The app store economy. Squared.

We previously blogged about the app store economy. This “economic trend” will probably get an extra boost – after Apple launching the Mac App Store on January 6 2011. The store is available for Mac OS 10.6.6 users and introduces the app sales model to Apple computers.

Happy New year – a year in which the app store economy’s figures will square?

Mac app store screenshot - credits picture go to readwriteweb as we still run Mac OS 10.5.8

Mac app store screenshot - credits picture go to readwriteweb as we still run Mac OS 10.5.8

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The app store economy: an innovative price model for publishers?

News behind a pay wall?

News behind a pay wall?

Newspaper publishers suffer for years now. The number of readers is going down – and as a result advertisers are less interested to put an advert in a newspaper. With the rise of the app store economy, publishers have the chance to come closer to a price model that works.

Strategy 1: news behind a pay wall?

In order to generate revenue there are plenty of newspapers who have turned news into paid content. The UK Times experiment with the paywall demonstrates that people say “No, thanks” and click away to another site when faced with a paywall at a news site. Source: The Times UK Lost 4 Million Readers To Its Paywall Experiment

Strategy 2: look at other industries (gaming industry) – The app store economy

The app store economy - innnovative pricing through inn-app purchase

The app store economy - innnovative pricing through inn-app purchase

Since there are loads of buzz within the publishing industry about publishing for the iPad, why not have a look at the opportunities of the app store economy? In the beginning of the Apple App Store, you had free apps and paid apps. After a while, they added a functionality called “in-app purchases”. In-app purchases mean that you can offer the apps for free and charge upgrades in the app – like e.g. in the gaming industry new levels.

Price model innovation newspapers: app store and in-app purchase

Consider this: a newspaper publisher creates an iPad edition. Would it make sense to offer the app for free, allowing everyone to read the entire newspaper on iPad? Would it make sense to limit the free articles to 3 and then offer “in-app purchase options” if one wants to read more? Would it make sense to show a summary of all articles and offer “in-app purchase options” to get the entire article?

We’d love to see publishers experiment with it and see whether the strategy from one industry can be applied to another one.

How to make money with Social Media? A new business in "global village"?

Every young marketer probably has met a C-level executive that made him end up in the same situation as depicted in the cartoons below. (Credits for the cartoons go to this linked website.)

Anyway, it was a starting point for me to come up with a concept of how you can generate revenue with Social Media. As far as my thinking is concerned I came to the conclusion that social media cannot make money for you if you consider, deploy and use it solely as a communication channel. To state it very simply: a Facebook fan page or a netlog advert probably won’t do the trick.

We see a remarkable resemblance with the “status” of marketing within an organization. To unleash the power of marketing you cannot reduce them to channel communication and sales support, just as you cannot simplify social media solely into a communication channel for your business.

To make money with social media stop considering it as a communication channel

To make money with social media stop considering it as a communication channel

Don’t consider social media solely as a marketing channel.

The opportunities of social media should be explored in a far more extensive way then as it being a highly targeted communication channel for marketing messages. The image below demonstrates why this approach won’t result in you generating money with social media.

Why only perceive social media as a marketing (communication) channel?

Why only perceive social media as a marketing (communication) channel?

Create a new value on top of Social Media

If you create new value on top of social media networks, you might create a new market. If you are smart enough to keep your “new value” open for multiple social networks, you have a potential 700+ million euro business ahead of you.

Social Media Photo applications

I came to realize that one important aspect about the usage of social media is to share photographs with its friends, connections, peers, … (you name it). What if you could provide additional value to this “photo sharing experience” in such a way that people actually would want to pay for it? Wouldn’t it be better than “spending money on social media advertising”?

Connect the virtual photo sharing experience with the physical one

Social media profiles mostly contain a section where the user can upload images. In this manner users share their real-life experiences with their peers in the virtual domain. If there was an application that could gain access to all the images of the user and offer the user a user-friendly interface to create and consequently order photo books, postcards, calendars or slide show movies from their social media-assets, one could generate a business from selling those goods.

social media apps request for permission to access photo data

social media apps request for permission to access photo data

Dirty sketch of the value chain for a social media web app

Dirty sketch of the value chain for a social media web app

Social Media Web app specs

  • I would make the web app open enough. This means it should be able to access data from multiple platforms: facebook, netlog, hi5 and flickr seem quite appropriate platforms for the app I have in mind.
  • The application presents multiple templates to the user: select a photo book template, select a card template, select a calendar template or select to generate a slide show movie. At the start templates and slide show movies are rather limited since they are created by the app developer. The goal is to come up with a business model that encourages people to supply templates to the platform. If another user selects the uploaded template in order to make and purchase a photo book, the creator of the template receives a margin on the order. Templates are created in such a way that there occurs no resolution problem (since the platforms mostly resize the uploaded images, I suppose).
  • The user selects a template and consequently selects photos from his social media album.
  • The user gets a preview of the template with his photos.
  • The user sees a price for his creation and can order and pay it online.
  • The user receives his physical good at home. He can now have a physical photo sharing experience as well. What’s more he can use the social media to “testify” about the usage of the photo book application. In fact, you can imagine that one takes a picture of its physical experience (receiving the photo book) and sharing this experience virtually again (indeed, upload a picture of the photo book to the social media platform!).

