Robert E.baensch: People need to pay for more information

Absrtact: The independent director of the American Consumer Report group, former director of the publishing Department of New York University, Mr. Robert E.baensch, delivered a speech today at the NetEase Mobile Media Summit Forum. Robert E.baensch says future multi-purpose devices will replace proprietary e-books, digital distribution

Mr. Robert E.baensch, the independent director of the American Consumer report group and former New York University's publishing department, delivered a speech today at the NetEase Mobile Media Summit Forum. Robert E.baensch says future multi-purpose devices will replace proprietary E-books, and digital publishing ads will be able to achieve one-click product purchases, a trend that will happen in the future.

The following is the full text of Robert E.baensch's speech:

Moderator: Dear friends, ladies and gentlemen, welcome back to the scene of 2012 NetEase Mobile Internet Media Summit Forum, the first part of the afternoon is invited the independent director of the U.S. Consumer Report Publishing Group, former New York University publishing department director Robert E.baensch to bring us a speech, The theme of his speech was the business model of mobile media. Mr. Robert E.baensch.

Robert E.baensch: Good afternoon, everybody! Welcome back! At first I would like to thank Ding for inviting me to China to attend such a special event. He is a leader, not just to create these technical areas, but also to effectively manage the new technology industry, there are many people who are his followers. Who is a proactive person to initiate new technologies in the face of such a changing market and industry, community. It is also true that ding can really show the leadership of such a leader, otherwise it is impossible to thank him for this.

We have a thematic discussion on the problems and difficulties they face. But it is interesting to note that none of them mentioned the question of money, nor did anyone mention the difficulties of fun and cultural change and the shift from print media to digital media, and whether there was money to allow technicians to implement technology both within and outside the company. There are a lot of challenges. This afternoon I will give you this is a real problem. You can also find some technology and new content. But how can it be turned into reality? There is enough money to turn the idea into a market and implement it on a market basis so that the market accepts it, so let's talk about the business model.

What kind of situation is it today? What is the economics of digital online publishing? First of all, to locate the market situation, because each information service has different consumers, once we know who they are to be able to manage such content, but also with the customer interface, this is not a new thing, not a store, not a bookstore , all require financial management, where does the money come from to reinvest in the new development industry, with new spending and income, and what is the future? Let's start from the beginning.

Today, such a world mainly provides a number of planar information, the transition to digital also includes science and medical documents now began to become numbers, the internet has more than 85 million of the log, there are more than 300 million information, the next step is how to turn the number online. Today is about the further development of mobile, what is the current situation of mobile technology. But my job here is not to give you the technology but how to create income with technology. Information is possible. What our users are creating is also possible, such as how can investment in Facebook be rewarded? We can invest further and make a profit. The size of the sites and sources of information has grown rapidly over the past two years and three years, with the advent of the internet allowing anyone, including some college students and freelance authors, to put content on the Internet, with a lot of things happening. With a lot of information being provided free of charge, how do you become a business? Today I want to focus on economics, where 31.1% of projects have been proposed and partly put into practice but have failed in large numbers. There are also a number of companies with a higher proportion, most of which are unsuccessful, with a small percentage of success. So it is technically feasible and people are feasible. But is it feasible from a commercial perspective?

So we look at the financial management or the management of finance has become the responsibility of every function within an enterprise, if the six of us have any mention of the transaction when there are difficulties, they each member of the organization to create income and expenditure. It's not the financial staff sitting in the office, not the Finance department or the accountants, everyone should be able to generate revenue, and have the responsibility to bring in investment returns and profits. To see some data, the newspaper industry has three sources of profit, distribution, advertising, copyright. There are many problems in China that are the same as the United States, each year you have 340,000 new headline content, what kind of industry can bring products? In addition to catering, if you are doing some fashion industry, you can see how many ties there are in spring and autumn. Our industry has 350,000 titles, there are paper, there are numbers, so at the Frankfurt Book Fair we have to explore the right to translate. China's right to buy more than 12,000 books.

