Changes in the MarketsChanges in the Technologies therefore Changes in the Publishing Industry

New Business Models in a rapidly evolving WorldRobert E. Baensch

Director, Publishing Programs

SUNY Global Center, New York

Three mega trends driving China

Changes in the Market

• Rising number of Consumers• Urbanization of China• Competition for time/attention• Changing Consumer Habits• Transition from Print to media

– digital delivery

Urbanization in the Market

• The largest migration in human history

• 300 million people have moved to cities

• 350 million more will be moving to cities

• 160 cities have population of one million

• 14 cities have population of more than five million

• Shanghai – 23.9 million McKinsey&Company, China, April 2014

Rising number of consumers

• China is unique in the global market

• 300 million people entered the consumer market over past 30 years

• 200 more million will enter middle class by 2026 – market growth

• McKinsey&Company, China, April 2014

Affluence rising with large scale Urban Growth

China grows in Urban Population

CHINA: World’s most mobile population

Changes in the Technologies

• Changing Consumer Habits• Transition from Print

to media – digital delivery• Mobile phone - SmartPhone

Internet users in selected countries 2014(million)

Major growth potential for China

Country Population Internet Users Penetration % population

USA 322.8 279.8 86.7 %UK 63.4 57.0 89.9 %

Germany 82.3 71.7 86.0 %France 64.6 55.4 85.7 %

S. Korea 49.5 45.3 91.5 %Japan 126.9 109.2 86.0 %

China 1,393.8 641.6 46.0 %

Source: Internet World Stats News, May 5, 2014, Number 079.

Transition from Print to Digital

“Digital will soon reach half of all time spent on media in China,

up from just a third of time spent

two years ago.”

--Zenith Optimedia September 2014

Digital replaces Physical Printthe only constant is change

Digital’s growing Dominance: Nearly half of Content Spending will be for Digital Products by 2017

Mobile devices proliferate in China

95% Own a Cellphone

37% Own a SmartPhone

69% Age 18-29

Own a SmartPhone

Source: Pew Research Center, February 2014

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Convergence Adds New Competitionfor Users’ Time and Attention…

Source: McKinsey iConsumer 2010

TABLET USERS – U.S.

Traditional media are losing attention rapidlyConvergence of print, images, audio, video multi media

“The certain – actual SHIFT”

Changes in the Publishing Industry

• Competition for time/attention• Changing Consumer Habits• Transition from Print to multi

media – digital delivery

Book Publishing in China is expected to have sustained growth.

Source: Datamonitor March 2013

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But… major changes are underway

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Digital Media Absorb and Challenge Every Traditional Model

Publishers compete for attention and time

Challenges• Number copies sold of more new print book titles

published has declined

• Ratio of digital readers to print readers is growing, changing marketing and distribution practices

• Information is consumed differently and the race for audience share is intensifying– Broadcast v. cable v. internet– Blogs and online magazines v. print newspapers and

print magazines– New Role of the mobile phone

95% Own a Cellphone 37% Own a SmartPhone 69% Age 18-29 Own a SmartPhone

Source: Pew Research Center, February 2014

Building Audience: Choice

Audiences today have unprecedented access to high-quality content across a variety of platforms and devices.

Being platform agnostic is essential to serving our audience.

AUDIENCE AUGMENTINGAUDIENCE FRAGMENTING

Platform “AGNOSTIC” versus Platform “SPECIFIC”

Uses of mobile: 2013 vs 2018

Publishers need to learn that every sector of our business is related to technology and changes

Technologies evolve much more quickly than markets

There is a lack of: • Consumer research during this transition

• Making connection with readers in an information overload world

• Consistency in how content is displayed across different devices

• Efficient workflows in managing digital text, images, sound, media content- lack of standards

• Experience marketing new formats via new channels – each medium has its own unique requirements

• Flexibility to respond to change – be proactive to changes

‘Skills’ was named as the most pressing obstacle to growth in mobile sectors

Obstacles to growth

Question: What are the biggest barriers to growth of mobile communications in Asia-Pacific? (Pick up to three)

Citations (% total respondents)

Top 10 New Jobs

Mobile Applications Developer

Search Engine Optimization Specialist

Sustainability Expert

Web Content Strategist

Information Services Coordinator

Source: Thinkopolis Report, Second Edition, The Future of Students and the Workplace, 2013

Digital Marketing Manager

Big Data Analyst

Privacy Officer

User Experience Designer

Cloud Services Specialist

Summary• Defining your customer of today and tomorrow

• Defining distribution and retail channels

• Develop many different ways to package and sell digital based content (multi media)

• Developing new goals which will demand new strategies – digital business models are not static

• Focus on good management, good people and good publishing programs

• Unified and integrated data will allow immediate analysis – analytics to measure change and growth

• Quality Content is the real value for long term success

谢谢！谢谢！

THANK YOUTHANK YOU

THANK YOUTHANK YOU

谢 谢Robert E. Baensch