How could a business model look like for this type of product?

There is a lot to say about a business model and its components, difference with a business plan, etc. Instead of going into an academic discussion about that topic, I will make use of the Business Model Canvas as developed by Alex Osterwalder. I believe his canvas provides a valid framework to design “a business”. The business model canvas is defined by the following building blocks: partners, activities, resources, value proposition, customer relations, channels, customer segments, cost structure and revenue stream.

The image below depicts a thinking exercise on a possible business model of the Social Media Photo Application. It is based on Osterwalder’s business model canvas. It might prove fruitful for reading purposes to download the business model canvas for the social media photo book application as a PDF. (yes click here, this is a link!)

Business model generation by using the BM canvas

Business model generation by using the BM canvas

Just one more thing, how should one call this type of solution: Social-to-Print?

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Sustainable Business Strategies for SMEs in a "dying industry"?

Business strategies for a dying industry

Business strategies for a dying industry

Print: a dying industry?

I often encounter the phrase “Print is dead”. Of course, print is not dead. First of all, it’s not a living organism – so technically unable to die because it never actually lived. Second, I still meet printed collateral on a daily basis. Third: history demonstrates that some people always tend to state that new emerging media “kill” existing ones. Concerning this third issue, allow me to have a small digression by referring to the panic for the medium radio with the rise of commercial television.

Commercial television would kill “the radio”. In fact, radio still exists. What happened is a re-allocation of the time spent for a specific medium. People tend to watch more tv and listen to the radio less. But radio is still alive and kicking. People just use it in a different way. The radio went from a “primetime” medium to a “drive time” medium – which means that people mainly use radio while driving a car. So: did video kill the radio star? No, it did not. It just resulted in a new way of allocating resources for specific media.

How to understand the phrase “print is dead”?

So one needs to pay attention what exactly is meant and how the above phrase should be understood. First of all, we have explained in the above paragraphs that media do not die. However, having a look at the phrase “print is dead”, there seems to occur another problem. What is the “printing industry”?

The printing industry is a rather general description of business activities related to printing. The argument that print is dead doesn’t hold much water past books, newspapers and magazine – which aren’t even dead also by the way. The printing industry has multiple subsections, so one cannot simplify that easily.

To start with: every single item made and sold in this world comes with packaging, even if ordered over the internet. So package printing won’t die. However, in times of economic downfall people consume less, which results in less shipments of goods (with printed packages). This also counts for commercial printing – which most of the time people denote when saying the phrase “print is dead”.

Is commercial printing dead?

Commercial printing is about the creation of leaflets, brochures, catalogues, etc. Yes, it still exists and it’s often quite important to have those “sales support documents” next to a powerful website. What is a fact is that more and more corporations are re-allocating their budgets from print to other media (internet, mobile, tv, …). But it is not dead. Nevertheless, the decrease in volume of printed marketing collateral has been an undeniable trend for years now.

Companies that have been in the industry for years are increasingly looking to survive. What business strategies have proven to be effective in surviving this turmoil?

Sustainable business strategies for commercial printers?

Business strategies and innovation are closely linked together

Business strategies and innovation are closely linked together

We don’t want to put an in-depth (theoretical) analysis here about business strategies for growth and innovation. But apparently they are closely linked to one another. The image on the left should do the trick for now. We believe it’s more fruitful to draw a real-life business case.

Sustainable business strategies for SMEs in commercial printing?

The graphics / printing industry has been going down for years now. The economic slowdown and the credit crunch only empower the trend. Loads of SME printers went bankrupt or at least had to shrink down the number of employees.

As a reaction, the industry’s major players reached out to a well-known strategy for growth: “M&A” (mergers and acquisitions). A financially strong company within the sector buys out less powerful players and consequently integrates them into the new structure. The sustainability and growth of the business is hence secured (it might be a short-term…).

As a result of the concentration process, the number of printers within the industry decreased. SMEs reacted by expanding into multi-media production services or by integrating into larger corporations. However more creative initiatives have seen the light as well. And those initiatives don’t even mean the loss of SME commercial printers. The initiative “Pinca” of the Pica Media Partners Group is one of those creative initiatives to counter-fight the negative spiral of the industry.

The Pica Media Partners case

Pica Media Partners is an independent network that contains more than 30 graphic communication corporations within it. The network covers the entire area of The Netherlands. By gathering the strengths of each entity in a network, the group has additional forces for marketing, sales and purchase. By uniting forces, the SME companies within the network can benefit from the state-of-the-art tools as if they were a big player.

In today’s printing industry it’s important to make the transition from a “printer” who sells products into a “media service provider” who sells services. An important element to successfully realize this transition is technology. Specific technologies support printers’ transformation into a service provider.

The network equally saw the importance of technology and jointly invested in an “online collaboration platform”. We are very keen to see how this technology will further prove how business model innovation can act as a strategy for growth. And I have to say: it looks quite promising. The deployment of the technology resulted in an innovative business model within the graphic production industry. In fact, BMI or business model innovation could well be the theme for my next blog post since I started to feel a particular interest in related subjects.

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