Convergence Assessment by J

EU-US SEMINAR: NEW TECHNOLOGY FORESIGHT, FORECASTING & ASSESSMENT METHODS-Seville 13-14 May 2004

Paper 9 : Technologies for the Future - Value System Analysis as a Tool for (Media) Convergence Assessment Juha Saukkonen, M-real Corp./University of Jyväskylä, Finland [email protected]

ABSTRACT This paper aims at creating understanding of the underlying rationale of (possible) convergence between magazine and other sectors of traditional mass media. Magazine as such has proven relatively weatherproof throughout the technological changes affecting media industries during 1900s. The track record of magazine media during the rise of World Wide Web as a ubiquitous media channel in 1990s – with the simultaneous economic downturn on the general economic climate - has repeated the same pattern. Both in terms of readership and advertising spending the position of magazine has survived relatively well compared to many other sectors of traditional media. In the study “Reassessing the value chain – magazine publishers and the media convergence” the practitioners of the sector as well as (non-publisher) magazine publishing experts and media researchers created in a joint collaborative process an updated Value System model of magazine publishing today as well as analysed the proximities of magazine to other media in terms of media properties and usage patterns. Also an assessment of probability, affectability and desirability of future changes identifiable from the previous phases of the project – was done in order to add to the understanding of convergence effects to specific activities and activity layers of magazine publishing value system. The results of the empirical study prove that the convergence potential between any two forms of media differs significantly in both in terms of: 1. General convergence potential between the chosen two media 2. The parts (activities or activity layers) of the two value nets that have potential to converge For magazine specifically, Internet - as it is seen today - seems to offer a relatively close match both in what comes to media properties as well as to usage patterns. However, sustainable business models have not been found in magazine-content based web magazines to capitalize this potential created by the proximity. Interestingly, the possible convergence between magazine and Internet media might be already losing its “momentum” as the results of our empirical study suggest that the two media will develop along different lines. Generally speaking, distances between different sectors of mass media – in terms of both media properties (“what the medium is good at”) as well as of usage patterns (“what the medium is good for”) – will be shorter than today in the studied time span, development from now to year 2105, suggesting that the overall potential for convergence is at growth. However, assessment of each medium’s future properties (“what the medium is good at”) as well as usage patterns (“what the medium is good for”) suggests that no other media seems to offer a close overall match with magazine, so instead of fusion of previously separate value chains - possibly leading to converged products, so-called “hybrid media” – we will see convergence on the level of individual activities or activity layers. POSTER SESSION 92


1. INTRODUCTION The once so rosy picture of “old” and “new” media happily co-existing and complementing each other has in many cases turned to difficulties in finding ways in which parallel operations across different sectors of media can be run with success. Even newspapers, acting with a sound base of existing audience on a time- and distancesensitive markets and thus seen to be a clearly transitional medium (the key value of which will move to digital form), have found it difficult to find economically viable ways of embracing new media.On the magazine publishing side, the uncertainty on the future has also been expressed, even though the leakage of advertising and/or readers to the new media has been less intensive, so the need to define the positions to be taken in front of new technology has been less urgent. This article proposes some viewpoints that any magazine publisher or researcher of magazine publishing should take into account when approaching any media convergence set-up, where magazine as a media product or a magazine publisher as an actor is involved. The degree in which magazine publishers have adopted the possibilities of new media on their business models vary a lot, from promotional web-sites to full interactive portals bearing the brand identity of a parent magazine. Some publishers, biggest of them being IPC, the publisher of more than 100 magazines and 350 million annual copies, has decided to fold their on-line magazine operations altogether already back in 2002. Sanoma Magazines, another key European player, said at a same time to keep its efforts on web publication limited, as the business is ruined by the “people’s unwillingness to pay for information obtained over the web” (MediaCompanies). Still, judging by the statements given by the representatives of publishers, also positive, encouraging experiences have been lived through in terms of cross-media. And the successful (success in this context should naturally be viewed as subjective - being relative to the business targets set to these operations, that can by no means be compared to the magnitude and financial performance of the traditional print magazine operation of the publisher) operation include things very different from each other, article showrooms to content sales, SMS services to user communities. What makes the point of view of these self-claimed “successful e-publishers” different, is their way of not seeing the range of opportunities of new technology not providing just an alternative platform for distribution of magazine content, but to penetrate – and to facilitate and economise – the whole process of the value creation system of magazine publishing.

