Ged Carroll

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  • News Of The World

    I was getting ready to give my presentation at the CIPR the other evening when the news broke on Twitter about the News of The World. There was a sense (which I personally believe to be wrong) that this was going to result in a revolution that would:

    • Take down News Corporation
    • Radically change the standards of journalism

    I want to hear a revolution out there

    When Karl Marx wrote his book The Communist Manifesto, he would have anticipated that the class struggle would have gone into revolution in the United Kingdom. At that time, the country was pioneering the industrial revolution and many members of society had every reason to be dissatisfied with their lot in life. Instead his writings inspired revolutions in the mainly agrarian societies of Russia and China. Whilst, the UK provides foreigners like Marx and Engel with the freedom to express their views in a manner that wouldn’t have been tolerated in their native Germany, the country also had an effective state security mechanism in the Special Branch of the police. But writers and thinkers have speculated that there is also something ‘counter revolutionary’ in the UK psyche.

    Probably the closest we came to seeing it was the economic induced Jarrow march and the industrial disputes of the 1970s; which were as much a kick back against useless management teams in companies and a lack of investment, as they were a rising up of the proletariat.

    Social rather than political movements didn’t get much further; the summer of love brought the modern fractured nuclear family. The backlash of punk ushered in the yuppie and the ravers of 1988 that were a reaction to the grim social and cultural reality of Thatcherite Britain with a bit of weekend hedonism turned into the controlling Big Society of today. All of these events felt as if the world was going to be changed; but it didn’t in any meaningful way. The UK hasn’t had a media industry equivalent of the Arab spring.

    Most of the noise around this is happening on Twitter and in the media of the middle classes rather than the heartland of the News of The World. They don’t speak for the minicab driver, the hairdresser, the plumber or the joiner; who are more likely to be worried about the latest antics of Cheryl Cole and where are they going to find the same quality of sports reporting in another Sunday paper?

    News Corporation resilience

    Rupert Murdoch has experienced many ups and downs as he built News Corporation and whilst the current News Of The World scandal is no doubt upsetting it isn’t the closest his business has come to going under. In terms of the organisation as a whole, the boiler plate on News Corporation press releases says everything that needs to be said:

    News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV) had total assets as of March 31, 2011 of approximately US$60 billion and total annual revenues of approximately US$33 billion. News Corporation is a diversified global media company with operations in six industry segments: cable network programming; filmed entertainment; television; direct broadcast satellite television; publishing; and other. The activities of News Corporation are conducted principally in the United States, Continental Europe, the United Kingdom, Australia, Asia and Latin America.

    As a business it exists pretty much as they present it, it is not a paper tiger like the investment banks or Enron and the current event is considered in the wider world to be a UK issue, so there is little likelihood of contagion to his other properties worldwide in terms of lasting reputational damage.

    Regroup, rebrand

    As the News Of The World shut down, rumours swirled around about The Sun going to a seven-day production. There is a strong business case for them to do this and the current phone hacking scandal debate just provided a great catalyst. Moving to a seven-day newspaper provides a number of opportunities for News International:

    • The Sun’s brand has been stronger and it simplifies the company’s brand portfolio; money is only required to support one brand
    • It allows News International to remove duplication, particularly at senior levels within the papers, so reducing the wage bill whilst increasing profitability

    Unlike the Wapping strikes of the 1980s News Of The World journalists being laid off would have little sympathy from the public at large; I doubt even the NUJ would be likely to back them in the face of the current scandal. This provides News International with a unique opportunity to rebrand and regroup around it’s flagship Sun brand. I think that it’s no coincidence that Rebekah Brooks said that News International would seek to ensure that as many of the journalists as possible were re-employed as soon as possible.

    Confluence of interest

    The proposed media revolution exposes too many interests to chaos and the system like a knitted jumper is too intertwined: pull one thread and the entire sweater would unravel leaving something useless behind. It is in no one’s long term interest to tug on that thread.

