Thursday, May 24, 2018

Amazon Launches Prime Book Box for Children


As we know, Amazon's ability to mix, match and smash business models has no limit, but one thing is clear: Amazon is king of the subscription model.  Recent numbers revealed by Jeff Bezo's about the number of Prime subscribers were, on the one hand, astounding but also entirely believable given the power with which Amazon has asserted itself in the retail channel.

The company continues to enhance their Prime subscription model and recently announced a Children's Book Box product.  Currently in test, the product sells for $22.99 per box and guarantees a 35% discount on the list price of the books included in each box.  Customers can decide how many boxes they want, on what schedule and which age tier they are most interested in.  There are currently four age group tiers from age 'I can't stand up yet' to 12.

Currently, the offering appears to be hard cover (no eBooks) titles and from the announcement the selections will be a combination of classics and new 'selected' titles.  Amazon has kindly made a cute video:



This book box features some of the functionality of existing amazon subscription services which includes confirmation of the shipments in advance, the ability to delay or pass on a scheduled shipment and the ability to substitute selections before they are shipped.   Amazon may be interested in gathering even more information about their audience via this product.  Children, generally speaking, don't make purchases therefore the data on their purchasing behavior gets mixed with many other purchases.  A subscription product like this could provide potentially new data to Amazon.

Aside from independent retailers which face yet another threat from Amazon, there's another market segment which may suffer if this product proves successful and that is the library market.  Both public and school libraries offer curation benefits and subscribe to services such as the Junior Library Guild to supply them will curated titles.   Is it possible that the suppliers and/or libraries themselves could be disintermediated by this type of Amazon service?  Of course, libraries provide other benefits in addition to the curation of children's books so the question isn't so simple, but those curation services cost money (and the books are sold full price).  If Amazon can provide a better service at a good price then they may take market share in the library market as well.

That said, one final point.  There is a substitution factor here.  It may be more likely that the target market for this Book Box product would never step foot in a library.  It may be the case that subscribers to the Book Box buy more (or the same) because the subscription service is so easy and convenient.   Libraries and other retailers may only suffer at the margins.   Regardless, Amazon again shows its' power and scale in being able to spin up a well crafted service like this with relative ease.

Related: WAPO on the best book box subscriptions

Wednesday, May 23, 2018

Po.et Creates Development Lab for Blockchain

One of the companies mentioned in my blockchain post is opening the development floodgates with the launch of their developer platform.  From Techcrunch:
It also announced the first company to launch an app out of the lab called Inkrypt. It’s an application designed to provide a way to publish content in a distributed fashion, meaning the article doesn’t live on any particular server. That makes it nearly impossible for sensors to block it.
“The first project to build on Po.et is Inkrypt, a global decentralized system providing a censorship-resistant solution for journalism hosting and delivery that will render journalism content permanent and immutable,” Po.et CEO Jarrod Dicker wrote in a blog post announcing the launch of Po.et Development Labs
 Dicker announced the launch on their web site:
Po.et is building the protocol for creators. When we talk about creators, we’re not just referring to those who will use the many applications built on top of the Po.et protocol for their work. We’re also talking about those who are building the applications on top of the protocol itself. Fostering an ecosystem for creators built by creators will enable people to own and value their content beyond anything that has been achieved on the internet. Po.et’s success will not only be a technological advancement, but it will also redefine, philosophically, what it means to be a creator. The era of permanence and reputation will transform the processes of building as we know it, in both how creators produce and the tools in which they use to do it.
Po.et is a platform of decentralized systems built for attribution, discovery and monetization of digital content. Today, Po.et is building a trustless, verifiable and more reputable version of the web. It’s aim is to be the platform for the world’s creative assets, enabling creators, media companies and alike to build and leverage value by using blockchain technology (immutability, reputation and access).

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Monday, May 21, 2018

Where Art Thou Growth?

A panel of experts provides some insight on how publishers can find growth opportunities to expand their businesses.

As one of the last session’s panelists at the Publisher’s Forum in Berlin stated, “it is easy to go mad if you allow yourself to be consumed by all the threats and opportunities to publishing and it is far better to focus on the opportunities.”  And, for these panelists speaking on the challenge growth poses, there are plenty of opportunities to contemplate.  The predominant theme of the conference’s discussions was that ‘change is here’ and publishers can no longer choose to ignore it.  This panel on Innovation and Growth was moderated by David Worlock with panelists Fionnuala Duggan from Informa plc, Joerg Rheinboldt from Axel Springer and Joseph Evans from Enders Analysis.