2. CONCEPT OF (MEDIA) CONVERGENCE MEDIA CONVERGENCE IS A PHENOMENON WIDELY RECOGNIZED AND ALSO WIDELY STUDIED IN RECENT YEARS. AS DEFINED BY SCHMID ET AL.H(1999) MEDIA CONVERGENCE IS A TERM THAT CAPTURES “THE COMING TOGETHER OF COMMUNICATION DEVICES AND PROCESSES; A MAJOR FEATURE OF THE DEVELOPMENT OF MEDIA TECHNOLOGY IN THE 1990´S. CONVERGENCE IS FAR MORE THAN THE STUFF OF HARDWARE AND SOFTWARE; IT IS THE DRIVING FORCE THAT HAS SPURRED MAJOR CHANGE IN THE MEDIA INDUSTRIES AND ALMOST EVERYWHERE ELSE”. OTHER VIEW BY KÜNG ET AL (1999) STRESSES THE BIRTH OF A NEW FIELD, WHERE BOUNDARIES OF UP TO THIS DATE UNRELATED INDUSTRIES OF MEDIA, TELECOMS AND INFORMATION TECHNOLOGY SEE THEIR BOUNDARIES BLURRING. SIMULTANEOUSLY TO THE TECHNICAL POSTER SESSION 93


DEVELOPMENT DEMANDING NEW COOPERATION STRATEGIES OF THE FIRMS IN THE NAMED INDUSTRIES, THE MARKET LIBERALIZATION AND PRIVATISATION TRENDS MAKE NEW FORMS OF INTEGRATION POSSIBLE, THEREBY CREATING NEW CORPORATE ENTITIES AND THEREBY ALSO TO A CERTAIN EXTENT INTEGRATED MEDIA PRODUCTS. THE MOST COMMON AND NATURALLY ALSO MOST STUDIED PHENOMENON OF THIS INTEGRATION ALREADY BROUGHT TO FULL PRACTICE IS THE ON-LINE (INTERNET) VERSIONS OF DAILY NEWSPAPERS AND DELIVERY OF THEIR NEWS CONTENTS TO OTHER SITES IN THE ON-LINE ENVIRONMENT. The terminology cited above like “coming together” or “blurring of boundaries” underlines the fact that individual products, processes or entities of media industry can not be studied nor understood in isolation of the other interlinked parts of the same system. The theoretical outcome of this development is perhaps best described by Lovink in his statement that media today is a partial media, with a promise to reach an ultimate moment of synergy, the medium to end all media”. Lovink himself sees this as an utopian moment, but admits its mythical drive when talking multimedia, web-TV, Gesamtkunstwerk etc. The best summary of the status of things, and a great motivator for both convergence practitioners and researchers, is the view by Leo Bogart (1998): ”The various media remain distinct and identifiable in their characters, internal economics and functions…But more and more they operate as parts of a system that must be regarded as a indivisible entity, with common elements of ownership, management and content” Media convergence is largely boosted by new technological means, but as e.g. Pagani (2000) states in her analysis on Digital Television, move towards new type of media is not a question of technological valence, but also the profound impact of the whole media system should be looked at. The real-life strategic and managerial applications have been numerous to prove the effects of these changes. The birth of media conglomerates active in numerous fields of media industry with different strategies of acquisitions, joint ventures or internal new competence building has shown through the ability of technological changes to be a change agent towards a total restructuring of an industry (Küng at al.). As (media) convergence is a wide concept, some further categorisation has been proposed to help in the recognition and analysis of convergence and potential for it. A Swedish state-initiated study in the end of 1990s proposed a following subdivision of media convergence (Teldok/Vinnova, Stockholm 2001) 1. Network convergence …where channels traditionally seen to serve a certain type of services can now be used for other type(s) of services 2. Service convergence …where different types of services fusion. There is a further separation to communication services and content services (?) 3. Device convergence …where different types of services can be utilized from the same device 4. Market convergence …where a player (actor) in one sector widens his scope of operation to another sector. An example used is a network operator widening his scope to content production.

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As Soramäki (2003) states, the sole common ownership of different media – cited as “market convergence” is not enough to create new operations nor make the value nets of existing operations more effective. It is value as any form of convergence can be questioned. The remaining three categories can and also do exist on both theoretical and practical level, giving support to views of Tadayoni on convergence: True convergence is essentially of Value Chain convergence (Tadayoni, 2000), which means that parts of previously separate value chains merge. This wide concept suggests that: - Convergence can happen between any value chains - Convergence can happen in only one activity or various activities of those converging chains - Any activity can form the base for convergence, either from upstream (close to the “production end” of the chain) or downstream (close to the “consumption end”) of the chain

3. VALUE NET OF MAGAZINE PUBLISHING The concept of the Value Creating System, alternatively labelled e.g. the Value Net approach (by Cinzia Parolini) or Activity Web - named differently but conceptually based on the same thinking - by Kenneth Pritsker, among others, was adopted for this paper. The early development of Value Net modelling can be derived from Michael Porter’s early work (1985), which was in the “old economy”, and in some cases still is, a viable way to describe the one-way nature of the flow of materials to the final product. As the information flows and physical flow of materials were separated with the development of Information Technology and borderlines and clear sequential order of activities started to blur, the added complexity needed new tools of description. The Value System (Porter himself being one of the modifiers) modelling was developed to break the tube-like earlier modelling. With this kind of amplifications the concept of the value chain comes close to business models. As Picard (2000) writes business models are described as the architecture of the product, service and information flows, including a description of various business activities and their roles. The complexity of bringing in new elements and dynamics is well highlighted in the diagram showing the “architecture” of one industry, aviation industry (Fig. 1). As Pritsker notes, the models tend to get very complex, yet being unable to support neither time dynamics nor iterative processes, in order to maintain some level of readability. S E G M E N T S O F A N IN D U S T R Y segm ent 2