The real challenge is to see how digital online publishing can make money, because the industry is undergoing a transformation, how can the return on the interconnected ebook be realized? Let's share our financial model. There are five ways to subscribe, read payments, and bundle mobile ads together. The key point is that we have a large number of variables in our industry and whether we have created matrices to measure these variables. The content of this industry is different from that of others. Which project is commercial in nature, and how to design and produce it? Marketing is not the same as flat marketing, but also have different sales. But in Beijing, Shanghai has a book city, then there are sales representatives? Because we are dealing with the sale of digital information to individuals. So we don't have the best seller ads in the paper. The final distribution is the same, with basically three major distribution channels. The environment in the Western world is more complex, with tablets and kiddle reading tools, and there are big differences in format.

How to distribute and distribute to whom? How much is the cost? What kind of platform distribution has become a business decision. You have to decide what is driving sales related to costs. So the digital and online publishing economy is a completely different world. We are going to the market in a different way, once the content must have Content management system, also need to interface with customers. and marketing for individual customers. There are also four major revenue models. First look at the market.

Fortunately, Chinese is the second largest language in the Internet digital format, what if it is a German publisher? What about the publishers in Portugal and Japan? You already have a world where you can accept digital information. So my point is that the market today is hit by the mobile technology tsunami. Some companies have been able to surf the tsunami, and the whole company has also made a theme adjustment. If you have a change in your information philosophy, see that the tsunami will be able to cope with the tsunami and not be engulfed by the tsunami. Moving is a new ecosystem for all of us because it can be affordable without spending 400 of dollars to buy a book.

Smartphones are widely adopted worldwide, and have reached 63% of mobile subscribers, with a higher proportion in China. The data show that as China's economy grows more rapidly, China will have great development relative to the impact of the recession in the United States and the market saturation caused by the eurozone's European debt crisis. Currently mobile phone users have reached 1 billion, Amazon in the United States is also a big discount, if the reader is not already installed customers, there is no way to sell e-books. So we have four types of income, the first is to order, second is sponsorship, and the third is bundled with the package of information and graphic products together. Currently in China Mobile is the main channel, in addition to E-commerce, electronic books and so on, can sell part of the content. For example, information on technology and medical technology, and our income statement is not the same. There are also digital magazines that include content costs and content development, software, technology, marketing and distribution channels that are not sold through bookstores or magazines. So this requires us to use different tools and measures to measure a way to listen. How do we measure and consider the development of this content? Whether content and formatting can be changed and defined again. Have you ever seen anything in a magazine that's exactly the same as what you see on the phone?

Content management System, we have some digital centers that combine video, images, and sound. Marketing to customers is surprising, and traditional publishers are more difficult to move to publishing, because they are still in the framework of selling print planes, involving financial management to sell such flat content and print content. There is also a source of income is the same, who is in where to manage fees, require different hardware, different software solutions. There are still some changes going on, some people are managing this change very well, and some people are very difficult to deal with change management, it is easier said than done.

And again, the key cost factors. This is different in our world, we don't want to spread what kind of content, including print some children use encyclopedia, some digital files into a database. They show some of the animals are black and white color, the primary market requirements are not just such a color, but also to see elephants in the running, animals in the animated form of activity. How should this chapter be embodied? Wikipedia published a lot of research articles, which have video, audio and animation, this is the digital world, there are trademark issues, there are different issues about copyright, there is a royalty arrangement. The publishers of these books have some standard practices.

If the content picture, text, voice and video are brought over, how to customize the format, how to format, how to put him in a large data source storage, once there is then to provide what the market? It was said that they were trying to think. Do we give them information in print mode? What kind of information do they provide to them in a digital way? Is it to be downloaded or to be accessed? How to price, which is related to the cost of information.

The most important thing for the content and the market is the customer interface. The first two sections tell a good example of how a customer feels, sees, or accesses, and finds such information. These are serious considerations, and these print publishers are not very good at turning information into numbers because they used to say that there was a cover and a title, and content and text in it. Magazines also have advertisements and articles in it, which is a kind of structure. So we need to have the ability to search for such content as well as what the cost is and what can be applied to the case and what the sample is for the customer to look for. About six weeks ago, I asked in the university library How to help people find information online, I found that I Google, I said that there are Google employees working here? He said no. The role is to help people find the information they want. Because there is no information in this activity search, not to say that no information is found, so we must take into account the cost of the problem. So who can afford to have Mr. Gu in different places?