    In 1992, with the re-election of a Conservative government backed by News International’s media The Sun ran a headline ‘It’s The Sun Wot Won It’. Tony Blair worked hard to build a relationship with Rupert Murdoch and one of the factors that was seen to help him win power was the tacit approval of the News International papers. Like the political power masters of old, News International can move a bigger block of voters than the Guardian Media Trust papers or the Trinity Mirror Group.

    Secondly, for every story that gets run, there are ten papers that don’t see the light of day. What would happen if the media was threatened?

    Ethics: the thin end of the wedge

    There is speculation that the phone hacking tactics that News of The World employees and contractors have been accused of has also been practiced at other media publications and that evidence will come to light of contagion of dishonesty. A measure of how true that is, was the desire for British journalists to work on the US equivalent of the UK red tops because of their unique no-holds barred approach.

    • What about payments for stories? Do these induce whistle-blowing for profit, or computer hacking?
    • What about dumpster-diving?
    • Or getting people drunk to then interrogate them?
    • What about the use of blackmail to persuade sources to cooperate which was one of the allegations made in the Max Moseley case?
    • How ethical is if for the government or organisations to leak stories?
    • Will journalists now need to be completely transparent about ‘sources close to the matter’? This would mean that journalists couldn’t pad their articles out with speculation, but it also means that PR teams would have to restrict access to spokespeople as briefings couldn’t be done to provide context or background without attribution

    The interface between society and the media would fall apart with the media left out in the cold about hard news stories. The social norming around these issues would be shut down and the sausage factory would be put back under wraps before lasting damage is done or the ramifications in business, politics and even the arts would ripple through every aspect of society. It is an imperfect system as it is, but one that works for most of the people most of the time.

    The media marketplace

    The Romans used to talk about ‘bread and circuses’ to keep a population happy and there is still an element of truth in that phrase today. The News of The World and their peers fill that gap. A media that falls to deliver to that need, fails to sell to a large proportion of the UK population. Whilst lip service may be paid to high standards, journalists will have to deliver what ever is required to keep the printing presses running and the website online. Despite the moral stance of O2 amongst others in pulling advertising from The News of The World; advertisers generally follow the audience in terms of their media spend. More media related commentary can be found here.

    More reading

    Did Twitter kill a newspaper? Of course not – GigaOM

    Phone Hacking Scandal live updates – The Guardian

    Why did Murdoch close the News Of The World? Daily View – BBC News blog

    Message from Rebekah Brooks to all News International staff

    Statement from Rupert Murdoch, Chairman and CEO, News Corporation regarding the phone hacking allegations

  • MySpace

    This has taken longer to write than I would have liked since TalkTalk Business still has me living the analogue lifestyle at home. I wanted to put finger to keyboard because much of the coverage around MySpace acquistion focused on:

    • The difference between what News Corporation paid for the social network and what it then sold the assets for
    • The decline in MySpace as a social network, the sale was another milestone for the MySpace story to be repeated

    There was less attention paid to the Specific Media side of the story and what would they be likely to do? It’s probably easier filter this out by what they won’t do.

    • Revitalise MySpace as a social network. That dog won’t hunt: like a restaurant that is no longer fashionable or a nightclub that has lost its buzz – lightning won’t strike twice. You would be better off starting again, simply because you could get rid of a lot negative brand perceptions, rather than trying to get people to come back. This is pretty much the same fate for ideas around going back to being a music-marketing brand
    • Change the game. This is the path that Friendster is taking with its new Malaysian owners, who are keeping customers network login in details and their social graph, but positioning the site towards social gaming. Existing social network members had the opportunity to download photographs and other details from their soon to disappear profiles. MySpace could try that but it would need some social gaming content like Farmville…

    Do nothing but monetise it. I personally think that this is the most attractive option. At the time of writing this post, Demand Media has a market value of about 1.1 billion US dollars. But it has that valuation based on the growth potential in its content factory model, one which according to Business Insider isn’t making sufficient money. What MySpace allows Specific Media to do is flip the Demand Media model on its head.