s egm ent 3

segm ent 4

segm ent 5

ACTIVITIES

segm ent 1

V e r t i c a l v a lu e c h a i n s : V a lu e n c r e a te d b y d ir e c t l y p r o v id i n g a n in c r e m e n ta l o u t p u t t o a p a r t ic u la r c la s s o f p r o d u c ts H o r iz o n t a l v a lu e c h a i n s : V a lu e c r e a te d b y p r o v id in g n e c e s s a r y l in k a g e b e tw e e n v e r t ic a l c h a in s t o e n s u r e p r o d u c t fu n c t io n a lit y w it h in a n in d u s tr y s e g m e n t I n t e g r a t i v e v a lu e c h a i n s : V a lu e c r e a te d b y c o o r d in a t in g h o r in z o n t a l a n d v e r t ic a l c h a in s a c r o s s in d u s tr y s e g m e n ts

F i g u r e 1 : A n a c t iv it y w e b o n a n i n t e r lin k e d in d u s t r y ( P r it s k e r 1 9 9 8 ) . ( A s im p lif ie d p r e s e n t a t io n )

POSTER SESSION 95


The present concept of Value Net, adaptable to any industry, should contain at least sufficient treatment on the nodes of the net and the description of the interconnection between the nodes to be usable for modelling and analysing the changes that the process of an industry will face (Parolini). In short, Value Net analysis replaces organisational units and products with activities as key nodes of the net, and the linkage between the nodes can take many different forms. Each and every node in the Value Net has to be (Parolini): - Sufficiently disaggregated to allow the identification of the fundamental choices of internalisation, externalisation or connection that the players in a system can make - Sufficiently aggregated to ensure that the representative model of reality does not get too complex and therefore hardly usable Most of the recent presentations of publishing value creating system have been designed to enlighten the change happened in the multi(or cross-) media era, where the realisation of a physical object has been replaced or at least fortified by digitised parallel products. A typical example of these presentations is the one by Wirtz (Figure 2)

C o n te n t/ S e r v ic e c r e a t io n

C o n te n t/ S e rv ic e A g g reg a t io n

V a lu e Added S e r v ic e s

Access/ C o n n e c t in g

N a v ig a t io n / In t e r f a c in g / T ra n s a c t io n

( P r iv a t e ) CUSTO M ER ( B u s in e s s )

F ig u r e 2 : M u l t i m e d i a V a l u e C h a in ( W i r t z 1 9 9 9 )

In the reference model that was carved out in the first phase of the empirical part of this study (Figure 3) (nodes and activity groups of which will be analysed in the following through the glasses of convergence), is loosely based on the model proposed by Wirtz, augmented by the addition of new elements, as the iterativity/interactivity connection with audience reader and on the other hand the separation of the two circles of a magazine (information and advertising circles). These additions are based on the joint collaborative process between 20 magazine publishers, (non-publishers) media experts and media researchers from UK, Spain, Scandinavia and Finland as a part of the research project “Reassessing the value chain – magazine publishers and the media convergence”, added with thee author’s own assessment based on the literature and practical experience of the business systems of magazine publishers.

POSTER SESSION 96


F ig . 3 : M A G A Z IN E P U B L IS H IN G V A L U E C H A IN

A D V E R T IS E R ´ S B R A N D M ANAGEM ENT

RESP O - I n te r e N S E ( A tt e n tio s t -D e s ir n e - A c tio n)

CO NTENT PACKAG IN G

CONTENT AGG REG A T IO N ( u p s t r e a m a c t iv it ie s )

( m id s tr e a m

READER 1

CONSUM PT IO N

A D V E R T IS IN G

CONTENT C R E A T IO N

A U D IE N C E

M ARKET IN G & SALES a c t iv itie s )

D IS T R IB U T IO N

TARGET GROUP KNOWLEDG E

R EAD ER KNOWLED GE

( d o w n s t r e a m a c t iv it ie s ) CONSU M PT IO N

E D IT O R IA L

R EADER 2

IN T R A A U D IE N C E A C T IV IT Y READER 3

READER FEEDBACK/ C O N T R IB U T IO N

It is vital to notice, that just as any process description, this model is a simplification of a complex world, and it is even more important to understand, that the lines between the two activities are often blurred and do not necessarily mean those activities are done in organisationally separate (either intra- or inter-company) entities. For example the Content Creation and Distribution activities in the model above represents a grouping of various more detailed activity nodes, as Figure 4 shows.

Figure 4: A more detailed analysis of main activities Content Sales/ Syndication

Content Aggregation Platforms

Own Editorial Process

Distribution

Audience

Channels

Film

masthead TV

Print

cable

sms

merchant

concumer Content Sourcing

Content Packaging

consumer retail cosnumer

Long-term Content and Visual Planning

WWW etc

radio consumer gprs etc.

