Webinar | June 4, 2013
Digital disruptors like Apple, and Netflix have discovered that consumers are willing to pay for content when the user experience is right, but many traditional media firms haven't been able to initiate the metamorphosis required to appease this digital appetite. Watch this webinar featuring Forrester Research Inc. Senior Analyst Peter Sheldon as he discusses why media firms need to invest in their underlying commerce technology to ensure they can effectively manage customer entitlements, flexible subscription models and custom content bundles in the quest to stay relevant and competitive.
:00 Hello my name is Matt Dion and I am the VP Marketing here at Elastic Path. I'm very excited about this digital commerce webinar we’re doing today which is the second half a two-part series were doing with Forrester. For the first part we were joined by VP and Principal Analyst James McQuivey. James dove into the business strategies that some of the leading providers of digital content are undertaking. Today’s segment will be presented by senior analyst Peter Sheldon. He's going to examine the complex technology considerations required to fuel these business strategies.
0:34 Before I turn things over to Pete I’d like to give a very quick overview Elastic Path. Elastic Path helps the world's biggest brands sell digital goods and content. Some other world’s largest media, publishing, software, gaming and telecommunications companies have chosen Elastic Path. Companies like Time Inc, Google, Rovi and Virgin Media have chosen Elastic Path both for our technology platform as well as our expertise in digital commerce strategy and implementation. We also regularly share strategies and best practice is on our blog which is the #1 ecommerce 1 in the world. Research papers, case studies and webinars can also be found on our website.
1:11 In part 1 of the series we discussed digital disruption. Now that consumers have embraced the variety digital platforms from tablets to phones to game consoles they’ve signaled their readiness to adopt new disruptive product experiences and content companies are in the perfect position to ride this wave of disruption. The second part today we’re to deal with technology considerations that your companies need to understand in order to take advantage of digital disruption. Our speaker today is the authority on digital commerce solutions. He's recently published a market overview on this topic and this report is available for free on our website. If you're interested in today's topic this is definitely a must read before. So now I'm very happy to turn it over to Pete Sheldon.
1:55 Thank you Matt. So as Matt said, today we're going to be talking about digital disruption and the technologies that leading media firms and publishers need to embrace as they go down this digital journey. Media companies really are in a situation where they must evolve their business models and they must evolve fast. The future is now and digital disruption as my colleague James talked about in the last webinar really mandates that change happens now.
2:32 You know a little bit of background and a recap of some of the material the James talked about to end the last webinar, there's a connectivity revolution happening at the moment. The adoption of new consumer devices and touchpoints is happening at a rate far faster than we've ever seen before. We've got $21 million users of e-readers, forty million iPads sold since it went on sale and thirteen million connects sold. So really we’re in a situation where the adoption of these new technologies is happening faster and faster
3:08 It's not just the those three technologies. Consumer ecosystems are expanding rather than simplifying. The number of touchpoints and devices that media firms and publishers have to support today is becoming exponentially more complex from year to year and e-business leaders and media companies really have a large challenge on their hands to be able to support all of these devices. Consumers are demanding to use them and unfortunately many media firms really are missing the boat currently in terms of the devices that they’re supporting.
3:44 And if we look a little bit into the future and some of the forecast data that Forrester is creating we're going to see a continued adoption of e-readers over the next four to five years. Tablets will see a big increase, doubling from forty million today to 82 million by 2015 and smartphones also in the US continuing to grow. But in terms of the proportionate share between these devices your smartphone is still going to be the dominant media device by which consumers interact with.
4:24 But there are other devices in the house, in the home as well and consumer eyeballs are really distracted. Consumers are moving between these devices and interacting seamlessly between these devices. Even within a single evening and in a household it's not uncommon for a consumer to interact with multiple of these different touchpoints from the home TV, desktop/laptop, e-reader, tablet, etc. and so there's a lot of different touchpoints that media firms and publishers really need to be on top of and an understanding around.
5:02 And the usage of these digital consumer touchpoints is really expanding if we look at traditional print newspapers and magazines we see that the number of hours that consumers are spending in a given week reading traditional media is on the decline. Conversely watching television and using the internet for personal purposes, the number of hours spent there is increasing. So consumers although the move is gradual, consumers are moving away from traditional forms of media to digital media.
5:40 And really the message is that media firms really have to embrace this persuasively connected consumer and join up all of the touchpoints those consumers are interacting with. It's no longer good enough just to have website and support a mobile site. You really need to have a presence on all of the popular devices from Smart TVs to tablets and across all of the different how it flavors a smartphone operating systems.
