what the papers say

The Guardian. 26.09.09 - SPOTIFY EXPANDS FOR SUBSCRIBERS
New business model proposes social media business sells equivalent of 300 CD's for $10 a month subscription.

A great example of a sound business model in the creative industries. I sound negative but actually I'm not. At least if Spotify pull this business model of they will be a good example of a successful subscription based digital media business and to date, successful online subscription business models are few and far between with most consumers still used to getting and expecting their online content for free.

The Guardian. 26.09.09 - TOUGH TIMES AHEAD FOR THE BBC
BBC income now outstrips all of its commercial rivals of ITV, Channel 4, BSKYB etc by more than $1 Billion.

Considering the phenomenal social media tools our broadcasting industries today have available to them, surely if these tools were capable of helping to grow business the commercial broadcasters should be more successful and profitable than ever as they can now reach many more billions of people with cheap and even 'free' technology and their business models are ultimately about communicating messages to mass audiences.

The Guardian. 03.10.09 - WILL THEY SPEND IT?
Great case study about the Financial Times launch of a new website called 'How to Spend It' aimed at marketing luxury brand messages and advertising to the very wealthy audiences of the FT. Effectively the FT are attempting to recreate the look, feel and business impact of a luxury magazine online utilising digital and social media tools. See www.HTSI.com.

The business model here is sound enough in that the FT is a world recognised brand but its magazine is difficult to access in all corners of the world. At the same time the luxury goods market remains buoyant, even in recession hit times. At the smae time technology and design are seen as equal partners to editorial content. The design partner here is the company Razorfish, a London-based digital media agency who have ridden out three recessions! Other key factors behind this busines model are the offer of free content "while the site builds critical mass'.

Linked to this article, Conde Naste, publishers of vogue.com seem to be ahead of the curve in relation to publishers going digital. Jamie Pallot, their editorial director of CD Digital says "publishers have to let go of any illusions a website can retain the hermetically sealed essence of a magazine." He suggests that online magazines can do well but only if they fully embrace the digital medium. 'They are two very different media and they get more different every day."

How to spend it is trailing 'Brand Hubs' through the new online offering. Viewers can click on an item and go through to extra information and images about that item.

The value of luxury advertising doubled on FT.com last year and advertisers are responding to the fact that they can measure their online advertising effectiveness and can also follow their customers. However, how they translate this into actual sales and profit is still to be seen.

It's clear that as online quality and band width improve luxury brands can better communicate their brnad values online as well as in luxury, glossy magazines. However, I love the following insight, which sums up some of the challenges of using social media tools for business success:

The internet brings the spectre of mass participation and the kind of mainstream popularity that fashionistas term the 'Burberry Effect'. However for luxury brands (and many others) it's about being seen int he right environment and the stature of what that environment says about your brand or product. "It's not about reach. If it were people would just advertise in the Sun" Samual-Camps, Universal McCann.