Interactive Content

Content creation activity divided to nodes

Distribution activity divided to nodes

Naturally the activities in the Value Net enjoy varying degrees of criticality (to the success of the whole chain as well as to a single actor) and possibility to differ the operations of one chain from another. The criticality (relative power over other net activities and their performers) has been linked with the concept of bottlenecks (van Siclen, 1996) and as a volume of incoming links or flow from other activities, so called hub position (Barabási, 2001). Fine (2003) claims that the dominant structural model of the value chain of communication industry in disintegration; the value chain consists of independent silos acting without leadership and coordination. On the positive side this means separate activities and their performers are still relatively easy to identify and agree upon, as the empirical study also revealed. For simplicity and usability reasons it is valuable to create wider entities to be included in the value net model, instead of detailed analysis of individual activities. Even though we showed earlier that the activities separated in the Magazine Publishing Value Chain POSTER SESSION 97


model were aggregate-level concepts, a further simplification can be drawn following the thoughts of e.g. Leyshon, who treated Music Industry as a system of (partly) overlapping networks. F ig . 5 : O v e r la p p in g

N e tw o r k s ( in th e v a lu e L e y s h o n 2 0 0 0

N E T W O R K O F R E P R O D C U T IO N

N E T W O R K O F C R E A T IV IT Y

s y s te m

o f M u s ic In d u s tr y ) ,

N E T W O R K O F C O N S U M P T IO N

N E T W O R K O F D IS T R IB U T IO N

For the further analysis in the empirical part of the research project on hand, a following a priori-model of Magazine Publishing Value System was created, combining the activities identified in the 1st phase of study (Figure 3) to three upper-level layers (see fig 6.), namely to those of - Layer of creation - Layer of form & place - Layer of consumption

Fig 6. V A LU E SY STEM O F M AG A Z IN E PU B LISH IN G & AC TIV ITY ”L AY ER S ” M A G A Z IN E P U B L IS H IN G V A L U E C H A IN

AD V ER T ISING LO O P A D V E R T IS E R ´S B R A N D M A N A G E M E N T

R ES P In t e r O N S E ( A t t e n t est –D e s i r e - A ci o n tio n )

A D V E R T IS IN G

UP ST AM UPS TRE EAM L AY ER AYE CR O N= T E N T C O N T E N T A G G R E C R E A T IO N T IO L AYE RG AO FN AY ER C R EAT IV IT Y IVIT

M ID ST R E AM EAM M A R K E C O N T E N T LT IAYE R =DBI US TT RI OI -N AYER N G P A C K A & G IN G SL A AYE L E S R OF AYER F O RM & P L AC E PL

E D IT O R I A L

R E A D E R FE E D B A C K / C O N T R IB U T IO N

A U D IE N C E R E AD E R 1

C O N S U M P T IO N

D O W NST AM NS T R E EAM L AYE R= AYER L AYER AY ER O F C O NSUM PT P T IO N

T A R G E T G R O U P K N O W LE D G E

R E AD E R K N O W L E D G E

R E A D E R 2

IN T R A -C O M M U N IT Y A C T IV IT Y

C O N S U M P T IO N

R E AD E R 3

C O P Y R IG H T : J u h a S a u k k o n e n 2 0 0 3

E D IT O R IAL L O O P

4: EMPIRICAL STUDY 4.1. Research setting In the research project “Reassessing the Value Chain – magazine publishers and the media convergence” an informant panel of 20 European magazine publishers, media experts and media researchers were gathered to form an informant panel for the three-phase process based on Argument Delphi-methodology. Since the mid-1970´s when the use and development – and critique – of Delphi-methodology was at its liveliest, critical remarks have been raised stating that a common defect of Delphibased research has been the little effort put to the choice of informants (e.g. Hill and Fowles, 1975). The often used co-nomination (an informant proposing another who proposes another etc.) is felt to lead to a biased sample, where the informants create at start a common school of thought. In the research on hand this “similar school of thought” pattern was broken on purpose using the co-nomination only partially, complementing it with researchers own decided choice of types of POSTER SESSION 98


informants sought to guarantee the required variety of angles to look at the issues and topics of the project, market roles and positions, interest groups represented etc. Three different market areas were selected to be included to the process: UK, Spain, Finland&Sweden. Choice was based partly to the intention include big, medium and small size of markets to the sample, but also to reflect different modes of operation (e.g. in terms of revenue streams and modes of distribution/sales). Table 1 shows some distinctive features of market areas in question. Part of the decision criteria was also the researcher’s ability to run and interpret thematic interviews with key informants that form an essential part of Argument Delphi –method (Kuusi 2000). Interviews served to deepen the topics and add understanding on the opinions expressed by offering a widened possibility to argumentation. The co-nomination choice of individual informants was based partly on the method called snowballing in Futures Research: Key informants (for their position on the researched field/market or their expected original contribution) are asked a suggestion/recommendation of other informants, who suggest the next ones. The role of the researcher is to make sure that the variance is maintained (e.g. including newcomers/small players to the sample, not just established “regime” of an industry, science etc.).