6:13 If we look at what's happened really in terms of the digital age over the last century we’re really in this age of the customer and the age of the customer really puts a customer in control. The customer expectations in terms of how they interact with you as a brand have really changed considerably from where we were even five years ago and customers now really demand that you as a brand are completely obsessed about them. They expect to be able to interact with you as a brand anywhere and everywhere that they go and really some of the company's today who do a great job of this are firms like Facebook, Apple and Best Buy. These firms obsess about connecting with their customers and building digital relationships with their customers.
7:11 One great case study of a media firm that really gets this is USA today. USA Today, a long-term incumbent media firm here in the US, a newspaper publisher and they've really transformed themselves over the last couple of years to be a leader in the distribution of digital content and they've done by really recognizing that although they still have their print edition of their newspaper they really recognized in need for digital distribution of their content and services across all mediums and all touchpoints. And today to go back to this word obsession they really have obsessed about this.
Many media companies out there are supporting the obvious touchpoints, the iPhone and Android and perhaps the iPad but USA Today have really gone a step further here and really obsessed and looked about all the digital touchpoints not just the ones that have high adoption but they're looking at emerging trends. Already they support Windows 7 and Windows Phone 7 experiences they've built apps for Google Chrome, Google TV and they're really trying to make sure that their content is available on absolutely all the consumer touchpoints and this may seem like a big headache too many of you who are watching this webinar today and are really thinking well, how do we do this?
The effort of supporting and building these experiences on all these touchpoints is really mind-boggling for many e-business executives. Many firms employ their digital agencies to build these experiences and spend a huge amount of money developing and building this and in terms of the ROI of supporting some of these emerging touchpoints or perhaps touchpoints that have lower consumer adoption in the marketplace it's a real challenge to justify the ROI. So what's the secret behind USA today's strategy to pursue all of these different touchpoints?
9:25 Well it really comes down to the fact that from day one they really focused on building out an API or application programming interface and their API today is really at the core of their digital strategy. Everything that USA has built in terms of digital touchpoints, the iPad the iPhone, all of them are built on top of the API. The API is a foundational layer of their whole digital strategy and what they've been able to do is take all of their new services and content services, you see them here highlighted in red on the left hand side of this slide and take all those services and movie reviews and music reviews and obviously their newspaper content and articles and expose those with an API. Now that API is both internal and external facing.
Internally the company uses the API to support all of those consumer touchpoints and in fact they didn't have the internal development capacity to build all of those themselves and in many cases they outsourced development to partners and to agency firms those agencies and partners who are empowered to use these existing APIs and very quickly gain access to this content.
But beyond that USA today has also built a successful independent or external Developer Network where the API that provides access to this content is publicly available out there on the internet simply by signing up for a developer key. Any organization or independent developer can get access to this content and much of it is free to use. And so this is great to give USA Today a far greater digital footprint and exposure to their to their customers and readers than they would be able to you achieve themselves just through their own development processes inside and so the key to this really is about it taking their content, exposing this through an API and managing access to this content - who has access, the profile of the user's and in the case of any content that needs to be monetized, controlling the level subscription to whether this content is given away for free or commercial relationships where perhaps they are providing this data to a third party that perhaps there is a license fee for that or a monthly subscription and being able to control the entitlements and access to all of this content and like I said, they do this through their API.
12:17 Now API's are not just about a way to distribute your media and content among your own devices that you support and out to your partner's. For many companies APIs are now actually a core part of their products set. The API is becoming the product.
12:38 And an example of where this is happening, companies like for example Hoovers. Hoovers provide business data services to their clients and typically in the past their Hoover service was accessed through an internet portal where clients would log in with their account and be able to do data searches on companies. In today's world Hoovers’ API allows that and although Hoovers’ continues to monetize their traditional distribution through the web and the other ways in which they distribute their content. The API is a core part of their strategy now and business partners like for example Salesforce.com and Siebel can take the API and suck the data in and to augment their own platforms. And so there's a whole ecosystem of platforms that play alongside Hoovers’. We see companies like Twilio who provide IVR functionality for call centers, their product is entirely an API. There’s no other interface or application upon this. It is purely an API that developers can embed and built into their applications and so the API is the product and is monetized in such a way.