We have three major service providers set up standards, we have a variety of service providers, such as Kiddle, there are 11 ways to read, there are mobile phones, tablets, PCs. Tens of thousands of e-books have been announced at the Las Vegas Electronic Consumer Fair, and there are thousands of different platforms for information interaction and sharing. So we see the challenge--the content management system! It used to be to create a content management system for editing, commenting, indexing, searching, and publishing all the information, how much is the cost of the software? Maybe four people say I'm a software person and two people say I do market research. Are you buying this system or are you hosting it for other organizations, and how publishers and distributors can learn to work with third parties in the information business to store electronic book information and disseminate information?

Finally, the content management system provides the Web interface, which means that we include business model issues, and I was involved in the Electronic distribution field in 1990, when there were about 16 (suppliers), about 230,000 pages per year, and now there are 100 vendors who are experts in content delivery. Which one is best for you, and if I have never worked with these vendors to know how to deal with them, what is the cost of dealing with them is appropriate? The last question, I have information, stored information, in the end how to design a good customer interface? This website can be run by my own business, Or is an association distributor, perhaps I am to let outside the manufacturer to help me to do the website, the related cost is how much? There are some additional costs that are legal. When I was talking about China and foreign publishers, a lot of foreign distributors and publishers told me why they went to China. China does not respect intellectual property rights. In March, I brought two lawyers to a specialized seminar on electronic publishing, and eventually we all had to learn how to protect what we were developing, and if we didn't, we would have the so-called "Harry Potter" problem. Once you have chosen a successful project, you can steal 50,000 books from anyone, anywhere. This is the long tail effect that someone said in the morning, so we have to spend a certain amount of money to protect this content.

I mentioned marketing campaigns for customers, from c to I, from business to personal. In the 80 's time has the market division, 90 's talk is the market enterprise, but now we talk about is the individual consumer. Now there are incredibly complex systems, such as Google or Amazon. They developed a preference for defining personal identities and finding individual consumers.

I share with you the key points that the slides can get after the meeting. In fact, the cost is divided into six chunks, the beginning of the project is the part of software development accounted for 60%, fortunately, there are many developers in China, the content production is 15%, the infrastructure is 10%, once the system is running, the cost of the software has dropped to 17%, in the content development of the increase to 25%, The infrastructure is 13%. Then once you have the business, the expansion of the business will need to account for more cost share, which is the average number. But I don't know what the percentage is for you, but you need to know that there are at least eight new cost centers for online business and digital services, Mobile information services. Because once it's working, you have 6 different forms of income. The first is advertising revenue, followed by sponsorship revenue. People sometimes ask Robert my company does not sponsor a business, but you may have other types of income, but you should explore potential and possible sources of income. Because when competitors are getting more and more into the market, revenue channels must be diversified.

NetEase is a leading company and HBS will say that our industry has a leader and a follower, but the dilemma is that there are many entrepreneurs but that is not a business, but some entrepreneurs. Let's see what NetEase has done. He would say I think it might be safe to do it and then do it.

Look at some of the key issues, the financial outlook for digital distribution, which means how we can transform the multimedia into digital content and how to find new delivery patterns. Delivery is not the same, regardless of content, access, quantity, quality are not the same. Once the information is found in the university to print out, I think they do not want 900 pages of textbooks, only need 4 pages to help them pass the exam information. The woman does not need a 200-page cookbook, but only needs 2 pages of information to help her make a dinner. Therefore, digital electronic distribution in the rapid development of the need for a new business model.

What are the prospects for the future? People have to pay for more information, we see 59% agreed, and 56% agree, so more electronic magazines have more readers. That might not have been the case two years ago. So I see a versatile device that replaces a dedicated ebook. The advertising of digital publications will be able to achieve one-click product Purchase, which is the trend in the future. That's why you need cash to grow, not just for survival, but for growth. In order to get cash, everyone has to make a decision to drive income, so there will be more spending, which has an impact on income, which brings profits and returns on investment. That's what I'm talking about.

Moderator Shoming: Thank you very much, Mr. Robert E.baensch for all of us to introduce the business model of mobile media.