As publishers strategize their growth plans, Duggan noted they are beginning to experiment with new models and market-entry opportunities.  One company discussed at the forum was the education company Alison, which brought to the self-teaching learning and life-long education market a ‘freemium’ model.  Alison’s model requires great scale but it’s a global business and the company is going into areas where there are large populations of ambitious, underserved people such as Nigeria.   Cengage has also challenged the traditional pricing model for educational materials with the launch of their content subscription model which has upended the textbook pricing model and may well become an industry standard model.  In seeking growth, new business model innovation can have a profound impact on your business.

Axel Springer took another approach by first decoupling the primary business silos into which the company had been organized for decades.  As a traditional news company, they offered news, display and classified advertising and services.  This ‘siloed’ structure has been broken apart over the past 10 years into over 200 companies which, in the aggregate, do the same thing but across a wider number of operating entities.  This structure, they believe, allows the businesses to be more creative and innovative in their relationships with customers and in new product development.  Rheinbold commented, “Basically, we do the same thing: news, advertising, classified but way bigger and more international.  Running the company is now less like a symphony and more like a jazz band.”

Axel Springer is looking at derivative products which can be developed from their content.  Over the past two years, the company started to think more strategically about how their network of companies could be ‘repackaged’ to provide products and services to other companies.  Out of this initiative they recently established a joint venture agreement with Porsche.  The JV is in its initial stage but the combined team has already spoken a lot about when cars become self-driving and how that will affect the driver experience. Will this change generate ‘new time’ blocks into which Axel can deliver content?   Other strategic opportunities may arise out of these changes: For example, Rheinbold noted that when cars need to be charged each day, customers will be putting charging devices into their houses which could create ‘ride along’ opportunities to deliver content for the joint venture company.  Being creative about developing derivative products could represent significant opportunities for growth.

Customer knowledge is key to delivering successful products but one of the areas where publisher actions seem to impede customer activity is in the scholarly and academic market.  According to David Worlock, scholars will continue to find it difficult to maintain complete knowledge of their fields as long as the major databases they use remain siloed.  Even in the face of intensive competition from Google, Apple, Facebook and Amazon (GAFA), publishers remain hesitant to collaborate with their competitors who all have the same issue.  In some situations, your competitors might be your best collaborators for growth.

Publishers should think differently about themselves – not as a single publishing brand with no customer identity but as an umbrella for many brands with consumer share of mind.  Axel Springer was a newspaper company, but they are now a ‘media company’.  Textbook publishers are now ‘education companies’.   Science publishers are now ‘knowledge companies.’  Transforming your identity like this may make defining who to partner with a different exercise and lead to partnerships you may never have thought of.   There is a lot of legacy baggage in the way publishers define themselves but adopting the customer-centric view should help shed that for the better.

Another growth opportunity is to embed your products in your customers ‘workflow’.   Once your products are entrenched they become ‘sticky’ and difficult to replace.  Additionally, indispensable products lead to close relationships with customers which will, in turn, generate new product development opportunities (further supporting renewal rates and price increases).  If you have products which are delivered to customers via third-party license, you may want to consider sunsetting these relationships and reap the benefits of direct contact with customers.  When I launched our first web products at Bowker, letting these third-party agreements expire was one of the first proactive things we did.

Some other avenues to growth mentioned during the conference included:
  • Leveraging audiences to build advertising models and sponsorship programs, especially around franchise products
  • Sponsored marketplaces which bring together seller and buyers
  • Creating communities of like-minded consumers: Podcast networks, author brands, subject specific areas (similar to Zapnito’s applications)

It’s considered a given that innovation provides growth.  But true innovation is often difficult to achieve and requires that customers, prospects, internal staff and other stakeholders participate in the process.  In my experience, innovative products require deep understanding of customer needs and behaviors.  Technology is vital, but it is a lever of change but not the change itself.  Once a solution has been identified to solve a problem the business model can be determined, and detailed work conducted to determine whether the product is competitively defensible and can be used as a platform for further enhancement.

In the end, though, this session demonstrated that the best foundational strategy for growth is hiring the best people.  Your employees and culture will frequently determine the success or failure of your growth plans.   I recently spoke to a new University Press director who brought a consultant onsite to help take staff through a change management seminar.  This, the director recognized, must be the first step before embarking on any new growth or transformation strategies.  This type of seminar will also inform the leadership team regarding the abilities of existing staff to carry out change effectively.  You may find you need new staff who have the innovation mindset.

Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com for project work or executive roles.  See here for examples of recent work.