14:10 Now what's key about some of these APIs is it's fine to build an API to provide free access to your content but for many companies like Twilio like Hoovers like USA Today, the content that they are exposing through their API is in fact there IP and they need to have a business model and be able to monetize that content through their API. So there's a subtle difference today between having a pure content API which is actually quite easy to build versus having a transactional API.
And a transaction API is really a far more complex piece that requires not just a distribution platform but also requires a commerce platform to manage the transactions and to manage the entitlements around this and like I said there’s subtle differences where a content API, generally the access is open and any competent developer can come along sign up for an account and start using it.
With a transactional API it needs to be controlled in an entirely different manner. The authentication needs to be very robust, typically we see organizations using the open standard OAuth to be able to very securely and easily authenticate users but secondly the transactional API needs to be secure not just over HTTPS because we are having to authenticate secure users, for some APIs there may actually be a transaction that occurs. For example being able to sign up for a subscription directly within the API and not require a credit card transaction to occur so in that case not only does it need to be done over the HTTPS but that API also needs to occur in a PCI compliant manner and so what we often see is a transactional APIs are in fact not necessarily open to the public and out there on the web. They are more fuel like, private APIs where access is only granted to trusted partners who have signed a contract and have become a partner to use that API.
There are subtle differences. I think one of the most important one is the metrics that media and publishing organizations use to measure the success of their API strategy. For a media firm who is putting their content out over an API as free content, it's really about usage and how many API calls they're having. It’s about how much penetration they can get with their content out into the broader market and the uplift that they can see from having an API. But for those who actually selling their content through an API it's about revenue, it's about how many incremental subscriptions they can gain and how much uplift in in terms of actual dollars that have been spent through the API that's important. So many of you whoa re watching this webinar today have started on an API strategy and have a content API, the shift to having a transactional API is actually quite a big step and has many intricacies that you need to plan very carefully as you go down that route trying to monetize your content through an API.
17:30 Now a few examples of companies that have really have done this well, what we see with APIs and companies who have created a transactional API around their content is it provides a great opportunity to create entirely new business models.
And an example I love and think is such a great example of this was a partnership between Citibank and Best Buy. Now Best Buy like many firms started building an API many years ago and in fact as they were rolling out their mobile commerce initiatives and supported iPhone app's and Android app and the mobile web they were really internally shifted towards building an API to support touchpoints we talked about earlier. But as a result they also made their API public and actually put together an entire team around their API as a dedicated team within Best Buy who looks after the API. And one of the important things they did was to assign a Business Development Manager to the API strategy. This dev managers role has been to go out and try to find new business partners and opportunities and to be able to generate revenue through the API.
A great example of this was Citibank. Citibank has a reward scheme as their customers who are using their financial products, credit cards, mortgages, etc. earn loyalty points. And Citi like Best Buy also have an iPhone app for consumers to I manage their loyalty scheme and what Citi was able to do working in conjunction with and using Best Buys API was to be able to not only pull the product catalog of products that Best Buy sell into the Citi application, so now as a city loyalty customer I can browse my points balance and I can decide to redeem that balance against merchandise that Best Buy sells. But the really cool thing about this is that I have full access to the entire Best Buy product catalog because that catalog is being pulled by Citi from Best Buy through their API.
But where it gets really clever is that this is in fact transactional so as I see a product, perhaps I want to convert my my Citi points balance into about buying an iPad, I can find the iPad in the application and I can actually buy it there and then and I can actually choose to do an in store pickup but all this occurs through Best Buy’s API and effectively what Citi is doing here is a conversion process between the dollar amount that Best Buy sells the product for at a conversion rate to their points. So as a city customer wants to buy the iPad what Citi is actually doing is creating a transaction, a purchase transaction directly into Best Buy e-commerce platform and a sale is completed and the neat thing about this is that a Citi customer could walk into a Best Buy store scam a piece merchandise that they want to buy, but buy it with their points balance and walk straight to the till and collect it as any normal web to store order. And this has being really great for Best Buy they’ve seen significant revenues through this channel and in fact the revenues that they've seen through this partnership with Citi has a gone a long way in terms of paying for the development effort of building the API. This has been very successful with incremental new business that Best Buy has been able to realize. So great example using APIs to create new business opportunities and new selling channels.
21:09 Another example of this is the Guardian. I'm going back to more of a media-centric example. So the Guardian realized very early on that digital was going to be a core part of their commercial strategy and like Best Buy and like USA Today they have many different API providing access to various services and content that the Guardian has. But they have a tiered access model, some of the data they have and content they have they give away for free. They have an open API that any developer can come and use and access and so this is where they have hundreds and thousands of developers who have already built applications and mashups that are using that content.
