Schuivende businessmodellen

Erik BrouwerCross Media Café, Hilversum27 March 2012

Erik.brouwer@nl.pwc.com0031 651317003

www.pwc.nl

PwC LLP

This is the time for new publishing strategies.

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PwC LLP

Interesting digital propositions

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The consumer wants to go digital but finds the content insufficiently differentiated Recommendation 1: Make use of the possibilities to differentiate with content between print and digital and make them complementary

Do you intend to switch from a printed newspaper to an e-paper in the future?

Consumer still sees print and digital products as substitutes

More than a third of the interviewed consumers (38%) does not expect to shift to an e-paper. The remainder of the consumers (62%) does consider a move from print to digital.

Only a minority of the consumers (12%) wishes to continue both the printed version and the e-paper. This proves that a majority does not consider printed and digital content as complementary and does not see added value in continuing to subscribe to both print and digital products.

Yes8%

no38%

maybe27%

Will continue to read both

12%

Already switched

15%Pie

Survey FD, selection respondents. Total # respondents = 2.255

Finding

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The consumer is often insufficiently aware of the differentiating capacityRecommendation 4: Improve promotion of uniqueness of digital propositions to consumers

How much do the following features contribute to the appeal of a digital tablet magazine?

The consumer expects the price of digital content to be lower than print

Consumers indicate that they expect digital content to be cheaper than print. A lower price raises the appeal of the digital proposition.

The consumer is therefore not (yet) aware of the fact that digital content can have added value as opposed to printed content.

The added value of digital content needs to be promoted to the consumer by clear and transparent communication about the digital proposition

Very appealing31%

Appealing47%

Neutral18%

Not appealing2%

Definitely not appealing

2%

Lower price than paper version

Survey Sanoma, selection respondents. Total # respondents = 6.664

Finding

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The consumer values the newspaper brandRecommendation 5: Introduce product bundles in line with the differentiating capacity of the content or the (manner of) news consumption

If you would receive a free tablet with a digital newspaper subscription, would you be interested?

Brand can be utilized to offer bundled subscriptions

A group of consumers is interested in bundled subscriptions of newspaper and tablet. The consumer considers the tablet a medium of interest for news consumption.

Of the potentially interested more than half (55%) indicates that the publisher is the logical supplier of bundled subscriptions of newspapers and tablets.

Yes34%

No20%

Maybe46%

Survey TMG, selection respondents. Total # respondents = 1.001

Finding

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Composition subscriber base at change of pric-ing Total subscription (print + digital)

Q FD.nl

Q FD Digitaal

Q FD Totaal

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Insight into migration of subscribers between print and digital is crucialRecommendation 8: Strike a balance between pricing of paid print and digital propositions

Migration behavior Total, Digital and website propositionSpecific target audiences show clear preferences for print, digital and bundled propositions (print and digital)

The research shows that pricing of the various propositions (print, digital and bundled) can to a certain extent influence migration of customers between these propositions.

At the same time we can distinguish distinct client segments within the wider target audience with a clear preference for print, digital or a combination of both. These consumers will not easily switch from print to digital and vice versa.

Current price

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# Total subscribers

# Website subscribers# Digital subscribers

Core customer base digital subscriptions will not migrate to Total despite price reduction

Large part of Total subscribers will cancel subscription at price increase

Part will migrate to digital or website subscription at price increase of total subscription

Survey FD, selection respondents. Total # respondents = 2.255

Finding

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Consumer still hesitant about long-term payment relationship for digital propositions Recommendation 9: Research opportunities for differentiation in subscription forms and payment relationships (print and digital)

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Single-stage amount

39%

Monthly subscription

3%Possibility to pay per day

4%

Not willing to pay54%

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Suppose the app would be provided as ‘paid only’, which distribution format would you then prefer for your ideal financial news application?

Large part of consumers prefers single purchases and single payment

The research shows that a large part of consumers for the present does not wish to enter into long term payment relationships (subscriptions) for apps.

There is still a clear preference for single payment for the app, or single payments for individual issues (magazines on app).

Survey TMG, selection respondents. Total # respondents = 453

Finding

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Recap. The 10 commandments for the newspaper and magazine industry

Stimuleringsfonds voor de Pers9

1. Make use of the possibilities to differentiate with content between print and digital and make them complementary.

2. Focus on the content that differentiates you from competitors and utilize brand value to build a payment relationship with consumers

3. Disclose (unique) content through smart phones and tablets, and exploit technological possibilities even more

4. Improve promotion of uniqueness of digital propositions to consumers

5. Introduce product bundles in line with the differentiating capacity of the content or the (manner of) news consumption

6. Form alliances with providers of products and services, and make ‘pay-per-transaction’ agreements

7. Strike a balance between free general content and paid unique content

8. Strike a balance between pricing of paid print and digital propositions

9. Research opportunities for differentiation in subscription forms and payment relationships

10.Obtain better insight into actual costs and profits (per customer)

I. Further enhance differentiating capacity

II. Make optimum use of the possibilites of digital distribution channels

III. Design new product combinations

IV. Redefine products and services and set the right prices

PwC

Our commitment to Digital: capturing the key dynamics of the global digital economy by our annual Global Entertainment and Media Outlook

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PwC's annual Global Entertainment and Media Outlook is a

consistent, comprehensive online source of global analysis

for consumer/end-user and advertising spending. With like-

for-like, five-year historical and forecast data across 13

industry segments in 48 countries, the Outlook makes it easy

to compare and contrast regional growth rates and

consumer and advertising spend.

PwC’s annual Global and Entertainment Outlook

Internet access spending

Internet advertising

TV subscriptions and license fees

Television advertising

Recorded music

Filmed entertainment

Video games

Consumer magazine publishing

Newspaper publishing

Radio

Out-of-home advertising

Consumer and educational book publishing

Business-to-business

Thank you for your attention

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Prof. dr. Erik BrouwerDirectorerik.brouwer@nl.pwc.com

+31 88 792 76 80+316 513 17 003