Neilsen says New Zealanders buy almost five million hard copy books a year. Meanwhile the Book Depository says out of the 160 countries it sell to, New Zealand is second only to Australia. We are ahead of the UK and the US.
These numbers come from a media release put out by the Book Depository. This may not seem remarkable, but the Book Depository is owned by Amazon.
The shopping giant may have started out as an online bookshop, but it has poured millions into developing the e-book market. Amazon still sells its own Kindle brand of ebook reader; the most popular standalone reader.
Book shelves still growing
In other words, the world’s largest retailer of ebooks is happy to let everyone know that hard copy is still more popular with readers.
Scratch the surface and it seems the e-book market topped out about a decade ago. It hasn’t grown significantly since then. Meanwhile hard copy book sales continue to climb.
Neilsen’s New Zealand specific market research found 80 percent of people in this country only read hard copy books. A mere five percent only read digital books. The rest read a mix of the two.
Books are still popular online. Almost 600,000 New Zealanders bought a book from a website in the last year.
Book Depository says orders to NZ have climbed 45 percent in the past three years. Although this might be because buyers are switching from other sources both online and offline. Still 45 percent represents significant growth, remember e-book sales are static.
A third of the books sold here by the Book Depository are for children. So the next generation is already invested in print rather than digital.
Part of this could be parents wanting to prise kids away from digital devices for a few moments, but there’s also more pleasure in reading a hard copy book together than sharing a screen.
Books expensive in New Zealand
I suspect one reason New Zealanders are enthusiastic online book buyers is because prices are far higher than elsewhere in the world.
This is particularly true for popular fiction books which are often discounted in large stores overseas. In some cases we pay more than twice the price paid by UK or US readers.
There are a few crumbs of comfort in this for local bookstores. While huge sales are going to offline online booksellers, the fact that readers continue to buy hard copy books in such large numbers means there is still a worthwhile market here. It’s doubtful that books will die in out lifetimes. Whether they can compete on price is another matter.
It’s no coincidence Sky TV reported a $240 million loss days after Spark won the Premier League Football rights. A thread connects the two news stories.
Spark is New Zealand’s rising media power. Sky is still number one, but fading.
You can’t blame Sky’s problems on Spark’s football win. The traditional pay-TV company hasn’t owned Premier League rights for five years now. Yet the move underscores the shift from old school television technology to streaming media.
Football key to sport portfolio
The English Premier League joins Spark’s growing TV portfolio.
The telco, yes Spark is still mainly a telco, also has the local rights to Manchester United TV. On the team’s current form that may not be much to write home about. Even so it’s a sound investment. United is the best know and most followed English club outside of the UK.
Spark says it plans to wrap the two football deals into a new standalone sports media business. Spark already has the rights to next year’s Rugby World Cup.
The company has hinted there is still more to come. Sky TV doesn’t have the clout, or the money, it once had. So Spark has an opportunity to prise other popular sports away from the incumbent. If nothing else, New Zealand Netball and Cricket must be possible candidates. And perhaps various motor sports.
Sky FanPass
This is not great news for Sky. But there are chinks of light among the dark. The pay TV broadcaster cut a deal allowing Spark to resell its FanPass service.
Fanpass is now another small, but nicely done plank in Spark’s sports media portfolio. It also means Sky gets to tap a market that it has previously struggled to reach.
Let’s not forget LightBox. Spark’s streaming TV operation may be a pale imitation of Netflix, but it’s a useful value-add for Spark’s broadband business.
Another useful add-on for Spark is that it offers cut-price Netflix to customers signing for long broadband contracts.
Sticky TV
All-in-all Spark already has enough media properties to keep viewers glued to its broadband services. And that’s a critical part of the company’s TV-over-internet strategy: customers who buy a bundle of services are less likely to decamp to a rival broadband service.
Premier League football isn’t New Zealand’s most popular sporting code by a long shot. However, it has particular value for Spark. First, it tends to be watched by relatively well-heeled fans who are willing to pay a couple of hundred dollars or so for a year’s worth of games.
Second, Premier League fans are well used to watching games using streaming. It was the first major sporting property to be picked up by a digital organisation. That was Coliseum Sports Media which had the rights from 2013 to 2016. Spark works in a partnership with Coliseum before BeIn Sport won the rights.
Overseas moves
In a media statement Spark managing director Simon Moutter say his company developed its plan after looking at overseas sports content media moves.
He says: “We’ve carefully considered the different models and will be looking to replicate the good things other businesses have done and learn from the challenges they’ve had — all the while thinking carefully about how sports media fits in a New Zealand context”.
Spark says it will launch its own sport ‘platform’ early in 2019 and will annouce pricing and package deals closer to the launch.
Latch
Spark Sport head Spark hired Jeff Latch to head the Spark Sport operation. He will oversee buying more content rights and will take charge of the ‘platform’. Latch was previously director of content at TVNZ. In that role he was in charge of buying content, including sport. Spark is partnering with TVNZ for the Rugby World Cup project.