Now at the other end of the scale they have very tight strategic partnerships with some strategic partners and this is where there are very few of these but the access to the content is part of a bespoke licensing agreement and so effectively what we have is a commercial partnership where their strategic partners are paying substantial annual fees to have access to a greater array of content and then they have a sort of niche layered in the middle. And so what we have are there tiers of access and access to content: open, niche and core and really the key to this is that the Guardian recognized that they had different consumers of their content. They have some consumers who are not willing to pay, there are some who are willing to pay for certain content and there are strategic partners who are willing to pay a lot of money to get access to all of their content. And so their access to their API again is controlled carefully through permissions and entitlements and depending on whether you are a license partner or not depends on the content you have access to.
23:14 So moving on a little bit from talking about API to now talking about on some of the challenges that media firms have with the walled gardens. When we talk about what gardens we’re really talking about the application stores like the Kindle Store or Apple App Store and one of the big problems with these app stores is that they really segregate the customer away from the content creator and that’s the publisher or the media firm. So it's very difficult for media and publishing firms to build a direct relationship with their customer when there’s this walled garden in the way.
23:54 I talked a little bit earlier about USA today and a great job that they've done in supporting so many different consumer touchpoints but despite these great efforts to support these touchpoints their subscription offerings and the way in which they sell to their consumers is actually very fragmented and a big part and the cause of this are these walled garden. So USA today has a number of different tiers of subscription. They have a subscription to the traditional home delivery newspaper, they have a separate subscription for there - online effectively this is their PC Edition which is a digital version. But then unfortunately they're also forced to have a separate subscription for their version on the Nook. This is in the Nook application store and this is controlled as a walled garden. They have to sell it through Barnes and Noble app store and likewise with Amazon they're forced to sell it through the Amazon Kindle Store. And so to be on these platforms, to be on Nook, to be on Kindle they have no choice but to be inside and playing in those walled gardens and unfortunately that creates fragmentation in terms of the different offerings that they. For consumers it's not possible for one of their customers to buy a generic subscription that gives them access to the digital online version as well as the Kindle version. These are two separate products and must be purchased separately and so all this great job to allow the consumer to seamlessly switch between devices kind of breaks up when it actually comes to the paid content and the subscriptions.
25:33 Similarly The Wall Street Journal have done a great job in terms of creating a class leading iPad version of their the newspaper but it lives inside of being a native app such as distributed through Apple's App Store. Unfortunately that means that's are they have to play along with Apple's rules and so every sale Apple takes a 30% cut and that is a big pill to swallow for all media firms and has been without a doubt the single biggest hurdle in terms of digitizing their content and really participating and distributing their content through controlled locked application stores like Apple and like Kindle and Nook as a revenue share issue and so this is certainly been a big hurdle for many media firms.
26:29 The good news really is that there’s a way out and html5 is becoming the weapon media firms are using to fight back against these walled gardens from Apple and Amazon.
26:45 And what's really interesting with html5 is it gives firms like The Boston Globe an opportunity to create incredibly rich experiences on these new touchpoints on tablets like the BlackBerry PlayBook, on the iPad, on the iPhone and Android etc. for it allows them to do that in html5 and a great thing about html5 is it’s a web standard, it’s viewed through a browser, it does not require an application and so what we're seeing is a shift in some of the media companies it started off having apps in the App Store are actually backing away from that strategy now and building using design and web design principles and we call this responsive design to create a optimized version of the site that is very optimized for the device it is being viewed on.
So definitely if you haven’t looked at what The Boston Globe have done here we do encourage you to take a look, very good example of using responsive design and html5 to adapt the web version or the digital version to all the different consumer electronic devices that support connectivity and a web browser.
28:03 Now, another great example of a company that's really been pushing the boundaries of what can be done with html5 is the Financial Times. You know the Financial Times started off with a native application and became very frustrated with the revenue share model that they had with Apple and also became frustrated that they were losing control of the customer relationship and it was really Apple that owned their customers as opposed to them. And so they started off working with a company they since acquired to
build an app-like experience in html5. They’ve used many of the new features HTML 5, the storage capabilities we’re their actually storing data directly in the web browser and the application really feels like a native app and the great thing here if you're on an iPad and you go to the Financial Times website it actually switches you over to use this this web app and so this gives them a lot more flexibility from a subscription and monetization perspective that they can have a single subscription that provides access not just to the online version, the .com version but also can also give the same user from a single subscription access to the iPad and it was possible before but it meant that every subscription that occurred where someone was signing up for that subscription in the iPad they were paying a 30% premium or a revenue share to Apple. So it gives the Financial Times a lot more flexibility in terms of modeling subscriptions by the rules that they want to play by as opposed to the rules that Apple wants to play by.
