Quantum Media News

AOL CEO Says Give the People What They Want

Aug 10, 2010: Tim Armstrong, CEO of AOL, has a shockingly simple philosophy regarding content distribution. “Get people the content as quickly as you can, and don’t force people to do things they don’t want to do,” he said at a recent event at the Harvard Business Club. He maintains that instead, a website should be adding value every second.

The June 15 event, organized by Quantum principals, boasted a packed room, all in attendance to hear Armstrong speak about AOL, Patch.com, and what he thinks will be important to the Internet of the future.

Armstrong started Patch.com to fill the gap in local news coverage. Armstrong said he told newspapers, “I think there’s a better way to cover hyperlocal,” and when they didn’t respond he created Patch to fill that gap. Armstrong said that Patch “allows you to cover much more information than a newspaper can do, for a fraction of the cost.” The way Patch does this is by having a small group of reporters and editors writing local news, but also having community members contribute information about local events, issues, even classifieds and the like.

Armstrong acknowledged that Patch will further dent already struggling newspapers, but said that several papers and blogs are choosing to work with Patch, rather than fighting it. Armstrong hopes to keep getting towns up on Patch, with the goal of having more than 500 local Patches by the end of this year.

While understanding that media companies need revenue, Armstrong also realizes that companies “can’t just stand up and say ‘I want to be paid for my content’” - they need to have content that people value enough to pay for. In other words, if you want to be paid for your content, you “have to have really good content.” It seems simple, but sometime the common sense answer is the right one.

Armstrong thinks that virtual commerce could be a big help in providing media companies with revenue streams other than advertising alone. He said he thinks a paid services system “could be applied to virtual commerce.” He added that virtual commerce models have worked very well culturally, and that he hopes this sort of currencies take off in the United States.

One thing Armstrong has done to increase content value at AOL is to change the way they think about development. He’s adopted a mobile first approach, in which new products are created first for mobile devices, and then adopted for other platforms. He believes this is vital because it focuses on where the customers want to be, rather than trying to change their behavior. Armstrong said he thinks a company’s first duty is “to help other people” - and that means giving them what they want, not what you want them to want.

Internet Subscription Sales Continue to Rise, MPA Survey Reports

Aug 16, 2010: Nearly 25% of all magazine subscriptions will be generated online, according to the recently released Magazine Publisher’s of America (MPA) survey, which Quantum Media principal Jean Hellering helped produce.

The survey found that 93% of internet new subscription orders really are from brand new subscribers, showing that internet subscription sales continue to be a source of circulation growth. This is supported by data from the survey’s previous three years, which shows that this percentage has remained high since 2006, and has grown each year.

Internet subscription sales increased 78% from 2006 to 2009, according to data from past surveys. Almost nine out of ten of those internet subscriptions are sold directly by the publishers themselves, according to the 2009 survey. This includes subscriptions sold on editorial websites; both internal and external e-mail lists; cross-selling; internal upsells; and offline to online.

In 2009, 43% of new subscription orders on the internet were placed mainly on publishers’ own websites, reports the survey. It also stated that search engine advertising accounted for less than 5% of new subscription Internet sales.

The survey reported that internet renewals are growing as a percentage of overall internet activity. Information from the past three surveys shows that e-mail has overtaken editorial websites as the main source of internet renewals; that editorial websites have been and still are the largest source of new subscriptions placed on the internet; and that overall internet payment has steadily improved.

Hellering assisted MPA in varying ways, including participating in writing the survey questions; compiling the responses; and preparing all of the analyses—both one version regarding only this year’s results and another version, a trend analysis, including only magazines that responded to all three surveys considered. Hellering also prepared the survey result documents posted on MPA’s website, with assistance from Ken Godshall of the MPA.

The Future of the Freemium

Jul 14, 2010: Quantum Media principal Carla Graubard recently attended the “Future of Publishing” event organized by the Wharton School of the University of Pennsylvania. At the event there was much discussion on the best way for media companies to get paid for their online content.

