2008/04/26
2007/08/16
Make sense 廢話
「隨著環球股市資金充裕，相信恆指有力挑戰新高。」類似的評語言猶在耳，環球股市突然因信貸緊縮而大幅調整。說明資金充裕並沒有任何預測性，去支持未來股市上升的論點。原因是資金不但可以流入流出不同地區，更可以迅速膨脹萎縮。回顧股市時，在已經知道升市結果時，去找原因解釋，說資金充裕，是一定對的。但若要預測股市，因為今天資金充裕而斷定明天股市繼續升，茶怪想，是一個大膽的假設。
人總是對意料之外的事情感到不安，嘗試基於已知結果，去找一個合乎常理的解釋，併砌成一個有前因後理的「故仔」，易明易記易講，安樂地作事後孔明。一位社會學者說，人並非理性動物，而是一種試圖將事物合理化的動物。可惜，自己認知的往往比想像中少，在構思「故仔」的過程中可能忽略了很多重要的因素，更否定了機緣巧合。這種思考方式很易受所謂「光環效應」 (The Halo Effect)所誤導。
每天股市上上落落，就苦了財經記者和編輯去tell the story，例如早上電視台引述美國通訊社的報導，跌市時說原油價格上升影響消費者信心，升市時說原油價格上升，石油相關類股份帶動大市造好，而不肯接受市場的複雜性和不可預知的本質。「光環效應」就是令人莽斷，升市時，誤以為所有因素都是利好的，包括油價上升; 跌市時，以為所有因素都是利淡的，亦包括油價上升。
新書The Halo Effect解釋光環效應，作者Phil Rosenzweiga扮演devil's advocate角色，挑戰傳統企業管理學思維。如果你喜歡Built To Last和類似有關企業成功之道的書，The Halo Effect不容錯過。
人總是對意料之外的事情感到不安，嘗試基於已知結果，去找一個合乎常理的解釋，併砌成一個有前因後理的「故仔」，易明易記易講，安樂地作事後孔明。一位社會學者說，人並非理性動物，而是一種試圖將事物合理化的動物。可惜，自己認知的往往比想像中少，在構思「故仔」的過程中可能忽略了很多重要的因素，更否定了機緣巧合。這種思考方式很易受所謂「光環效應」 (The Halo Effect)所誤導。
每天股市上上落落，就苦了財經記者和編輯去tell the story，例如早上電視台引述美國通訊社的報導，跌市時說原油價格上升影響消費者信心，升市時說原油價格上升，石油相關類股份帶動大市造好，而不肯接受市場的複雜性和不可預知的本質。「光環效應」就是令人莽斷，升市時，誤以為所有因素都是利好的，包括油價上升; 跌市時，以為所有因素都是利淡的，亦包括油價上升。
新書The Halo Effect解釋光環效應，作者Phil Rosenzweiga扮演devil's advocate角色，挑戰傳統企業管理學思維。如果你喜歡Built To Last和類似有關企業成功之道的書，The Halo Effect不容錯過。
2007/08/05
電視風雲
前美國副總統戈爾新著The Assault on Reason說美國人民看電視太多，喪失了對政治的理性思考能力。美國人平均每天看電視四個半小時，深受電視畫面影響，政治人物耗用大量政治經費買廣告時段，以煽情的手法，宣傳自己的政治立場，例如布殊政府誇大美國受恐怖襲擊的風險，以及刻意地將薩達姆和阿爾蓋達組織扯上關係，以誤導國民支持美軍出兵伊拉克。
電視有別於文字媒體，其參與門檻高，播放權落在少數人--電影台和廣告客戶手中，大部份人只有看的份兒，不能加入討論。資訊流通，讓人民可以掌握正確的知識，以後經過充分討論，才投票選擇政府，正是民主有效運動的條件。戈爾說，電視作為單向的資訊傳播，危害美國民主的延續。
茶怪想，電視對政治的影響力不容低估，在政治冷淡的香港，早前電視直播特首候選人辯論，引起廣泛關注，我們對曾蔭權和梁家傑亦留下深刻的印象。但政治show高潮過後，香港電視觀眾又返回追劇集的慣性動作。