29:45 Now although html5 is providing a way out of walled gardens for firms like The Boston Globe and the Financial Times unfortunately we see more I walled gardens and app stores emerging.
29:58 For those of you who have to use a Mac you’ll be familiar with the application store in the Mac, well with the next version of the Mac OS Mountain Lion, Apple are trying to gain even more control about this. What they’re doing is shipping with the next version of the OS that all software that’s installed on the Mac by default, and this can be changed, but by default has to have a digital signing by the developer that's approved by Apple. So it's not quite the same, not quite as restrictive as the App store model but it does mean that software developers out there and for publishers now need to effectively have their software digitally signed by Apple and approved by Apple. Although the distribution itself doesn't need to happen through the App Store they can still distribute directly to the consumer, Apple is gaining at greater control over the distribution of software
30:55 Similarly Microsoft with the launch of Windows 8 also going down this model and a big part of their strategy is to control the distribution of Microsoft office software to Windows 8 through an App Store. But the good thing with Microsoft is that they've really sort of recognized that although there is a revenue share model that’s very similar to the model that apple has they’ve shied away from taking control of the customer so for example The Telegraph have been building a beta version of their digital channel on Windows 8 and will be offering varied subscription models people who effectively install this application on their Windows 8 PC. But the good thing is that in terms of owning the customer relationship here, that's happening directly with the Telegraph so I think these walled garden App stores and certainly Microsoft have taken note of this and really understood that although they may get away with being a distribution partner of taking a revenue share that really the media firms and companies like The Telegraph want to own the customer relationship directly.
32:16 We’ve talked a lot about the way in which firms are distributing this content, one of the key things that’s really critical to this is that is entitlements and knowing who your consumers are and what they’re entitled to see. Now I talked earlier a little bit about a standard called OAuth and OAuth is an open standard that really most companies now are adopting and using for identity management. So OAuth is certainly a great way of being able to securely identify a returning user as the switch between touchpoints as they access your content one minute from an iPhone next minute from an iPad next minute from a PC but it's great knowing who they are but it's really important to know what content their entitled to, what their subscription entitles them to what additional piece of content they have purchased on an ad-hoc basis, how if there are any time restrictions on how long their entitled to be able to see and consume content for
33:23 And so we see a lot of firms really putting a lot of emphasis now on the entitlement management of this type of content. So for example Amazon’s cloud player allows you to upload and manage your own music library as well as songs and music you buy directly from Amazon and allows you to play it over the cloud across all your devices. But the key here is really the digital entitlement management as users authenticate to the Amazon Cloud Drive and Amazon Cloud Player on any of their devices. It’s really Amazon’s responsibility here using their digital commerce platform to identify that consumer and to understand what music that consumer has uploaded and has purchased and what their entitled to be able to play over the cloud. I know it may sound easy but it's in fact incredibly challenging for these firms to manage those entitlements especially as consumers are uploading content uploading music and purchasing music across all different devices. The entitlements always have to be 100 percent accurate regardless of the device that the consumer decides to use a service from
34:45 Another example of this is obviously Netflix. Netflix like USA Today supports so many different touchpoints and it's critical that as users authenticate through those touchpoints with their Facebook account or authenticate with a username and password that Netflix has a clear understanding as to the entitlements that those customers have and validate that the subscription is still valid and that they still have entitlement to view content not just the sort of gatekeeper access of letting them and out but actually contextual entitlements, what movies have they previously watched and knowing whether a customer has actually watched an entire movie or if they should be starting again down from a certain point in a movie so there’s a lot of contextual information. It’s not just a case of do you own or not own a piece of content, its about where did you get to last time you read or watched or listened to that piece of content. So there’s a lot of contextual information that these entitlement engines must support as well.