    It is primarily a sale of people’s content to which advertising can be put against. Consumers generally leave MySpace profiles dormant. Drop them an email, talk about new features and at the bottom of it an opt-out option to make their blog posts public and ‘Hey presto’ instant content farm.

    What people didn’t realise about MySpace was that it wasn’t only music marketing and Tila Tequila pictures, but professional content from the likes of the CIPD and soccer mom’s photo albums. So there is a diverse range of material to be monetised. Well worth the 35 million US dollars that Specific Media has paid out for the moribund social network.

    Sure it’s cheap advertising, but it could be put against relevant content and it wouldn’t even have to split the profits with the content providers in the way Google has to. More related content can be found here.

  • Invisible birdcage + more news

    Invisible birdcage

    China’s Internet: The Invisible Birdcage | Sinocism – interesting article on the business factors driving the Chinese internet. Linguistic and cultural difference has created a vibrant domestic internet scene. The invisible birdcage in question is the Chinese eco-system of sites and services that mean China’s netizens need not stray far. Inside the invisible birdcage we see an active, lively online environment full of the kind of social activities one would expect on western platforms. The invisible birdcage confounds expectations of a censored internet experience.

    Feds to Launch Probe of Google – WSJ.com – but is this good for consumers, or just companies like Microsoft who have consistently been lobbying Washington and Brussels? The ironic aspect of this is that social search could finally shake things up

    High-tech venture capitalists to Congress: The PROTECT IP Act is bad for America – Boing Boing – which is why Silicon Roundabout turning to Silicon Britain is a pipe dream

    Luxury

    Chinese Media Giants In War Of Words Over Luxury Consumption « Jing Daily – interesting that this is on CCTV around about the same time as discussions on reducing luxury goods tax. Rui Chenggang is the Cheryl Cole of Chinese newsreaders

    FT.com – No longer a Cinderfella – fashion as a real-world attention economy. Luxury brands having to step up and provide decent men’s products

    From Alley To Airport: Beijing Urban Brand NLGX « Jing Daily

    Boutique Supermarkets Flourishing In China, But Is The Demand There? « Jing Daily

    Breaking Down China’s Booming Luxury Watch Market « Jing Daily

    In China, Women Begin Splurging on Luxury Items – WSJ.com – interesting change in purchasing power, much more egalitarian than North America or Europe

    Business of Luxury summit: Amex discovers a new luxury consumer | FT.com – gen-x new fashion buyers: electronics, home furnishings, holidays

    Media

    “Brands are over-obsessed with fans,” says Facebook adsales chief | FT.com

    Online

    Geosocial networking: The secret sexism of social media | The Economist – this feels a bit lazy. Whilst I agree that security and competition plays a role; its also probably because this stuff is early adopter in nature and that tends to skew male anyway

    Underpinnings of the Internet Shift – NYTimes.com – interesting the way governments are subverting the freedoms of citizens in developed countries. This is probably the most lasting legacy of Wikipedia, the wisdom of mobs and the lobbyists of the media industries who see UGC as akin to communism

    Retailing

    Jack Ma: we’ve got this covered | FT.com – interesting how the Baby Taobaos are specialising to combat competition, if Steve Ballmer had done this with Microsoft; they’d have been dangerous

    Security

    Hackers publish claimed Tony Blair contacts | FT.com

    Danish police proposal: Ban anonymous Internet use – Boing Boing

    Software

    Nokia’s Stephen Elop is still over MeeGo, even if the N9 is a hit – Engadget – this isn’t strategy its dogma

    Technology

    Gartner follows IDC’s PC sales cut forecast for 2011 and sees change ahead | guardian.co.uk

  • Walmart

    Today some of the most successful companies out there are ones that have a key technology platform and Walmart looks like it will be joining them:

    • Retail: Amazon, eBay, Alibaba
    • Office productivity: Google, Microsoft, Zoho
    • Telecommunications: Microsoft (Live Meeting and Skype), Cisco (WebEx)
    • Consumer services: Baidu, Google, Netease
    • Entertainment: Netflix, Amazon, Apple, PPLive

    I think we’ll soon see Walmart added to this list. At the present time the average consumer view of Walmart is likely to be that of a large, malevolent, low-class retailer in the US; the weird Yanks that bought ASDA in the UK and a trusted supermarket in China.