港人每天花在熒光幕前的時間相信較美國人更長，而且收視率高度集中在一個電視台，電視的影響力在香港較美國更甚。香港電視絕少提及有關政治的課題，沒有戈爾口中的政治偏袒，但茶怪想，電視影響的不是在於政治，而是在社會倫理。香港最高收視的節目，多半是有關家庭倫理的長篇劇，每晚追看的港人，不知不覺地習慣了探究別人的家事，然後加入自己主觀的道德判斷，去判別誰是忠奸。對現實世界中的桃色誹聞、遺產爭奪新聞，這些與社會上大部份人無關的事件，港人像看劇集一樣感興趣。
電視有別於文字媒體，其參與門檻高，播放權落在少數人--電影台和廣告客戶手中，大部份人只有看的份兒，不能加入討論。資訊流通，讓人民可以掌握正確的知識，以後經過充分討論，才投票選擇政府，正是民主有效運動的條件。戈爾說，電視作為單向的資訊傳播，危害美國民主的延續。
茶怪想，電視對政治的影響力不容低估，在政治冷淡的香港，早前電視直播特首候選人辯論，引起廣泛關注，我們對曾蔭權和梁家傑亦留下深刻的印象。但政治show高潮過後，香港電視觀眾又返回追劇集的慣性動作。
港人每天花在熒光幕前的時間相信較美國人更長，而且收視率高度集中在一個電視台，電視的影響力在香港較美國更甚。香港電視絕少提及有關政治的課題，沒有戈爾口中的政治偏袒，但茶怪想，電視影響的不是在於政治，而是在社會倫理。香港最高收視的節目，多半是有關家庭倫理的長篇劇，每晚追看的港人，不知不覺地習慣了探究別人的家事，然後加入自己主觀的道德判斷，去判別誰是忠奸。對現實世界中的桃色誹聞、遺產爭奪新聞，這些與社會上大部份人無關的事件，港人像看劇集一樣感興趣。
2007/06/29
他們才是上市委員?
富豪們有機會優先購入新股，毋須與散戶投資者一同抽籤以待分配合，如果該新股是熱門股，上市後藉著供不應供的關係，股價上升，認購落空的散戶唯有以較高的價錢買股，這樣，富豪們變相可以低於市價買股，做成不公平。蘋果日報今日的設計圖片真的可圈可點，以幾位富豪扮演電影「盜海豪情」的主角，是喻意他們一擲千金的豪情，還是指他們是盜賊? 茶怪無意作道德判斷，只是制度不健全，容許不公平發生。
茶怪想，這個優先認購安排最大的禍害，不是誰賺多少，而是富豪們竟然成為真正的上市審批委員，有權決定哪一家公司集資成功與否，通過港文所上市委員會評審的公司當然可以上市，但要集資成功，愈來愈需要幾位富豪們的認可，市場愈來愈依靠他們的指引，他們可能是投資有道的，但即使排除個人利益因素，單憑幾個人去決定一間公司的價值，當然不及市場集群眾智慧去決定的客觀，再者他們的買入價較一般投資者低，其實跨大了他們的投資信心。這樣，令市場無法有效反映公司的價值，亦阻礙了交易所作為有效集資渠道的功能。
2007/05/25
反轉豬肚
做生意的一般不敢得罪客人，千錯萬錯，客人永遠是對的。食肆全面禁煙，酒樓員工都違規者「盡量容忍」，得罪客人等於與自己荷包對著幹。客人拖數賴帳就更麻煩，一方面公司希望客人繼續光顧，另一方面，又怕欠款愈欠愈多。免費報紙AM730則反其道而行，今日在要聞版刊登了一則「欠廣告費啟事」，促請一廣告客戶清還欠款，還公開其股東身份。實行為客人做個「反宣傳」，這一招真絕，欠款的客戶相信只好乖乖就範，否則報紙天天來這一套，恐怕其旅行社生意做不下去。「欠廣告費啟事」會不會嚇怕其他的客人呢? 茶怪想，AM730的廣告版位天天爆滿，惡得起。該客戶不單只馬上付清欠款，還要再落另一則廣告解釋事件，以保護自己的聲譽，報紙又有生意。
2006/12/11
Do you trust newspapers?
When a real estate sales agent pursues you to buy a flat, you won't take his words as fact. So do you regard comments from car sales, cosmetic sales and stockbrokers? You treat their words as advices or opinions, if not mere selling efforts, because you know how they earn their living -- from pursuing you to open your wallets. Do you trust the contents of newspapers?
