Multichannel Multimarket Media Services WP1 Dynamic media business models, value chains and ecosystems

Transcription

1 Multichannel Multimarket Media Services WP1 Dynamic media business models, value chains and ecosystems Juho-Petteri Huhtala, Aalto SE Seppo Leminen, Aalto SE / Laurea

2 Agenda 1) Key objectives and research questions in MuMuMeSe 2) How rapid digitalization is affecting on traditional business? - Case Sony Music Entertainment 3) Market situation among the virtual learning environments - Trends, market outlook for ereading devices and elearning 4) Business models for digital platforms - Supplier roles in e-business Why providing full service is challenging? - Case Moodle Open source business model

4 Multichannel Multimarket Media Services WP1: Key objective (Aalto SE & Laurea) Perspective 1 Virtual environments and spaces for multimarket online services Perspective 2 ereading concepts for training and HRD online services Perspective 3 Scalable architechts and processes for multimarket online services Task 1 Business models, value chains and ecosystems in service internationalization - Our key objective is to examine alternative e-business models and develop consumeroriented business models for both e-learning and online gaming environment - We approach this objective from 3 different perspectives: Virtual environments and spaces for multimarket online services, ereading concepts for training and HRD online services and scalable architechts and processes for multimarket online services

5 Multichannel Multimarket Media Services WP1: Key research questions (Aalto SE & Laurea) Perspective 1 Virtual environments and spaces for multimarket online services Perspective 2 ereading concepts for training and HRD online services Perspective 3 Scalable architechts and processes for multimarket online services Task 1 Business models, value chains and ecosystems in service internationalization Key research question(s) for Aalto/HSE from 3 different perspectives are: What is the current market situation among the virtual learning environments available in Finland? What are the most relevant business models for combining the printed and digital materials to the various types of services in learning solutions aiming at productization? How should the service concepts be developed so that they are scalable to the international market? (Master thesis, will be published )

6 Multichannel Multimarket Media Services WP1: Current status of the study (Aalto SE & Laurea) Perspective 1 Virtual environments and spaces for multimarket online services Perspective 2 ereading concepts for training and HRD online services Perspective 3 Scalable architechts and processes for multimarket online services Task 1 Business models, value chains and ecosystems in service internationalization What is the current market situation among the virtual learning environments available in Finland? What are the most relevant business models for combining the printed and digital materials to the various services in learning solutions aiming at productization? How should the service concepts be developed so that they are scalable to the international market? -Study steps done by far: Academic literature review of ebusiness models, data collection from additional resources for elearning market outlook Interviews with key participants (WSOYpro, Sanoma Games) Definition of the current digital business models through benchmarking cases - Moodle, Sony Music Entertainment (Aalto SE) - ereading business model adaptations from Next Media ereading-project (Laurea) - In final report: Roadmap of future business models and revenue logics for virtual environments Based on earlier academic research, conducted interviews and benchmarkings

8 Case Sony Music Entertainment Evolution of the music market CD 1993 Mp Napster itunes Spotify 2008 Nokia Comes With Music 2008 Amazon MP3 Store WinAmp ipod Rockband 31,70% 23,40% st MP3 player 20% 15% 11% 2000-> Large amount of P2Pnetworks available 5% CD era ( ) Free music era (1999-) Music ecommerce era (2003->)

9 Case Sony Music Entertainment Strategic milestones Sony Connect music store 1992 ATRAC CD Focused business 2001 Duet 2001 PressPlay 2008 Co-operation with Google and Nokia 2009 Co-operation with Apple and Spotify SDMI 2003 MusicNet, FullAudio etc. CD era ( ) Free music era (1999-) Music ecommerce era (2003->) CD Napster itunes 1993 Mp Spotify

10 Case Sony Music Entertainment Revenues 3,7 3,8 4,4 5,2 5,7 5,3 5,6 5,5 4,3 Music integrated with other digital media content-segment! 3,0 2,9 2,9 2,3 1, CD focus SDMI Duet MusicNet Connect store Wide co-operation CD era ( ) Free music era (1999-) Music ecommerce era (2003->) CD Napster itunes Spotify 1993 Mp3