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TABLE 1: DIFFERENCES OF THE MARKET AREAS INCLUDED IN THE INFORMANT SAMPLE (FIPP, 2004) Market size UK

Spain

Sweden

Finland

Magazine ad spend US$ million 2002

2390

656

228

168

Total readership universe size (18 years+, 1000s)

44600

32600

6900

3960

UK

Spain

Sweden

Finland

Share of advertising revenue %

37

38

25

28

Share of copy sales revenue %

63

62

75

72

UK

Spain

Sweden

Finland

Retail sales %

89

94

28

14

Subscrition sales %

11

6

72

86

Media market structure

UK

Spain

Sweden

Finland

Revenue structure

Sales distribution breakdown

Magazine share of ad spend %

15,7

12,9

14

17

TV share of ad spend %

31

40,4

22

19,1

Newspaper share of ad spend %

40,2

28,3

48,9

55,1

1.1.1.1.1.1.1 Penetration of new technology Share of population with www-access 2001 (mill.)

55,3 (all) 25 (adults)

63,6 (all) 49 (adults)

Nr of consumer magazine web-sites

na

280

na

150

From the very beginning of the process the principle of creating an international group of informants was obeyed to guarantee richness in views presented.

The participants (anonymously and unaware of the personality of the others – unlike in most Argument Delphi studies (Tapio, 2002) - as a certain part of the participating panel members act on the marketplace with clear competitive positioning) produced both the Value Net model (Figure 3 in previous chapter) as well as created picture of the differentiation between different media based on their relative strengths (see 4.3. and 4.4.), both “Now” (during the enquiry process 2003/2004) as well as in the year 2015. The (numerical part of) assessment was done by giving a score for relative merit of each medium (on scale 1 to 5) for each separate measure explained in the following chapters. In addition to numerical assessments, the informants were asked verbal commentary/additions to any opinion or dissolution made by themselves, any other informant or the researcher, according to the principles of Argument Delphi- research tradition. In addition 6 and 8 persons were interviewed in depth after each of the successive two rounds. In the following analysis the first 6 of the total of 16 informants are presented, as the process still is ongoing when submitting this paper. 4.2. Research questions/targets

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The targets for empirical research can be summarized as follows: The main research question: - Can value chain –modelling be used as a conceptual tool to analyse the phenomenon of media convergence and its dimensions for the future? Additionally following set of research questions could be raised: -

How should the activities in the present value constellation system of magazine publishing industry be arranged and grouped?

-

Can a justifiable way of analysing/describing the (media) convergence between magazine publishing and other (media) value constellation systems be found?

-

Where does the highest convergence potential to magazine publishing exist, and what are the underlying factors leading to that high/likely potential?

In the following chapters preliminary results of the analysis are presented. At the moment of writing this paper the input of one third of the informants (6 out of 15) had been analysed. The sample for the media assessment “Now” as well as “2015” was the same, but will alter in coming weeks, when the data gets completed. But as there were already informants from all market areas covered by the original sample and all positions relating to the industry (publishers/(industry) experts/external media experts), the preliminary results should be indicative of the results expectable. 4.3. Measures operationalized to assess different media The pre-requisite to any kind of convergence to happen (either in the downstream or upstream activities) there is some common ground between the two chains. As Tadayoni suggest, Value Chain convergence happens more and more because of the information being digitised, so allowing quick and economic transmission of the output of one activity node to another. We suggest that the digitisation do is a good base for convergence to happen, but is not enough as a explaining factor why certain convergence applications work better that others in theory and in practice. Also the ubiquitous nature of digitisation means that its not likely to offer sustainable competitive advantage to value nets over one another. We state that the depth and the width in which media convergence takes place between any media, depends on the match there is between the - Media properties - Usage patterns of the media in question (figure 7).

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Match between two media in usage patterns close distant

Figure 7:Convergence potential between media based on proximity of Media Properties and Usage Patterns

Value Chains converged in upstream activities

No/low potential for Value Chain convergence

Fusioned Value Chains

Value Chains converged in downstream activities

close

distant

Match between two media in media properties

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4.3.1. Media properties The measures utilised to assess the properties of the media have also been referred as factors of information (content) type (Sabelström-Möller, 2001). These factors refer to the technological nature of different media, namely its narrative base and ability to serve as a source of up-to-date, short-lived information vs. durable information. These foundations of each medium have a big influence on how the operations and assets of the media performers are organised thus influencing the base for convergence. These properties refer to the upstream activities of the value chain - content creation, aggregation and packaging – proximity of media properties offering high potential for convergence in upstream activities of value chains. The components of Media Properties used in this study were: • Narrative base: Text-based vs. Image-based (values 1 to 5 respectively) • Durability: Topical vs. Durable (1 to 5) In table 2 the assessment on different media in terms of media properties is shown, both as the media is seen today and the evaluation on the state of things in year 2015 + the changes between now and year 2015. Table 2: Assessment of different media in Media Properties, Now (mean values)

Topical-durable (1 to 5) Text-Image (1 to 5)

Ana TV

Radio

Inet

Newsp

Maga

Book

Digi-TV

1,75 5

2,25 1,8

2,75 2,6

2,75 1,8

3,75 3,2

4,5 1,2

1,25 4,6

Assessment of different media in Media Properties, 2015 (mean values)