35:54 As we warp up in the next step 10 minutes what I want to talk and really conclude with is that as media firms and publishers kind of move forward to tomorrow and try and follow if you like in the footsteps of USA Today in terms of supporting the distribution of their content and services across so many different consumer touchpoints that they really need a platform or a digital commerce platform that has unique capabilities to allow them to do this
36:32 And if we look at companies like media firms and publishers there’s certain unique characteristics in terms of having a digital content platform and a unique set of features and services. So we see in a retail example we’re used to being on Amazon.com and seeing cross sells, would you like to buy A with B and product bundling. Well this is very applicable as well in the digital media world as we try and upsell a consumer from one tier of a subscription to the next tier of a subscription or perhaps we try and bundle in multiple pieces of content or multiple services into a single subscription so lot of flexibility is required around cross selling and bundling to try and create uplift and revenues with the digital media services we sell.
37:29 We need to make sure that the digital assets that we’re selling are protected increasingly as we're distributing media we don't actually allow the consumer anymore to download it and store this media actually on their device so much of this content as is the case with Netflix and Pandora and Spotify this content is streamed from the cloud. The consumer although they own access to the content never actually they never own content and actually store content on devices anymore and that makes asset protection a lot easier because we are now just streaming content in a contextual manner but where content is still downloaded be that publication date in a PDF or be that music or software I it is really the role and job of the commerce platform to make sure that that asset is protected through DRM and other technology we see this a lot with streaming video when DRM solutions are employed to make sure that consumers cannot screen capture and record movies or perhaps pay to watch once and then intend to copy for their own corporate purposes so it’s very important to imply DRM solutions and protect media content you're selling.
39:02 Subscriptions are so key, we've talked about subscriptions at length as we've gone through this webinar subscriptions are really the key to monetizing your content many firms do giveaway either some or all of their content on a fee basis but typically the content is either restricted and to get access to for example the full article verses an abstract for an article requires having a subscription to the service and subscription management in terms of not just being able to offer different tiers of subscriptions and sophisticated subscriptions but it's about making sure that those subscriptions are managed and as consumers typically you pay for subscriptions on a monthly recurring basis billing out to their credit card that you as the publisher or distributor of that content are able to maintain that subscription and to have processes in place to try and protect yourself for consumers who either are canceling their subscriptions, providing incentives for them not to do that but also for customers where perhaps their credit card number has expired or there monthly credit card billing is not successful, being able to have the processes in place to be able to try and recapture that subscription and to try other ways of keeping the subscription alive. It's very costly to acquire a new customer, to acquire a new subscription and so it's very important that the platform you have has the marketing tools and processes in place to be able to keep that customer over a long lifetime and not have them cancel after the first month or two.
41:04 Entitlements and authentication, already talked a little bit about this. It's really the goal of the digital commerce platform to manage entitlements, many firms may have legacy or back office applications that manage entitlements in somewhere that's the case and there needs to be a tight integration between the distribution platform in the transactional platform and the entitlements platform that really need to go hand in hand. It's no good just to be able to sell a product or service or subscription, you need to be able to manage that service and subscription over the lifetime of the customer and every time that they interact with you through one of their touchpoints via the cloud you need to authenticate them and you need to identify what content that customer is entitled to and that's really the role of the digital commerce platform
41:57 The great thing with digital is that the physical boundaries and market boundaries generally disappear and so it's very important to be able to sell this content not just within your own home market but to look at further opportunities to sell this globally across different markets and that requires a platform that can support multiple languages, can support lots of different payment types in currencies as you potentially want to sell your content into emerging markets and to different countries you need to be able to support the payment types that consumers in those countries have. The credit card is not always the answer especially in Asian and some European markets and as well you're going to need tools like a fraud detection services making sure you have a good grasp on what is a credible transaction versus potentially a fraud transactions so it is very important to your platform to support your Global Audience
43:02 I talked a lot aboutAPIs earlier and if we wind back the clock a couple of years much of that digital content was distributed over the web on a Web site. We would go to a newspaper like USA Today and consume their digital content over the web. Today we’re typically doing that more inside of apps and so digital media firms really want to control the distribution of some of these apps and so having your own app store, your own distribution mechanism not just relying on commercial app stores and walled garden app stores from Apple and for my from Amazon, etc. but actually being able to have your own app store where you can control the distribution of different content and services and products is very important so we're looking at a platform that can support alternative distribution models beyond just the web this is really where an API strategy comes in
44:01 And we finally talked about this already but having a platform that you can sell through and provide access to your content over an API is absolutely critical. It's really the foundational starting point you need to be able to distribute your content through an API and you need to be able to monetize that content through an API.