Latch says Spark will work with a specialist sports-streaming company. He says the platform used will be different from the one used by Spark’s Lightbox service.
He also said Spark intends its sports media operation to work as a standalone business and not be used merely as a way to woo broadband or mobile customers. To a degree this is what Spark has done with Lightbox.
Netflix close to two million NZ viewers
Had Sky merged with Vodafone it may have fought off the challenge from Spark, although that’s far from certain. Yet nothing could protect Sky from its other threat: Netflix.
Roy Morgan research says Netflix now has nearly two million viewers in New Zealand. The service saw subscription numbers grow 35 percent in the last year to reach 1.9 million viewers. The research company goes on to report:
“Now over three million New Zealanders have access to some form of Pay or Subscription TV, up 13.9 percent on a year ago. The growth in Pay and Subscription TV is being driven by the likes of Netflix along with a suite of rival streaming services including Lightbox, Sky TV’s Neon and Amazon Prime Video.”
Viewer numbers are growing slower for Sky TV’s Neon service. It was up 1.7 percent in the year to reach a total of 1.6 million viewers. Lightbox is the second most popular video on demand servide with 830,000 users. That’s up 43 percent on last year, growing faster than Netflix. Vodafone TV has 295,000.
Ben Brooks gets close to the heart of the problem with pay walls when he writes Subscription Hell. It’s hard to make money from pay walls.
The only online sites that do well are those like New Zealand’s National Business Review or The Economist. Both serve well-heeled audiences with unique, quality content readers can’t get elsewhere.
Brooks makes two interesting points.
First, differentiation. Brooks is thinking about podcasting, but it applies to all online media. In essence he says there are thousands of undifferentiated podcasts chasing the same audience.
…but will they pay?
The implication that no-one will pay to listen to one of the podcasts when there are dozens of free alternatives. You could say the same about most online media. This, in part, does not apply to pay wall successes like the NBR and The Economist. Their audiences don’t have obvious alternatives.
The other point is subtle. Brooks makes the connection between people paying for apps and buying pay wall subscriptions.
On the surface these are two quite distinct markets. And yet, recently I was thinking about exactly this concept from the opposite point of view. I have a number of subscriptions to pay each month. Some are for apps or online services. Others are for, it’s not the best word to use, but let’s go with it: content.
Pay wall, subscription software: two aspects of the same thing
In my budgeting, I see the two as aspects of the same thing. I allow myself so many dollars a month for subscriptions. It’s a single pool of money to cover things like cloud storage, online music, movie downloads, pay walls, apps and services. What isn’t spent on apps is available for media. What isn’t spent on online media can be spent on apps.
A decade ago the budget was zero. It’s not zero today. While it isn’t a huge amount of money, it’s about the same as I spend on coffee. It may grow larger in the future.
The issue is, consciously or not, people only budget so much money for subscriptions. I have a limited pool of funds. So does everyone else. The world has a limited pool of funds for subscriptions. On a world scale it is huge and still growing. Even so, there is not enough to go around for everyone who would like to earn money selling pay wall subscriptions or apps. Too many sellers, too few buyers.
And there’s the problem. It’s not hopeless. Services like Press Patron (see the red button at the foot of this page) offer a way out. People can choose to set their own amount to pay. If you go back to my budget approach, if I don’t buy software one month, I can flip a few bucks into someone’s Press Patron.
But it’s difficult. The market for content pay walls or subscription software is not infinite.
Put aside for one moment the recent headlines. Forget about Facebook boss Mark Zuckerberg facing politicians in Washington. And park everything you’ve heard about Cambridge Analytica.
There are problems with the way most media organisations report Facebook. It’s something no-one ever talks about.
The first problem is that media organisations are not disinterested external observers.
Media company
You could argue that Facebook is the world’s most powerful media company. You could make a case that it is more powerful than any other media company in history.
Sure, Facebook insists it is not a media company. But that idea is ridiculous. It publishes material and extracts revenue from advertising. That’s a classic description of how the media world has operated for over a century.
Even if you don’t accept Facebook is a media company, it is not separate from the media industry.
The site can channel huge numbers of readers to, say, an online news site. The fact that it doesn’t do a good job of this is neither here or there.
That said, some media organisations and their employees feel so desperate that they may put aside traditional media ethics when it comes to scrutinising the hand that they hope will feed them.
Never mind that Facebook is responsible for the mess those media companies are in.
The second problem with the way the media covers Facebook is that most media organisations see it as a technology company. They usually assign specialist technology writers to cover it. A lot of the time, they relegate coverage to their technology ghetto pages.
While Facebook uses technology, so does everyone else. It’s no more a technology company than, say, the newspaper publisher in your city. Sure, there are apps. But most newspapers also have apps. It uses a customer database. So does almost every other business.
There’s very little that is unique, clever or inherently technical about Facebook. The one thing it has going is a powerful algorithm for connecting people to each other, figuring out their preferences and then packaging them so advertisers can target them with, what the company would claim is, pin-point accuracy. It’s big, but in technical terms it is trivial.