Radio

Inet

Newsp

Maga

Book

Digi-TV

1,8 1,5

2,8 2,6

3 2,2

3,8 3,6

4,2 1,6

2,2 4

Assessment of changes in different media in Media Properties, Now=>2015 (mean values)


Radio

Inet

Newsp

Maga

Book

Digi-TV

-0,45 -0,3

0,05 0

0,25 0,4

0,05 0,4

-0,3 0,4

0,95 -0,6

As a general summary it can be stated that the properties of each medium are seen to be changing on average very little over the time span forecasted, but also very differently from one medium to another. Also the direction of changes is different for different media. If the only purely auditive medium – radio – is excluded, the development is towards more durable information, and the printed communication leaning increasingly to image-based information, (Digital) TV moving towards same score but starting from the ultimate (image-intensive) end of the score.

4.3.2.Usage patterns The previous category, Media Properties, refers to differences that exist between different forms of media independent on the action taken when consuming the end products of these separate value chains. To reach the full convergence potential the media has to find common ground also in downstream activities, activities closest to the consumption of the (media) product. The factors defining the downstream activities of the Value Chain are described in this study as Usage patterns (also cited as Information Usage by Sabelström-Möller). The components used in this study to construct the concept of Usage Patterns were: • Action-causing vs. Enjoyment (scored 1 to 5 in the assessments) • Basic vs. Additional information (scored 1 to 5 in the assessments) • Push vs. Pull (1 to 5) POSTER SESSION 103


Table 3: Assessment of different media in Usage Patterns, Now (mean values) Ana TV Radio Inet Newsp Maga Action-Enjoym. (1 to 5) 3,6 3,4 2,8 2,2 3 Basic-Additional (1 to 5) 2,75 2 3,75 2,25 4,25 Push-Pull (1 to 5) 1,2 1,2 3,6 2,8 3,4 Assessment of different media in Usage Patterns, 2015 (mean values) Radio Inet Newsp Maga Book Action-Enjoym. (1 to 5) 4,2 2,4 3,2 4,2 4,6 Basic-Additional (1 to 5) 2,6 3,4 2,6 3,6 2,4 Push-Pull (1 to 5) 1,8 4,2 2 2,8 2,6

Book 4,2 3,5 3,4

Digi-TV 3,6 3,75 1,6

Digi-TV 2,8 3,6 3,4

Assessment of changes in different media in Usage Patterns, Now=>2015 (mean values) Radio Inet Newsp Maga Book Digi-TV Action-Enjoym. (1 to 5) 0,8 -0,4 1 1,2 0,4 -0,8 Basic-Additional (1 to 5) 0,6 -0,35 0,35 -0,65 -1,1 -0,15 Push-Pull (1 to 5) 0,6 0,6 -0,8 -0,6 -0,8 1,8

average 0,37 -0,22 0,13

The forecasted changes in Usage Patterns were on average of bigger magnitude than the changes in Media Properties. As a summary it can be stated that tomorrow’s media is believed to be: - more enjoyment-orientated - more of basic-type of information - more pull-originated (=consumer-initiated) Biggest individual change is assessed to happen in the push-pull-dimension of (Digital) TV. 4.4. Proximity of different forms of media The assessments for different media can be positioned to a chart showing the assessed distance/proximity between the media, separately for Media factors and Usage Patterns.In case of Media Properties, the proximity of two media is a short distance of two media in a two-dimensional scale where the two axis of the scale are TopicalDurable and Text-Image scores.In what comes to Usage Patterns, the proximity of two media is a short distance of two media in a three-dimensional space where the three axis of the space are Action-Enjoyment, Basic-Additional and Push-Pull scores. As can be seen (in the table 4 below), based on Media Properties, Book is the form of media which has the lowest average proximity to other media, while Internet – as it is today - seems to stay in the crossroads between the paths of many different media. Specific proximity is assessed to prevail between Internet and Newspaper, as well as between (Analogical) TV and Digital-TV, even though the latter is assessed to mean a significant move towards other media in terms of Media Properties, offering a new challenge or increased (convergence) business opportunities to other media. Perhaps in case this kind of development continues, Digital TV can take the role of “Medium to end (or melt together) all media”. Specifically, if the purely auditive media Radio is excluded, the trend of closing distances is clearly seen for all visual media.

Table 4: DISTANCES BETWEEN ANY TWO MEDIA IN MEDIA PROPERTIES (Topical-Durable, Text-Image) NOW

AnaTV now

Radio Now

Inet Now

Newsp Now

POSTER SESSION 104

Maga Now

Book Now

DigiTV Now

average


AnaTV now

3,24

Radio now

3,24

Inet now

2,60

0,94

Newsp Now

3,35

0,50

2,60

3,35

0,94

2,69

4,69

0,64

0,50

2,05

2,33

2,97

0,80

1,17

2,24

2,50

1,72

1,85

3,18

0,80

Maga Now

2,69

2,05

1,17

1,72

Book Now

4,69

2,33

2,24

1,85

2,14

2,14

Digi-TV Now

0,64

2,97

2,50

3,18

2,87

2,87 4,70

4,70 average

2,87 2,01 1,71 1,90 2,11 2,99 2,81 2,34

DISTANCES BETWEEN ANY TWO MEDIA IN MEDIA PROPERTIES (Topical-Durable, Text-Image) 2015