44:26 One other thing that's really different is that traditional web metrics that we may be used to it and looking at in a sort of online retail scenario of measuring conversion rates, measuring average order value, measuring abandoned shopping carts, average cart size, etc. they don't really necessarily always apply in this digital world and in this digital world there are really many digital inputs you need to consider as you put together your metrics and analytics and so you certainly want to look at transactional elements in terms of the average order size and so forth but you really need to be taking in a far greater context and looking at many other things and looking at what your customers are saying about the quality of the applications and services you have out there, there's a ratings and reviews. Looking at what the social networks are saying about your services, social listening and monitoring activities as its related to your services on Twitter and Facebook and listening to that voice of the customer there are so many more analytical inputs into metrics today beyond just the transactions and what products you’re selling and the quantity product you’re selling and all this really needs to funnel down and filter into your processing, into your data warehouse that will ultimately allow you lots of different areas of analysis you not just looking at financial performance of your products and services but looking at things like the actual usability and the physical performance. How fast, are there any bottlenecks in terms of usability as it relates to using your iPhone app or your iPad app etc. and obviously building and monitoring KPI’s and all of this feeds back into the actions that you're going to take as an organization around personalization, around targeting, optimization, your campaign management, how you’re going to leverage merchandising tools like bundling, subscriptions, cross sales to try and drive incremental uplift in terms of your sales of digital services so all of this feeds in
46:57 So really to wrap up a few key takeaways: Embrace this embraces persuasive connectivity, really understand that consumers want to interact with you across more devices than you can every possibly think about and you really need to stop fighting organizational challenges and boundaries and really stop fighting your customers. You really need to make it as easy as possible for customers to access your content anytime via any touchpoint. That's really key you need to get that step down first. Secondly be careful you don't lose control of the relationship you have with that customer. You spend a lot of time and money in the acquisition process of obtaining a new customer, once you have that customer in place you really need to have control and ownership and unfortunately if you do rely on distributing your content through wall garden and app stores you lose a little bit of control here, you lose that relationship with the customers so you really need to think carefully about how important a direct relationship is for your organization. And finally make sure the experiences is contextual. This is where managing entitlements is really critical, that every time that a consumer comes back to interact with your brand regardless of where and when they do that and on which digital touchpoint they decide to use, that the experience is the same every time the content, that the content purchased on one device is available on another. That the position they last read an ebook at is the same position they pick up on as they come into from another device and so entitlements are really key to getting that right
48:50 So as I conclude there's you really one side of the fence you can win. You can win this battle or you can lose it. As James talked about in the last webinar, there’s so much disruption happening in the world digital media. There are new start ups running around looking to you to just steal away your business and your customers so you really need to embrace this change and understand you don't want to be the Spanish Armada of the information provider world and with that I'd like to wrap up and pass back over to Matt and I believe we have some questions
49:33 Yeah great, Thanks Pete that was awesome. Yeah couple of questions here, so you kind of wrapped up there in the end with this concept the digital commerce platform has specific features and characteristics to companies selling digital content, it’s obviously a new category however you e-commerce platforms have been around forever and a very crowded market and a lot of digital companies may have one these in place already so given that, these traditional Commerce platforms have been more or less designed for that retail experience – what are some of the limitations that company's might have using their existing commerce platform or implementing a new retail based commerce platform for this?
There certainly are limitations, I think it comes down to the design and the purpose. If we look at a traditional e-commerce platform that perhaps was designed originally for retail there’s certain features in there that perhaps aren’t really relevant in the digital world.
First of all the shopping cart, for most online retailers the shopping cart is a way to purchase multiple items at once much of the merchandising and promotional capabilities are actually designed around the shopping cart the fact that we have multiple items in a cart. Well the digital world we're really not buying multiple items we’re generally buying a subscription, it's a singular entity. So usually this concept of a cart not to say that it doesn't work but it's not necessarily applicable in the digital world.
The other thing is that many e-commerce platforms and I think this is a big differentiator, you most retail centric e-commerce platforms tend to you focus on capturing a transaction. Some of them do have order management capabilities that look after the life cycle of the order after the transaction is completed and the credit card authorization occurs and may manage the distribution center by which an orders is fulfilled or if it goes from a drop shipper but in the digital world what happens after the transaction is in fact the most important piece. It's fine that we can sell a subscription but what’s so critical is it that we have access to better understand the entitlements to the subscription going forward. We’re able to authenticate the user and identify what subscription or subscriptions they have and ultimately what content that subscription entitles them to and I think that's the key differentiator between a normal or conventional e-commerce platform verses a digital commerce platform is really that for the most part retail centric solutions tend to be focused on capturing a transaction and handing it off to a back-end systems for fulfillment.