11 Case Sony Music Entertainment Business model Strategy Old ( ) New (2007-) Dominant player Monopolistic attitude towards whole music market Controls the value-chain Focuses producing quality music Being everywhere: strategic partnerships (Spotify, AT&T, Nokia) Digital Services Digital music in copyrighted ATRACformat (DRM) No other digital formats Secure Digital Music Iniative Mp3 = Piracy attitude Own platform with Sony mucis (Connected) Bundled records Mp3 accepted as main format SDMI suspended Spotify, Nokia Comes with music New own online-store launched 09/10: Ariama.com (50 major and independent labels) Single songs

13 Major trends in digital landscape ) SOCIAL MEDIA Radical exchange in consumers internet experience 2) REAL MOBILITY: ereading DEVICES, SMARTPHONES AND SOFTWARE Rapid technological development in both devices and software 3) PAID DIGITAL CONTENT Increase in digital services demand and willingness to pay for it

14 ereading devices: single & multi-purpose Single-purpose ereaders Multi-purpose ereaders

15 Single-purpose ereader usage intentions (Source: NAT Digital Home Online Survey, Q4 2009) Total U.S. Internet Audience, n=6,870

16 Multi-purpose ereader (ipad) usage intentions If you owned an ipad, how likely would you be to use the following features of activities on the device? Internet Browsing 21% 21% 50% 48% Music 26% 38% Books 30% 37% Address books/contact lists 27% 37% Videos Photos 28% 26% 36% 35% Most likely Unlikely Newspapers/magazines Games (card games, puzzles etc.) 34% 30% 30% 32% Downloading apps 26% 36% Games (strategy, rpg, shooters etc.) 22% 44% 0% 10% 20% 30% 40% 50% 60% Total U.S. Internet Audience, n=2,176

17 Tablets today (Adapted from various raports such as BCG e-reader survey & PwC market outlook ) 29 % of customers would like to own single-purpose e-reader e.g. Sony Reader (66 % multi-purpose, e.g. Apple ipad) 91 % of customers think that ability to purchase content from different retailers is increasing the usage of e-readers/tablets ~11-15 % of finnish consumers are intending to purchase an ereader/tablet within a year Single-purpose devices Finnish consumers willingness to pay: Inexpensive 51 Expensive 94 Current prices in Amazon.de: Sony Reader Pocket 90 Kindle DX 137 Bookeen Cybook opus 162 Multi-purpose devices Finnish consumers willingness to pay: Inexpensive 94 Expensive 195 Current prices in Amazon.de: elocity 7" tablet 267 Apple ipad Wifi 16GB 403 Toshiba dual ts 1300

18 How much ereading device should cost? (Source: Forrester Research, Inc.)

19 Global printed and electronic educational book market Printed educational books 37,45 37,897 38,972 39,849 38,911 38,47 38,691 39,34 40,01 40,712 Electronic educational books 0,186 0,231 0,293 0,372 0,514 0,649 0,884 1,319 1,875 2,439 PwC projects, that in ,65% of educational books will be e-books (PwC, 2010)

20 Pricing - Willingness to pay for digital content (Adapted from various raports such as BCG e-reader survey & PwC market outlook ) Digital book (Finnish consumers): From 5 to 9,40 for a book on e-readers/tablets Case Akateeminen.com: Finnish literature e-book costs ~18-25 Digital magazine (Finnish consumers): From 2,90 to 5 for single copy of digital magazine Case Suomen Kuvalehti: single copy costs 5,99 Digital newspaper (Consumers world wide): From 7 to 11 for a monthly subscription Case USA Today: 8,7 a month

21 E-learning markets 2010 in Finland 4 % 2 % 2 % 2 % 4 % 5 % 6 % 1 % 1 % 22 % Content production, digital learning materials e-learning platform services and development Learning@net Development of social media tools Learning games 12 % 18 % 21 % 3D-world services for educational purpose Translation services Netcasting According to Suomen Oppimiskeskus ry (2010) 150 e-learning firms are existing in Finland (77% of firms are less than 10 person micro companies) Overall revenues were about 248 million (59% comes from the fifth largest content publishing companies in Finland) (Suomen Oppimiskeskus ry, 2010) Revenues from electronic content were 54 million and revenues from platforms were roughly 52 million