Radio 2015 Radio 2015

Inet 2015 1,49

Inet 2015

1,49

Newsp 2015

1,39

Newsp 2015 Maga 2015

Book 2015

DigiTV 2015 average

1,39

2,90

2,40

2,53

2,14

0,45

1,41

1,72

1,52

1,32

1,61

1,34

1,97

1,35

0,45

Maga 2015

2,90

1,41

1,61

Book 2015

2,40

1,72

1,34

2,04

2,04

Digi-TV 2015

2,53

1,52

1,97

1,65

1,65

1,92

3,12

2,13

average

1,84

3,12

2,16

CHANGES IN DISTANCES NOW=>2015, MEDIA PROPERTIES (Topical-Durable, Text-Image)

Radio Radio

Internet

Newspaper

Magazine

Book

(Digital) TV average

0,54

0,89

0,85

0,07

-0,44

Internet

0,54

Newspaper

0,89

-0,35

-0,35

Magazine

0,85

0,25

-0,11

Book

0,07

-0,52

-0,51

-0,10

(Digital) TV

-0,44

-0,98

-1,21

-1,22

0,38

0,25

-0,52

-0,98

-0,40

-0,11

-0,51

-1,21

-0,54

-0,10

-1,22

-0,29

-1,58 -1,58

-0,68 -1,24

In case of Usage Patterns, different media rank closer to each other, Magazine and (presumably, as much of the nature and use of Digital TV is still unknown) Digital-TV being the ones with the closest (average) distance to other media but also the closest single match between any two media. . For magazine, its distance to other media in terms of usage patterns is forecasted to see the smallest change.

POSTER SESSION 105


Table 5. DISTANCES BETWEEN ANY TWO MEDIA IN USAGE PATTERNS (Action+Enjoym., Basic-Add., Push-Pull) NOW

AnaTV now AnaTV now Radio now

0,78

Inet now

2,72

Radio Now

Inet Now

Newsp Now

Maga Now

Book Now

DigiTV Now

0,78

2,72

2,18

2,73

2,40

1,08

3,03 3,03

2,02

3,17

2,78

1,81

1,80

0,57

1,44

2,15

Newsp Now

2,18

2,02

1,80

Maga Now

2,73

3,17

0,57

2,24

2,24

Book Now

2,40

2,78

1,44

2,43

1,42

Digi-TV Now

1,08

1,81

2,15

2,38

1,96

2,43

2,38

1,42

1,96 1,91

1,91 average

average 1,98 2,26 1,95 2,17 2,01 2,06 1,88 2,05

DISTANCES BETWEEN ANY TWO MEDIA IN USAGE PATTERNS(Action+Enjoym., Basic-Add., Push-Pull) 2015

Radio 2015 Radio 2015 Inet 2015

3,10

Newsp 2015

1,02

Inet 2015

Newsp 2015

Maga 2015

Book 2015

DigiTV 2015 average

3,10

1,02

1,41

0,92

2,35

2,47 2,47

1,76

2,29

2,90

0,92

2,34

1,62

1,54

1,77

1,68

Maga 2015

1,41

2,29

1,62

Book 2015

0,92

2,90

1,54

1,28

1,28

DigiTV 2015

2,35

0,92

1,77

1,52

1,52

1,63

2,31

1,79

average

1,83

2,31

1,77

CHANGES IN DISTANCES NOW=>2015, USAGE PATTERNS (Action+Enjoym., Basic-Add., Push-Pull)

Radio Radio

Internet

Newspaper

Magazine

Book

(Digital) TV average

0,07

-1,00

-1,76

-1,86

0,54

Internet

0,07

Newspaper

-1,00

0,67

Magazine

-1,76

1,71

-0,61

Book

-1,86

1,46

-0,90

-0,13

(Digital) TV

0,54

-1,24

-0,61

-0,44

4.5.

0,67

-0,80

1,71

1,46

-1,24

0,65

-0,61

-0,90

-0,61

-0,36

-0,13

-0,44

0,13

0,39 0,40

0,21 -0,47

Convergence potential between magazine publishing value system and value systems of other media

To assess the potential for convergence for any specific pair of media, a combination of their proximity of both Media Properties and Usage Patterns is to be analysed simultaneously. In the figure 9 the angle from which other media is looked at, is the one of magazine, so the medium itself would naturally be in the extreme lower left-hand corner of the grid, having zero-distance to itself in both Media Property and Usage Pattern –terms.