While much of the publishing world continues to scramble to figure out how to make money with online content, Gordon Crovitz, a former publisher of The Wall Street Journal and executive vice president of Dow Jones, and current co-founder of Journalism Online, has a plan.

At the recent event Crovitz contended that it’s not a question of if one should charge for online content, but of how. According to a November 2009 study by Boston Consulting Group (BCG), 48% of Americans said they would pay for online content, though few do so now.

Crovitz favors a freemium model, under which much content remains free, but consumers can opt to pay for additional content, or certain articles. He claimed that the most engaged users will be willing to pay for full access, while the less avid readers will be satisfied with the free content. Crovitz suggested that if publishers could convert just 10% of their most avid readers to paying customers, they would have a profitable model - and a great way to restore the value of original content.

In order for the freemium model to work, it needs to be easy for consumers to use. Crovitz suggested the simple solution of placing a small icon next to content that readers have to pay for, so with a few clicks the deed is done.

Crovitz stressed that the core relationship is between the reader and the brand - not the medium or device. The time to start charging for online content is now, said Crovitz, not only for the added revenue stream, but for the future value proposition of the print model.

Crovitz concluded his presentation with a warning about “What’s at Stake,” - the need to develop a sustainable business model for creators of original content who can no longer rely on advertisers alone to cover the costs of creating valuable content.

*All slides displayed in this article were taken directly from Crovitz’s Wharton presentation. Credit and thanks to Press + 's Crovitz.

Wikipedia Founder Still Trusts in the Good in People

Jun 14, 2010: Trust in the community is the key to Wikipedia’s huge success, according to Wikipedia founder Jimmy Wales, who recently participated in a spirited conversation with Professor Adam Klein, founder of Media Leader, LLC and an adjunct professor at Columbia Journalism School.

The June 2 event, which was organized by Quantum principals Carla Graubard and Ava Seave, had an excellent turnout, with nearly every seat filled. The event had to be extended in order to handle all the excellent questions posed by audience members, and an atmosphere of intellectual community held through to the very end.

In Wales’ ideal world, Wikipedia would foster “a social culture of thoughtfulness.” He maintains that “it’s really about creating a community that cares about quality.” Wales explained that even when people are utilizing user names, and not their real names, they create an identity around that user name, and then begin to value the reputation surrounding that user name identity. If we can have civility, both online and off, said Wales, we can “move forward in a way we haven’t in a really long time.”

Wales maintains he has no fear of Google, citing the fact that Wikipedia is a non-profit, so there’s no money to be had by shouldering in on its business. In terms of search engines, Wales thinks Google shouldn’t be overestimated, since search sites don’t have the same kind of social hold as sites like Facebook.com, and so there is less user loyalty.

While he isn’t afraid of Google, Wales does know how to get the best use out of the search giant. Wikipedia entries use a very short url, such as en.wikipedia.org/wiki/Cats for an entry about cats. The subject being in the url causes the pages to naturally end up high in Google searches, though Wikipedia has no deal with Google.

When asked how he feels about social media, Wales said that he feels that the current climate is more like participatory media than social media. He suggested that people seem to be getting interested in niche sites that focus on a specific interest, like wikia.com, which has pages on muppets, healthy recipes, genetics, The Simpsons, guns and nearly any other topic one can think of. Wikia has more than 100,000 pages already. Wales said that this diverse assortment of very specific websites is an exciting development, because “in the past, you’d never be able to find all of your soulmates out there.”