Sunday, May 20, 2018

Update on Consulting and Recent Projects

For those of you who may have missed my quarterly newsletter sent out this week here is a link to it.  In this issue, I note some of the consulting projects I've undertaken over the past six months and also some of the more popular blog articles I've written.  

https://mailchi.mp/53b6711b147b/irobot-artificial-intelligence-and-the-implications-for-publishing-558213 With respect to my consulting activities, I continue to pursue engagements where the client focus is either on growth or efficiency (and some times both).   Typically, the CEO and/or the board are seeking help to make a step change in their growth of revenue.  Sometimes the opportunity has been identified but the implementation and execution planning for that opportunity is unclear.  I have undertaken strategy projects both as a consultant and operations executive where the execution of a defined strategy has been very successfully implemented and I enjoy the success of these projects.  In other instances, the opportunities are unclear in which case exploratory work (including market research and internal staff focus groups) is undertaken over 4-6 weeks (typically) where the deliverable is a facilitated workshop with key staff and stakeholders to develop proof of concept ideas.  The next phase is a longer product development and proof of concept effort which can last several months.

Following is a partial list of some of the consulting work I've undertaken.  Please reach out to me to discuss any particular problems, issues or opportunities you are dealing with and we will see if we can work up a solution.  (908) 938 4889

  • AARP – Market assessment, financial modeling and market definition for new membership service offering
  • Membership association – Business process reengineering to support new education and assessment delivery
  • Private equity client – Due diligence review, staffing and operational efficiency planning for prospective deals
  • Hewlett-Packard – Subject matter expert and market entry and development strategy
  • InterPublic Group – WW technology assessment, capabilities audit and technology planning
  • Klopotek AG – Sales effectiveness review.  Sales refocus and market entry planning.  Corporate development
  • Book Industry Study Group – Supply chain efficiency review focused on eBook identification and standards

Newsletter link:  Information Media Partners Spring Newsletter: Blockchain, Artificial Intelligence, SSP Conference Panel.

Sunday, May 13, 2018

Publishing Technology Survey Request: How strategic is technology spending?

Please take some time to complete this technology survey. Results will be published here. I encourage you to forward this survey to your colleagues as I would like as many responses as possible.  Additionally, if you have email lists and/or newsletters and want to include a link to the survey you can also use this link:  https://www.surveymonkey.com/r/PubTechSpend  THANK YOU!
  Create your own user feedback survey

Thursday, May 10, 2018

Allianz makes Lemonade

Real digital transformation requires a customer-centric focus.  Allianz shows how they have reinvented the selling of insurance.

At Allianz insurance, Lemonade isn’t just a beverage on hand in the boardroom it’s the future of direct- to-consumer insurance sales.  Lemonade is an app that uses artificial intelligence (AI) and machine learning (ML) to enable insurance buyers to purchase insurance and file claims in minutes without human interaction.   At the Klopotek Publisher’s Forum conference in Berlin last week, Klaus Driever, Head of Strategic Digital Initiatives for Allianz AG, presented their version of digital transformation.  Allianz is not a publisher (in the traditional sense) but similarities between insurance and publishing exist: Long-evolved legacy processes, evolving B2C models and operating pressures including efficiency and profitability.

In guiding product development for their app solution, Allianz was guided buy two principals: First, they adopted the “amazon flywheel” which is best explained in a diagram but effectively requires that repeated technology improvements must lead to cost efficiencies, better customer satisfaction and growth.  Second, the company focused intently on understanding customer behavior and the customer journey.  Again, this is best shown in this image (left) which tracks the consumer through phases of interaction:  Awareness > consideration > preference > action > loyalty > advocacy.   As an important takeaway from this presentation, Allianz noted that implementation of this methodology also leads to deeper insight into behavior and further understanding about the nature of changing customer behavior.

Allianz is a legacy insurance company with a long history, but they are self-aware enough to understand that the way they operated in a digital world is ineffective in a customer-centric world.  The same is often said about the publishing industry, which suggests that the application of machine learning and artificial intelligence to publishing processes and procedures could have the same growth effect as Lemonade has had at Allianz. 

At most publishing houses, content acquisition, development and production are poorly run departments lacking efficiency and effectiveness.  In the process of managing reams of submissions for a limited number of publications or lists, most submissions are ignored or only cursorily reviewed over periods which can exceed months or years.   Once a submission is accepted for publication, the writing, editorial and production cycles are deemed efficient if measured in months, (and not necessarily excessive if measured in years).  Once published, the publication could fall flat due to poor or unintelligent marketing and promotion.   The process is frequently obscure to all participants and rejected authors receive little or no feedback on their submission.  Artificial intelligence applied to these processes could be revolutionary.