Unfortunately, most people treat what the newspaper said as factual reporting. But if you follow my previous two articles and believe in what i said, you know the newspaper publishers made their business by selling advertising, rather than selling newspapers. In other words, you, as a reader, are not their customers. Their customers are advertisers. Your purchases of the newspapers merely help them serve advertisers better. Then you won't be surprised to learn that newspaper publishers behave more like salespeople than judges. Will you still take their words as fact anymore?
Most newspapers do not tell lies. Neither do most salespeople for apartments, cars and stocks. Newspaper publishers sell your attention. To source as much quality attention as possible, newspapers must arouse your curiosity. The aim is to arouse curiosity, whether by telling the truth or lies. If the truth can arouse attention, that's perfect for readers. Unfortunately, it is always easier to find a curious lie than the curious truth although, in that case, accurate and objective reporting would be compromised.
Drawing attention is the old trick, which include photos of celebrities taken by paparazzi, bloody and violent photos of scenes of traffic accidents and suicides, and the outing of privacy of celebrities or even ordinary people.
It serves advertisers up to the moment that you decide to buy the newspaper. The more dangerous trend is that newspapers try to blur the line between editorial contents and advertising contents.
Once you buy a newspaper, you have the very own right to read the editorial contents only and disregard the ads. i think most readers have unconsciously developed the habit of skipping the ads. Obviously, even though news reports and ads share the same page, there must be straight black lines separating reports from ads. Advertisers hate those black lines.
There have been headline stories about how fat Hongkong people are. Another report said how much fatter we have become since we started waking up for the World Cup games a few weeks ago. Pages of ads from fitness and weight-losing centers followed.
Besides, there are dozens of feature stories about fashion, retirement planning, test drives, dining, travel, etc. All of these speak well for their advertisers.
The business section should be the second-most lucrative section for generating advertising revenue, after the front page.
i always suspect, without any proof, that newspapers turns bullish about the stock market when there are big initial public offerings. i also wonder how seldom newspaper cites negative comments from analysts and fund managers about the stock market. i also get the similar feeling whenever property developers launch apartment flats. The market opinions cited by newspapers are often predictably tilted toward the positive side.
Just look at the full pages of ads placed by property developers and IPO companies and you might have the same suspect as my own.
Worst, there are routine advertisers who place pages of ads everyday and could turn angry about negative reports about their corporate images. Theoretically, the editorial department and the sales department of a newspaper publisher are separate. However, the editorial department often feels the pressure from the other side of the company.
Journalism ethics mandate accurate and objective reporting. However, reporters and editors have the freedom to choose whom to interview. Experienced reporters can easily tell in advance what the stance a particular person has and what he or she will comment.
If i want to write a bullish report about certain IPO, i could call up any brokers who are offering margin financing for the subscription. If i want to trumpet the property market, i could interview any sales of property developers and agencies.
Even more dangerous are the citing of anonymous sources of information. Journalists have the duty to protect identities of their confidential sources, as it is in the public interest of sharing information. However, this rule can be easily abused, for people to distribute some information, true or fake, in favor of their own interest.
Furthermore, reporters and editors also have the freedom to choose what comments to cite from the interviewee, and what angle to present the story, after the interview. Editors choose the headlines, after the report is written.
Unnoticeably, the newspaper of your own choice would be full of advertising contents. If you are an Adam Smith, free market, advocate, and you understand that the newspaper publishers are profit-maximizing bodies, you won't have any complaint about any biased reports.
When you make decision on investment, homebuying, car buying, shopping, you are inevitably influenced by the media. The business tie between advertisers and the media would probably make you spend more money than otherwise.
An ideal newspaper business is one that has high creditability, which attracts many serious readers. The high circulation lures much advertising revenue and hence generates high profits. But the reality is that the newspapers with highest creditability are not necessarily the most profitable ones.
Nevertheless, under such a business restructure of newspaper business, the journalism ethic standards and editorial independency become very important safeguards for the dissemination of unbiased, accurate information, which makes journalists who uphold these ethical values highly respectable.
Jul 12, 2006
Copyright Quamnet
Unfortunately, most people treat what the newspaper said as factual reporting. But if you follow my previous two articles and believe in what i said, you know the newspaper publishers made their business by selling advertising, rather than selling newspapers. In other words, you, as a reader, are not their customers. Their customers are advertisers. Your purchases of the newspapers merely help them serve advertisers better. Then you won't be surprised to learn that newspaper publishers behave more like salespeople than judges. Will you still take their words as fact anymore?
