It’s time to sum up our research findings on this last working day of the year. In fact EDGE research group has been working on three interrelated projects during the past two years. EDGE is a research group at the School of Business and Economics at Åbo Akademi University. The focus of the group is issues surrounding business model innovation and revenue models in industries undergoing fundamental transformations.
EDGE research group has had its focus on three research projects in 2012-2013:
- Personal Media Day (PMD) = Consumers’ changing media consumption patterns, mapped by way of e-diaries and a survey to give an overview of Finns’ media consumption. Almost 1000 people aged 15 – 80 following the geographical distribution of the Finnish population took part of the survey which covers a wide range of media consumption from print newspapers, magazines and TV to mobile devices, i.e. smartphones and tablets. Personal Media Day (PMD) is a part of the Next Media R&D program and is designed to bring a greater understanding of consumers’ everyday media consumption practices.
- Disruptive Business Models (DBM) = Media firms’ approach to find new sources of revenue in the digital ecosystem and the process of service design. Making sense of MEDIANOMICS. Qualitative research with 80 interviews conducted to date with media executives, industry experts as well as new disruptive players in Finland, Sweden, the UK and USA. The material also includes 40 seminars and workshops with media executives, board members and new players in the media business. This project is the focus of my PhD thesis and I hope to finish the manuscript for the monograph during 2014-2015. Dissertation is planned to take place in 2016.
- Mobile Value Services (MVS) = New advertising solutions combined with a personalized media experience on smartphones and tablets. New project started in 2013. Particularly looking at the user experience of mobile applications (measuring behavior), user engagement and impact (understanding the behavior), and the business model of mobile applications (developing and innovating).
The focus of my research project has been on media firms and more specifically newspaper publishers’ approach to find new sources of revenue in the rapidly changing digital ecosystem. The design of new and viable business models is a real challenge in the constantly changing media landscape, where consumers are increasingly online. In fact Finnish Internet users are now among the most avid consumers of online news and rank #1 among European countries. Consumers obtain and share their news on multiple platforms including blogs and social media. Mobile media consumption is clearly an accelerating trend, which in turn requires new business models and new ways of engaging consumers in media and advertising content in the right context.
In the Digital News Report by Reuters Institute it was found that 49% of 18 to 24-year-olds read a digital newspaper, the highest reach of any age group. The survey of 11,000 Internet users in nine countries revealed that 25 to 34-year-olds are twice as likely to part with their cash for digital news than older readers. According to the study, 20% of 25- to 34-year-olds said they had paid for online news compared with less than 10% of those aged over 55. This should be good news for all media firms developing new services. And multi-platform availability of services is increasingly important, as 33% get news on at least two digital devices while 9% us three or more devices (Digital News Report 2013, Reuters Institute for the Study of Journalism, Oxford University, 2013). Finland will be included in a longitudinal study during 2014-2016 as a partner to Reuters Institute and it will be of utmost interest to media firms to follow this study closely as the digital ecosystem and new platforms for paid content keep evolving,
The results from the multiple in-depth interviews in four countries (FI, SE, UK, USA) indicate that the change in consumer behavior is accelerating. Recent consumer surveys support this view. The willingness to pay for content is influenced by other media content services (e.g. Netflix, Spotify, MTV Katsomo) and the introduction of ‘paywalls’ for news services has recently taken place in the Nordic countries.
The interviews reveal that there is an increased sense of urgency in deciding which path to choose and where to invest. New concepts and platforms for news are being introduced. Different companies have chosen different approaches to meet the digital demand for news. Printed newspapers may become a luxury product with the increased cost of distribution. Publishers that invest only in printed newspapers will not be successful in the future. The critical question is how to manage digital transformation and utilize customer insight to develop new services to both consumers and advertisers. The strategic choices of newspaper publishers are described in more detail in the project report.
An agile organization is a prerequisite for innovation. It is vital to nurture a corporate culture that supports ideas, development and prototyping. The ability to collect, analyze and utilize customer data is of essence. Service design based on customer insight is required in order to be able to offer valuable content to the consumer in different contexts, on different platforms. It is important to recognize the various phases of the consumers’ purchase path and to offer the right kind of content for each phase including advertising solutions. The innovation process for new products and services needs to be shortened. Trial and error, i.e. testing with consumers is part of the service design process. However, it should be noted that ”no service concept survives its first contact with customers.”
It is time to say thank you to all the readers of this blog, as well as to colleagues at Åbo Akademi University. It has been a great learning experience to work with our skilled researchers and I would also like to thank all the people I have had the pleasure to interview. The dialog in these interviews and workshops has been valuable to my research. I wish everyone a Happy New Year and the best of success in 2014.