03.2011) Planning 2011 research tasks MCRG blog at http://mediaconceptsrg.blogspot.com/ 280 pageviews in March 37 posts in March Value-added services reading and benchmarking Plan for the next working period (01.04.2011-30.06.2011) New website MCRG with presentations and reports/articles Model of elements of interactivity and value added services (June miniseminar) NEXT MEDIA - A TIVIT PROGRAMME 4.5.2011 6
Activity2: Role of advertising in ereading context Research team: Jerry Lindholm, Hanna Kännö, Jari Salo, Riikka Siuruainen, Mervi Rajahonka, Seppo Leminen Preliminary research questions: What is the role of advertising in ereading context? What are the forms and concepts of advertisement in ereading context? How to advertise in ereading context? How to advertise in ereading context in a way that is beneficial (valuecreating) both to consumers and companies? Relevant to consumers efficient for companies/advertisers Current status: Next step(s): Data collection for the surveys research and preparing survey for ereading adverting Starting beweekly blogs of advertising for the companies 7
Activity 3: ereading market research metrics Research team: Juho-Petteri Huhtala, Jari Salo, Seppo Leminen Preliminary research questions: How digital circulation should be measured in various ereading contexs? Current status: Initial planning of Activity 3 done with Steering Group and case company KSF Media Next step(s): Survey for media houses to uncover their current vision towards digital circulation metrics (In co-operation with Activity 2 during Q2-Q3/11) Interviews with Next Media project companies about digital circulation metrics (In co-operation with Activity 1 during Q3-Q4/11) Next Media workshop/roundtable about digital circulation metrics and, as a result, a white paper proposal for Finnish Audit Bureau of Circulations during Q4/11 8
Business model options in ereading context to be published in 2011 Journal of Digital Marketing (JDM) Emerging Business Models in the e-reading Context Huhtala, Sihvonen, Leminen
What factors are influencing the choice of the business model?* External factors -Occuring market trends - Influence of strategic partners -Other environmental factors (such as competitors actions) -Type of industry (newspaper, magazine or book)** Publishing company X Internal factors -Current technical infrastructure and knowledge - Available resources - Organizational culture - Strategy in traditional publishing business** e-reading business model * = Source: xxxx ** = Most influencal factor
Big question 1: Open or closed service platform? Or both? CLOSED SERVICE PLATFORM vs. OPEN SERVICE PLATFORM We are willing to distribute and produce standardized products... As the others have the wisdom, we are not trying to invent these [formats and digital channels] by ourselves Apple has somewhat convinced us that closed environment is currently our thing It's hard to see that it [closed service platform architecture] would work in a long run. If consumers are not accepting these 'enclosed gardens', the model should be open Our e-papers can be downloaded to almost any device
Big question 2: Static or modular service design? Or both? STATIC SERVICE DESIGN vs. MODULAR SERVICE DESIGN We do have sort of two different products or product areas, meaning that we have this replica which is identical to the print paper and then we have this actual news site which is alive when the aforementioned is static
So what are the business model options from technological perspective? STATIC SERVICE DESING CLOSED SERVICE PLATFORM E-paper business Unified concept based business e-reading business model Application world based business Web based business OPEN SERVICE PLATFORM MODULAR SERVICE DESING
E-paper business E-paper business Application world based business Unified concept based business Web based business Traditional content Digital replica Layout design as it is in traditional publishing Closed platform for distribution Service(s) designed for one device a time
Application world based business E-paper business Application world based business Unified concept based business Web based business Traditional content Digital variations Multiple opportunities to re-design the service E-paper apps Choices Multi-purpose apps (Content bundles) Closed platform for distribution Services designed for one device (E.g. Apple s ipad) a time Premium content apps Web content apps
Unified concept based business E-paper business Application world based business Unified concept based business Web based business Traditional content Digital replica Layout design as it is in traditional publishing Open platform for distribution Services designed for multiple devices (ipad, Android) a time
Web based business E-paper business Application world based business Unified concept based business Web based business Traditional content Digital variations Multiple opportunities to re-design the service Open platform for distribution Services designed for multiple devices (ipad, Android) a time
Other slides