22 Agenda 1) Aalto/HSE key objectives and research questions in MuMuMeSe 2) How rapid digitalization is affecting on traditional business? - Case Sony Music Entertainment 3) Market situation among the virtual learning environments - Trends, market outlook for ereading devices and elearning 4) Business models for digital platforms - Supplier roles in e-business Why providing full service is challenging? - Case Moodle Open source business model

23 The supplier roles in e-business 1) Content providers Offers predetermined content (Standardized or individualizable) E.g. Otava (e-learning) SM-Liiga (online league) 2) Application providers Offers applications and often co-operates with content providers E.g.Gateway Multimedia (e-learning), SC5 (online league) 3) Hardware providers Offers hw for digital content, not learning specific in most cases E.g. Sony, Apple, Nokia (both) 4) Service platform providers Offers digital service platform, which complement the mediation of digital content by applications E.g Moodle and Blackboard 5) Full service providers Offers all-in-one solutions, comprises products and services in relation with the whole e- learning system E.g. WSOYpro (?)

24 Why providing full service is challenging? 1 Content provider Possible elearning value chain 5 Full service provider Support activities Learning process related services Distribution Promotion Bundling Hardware provision Software provision Didactic planning Content generation Pricing Product design

25 Why providing full service is challenging? Other publishers Consulting service providers Content creators Labor unions Teleoperators Media Teachers Hardware developers Newmedia houses Muncipalities Free platforms Free professional material portals Free content providers Software developers

26 Case Moodle Briefly Open source web application designed for producing Internet-based courses and websites Written in PHP, runs nearly any server platform, used with any web browser Translated into over 70 languages including Finnish Currently registered sites in 210 countries, 3.7 million courses held by 1.1 million teachers

27 Case Moodle Key groups 1) Moodle trust The core company that maintains and coordinates the Moodle project 2) Moodle partners Selling support / consulting services for Moodle clients Paying to Moodle Trust for certified partnership 3) Moodle clients Buying services from Moodle partners Services are e.g. system implementations, new installations, consulting, training Buying certain extra features from Moodle Trust 4) Moodle developers Spread across the globe, some work for institutions that use Moodle Some are funded by Moodle trust, some are paid by other companies Majority work on a voluntary basis 5) Moodle community Moodlers Testing features and providing ideas for new features Organizing and attending MoodleMoot-meetings Entirely voluntary Information is shared mainly through Moodle community forums

28 Case Moodle Business model Moodle developers Moodle community - + Moodle trust + Annual fees + royalties Free Extra features + Moodle partners Free Muncipalities Schools = source code = product = service

29 Case Moodle Advantages 1) Robustness Infinite number of Mooble developers, many testers in Mooble community -> number of bugs minimized 2) Flexibility Flexibility of mixing and matching Mooble on existing software sollutions 3) Community support Constantly evolving platform, community highly motivated to solve problems / answer questions

30 Case Moodle - Disadvantages (ITC Distance education survey Administrators & faculty of American Community Colleges, n=226)

31 Case Moodle - Disadvantages

32 Case Moodle - Disadvantages (ITC Distance education survey Administrators & faculty of American Community Colleges, n=226)

33 Last words 1) In digital landscape companies need to forget their status in traditional market and start to rethink and reshape their business models 2) Today digital landscape is business model playground time tells, which one(s) succeeded 3) Setting the rules and controlling the whole value chain in digital lanscape business is more challenging than in traditional market, because of the amount of different actors 4) elearning solutions needs to developed so they can be easily consolidated and integated to any LSM platforms / ereading devices possible (ipad is not the last and only format out there) 5) ereading hype is on, larger markets will follow - In order to be widely used/accepted device, the price of the ereading device must be much lower than todays multi-purpose devices 6) Future is blended learning (Traditional + digital) Big question is, how off-line and on-line content should be bundled?