Conversation Between Wikipedia’s Wales and Prof. Klein Organized by Quantum Principals

Jun 08, 2010: Principals Carla Graubard and Ava Seave organized an exciting debate between Jimmy Wales, founder of Wikimedia Foundation - which operates Wikipedia.org, and Professor Adam Klein, founder of Media Leader, LLC and an adjunct graduate journalism professor at Columbia Journalism School. The event took place on June 2, at The Harvard Club on 44th Street in Manhattan. Wales believes the future of Wikipedia lies in other similarly-structured sites that delve into topics outside the scope of the encyclopedia. Wales has said that his goal for Wikipedia is for it to eventually contain “the sum of human knowledge.” He contends the future will be a collaborative web culture. Wales earned a Bachelor’s degree in finance from Auburn University and a Master’s in finance from the University of Alabama. He received the “Time 100 Award” in 2006, as one of the most influential people in the “Scientists & Thinkers” category.Wale’s contentions will be questioned by Klein, who currently teaches graduate students at Columbia about evolving digital media business realities. He has also taught strategy and management at Harvard Business School, where he earned an MBA and Doctorate in change management. Klein was a lead partner in the Boston Consulting Group and Klein & Co.; the president of Video Egg; EVP Strategy EMI Music; President/COO of AskJeeves; and EVP, President Global Marketing for Hasbro, Inc.For more information, visit www.hbscny.org/article.html?aid=473.

Helping Global Media Company Profit from the Boomer Explosion

Apr 28, 2010: Quantum Media Principals Carla Graubard, Erica Gruen and Christine Arrington were recently engaged to help a leading global multi-billion dollar media company gain a deep understanding of the Boomer market, highlight key strategic insights and develop a roadmap for success.

Quantum worked with the client to assess how the company can increase penetration of the Boomer and Boomer Plus market, a demographic about to become the largest and richest for the first time in U.S. history. Quantum covered the waterfront, providing deep insights in a very compressed time frame. Deliverables include:

*Describing the consumer and industry target markets, identifying unique strategic marketing issues, and assessing the competition.

*Identifying client’s core internal assets, non-core competencies, strengths, weaknesses, sources of competitive advantage and assets required for success.

*Listing key success factors for successfully achieving business and financial goals and internal hurdles, and providing strategic framework for supporting penetration goals.

*Developing initial roadmap, strategies and high-level tactics for increase in market share and initial list of concepts for research and testing.

Principal Jean Hellering to Produce MPA’s Subscription Sales Survey

Apr 20, 2010: Principal Jean Hellering will be producing the MPA's third annual Subscription Sales on the Internet Survey. The survey is in the field now and results should be available in July.

Principal Alison Anthoine Gives Wise Counsel

Apr 14, 2010: Alison Anthoine, sees her law training integral part of her management consulting practice. She frequently combines both sides of her training for her clients. However, when she is quoted on American Express's Open Small Business site in "16 things Your Lawyer Won't Tell You," she is quite critical of some practices of her fellow lawyers. "Litigation is a sinkhole," she declared. "Mediation gets the principals in a room together with a facilitator, the principals get to speak for themselves (rather than paying lawyers to posture for them). Most importantly, the facilitator gives the principals the neutral listener that they hope to get from their ‘day in court.' They are empowered to reach their own resolution without any legal mumbo jumbo...."

Seave Joins Board of Magnify.Net

Mar 01, 2010: Quantum Principal Ava Seave has joined the Board of privately held Magnify.net. Magnify.net's primary product is a video publishing platform that makes it easy for companies and other organizations to integrate user-generated video, video that they produce, or video that they discover into their websites. Magnify.net writes on its site: "We're powered by the passions of your visitors -- finding relevant user-generated videos and giving you the tools to build a vibrant video community. We built Magnify.net because we believe that everyone has a story to tell and we wanted to give you a platform to tell that story with video. We wanted to make it easy for you to get video and easy for you to share video with the people that make your site or blog so great -- your members and visitors."

Seave agrees with the company's assertion that it has an early advantage in driving the integration of video into high-traffic vertical content sites and that the growth of these niched sites (which matches similar segmentation trends in television and magazines) attract advertisers looking to target specific audiences. The company has two major revenue streams -- ad revenue sharing and fees for pro and enterprise platforms. Funding for Magnify.net has come from Angel and Private Funding including Lead David Rose, Rose Tech Ventures, New York Angels, Next Stage Capital.