Most newspapers do not tell lies. Neither do most salespeople for apartments, cars and stocks. Newspaper publishers sell your attention. To source as much quality attention as possible, newspapers must arouse your curiosity. The aim is to arouse curiosity, whether by telling the truth or lies. If the truth can arouse attention, that's perfect for readers. Unfortunately, it is always easier to find a curious lie than the curious truth although, in that case, accurate and objective reporting would be compromised.
Drawing attention is the old trick, which include photos of celebrities taken by paparazzi, bloody and violent photos of scenes of traffic accidents and suicides, and the outing of privacy of celebrities or even ordinary people.
It serves advertisers up to the moment that you decide to buy the newspaper. The more dangerous trend is that newspapers try to blur the line between editorial contents and advertising contents.
Once you buy a newspaper, you have the very own right to read the editorial contents only and disregard the ads. i think most readers have unconsciously developed the habit of skipping the ads. Obviously, even though news reports and ads share the same page, there must be straight black lines separating reports from ads. Advertisers hate those black lines.
There have been headline stories about how fat Hongkong people are. Another report said how much fatter we have become since we started waking up for the World Cup games a few weeks ago. Pages of ads from fitness and weight-losing centers followed.
Besides, there are dozens of feature stories about fashion, retirement planning, test drives, dining, travel, etc. All of these speak well for their advertisers.
The business section should be the second-most lucrative section for generating advertising revenue, after the front page.
i always suspect, without any proof, that newspapers turns bullish about the stock market when there are big initial public offerings. i also wonder how seldom newspaper cites negative comments from analysts and fund managers about the stock market. i also get the similar feeling whenever property developers launch apartment flats. The market opinions cited by newspapers are often predictably tilted toward the positive side.
Just look at the full pages of ads placed by property developers and IPO companies and you might have the same suspect as my own.
Worst, there are routine advertisers who place pages of ads everyday and could turn angry about negative reports about their corporate images. Theoretically, the editorial department and the sales department of a newspaper publisher are separate. However, the editorial department often feels the pressure from the other side of the company.
Journalism ethics mandate accurate and objective reporting. However, reporters and editors have the freedom to choose whom to interview. Experienced reporters can easily tell in advance what the stance a particular person has and what he or she will comment.
If i want to write a bullish report about certain IPO, i could call up any brokers who are offering margin financing for the subscription. If i want to trumpet the property market, i could interview any sales of property developers and agencies.
Even more dangerous are the citing of anonymous sources of information. Journalists have the duty to protect identities of their confidential sources, as it is in the public interest of sharing information. However, this rule can be easily abused, for people to distribute some information, true or fake, in favor of their own interest.
Furthermore, reporters and editors also have the freedom to choose what comments to cite from the interviewee, and what angle to present the story, after the interview. Editors choose the headlines, after the report is written.
Unnoticeably, the newspaper of your own choice would be full of advertising contents. If you are an Adam Smith, free market, advocate, and you understand that the newspaper publishers are profit-maximizing bodies, you won't have any complaint about any biased reports.
When you make decision on investment, homebuying, car buying, shopping, you are inevitably influenced by the media. The business tie between advertisers and the media would probably make you spend more money than otherwise.
An ideal newspaper business is one that has high creditability, which attracts many serious readers. The high circulation lures much advertising revenue and hence generates high profits. But the reality is that the newspapers with highest creditability are not necessarily the most profitable ones.
Nevertheless, under such a business restructure of newspaper business, the journalism ethic standards and editorial independency become very important safeguards for the dissemination of unbiased, accurate information, which makes journalists who uphold these ethical values highly respectable.
Jul 12, 2006
Copyright Quamnet
The Reading Camp in MTR
You cannot beat a rivalry company who sell goods for free, can you? Who's gonna buy from you if they could get elsewhere for free? The answers should be straightforward enough: No and no. Put it into the prospective of the newspaper industry, however, the answers would be a little tricky.
Skeptics said pay newspaper would face the fate of pay-TV Rediffusion back in the late 1960's, when free-to-air TVB started. TVB established its broadcasting business in 1967 by offering free access and beat the British-controlled, once incumbent, Rediffusion while Rediffusion charged subscription fees. The overwhelming success of TVB's "pricing strategy" forced Rediffusion to give in billing in 1973, merely six years after TVB was established. Still, its initial success on viewership, combined with its later efforts on primetime dramas, which were just as appealing, TVB has for the past few decades, sustained its prominent position in Hong Kong's TV broadcasting industry.