52:23 Great, okay so a company needs a digital commerce platform what you think is the best way for them to evaluate the options out there?
One of the key things for media and publishing firms to look at, they need to find a platform that can support their touchpoint strategy. It's absolutely key, as I talked about in the webinar, to be able to support a vast array of consumer digital touchpoints and so this isn’t about having a website anymore or having an e-commerce site. In fact few digital transactions will actually occur through a desktop or laptop PC website. This is about being able to embed commerce and embed the ability to sell and manage a subscription in any device, this may be on the television and may be on a games console, it may be embedded within a game itself on Facebook and so it comes it really comes back to the commerce API and I think that's one of the key things you need to evaluate as you look at a digital commerce platform. First of all, does it supply an API, a RESTful API that can be easily be embedded into any end consumer touchpoints but secondly does it support transactions through that API and transactions that are relevant in a digital world.
54:04 Yeah, I know you guys are big on the scenario-based evaluations that are some ways better than an RFP process depending on the scenario but here it sounds there are so many different scenarios, does it apply well to evaluating these kinds of technologies?
54:22 Yea you know, I think for any kind of vendor selection we would definitely recommend that organizations really put together some scenarios and ask the vendors that they’re evaluating to demonstrate these scenarios and so you know this may be to ask them for example, ask them to demonstrate how easy it is to embed the sale of a subscription or the sale of content into something other than a PC based web browser and to demonstrate the flexibility of the platform and an API to able to do that. So it’s absolutely critical to put together real-world scenarios not just to prove the integration points but actually to prove the day-to-day management as it relates to your pricing and campaigns the management to those subscriptions on a day-to-day basis to demonstrate how the platform allows you as the business user, as a marketer to maintain a solution.
55:31 Great, taking it up to a higher level you talked a lot of examples of digital disruption and a lot of companies that are facing this are huge and have a lot of cash so what is the problem? What technical challenges challenges are these companies facing overall to just go ahead and do this.
55:54 I think often, its not necessarily a technical challenge I think it’s more organizational and the fear of change. There is a lot of fear of disrupting the current business models that they have and the current distribution networks and partners that they have and as they embrace digital it can a disruptor so it’s not to say that technology isn’t always a barrier, it often is but I think before evaluating the technology hurdles you really need to have your organizational eggs aligned to make sure that they're you right up at the C-level and CEO and that there’s buying to make this shift to digital.
Once that's in place and you know everyone is pedaling in the same direction and you’ve able to really make significant progress at disrupting some of those siloes and boundaries within your organization then you can look at the technology and I think often for media firms and publishers really have very limited internal resources. They're publishers the reason they’re in business and their core business model is around content generation they're not experts in technology they don't have large internal corporate IT groups and so I think in this industry, in media and publishing industry's more so than other industries there is certainly a strong reliance on vendors and partners and system integration firms to help them down this digital journey.
57:38 Great. Okay so business decides they’re going to digitize, they’re going to sell direct to the consumer. Execs decide that they’re going to hand that project off to the CIO. What does this first 30 days look like? What does he got to do?
57:53 I think the CIO’s biggest challenge here is this is happening for the first time and they’re building a direct to consumer relationship for the distribution of digital content is that first of all they have to understand that they have to build and own a digital relationship with their customers and this centers really back into account management and entitlements and making sure they have a platform in place that can effectively manage that. The key to this before we start worrying about what touchpoints are we going to distribute our content through we need to make sure we have a centralized platform in place that can manage the profile, a single unified ubiquitous profile for the customer that will work across all devices and that there's a mechanism for authentication a secure mechanism to make sure we’re using technologies like OAuth and then making sure we have an entitlements engine in place that time you once we start time provisioning access to content be that free access or paid access with subscriptions that we’re able to manage that on a very secure and flexible basis going forward.
59:09 Great, okay we’ll end it there, we’re out of time but thank you very much Pete, this is very valuable content. These are the kinds of conversations we’re having everyday with our customers so I know this is going to be hugely valuable to a lot of customers in the market. Again I just want to remind everybody about the recent research report that you, The Market Overview where it gets into these concepts about the digital commerce commerce platform, what business models they serve and some of the technical features along the way and what not so with that thank you again very much Pete and have a good day everyone.