Ava has known Founder and CEO Steven Rosenbaum since the early '90s, and is delighted to be associated with this company. You can read the full press release here.

Quantum Media Joins Clinton Foundation EMP as Mentors

Mar 01, 2010: Two Quantum Media principals, Alison Anthoine and Erica Gruen, have recently joined the Clinton Foundation Entrepreneur Mentoring Program (EMP) as Mentors.

In partnership with Inc. Magazine, EMP is building mentoring communities in several cities nationwide by pairing inner-city entrepreneurs with successful business leaders and entrepreneur mentors. The goals of the program are for mentors to help these entrepreneurs to (1) develop a better understanding of their business and industry; (2) become better leaders and sharpen their business acumen; and (3) make better decisions on the critical issues facing their companies.

The recently-launched Greater New York City EMP includes a diverse range of eleven small businesses that will work with their mentors throughout the coming year. Alison has been paired with the Marcin Bolen and Darek Barcikowski, the founders of White Eagle Media LLP, which publishes a biweekly newspaper serving the Polish-American community in seven regional editions around the country. Erica has been paired with Sharon Brown, president of Environmental & Occupational Safety Services, Inc. (EOSS), a full service environmental engineering firm with offices in three cities.

Quantum Media Elects Two New Principals

Oct 26, 2009: Quantum Media is pleased to announce that it has elected Jean Hellering and Stefanie Lemcke as Principals, effective immediately. Both had previously been Quantum Associates. Jean is a publishing and direct marketing industry expert specializing in financial/business modeling and business analysis. Stefanie is a German consultant based in New York advising European and US companies on the development and implementation of new business and product strategies with a focus on online video, television and internet technologies.

Quantum Media Leads Series of Rebranding Initiatives

Mar 01, 2010: Three Quantum partners have recently led a series of major cross-platform rebranding initiatives for leading consumer and B2B media brands. Most of the Quantum initiatives have focused on the parent company's largest and/or flagship brands. The assignments have resulted in many "wins," including these:

Accelerated growth in revenues, profits and margins
Cost-efficient new customer acquisition
Increased awareness among new/strategic target market segments
Growth in traffic, page views, loyalty and retention
Increase in sales volume of up-sell and cross-sell products and services
Positive, refreshed brand image for all customer groups; and
Ability to sell single brand to multiple-brand media buyers

Each rebranding initiative has been cross-platform, with primary focus on digital strategies and tactics. All of the initiatives have involved cross-functional executive teams across disciplines - including editorial/content, advertising sales, consumer marketing, online, research, business/financial planning, IT, fulfillment, CRM, CMS and operations. Quantum's approach is designed to ensure contribution from and buy-in to a consistent positioning and shared support for specific strategies, tactics and programs. For each of these assignments, Quantum followed a formal process that is time-limited and ensures strong ideas emerge that are clearly but succinctly articulated. Resulting ideas are supported by the entire management team and vetted to be sure they can be implemented--on time and within budget.

Quantum's clients included several leading brands and assets owned by Readers Digest Association, Hearst, American Lawyer Media, a leading weight loss brand, and a prestigious shelter media company.

The Curse of the Mogul, coauthored by Quantum’s Ava Seave, is featured in article by David Carr

Oct 07, 2009: David Carr, columnist and reporter for The New York Times on media and other business topics featured content from the book, "The Curse of the Mogul: What's Wrong with the World's Leading Media Companies" by Jonathan Knee, Bruce Greenwald and Seave in his September 27 Dealbook column. Carr interviewed co-author Knee for several hours at mogulish hang out The Four Seasons and reflected on the analysis of the media business in the book and his own propensities when it comes to moguls. Read more about or purchase "The Curse of the Mogul."