POSTER SESSION 106


2

Potential to Convergence on Upstream activities

No/Low Potential to Convergence

INTERNET NEWSPAP RADIO ANALOG TV DIGITAL TV BOOK

Potential to Convergence on Downstream activities

Potential to Fusioned Value Chains

1

Proximity to Magazine on Information Usage

3

Fig 8: Convergence Potential between MAGAZINE + other Media based on Proximities in Media Properties and Usage Patterns – changes from Now to 2015

0

1

2

3

Proximity to Magazine on Media Properties

The results suggest that the media – as they are today - that has the closest match with Internet (as the two media are experienced to be today) is Magazine. And moreover, the match is constructed of a balanced match between both Media Properties and Usage Patterns, giving ground to wider Value Chain convergence than a match in only one of the two dimensions would support. Obviously there is not any one good explaining factor why the experiences of Magazines on Web have been rather unsatisfactory for publishers. This kind of Content Convergence - moving relatively unchanged magazine content to be distributed over the Internet – both lacks viable business models (often blamed to derive from customers’ unwillingness to pay for any web-based service) but – more importantly - seemingly is a view too narrow to look on the convergence possibilities between magazine and Internet Value Chains. Interestingly, the proximity of the two media – Internet and Magazine – is forecasted to diminish in the future, as the Usage Patterns will take significantly different routes of developments. Simultaneously, all other media is closing the distance to magazine, none of them coming to very close distance. For reference, in Figure 9 is shown the same development looking from Internet angle, suggesting strong potential with Newspaper value system in the upstream activities. Simultaneously, all other media is closing the distance to magazine, none of them coming to very close distance .

POSTER SESSION 107


N o/Low P otential to C onvergence

2

P otential to C onvergence on U pstream activities

M AG AZIN E NEW SPAP RA DIO AN ALO G T V D IG IT A L T V BO O K

1

Proximity to INTERNET on Information Usage

3

Fig 9: C onvergence P otential betw een IN TE R N E T + other M edia based on P roxim ities in M edia P roperties and Inform ation U sage – changes from N ow to 2015

P otential to C onvergence on D o wnstream activities

P otential to Fusioned Value C hains 0

1

2

3

Proxim ity to INT ER NET on M edia Properties

As stated earlier, Digital TV might be tomorrow’s “media melting pot”, moving towards close distance to (all) other media both in Media Properties and Usage Patterns. Below (Figure 10), the distances and changes to them looked from Digital TV angle, proposing a high potential of convergence with Internet.

N o /L o w P o te n tia l to C o n ve rg e n c e

2

P o te n tia l to C o n ve rg e n c e o n U p s tr e a m a c tiv itie s

IN T E R N E T NEW SPAP R A D IO AN ALO G TV

NOW

M A G A Z IN E BOOK

1

Proximity to DIGITAL TV on Information Usage

3

F ig 1 0 : C o n v e r g e n c e P o t e n t ia l b e tw e e n D IG IT A L - T V + o t h e r M e d ia b a s e d o n P r o x im it ie s in M e d ia P r o p e r t ie s a n d In f o r m a t io n U s a g e – c h a n g e s fro m N o w to 2 0 1 5

P o te n tia l to C o n ve rg e n c e o n D o w n s tr e a m a c tiv itie s

P o te n tia l to F u s io n e d V a lu e C h a in s 0

1

2

3

P r o x im ity to D IG IT A L T V o n M e d ia P r o p e r tie s

4.6.

Change factors and their effect on activity layers

The treatment of research findings in previous chapters aimed principally to answering the questions: - Magazine publishers and convergence: With whom? (both in terms of which value system and which and of activities (upstream vs. downstream) An additional method used to cast light on the future convergence issues was a joint assessment of expected individual future change drivers, that surged in the individual

POSTER SESSION 108


panel members’ argumentation and reference literature/prior research. A total of 16 statements was asked to be given a score for their: -

probability affectability desirability

The statements were then grouped by the researcher based on the activity – and consequently: activity layer – they refer to. In can be estimated, that magazine publishers would be initiators for changes that have high probability, high affectability and high desirability for their business. Based on the panellists´ assessment, the midstream layer (especially its distribution activity) has strong affectability to magazine publishing business, is not seen to be desirable to magazine publishers. The changes anticipated in the downstream layer have the highest probability, and there (based on the strong “target group capability” of magazine publishing) the panel members see more desirability to magazine publishers. Fig 11: ANTICIPATED CHANGES BY ACTIVITY LAYERS – THEIR PROBABILITY, AFFECTABILITY, DESIRABILITY (FROM MAGAZINE ANGLE) MIDSTREAM DOWNSTREAM LAYER= LAYER= LAYER OF LAYER OF FORM&PLACE CONSUMPTION

UPSTREAM LAYER = LAYER OF CREATION FUTURE CHANGES IN THIS LAYER: AVERAGE PROBABILITY, STRONG EFFECT, LOW DESIRABILITY

UPStream Proba Eff ect Desire MidStreamProba Eff ect Desire Dow nStr Proba Eff ect Desire

5,20 6,50 4,00 5,45 7,20 4,90 6,60 6,90 5,43

FUTURE CHANGES IN THIS LAYER: AVERAGE PROBABILITY, VERY STRONG EFFECT, QUITE LOW DESIRABILITY

FUTURE CHANGES IN THIS LAYER: STRONG PROBABILITY, VERY STRONG EFFECT, AVERAGE DESIRABILITY