    What these perceptions don’t tell you is that Walmart has innovation in its corporate DNA. In 1987, they set up a satellite network connecting stores with headquarters over voice and data. When I was in college Walmart was associated with the ‘beer and diapers’ urban legend precisely because the company had a reputation for pioneering and pushing supply chain management and data-mining to the edge in order to maximise returns from its stores.

    Walmart like Amazon already has a large logistics footprint; some of the moves it has been making over the past 18 months make me think that the company is going for a big platform play – building a big box retailer online. Bear with me, while I run you through a few selected highlights:

    • Vudu – purchased in February 2010 by Walmart. The company provides stream on demand content that home audiences can pay for. The technology can be integrated into a variety of consumer electronics. It’s a digital content supermarket by another name
    • Kosmix – move forward to April 2011 and Walmart buys a social media platform that organises content by topic. Lots of smarts for social commerce, product reviews, marketing insights, customer services
    • Yihaodian – Walmart buys a minority stake in an e-commerce company with logistics in the high growth coastal areas of China. Due to the nature of the Chinese marketplace, that minority stake is the same level of commitment as acquiring a US business outright. The sale of physical goods in China maybe more attractive than the digital media market because the media industry is disrupted and alternative monetisation models are already well in place
    • Walmart is also starting recruit rock-star web tech talent with a particular focus on improving the mobile experience of their online properties

    More retail sector related content can be found here.

  • Korean churches lessons

    I was talking with a friend over dinner about the success of Christian churches gaining a foothold in Korea. There are lessons learned from Korean churches in the way that they have managed to grow. On the face of it Korea would be stony ground for a ‘new religion’.  While Korea was part of the Japanese empire for a good while.  Korea still managed to maintain a strong culture and sense of identity of which Buddhist and Confucian belief systems are a key part. (This isn’t meant to be a theological or politics-related discussion).

    A number of the success factors struck me as being classic factors for marketing success as well:

    • Location – Buddhist temples tend to be away from the population up in the hills and the mountains. This is because Korean Buddhism, like Japanese Buddhism puts a strong emphasis and place on nature. Contrast this with churches that are located in people’s neighbourhoods. It’s easier to get to your place of worship. From a marketing point of view look how Apple has improved, first by going in-store at CompUSA and later building its own stores because it is easier for people to get to an Apple retailer
    • Ritual -this kind of extends from the first point, because when you can get to your place of worship easier, it is easier to do a regularly repeatable ritual that reinforces how you feel about your religion of choice. People go to Church every Sunday. Again if you can get people to do something on a regular basis they are more likely to incorporate your product or service into their lifestyle: Google being a great example, which is why Yahoo! failed to dislodge the search giant from its position despite having a comparable product five or so years ago
    • Evangelists – people who are involved in the Korean churches already seem to do a good job in terms of word-of-mouth marketing encouraging their friends to trial Christianity. If these guys had a net promoter index they would be hitting 8+ consistently; again mirroring Apple’s rise
    • Network effects – the rise of Christianity is a virtuous circle with more of the converted going out there bringing in yet more people. From a virtual standing start, now over 29 per cent of Koreans identified themselves as Christian according to 2005 Korean census data quoted by Wikipedia. I’ve been a Mac user long enough to remember when it was unusual to own Apple products. I was one of only two people in my halls of residence of college who had a Mac; yet now you can’t move in Starbucks because of the see of glowing Apple logos on the laptop lids
    • Smart engagement process – when you start at one of these churches they put you into a study group to get a download on what Christianity is. You get to meet more people, so your engagement with the church moves beyond the person who originally encouraged you to come along to other members of the church. In marketing companies are always looking for multiple touch-points of engagement. There’s definitely lessons learned from Korean churches in terms of customer experience and customer journey. 

    Korean christianity was covered in The Economist here. More marketing related posts here.