Erica Gruen’s Early Cable Programming Leadership Touted

Mar 01, 2010: The New York Times recently gave a shout out to Principal Erica Gruen, recognizing her contribution to the turnaround and subsequent success of the Food Network brand, one of America's most popular TV channels. In the Sunday Magazine cover story of August 2, the Times said, "Erica Gruen, the cable executive often credited with putting the Food Network on the map in the late '90s, recognized early on that, as she told a journalist, ‘people don't watch television to learn things.’ So she shifted the network's target audience from people who love to cook to people who love to eat, a considerably larger universe and one that — important for a cable network — happens to contain a great many more men."

The Curse of The Mogul: What’s Wrong with the World’s Leading Media Companies

Aug 09, 2009: In their new book, The Curse of the Mogul, coauthors Ava Seave, Jonathan Knee, and Bruce Greenwald explain what is going on behind the sometimes good, but mostly ugly, financial performance of much of the media industry: film, music, database publishing, TV, video games, telecom, newspapers among others. And then they give advice for how managers can structure their businesses more rationally in the future. Read more.

Innovation and Digital Commentary Featured

Jul 15, 2009: During June's Internet Week. Quantum Media's Ava Seave spoke to reporter/blogger Jason Bunyan about funding new digital businesses and protecting creative innovations. Ava, an Associate Adjunct Professor at Columbia Business School, moderated a panel called Innovation and Digital Video at Columbia Business School, and explored how to combat issues plaguing digital video businesses. Though digital content creators have challenges that social community creators do not, the current state of economics and technology has rendered the two groups’ overarching challenges almost identical. Read the full article and see the video.

HBSCNY names Quantum Partner of the Year

Jun 30, 2009: Quantum Media principals have organized the Media Guru program since its inception. From HBSCNY: "The Harvard Business School Club of New York is delighted to announce Quantum Media as HBSCNY's Partner of the Year....We greatly appreciate your countless hours of hard work, dedication, and loyalty to the club. Thank you very much for your work."

Implementing Results From Customer Satisfaction Research

Jun 16, 2009: Several Quantum Media clients have found that simply carrying out customer satisfaction research isn’t enough—implementation of the recommendations can be difficult and confusing for the content side, since there are so many subjective variables within the “quality” of content.

One very large consumer magazine client engaged Quantum Media to take the customer satisfaction research it had done, create an audit of the specific content that was being delivered across a variety of categories, and then make a “roadmap” of how that content had to change to more closely meet customer wants and desires. This approach can take into account subjective “style” evaluations, proportion of visual versus verbal content, and even the “price level” of service content suggestions.

This particular Quantum Media client followed the new “roadmap” with a new Editor and, along with some other changes, produced a 30%+ lift in newsstand sales.

Quantum Goes Global

Jun 16, 2009: With the increasing internationalization of the media market, Quantum is serving clients around the world, particularly in Europe, Dubai and India. Quantum was the only US consulting firm asked to speak at FIPP's first international digital conference for magazine publishers, including more than 275 publishers from 35 countries.

Effective Cross-Product Marketing Takes On Renewed Importance

Jun 16, 2009: The first 30 days after a new subscriber pays up is objectively the best time to offer your other products to that subscriber. Many media companies, upon looking more closely, are discovering that they aren’t cross-marketing their products effectively, sometimes because of “fiefdoms,” and sometimes because senior management just doesn’t get involved in setting cross-product marketing guidelines—a touchy area.

Recent successful cross-marketing initiatives:

Consumer Reports sends out a small brochure to its new customers, "Welcome to the CONSUMER REPORTS family of products." It lists and describes some 20 products, including magazines, newsletters, research services, web services, books, and more. This has been effective in cross-selling.
Rodale recently set out a goal to increase sales of its own products to its existing customers over the course of one year. The result was nearly a 30% improvement in net income for that year.