The history of TV broadcasting history appears to support an obvious point: Cutting price wins more customers. Cutting price to zero wins all. This hypothesis holds true to almost all business. Newspaper business is an exception. Both TV and newspaper are media business. As TVB beat its rivals by offering free viewing, why free newspapers cannot kill pay-newspapers?
The reason is obviously on the hardware. TVB does not deliver television sets into your homes. It only sends airwaves and you have to buy whatever television sets you like in order to receive the airwaves. However, newspaper publishers buy the paper materials.
The cost of setting up broadcasting stations, hiring scriptwriters and actors/actresses and producing dramas are relatively fixed, no matter how many viewers there are. The more viewers the broadcaster has, the higher advertising rates it can charge. As the additional cost for serving a new viewer is zero, it is best for the broadcaster to have as many viewers as possible.
Newspaper business is different. As it involves paper materials, by giving away newspapers for free, it fully subsidizes the readers for the paper costs. Certainly, the advertising rates rise with the readership. But it also depends very much on the quality of the readership, which would directly affect the benefit of the advertisers.
Although they often bolster circulation statistics, free newspapers do not want to waste papers. They want the papers to reach the most valuable readers for their advertisers.
Please refer to my previous article "Before you read a newspaper". It is wrong, however convenient, to think that supply chain of newspaper business, those of either free or pay-newspapers, is like this: raw information --> reporting --> editing --> printing --> wholesale --> retailing. No, it doesn't work like that.
In fact, information is plentiful. What is scarce is your attention. When i think of new cars, i immediately recall the image of the Audi A4 i saw in an ad on today's newspaper. If you ask me what today's headline news is, the first thing i recall from today's newspapers is Grand Promenade with pretty ladies and blue sky. i can't get it wrong, can i? The ad of this Shau Kei Wan property estate appeared on the entire first page of today's the Hong Kong Economic Times as well as the Hong Kong Economic Journal.
Advertisers of properties, cars, luxury watches, beauty services want your attention so much that they are willing to pay for the paper materials for you if only you glance the newspaper next morning.
However, the advertisers do not entirely trust the circulation statistics when they consider placing an ad. The advertisers also concern about the quality of the attention -- whether readers just throw away the newspaper in two minutes or they spend a considerable time and effort on it.
It is easier to identify the more serious readers for pay-newspapers. If you need to pay for it, you would probably read it. Otherwise, you won't buy it in the first place. The $6 charged for the newspaper indeed serves the purpose for the publishers to identify the more serious readers.
It is a bit tricky for free newspaper publishers to identify serious readers. But for free newspapers, everyone gets them for zero cost. Some spend a few minutes on them. The others put them on the table and forget them. A few desperately take them for the use of wrapping up their dog's wastes during nightwalk. In the meantime, free newspaper publishers waste their paper costs and advertisers waste their marketing budgets.
How about a fair deal? Free newspapers are as usual, but those who take them would have an obligation to stay in a designated area, a "reading camp", for a considerable period of time without doing anything else. Strangers are all around you, and you are unlikely to find a friend to chat and kill time. You are virtually "invited" to read in this "reading camp".
This "reading camp" idea sounds very odd, something could possibly happen only in the former Soviet Union or Nazi Germany. No, it didn't happen then. Instead, it happens to you every morning during the ride to work by the mass transit railway.
MTR train is an ideal "reading camp". i noticed that there are more people sleeping in bus than in MTR trains. The seats in MTR trains are not comfortable enough. The light is bright in MTR trains, keeping you from asleep and facilitating you to read. The train runs steady enough. There is no beautiful landscape scene but black tunnel walls outside the windows, sparing your eyes. It is just impossible to listen to radio as radio frequencies are blocked under the ground. Food and beverages are not allowed in the train.
Under such an environment, you are all set to get your head down on a newspaper. And you get trapped there until arriving at the destination.
It would be too creepy to open a board-sheet-sized newspaper inside these crowded moving capsules. Therefore, publishers tailor their newspapers into tabloid sizes to fit the tiny space among commuters.
Therefore, those people who grasp free newspapers and rush toward the platforms are very likely to be more serious newspaper readers. They immediately get their certification ISL 9000, ("I Shall Look"), as qualified suppliers of attention, each eligible for the waiver of the $6 payment.