Technology
Compared to Apple, Microsoft, Google and Amazon, Facebook is not a technology company. You could describe it as a technology-enabled business. Now go and find any global enterprise that isn’t.
The problem with this is that media organisations frame Facebook as a technology story. They categorise it in a technology ghetto. They assign the story to journalists who might be skilled at decrypting an annual report from, say, Apple or interpreting the latest software from Google.
And, let’s be honest here, most of the time they do not give reporters the time or resources needed to unpick the story behind the story. After all most stories about Facebook don’t seem worth much more than the once-over-lightly treatment.
All of this explains why the media, indeed most of the world, was blindsided by revelations about what goes on behind the scenes at Facebook. It’s not so much the company was operating in stealth mode, at least no more than any other large corporation, it’s that there’s not enough outside scrutiny.
While there are many things wrong with Facebook, matters came to a head when unfriendly forces meddled in both the 2016 US presidential election and the UK Brexit referendum.
As part of the clean-up, Facebook will change the way its News Feed works.
The News Feed is a scrolling list of updates that the Facebook app and website show on the main page. Each News Feed is tailored to the person logged-in to the Facebook account.
News Feed priority
Facebook’s News Feed prioritises items based on the user’s previous activity, their likes and interests. It also serves up news stories from external publisher using similar algorithms to select items Facebook thinks will interest the user.
Zuckerberg says news will downgraded after the change. Instead Facebook will show posts that it considers are more ‘meaningful’. That means Facebook users will see more posts and photos from friends and family members, fewer links to news stories and videos.
Facebook uses the term ‘meaningful’ to mean users will see more items they will interact with. That means writing a response, clicking on links or hitting the ‘like’ button. This is in contrast to the way users tend to passively scroll through news stories and video links.
Users will still get news items in their News Feed. Instead of selecting items based on interests, Facebook will serve up the stories that have more comments or have generated a lot of chatter. This could mean more gossip and sensational stories, fewer hard news items. Although that remains to be seen.
In some ways a positive move
Despite the possibility of poor quality news, giving users material less likely to depress them seems like a positive move. And brave. Zuckerberg admits the change could be hurt Facebook’s business in the short term. Shareholders agree. Facebook shares dropped 4.5 percent after Zuckerberg’s announcement.
If that’s the case, why is Facebook doing this? Zuckerberg and his team have always been aggressive. They run a clear Facebook-first strategy where they only make choices that are good for Facebook shareholders. This move is a long-term play with complex objectives.
Zuckerberg quotes internal company research that shows social networks can often make people feel bad about themselves. There are many reasons for this, one is that other users post carefully edited versions of their news tweaked to make their lives look as exciting or as perfect as possible. Too much Facebook can leave people feeling envious.
Facebook’s own research says that those who get deeper involved with their News Feed have better than normal personal well-being. Which implies it is the news part of the News Feed, that is the stories from journalists and others, along with the sugar rush diet of snackable video material that depresses users.
While cutting down on the bad feed items and increasing the good ones makes perfect sense, there is a problem. It means people will spend less time on Facebook. That means they will see less advertising which, in turn, will mean less revenue for the social media giant.
We can take it as read that Zuckerberg and his senior officers have workshopped how this will play out. The drop in time spent may not be huge.
It’s possible that having happy engaged readers means the advertising is more effective and that Facebook can increase rates. At this point it is worth mentioning that Facebook’s revenue per ad served has been falling for some time. Arresting that fall is important.
Flying below regulatory radar
There’s another angle to the change. Facebook has begun to attract attention from governments and regulators who have many concerns about its power. Acting now may see some of the possible regulatory action before it happens. There’s even a possibility some regulators have had a quite word in Facebook’s ear suggesting this kind of move might be wise.
Facebook’s move looks like a positive step for its two billion or so users. It may even decrease the total amount of unhappiness in the world. Yet that won’t be the case in news organisations and with publishers who depend on Facebook to funnel readers to news websites. They’ll get less traffic than before.
Publishers are understandably angry. In effect those who have used Facebook as a distribution network have been victims of a giant bait and switch con job. Facebook wooed published a decade or so ago with the promise of delivering traffic. The argument for publishers was they may as well fish where the shoals were swimming. Pulling the plug on them is an act of bad faith.
Yet Facebook has steadily dropped the amount of external news material in its News Feed in recent years. The latest move is only a speeded up version of what has already been happening.
Many publishers learned long ago that stories about the colour of a dress or pictures of cute animals were more likely to get Facebook traffic than an in-depth investigation into changes in taxation or other heavy-duty reporting.
The other aspect of Facebook changes is that it will be harder for companies and public relations professionals to get News Feed attention. That will force them to spend more on advertising if they want a Facebook audience.
Facebook is not now and never has been the publisher’s friend. Yet it makes sense to keep customers, literally, happy. In the long term that’s likely to pay dividends. In the meantime, what’s left of the traditional news media will need to find another path out of the internet maze.
Facebook will drop traditional news stories from the News Feed. Mark Zuckerberg says