As I noted in a previous post (I Robot), many AI solutions are entering the marketplace, but I am not yet aware of any real data on the benefits being seen from these solutions.  But, generally speaking, the adoption of AI is having a material impact in other ‘non-technology’ environments.  For example, in hiring (typified by lots of resume submissions), AI applications have been able to significantly reduce the time spent on matching applications to job specifications.  And machine intelligence has been shown to predict the likelihood of job success of specific applicants.  Similarly, Hilton has shortened the average time it takes to hire a candidate from 42 days to five with the help of HireVue, an AI startup.   Shortening cycle times can have a material impact on revenues and Allianz spoke about this positive aspect of their Lemonade implementation: They also believe their B2C solutions will generate incremental sales based on ease of use for consumers.

Implemented initially for life insurance, Lemonade will soon be a full-service provider for all Allianz consumer insurance products.   Cycle time is important in publishing as well: Many years ago, Macmillan Computer Book publishing was able to produce a new computer reference title in two weeks versus their standard eight-week process.  Each week shaved off the standard production process was worth $100K in revenue.  AI and ML will achieve the same kinds of improvements but without the “brute force” brought to bear by Macmillan and, at the same time, apply continuous improvement to processes (producing even more gains). 

Imagine an AI-based app like Lemonade for publishing submissions which asks simple questions about authors and their work, asks them to describe the work and to detail their process and/or research approach.  Authors also submit their work via the app.  In the background, the AI technology can interpret each these inputs and place the results against a ‘success or fit’ graph.   Works can be rejected not only because they aren’t very good, but also because they are not a fit for the publisher.  Additionally, feedback can be communicated back to the author for their interpretation and use.   Initially, this process for a publisher could serve to funnel publishable materials to acquisition editors but, given the potential of AI and ML (and current examples from other industries), there is every reason to believe humans could eventually be excluded from most of the editorial and production process.

Once implemented within publishing workflows more improvement initiatives will emerge.  And frankly, they must because exerting any additional productivity or optimization out of current processes is simply impossible and will never support the breadth of transformation required for reinvention.   Having implemented Lemonade, Allianz has also seen opportunities for new products which may not have been available without the AI solution and attendant customer insights.  Other companies have expanded AI use from recruitment screening to staff diversity, hiring and staff retention.

The publishing process is a symphony of inefficient tasks, activities and procedures that is heavily reliant on people for execution.  While this may make publishing a quaint, friendly industry it also makes it prime for reinvention and rethinking.  Publishing has emerged from the digital book ‘revolution’ largely intact without huge dislocations, but that will not be the case once AI and ML are commonplace in the industry.   Publishing’s end product will be similar to those created today, but future publishing processes will be unrecognizable next to those in current practice.  There is a revolution coming and, unless we anticipate it, not everyone is going to be able to make Lemonade.


While you are here...Please take our survey on publishing technology.

Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com for project work or executive roles.

Jeff Bezos interview with Matthias Döpfner (Axel Springer CEO)

Very interesting wide ranging discussion with Jeff Bezos.

Bezos spoke with Axel Springer CEO Dr. Matthias Döpfner about the early days of creating Amazon, his decision to invest in The Washington Post, and how he funds his rocket company, Blue Origin.



http://www.businessinsider.com/amazon-founder-ceo-jeff-bezos-interview-podcast-2018-5

Thursday, April 19, 2018

I ROBOT

© Andrea Danti thinkstock

Artificial intelligence and machine learning tools are making significant inroads into publishing processes and product development.

Those of us who may be short on time and haven’t been able to get to that autobiography we’ve been meaning to write need worry no longer:  Artillect Publishing will do the work for you by scanning your online presence, merging some ancillary information and producing your sure-to-be best-selling biography.  Using artificial intelligence in its production process, Artillect is just one example of the increasing number of applications of artificial intelligence (AI) replacing inefficient processes, creating new products and adding insight to publishing.

News organizations including the Washington Post and Associated Press have been using artificial intelligence tools to create news reports for weather, sports and financial reporting where interpretation of the day’s (or game’s) activity can be fairly straightforward.   As these uses have grown in acceptance and utility, the use of AI to deliver more complex products is also growing.  AI tools can analyze text, images and data and deliver to a journalist sufficiently structured content around which they can build articles and stories.  AI tools can do this faster, more comprehensively and with greater accuracy than traditional research methods.  In analyzing text or images, AI tools can characterize the content: Positive/negative, liberal/conservative, for example.   Journalists have even used this capability to change editorial content to match specific political viewpoints, creating liberal, center and/or conservative versions of the same article.