Free newspaper publishers seem to have discovered these "reading camps" much earlier than i did. Metro has run a successful business by signing a contract with the MTR Corporate for the rights to distribute their newspapers inside each of the subway stations. am730 and Headline Daily send their distribution workers near many entrances of subway stations.
Will free newspaper kill all the pay-newspapers just because of their zero pricing? My answer is no because free newspapers will waste a lot of paper if they target readers who do not travel by MTR. The few coins quite affordable by many readers will continue to work as an old trick to find the right readers.
Next time, i will touch on the role the newspaper contents play.
Jun 6, 2006
Copyright Quamnet
Skeptics said pay newspaper would face the fate of pay-TV Rediffusion back in the late 1960's, when free-to-air TVB started. TVB established its broadcasting business in 1967 by offering free access and beat the British-controlled, once incumbent, Rediffusion while Rediffusion charged subscription fees. The overwhelming success of TVB's "pricing strategy" forced Rediffusion to give in billing in 1973, merely six years after TVB was established. Still, its initial success on viewership, combined with its later efforts on primetime dramas, which were just as appealing, TVB has for the past few decades, sustained its prominent position in Hong Kong's TV broadcasting industry.
The history of TV broadcasting history appears to support an obvious point: Cutting price wins more customers. Cutting price to zero wins all. This hypothesis holds true to almost all business. Newspaper business is an exception. Both TV and newspaper are media business. As TVB beat its rivals by offering free viewing, why free newspapers cannot kill pay-newspapers?
The reason is obviously on the hardware. TVB does not deliver television sets into your homes. It only sends airwaves and you have to buy whatever television sets you like in order to receive the airwaves. However, newspaper publishers buy the paper materials.
The cost of setting up broadcasting stations, hiring scriptwriters and actors/actresses and producing dramas are relatively fixed, no matter how many viewers there are. The more viewers the broadcaster has, the higher advertising rates it can charge. As the additional cost for serving a new viewer is zero, it is best for the broadcaster to have as many viewers as possible.
Newspaper business is different. As it involves paper materials, by giving away newspapers for free, it fully subsidizes the readers for the paper costs. Certainly, the advertising rates rise with the readership. But it also depends very much on the quality of the readership, which would directly affect the benefit of the advertisers.
Although they often bolster circulation statistics, free newspapers do not want to waste papers. They want the papers to reach the most valuable readers for their advertisers.
Please refer to my previous article "Before you read a newspaper". It is wrong, however convenient, to think that supply chain of newspaper business, those of either free or pay-newspapers, is like this: raw information --> reporting --> editing --> printing --> wholesale --> retailing. No, it doesn't work like that.
In fact, information is plentiful. What is scarce is your attention. When i think of new cars, i immediately recall the image of the Audi A4 i saw in an ad on today's newspaper. If you ask me what today's headline news is, the first thing i recall from today's newspapers is Grand Promenade with pretty ladies and blue sky. i can't get it wrong, can i? The ad of this Shau Kei Wan property estate appeared on the entire first page of today's the Hong Kong Economic Times as well as the Hong Kong Economic Journal.
Advertisers of properties, cars, luxury watches, beauty services want your attention so much that they are willing to pay for the paper materials for you if only you glance the newspaper next morning.
However, the advertisers do not entirely trust the circulation statistics when they consider placing an ad. The advertisers also concern about the quality of the attention -- whether readers just throw away the newspaper in two minutes or they spend a considerable time and effort on it.
It is easier to identify the more serious readers for pay-newspapers. If you need to pay for it, you would probably read it. Otherwise, you won't buy it in the first place. The $6 charged for the newspaper indeed serves the purpose for the publishers to identify the more serious readers.
It is a bit tricky for free newspaper publishers to identify serious readers. But for free newspapers, everyone gets them for zero cost. Some spend a few minutes on them. The others put them on the table and forget them. A few desperately take them for the use of wrapping up their dog's wastes during nightwalk. In the meantime, free newspaper publishers waste their paper costs and advertisers waste their marketing budgets.
How about a fair deal? Free newspapers are as usual, but those who take them would have an obligation to stay in a designated area, a "reading camp", for a considerable period of time without doing anything else. Strangers are all around you, and you are unlikely to find a friend to chat and kill time. You are virtually "invited" to read in this "reading camp".
This "reading camp" idea sounds very odd, something could possibly happen only in the former Soviet Union or Nazi Germany. No, it didn't happen then. Instead, it happens to you every morning during the ride to work by the mass transit railway.