Casadesus-Masanell & Ricart on strategy and business Most companies still create and evaluate business in isolation, without considering the implications of how they will interact with rivals business Moreover, companies often don t realize that business can be designed so that they generate virtuous cycles. These cycles, when aligned with company goals, reinforce competitive advantage. A business model = A set of managerial choices and consequences of those choices A good business model = Aligned with company goals Self-reinforcing Robust (=defends internal and external threats) Strategy is designing and building the car Business model is a car Tactics are how you drive the car Casadesus-Masanell, R. and Ricart, J. E. (2011) How to design a winning business model. Harvard Business Review 89, no. 1 (January-February), pp. 100-107. 4.5.2011 19 19
Ryanair Casadesus-Masanell, R. and Ricart, J. E. (2011) How to design a winning business model. Harvard Business Review 89, no. 1 (January-February), pp. 100-107. 4.5.2011 20
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Case ereading Services, Business Model task XX/2011 Period review and planning meeting 14.2.2011 (SG), 4.3.2011 (SG) Bm task meeting at Aalto 07.02.2011 Bm task meeting at VKL 04.03.2011 Realization of the previous working period (01.01-31.03.2011) Recruiting personnel and master thesis worker for the task Preliminary research plan was produced Aggregate directions for the research Initial research plan rewritten based on the comments companies Plan for the next working period (01.04.2011-30.06.2011) Main goals for the next period: Benchmarking studies of Sanoma News and Sanoma Magazine, Closer definition of the cases will be finalized by the end of March, Antti Sihvonen Description of other possible company cases, Antti Sihvonen and Seppo Leminen Continuing finding best practices and reporting them continuously, Merja Helle Interim report on value added interactive services in miniseminar June 2011, Merja Helle Presentation about the results in Demo Day at TAIK in June, Merja Helle Starting to update business model cases (2010), Riikka Siuruainen, Mervi Rajahonka Starting to develop service modularity and virtuous cycles within business model, Riikka Siuruainen, Mervi Rajahonka Data collection for the surveys research and preparing survey for ereading adverting, Jerry Lindholm Starting beweekly blogs of advertising for the companies, Jerry Lindholm Data collection for the surveys research and preparing survey for market research information during servitization process, Juho Huhtala NEXT MEDIA - A TIVIT PROGRAMME 4.5.2011 22
Case ereading Services, Business Model task XX/2011 Plan for the next working period (01.04.2011-30.06.2011) Activities of all partners in the task(/case) for the working period: Aalto University, School of Economics, benchmarking studies, description of other possible company cases, data collection for the surveys research and preparing survey for ereading adverting, starting beweekly blogs of advertising for the companies, data collection for the surveys research and preparing survey for market research information during servitization process, Aalto University, TAIK, Benchmark research and literature review on Interactivity and Value Added Services Laurea, updating conducted business model, develop service modularity and virtuous cycles within business model Sanoma News, open ereading product development data for benchmarking purposes Alma, open and comment value added services and advertising for research purposes Sanoma Magasine Finland, open ereading product development data for benchmarking study purposes epaper Finland, open and comment value added services and advertising for research purposes Tieto, open and comment value added services and advertising for research purposes Otava, open and comment value added services for research purposes WSOY, open and comment value added services and advertising for research purposes Talentum, open and comment value added services and advertising for research purposes Suomalainen kirjakauppa, open and comment value added services for research purposes Akateeminen kirjakauppa,open and comment value added services for research purposes KSF Media, open and comment market research metric for research purposes Suomen kustannusyhdistys, open and comment market research metric for resaerch purposes NEXT MEDIA - A TIVIT PROGRAMME 4.5.2011 23
Case ereading Services, Business Model task XX/2011 Plan for the next working period (01.04.2011-30.06.2011) Continuous update of business model cases (2010) (Riikka Siuruainen, Mervi Rajahonka) Starting to develop service modularity and virtuous cycles within business model, ( Riikka Siuruainen, Mervi Rajahonka) Virtuous cycles and modularity within business model What it is and how it can be used in transformation to digital business Case examples where business have taken shape of virtuous cycles (Amazon, Apple etc.) Critical factors behind winning business Modularity approach in digital service offerings What it is: Modularity in traditional vs. digital service offerings How can it be used in transformation to digital business o building services of loosely coupled modules with standardized interfaces o unbundling and bundling of services into new combinations for different customer segments etc. or offering customized or personalized services for customers o mass-customization revised / economies of scale and scope achieved simultaneously o making customer involvement and co-creation of value easier Case examples Critical factors behind winning business (Integration of virtuous cycle and modularity approaches) NEXT MEDIA - A TIVIT PROGRAMME 4.5.2011 24