The accuracy (or veracity) of news content generally sparks emotions and Knowwhere is applying AI and ML to the detection of ‘fakenews’.  Their process aggregates stories from more than a thousand different sources of varying political persuasions to create a “knowledge graph” or database of each news story which is then reviewed by (human) editors.  Mediashift recently reported that USAToday uses AI to create visual and interactive content, which they refer to as ‘dynamic editorial’ and hope will improve attention and raise reader engagement.

Journalism is by no means the only focus for AI and many companies across the media landscape are using and experimenting with AI tools.  In the last few days, for example, journal publisher Taylor & Francis (T&F) announced two partnerships with AI companies to add AI tools to their editorial processes.   In the first of these, T&F are working with Katalyst Technologies to create “contextual copyediting” using AI and natural language processing to assess and score the language quality of articles accepted into their journal’s workflow.  This use of AI is designed to make their editorial process more efficient by identifying and classifying journal submissions.  In the second example, the company announced they are working with UNSILO which will help T&F subscribers optimize the use of T&F content by surfacing additional, highly relevant content based on what they are already reading.   T&F expects that this function will enable users to discover new and pertinent research.

Next month, at the Society of Scholarly Publishers (SSP) meeting in Chicago, I am hosting a panel discussion on how publishers are using AI and machine learning (ML) to rethink how they manage their businesses.  On the panel, I will have executives from Storyfit, Yewno, Unsilo and Molecular Connections.   In advance of that meeting, I thought it would be interesting to explore some of the companies offering their versions of AI to publishers:

StoryFit: Uses machine learning and data analysis to predict content marketability, improve discovery and drive sales for publishers and movie studios.

Yewno: Uses machine-learning and computational linguistics analyze high-quality content to extract concepts and discern patterns and relationships to make large volumes of information more effective.

UNSILO: Provides artificial intelligence tools and solutions for publishers to grow new business opportunities and improve existing customer experiences and workflows.

Bibblio: A recommender system that helps content businesses and publishers deliver more relevant, engaging discovery experiences to their users.

Iris.ai: Helps researchers build precise reading lists of research documents across three parameters: Key information extraction (marking of possible contextually disambiguating information, forming basis for a document fingerprint); Neural Topic Modeling (clustering of semantically similar documents, cluster labeling, document fingerprint update); WISDM (basis for document fingerprint indexing. Fingerprints are matched using the WISDM document similarity metric.)

ECHOBOX: Helps content owners automate their social media presence and “is the best social media platform for publishers.”   Their solution is the “first artificial intelligence that increases your reach.”

Copyleaks:  Detects plagiarized content in scholarly workflows.

StatReviewer:  Uses ML to generate statistical and methodological reviews for scientific manuscripts to discern the integrity for scientific manuscripts.  Product is currently in private beta.

Webbitz: An AI-powered video creation platform that leverages patented text-to-video technology to streamline production of original short-form videos across multiple platforms.  The company works with more than 400 publishers.

Ross Intelligence: Using a combination of IBM Watson and proprietary algorithms, ROSS is the AI-driven successor to tools like LexisNexis and supports both legal discovery and legal research findings.

ScriptBook: Employs artificial intelligence to analyze screenplays.  The Script2Screen-solution delivers an objective assessment of a script's commercial and critical success.  The company believes their AI-driven process delivers both objective and fair results.  It treats every screenplay equally with no bias.

Arkadium: An AI product company which has been used by Sports Illustrated to create infographics.

There is little doubt that AI and ML applications and tools are here to stay within publishing workflows.  But it’s also true that we are only at the beginning of what will be a fundamental shift in workforce management, application and roles.   The prevailing concern is that machines will take all the jobs and leave humans with nothing left to do.  Not only is this excessive hyperbole, the impact of technology on work activities over the last 200 years points more towards a shift in the role of human work rather than the total replacement of workers.   When ATMs were first rolled out more than 30 years ago, there was an expectation that brick and mortar banks and their tellers would disappear.  In fact, the opposite occurred and teller employment increased as banks focused on building closer customer relationships.

AI will improve publisher workflows but will also help expand the utility and benefits of the products we are producing for customers.  Many of the newspapers mentioned above have been able to materially broaden their reporting in a way which would not have been possible without the type of functionality that AI offers.  Expect to see many more examples of this technology within the publishing business more broadly.