MTR train is an ideal "reading camp". i noticed that there are more people sleeping in bus than in MTR trains. The seats in MTR trains are not comfortable enough. The light is bright in MTR trains, keeping you from asleep and facilitating you to read. The train runs steady enough. There is no beautiful landscape scene but black tunnel walls outside the windows, sparing your eyes. It is just impossible to listen to radio as radio frequencies are blocked under the ground. Food and beverages are not allowed in the train.
Under such an environment, you are all set to get your head down on a newspaper. And you get trapped there until arriving at the destination.
It would be too creepy to open a board-sheet-sized newspaper inside these crowded moving capsules. Therefore, publishers tailor their newspapers into tabloid sizes to fit the tiny space among commuters.
Therefore, those people who grasp free newspapers and rush toward the platforms are very likely to be more serious newspaper readers. They immediately get their certification ISL 9000, ("I Shall Look"), as qualified suppliers of attention, each eligible for the waiver of the $6 payment.
Free newspaper publishers seem to have discovered these "reading camps" much earlier than i did. Metro has run a successful business by signing a contract with the MTR Corporate for the rights to distribute their newspapers inside each of the subway stations. am730 and Headline Daily send their distribution workers near many entrances of subway stations.
Will free newspaper kill all the pay-newspapers just because of their zero pricing? My answer is no because free newspapers will waste a lot of paper if they target readers who do not travel by MTR. The few coins quite affordable by many readers will continue to work as an old trick to find the right readers.
Next time, i will touch on the role the newspaper contents play.
Jun 6, 2006
Copyright Quamnet
Before you read a newspaper
i heard a relative bought 10 copies of the same newspaper one day, bringing down a dozen of trees, and never read a single news headline of those papers. You might have recently noticed, in any usual morning without any exciting breaking news happening in town, people tightly queue up in front of newsstands. They grasp the bulking papers and cut up pieces with scissors they have brought, and in the next minute, they throw the papers into trashes.
What they really go for are shopping coupons. The face value of those coupons far exceeds the price of the newspaper. For instance, one day, Sun Daily which is sold for HK$4 gave out coupons worth HK$20. You earn HK$16 for each copy purchased. If you bought 10 copies, you would sweep a profit of HK$160. That's why people are so desperate to buy newspapers that they go down the street at six o'clock in the morning.
On the surface, the phenomenon contrasts with the economic wisdom that "there isn't such a thing as free lunch".
Some newspapers, such as Metro and am730, are free of charge. Moreover, those attached with valuable coupons, such as Sun Daily, are actually cheaper than free. What went wrong?
Meanwhile, the free newspapers have generated a new kind of jobs-- the front-end newspaper collectors. i am not talking about those workers responsible for distributing free newspapers in the street. It is the reverse. There are some people asking you to pass the newspapers to them, if you have already finished reading them. One day, i was wondering why a middle-aged woman stood in the middle of the pedestrian and said good morning to everyone passing by. Later, i figured out that she is collecting finished newspapers. There used to be newspaper collectors only who collect large bulks of newspapers left in the recycle bins. But this new type of jobs is different in the way that the workers actively remind, or pursue to a certain degree, people to give away their papers.
These workers are not wearing uniforms. They are not hired by the newspaper publishers. They are not offering value-added services to help you conveniently unload your unwanted stuffs. They want your papers because the papers can be sold for money.
Papers are costly. Readers of free newspapers get papers free of charge. Even for paid newspapers, the wholesale price of newspaper cannot fully cover the cost of paper materials used, let alone the heavy overhead of the editorial departments. What a favorable deal for readers, as a consumer?
You get it all wrong if you believe what you are doing every morning is what it appears to be. You buy a breakfast and have it. Fine, you are a consumer of a meal. By handing the coins to the newsstands, you are not buying newspapers. You and all the other newspaper readers are not consumers at all.
The supply chain appears to be: raw information -> reporting -> editing -> printing -> wholesale -> retailing. No, the supply chain is actually the reverse of what it appears to be. You are the supplier -- the supplier of attention, eye-balls; the supplier of brain-space, memories, perceptions. Newspaper publishers actually work as the collectors, the aggregators of attentions and all the stuff. Their business is to sell these "goods" to advertisers including property developers, supermarkets, warrant issuers, watch companies, apparel retailers, etc.
In fact, attention is valuable goods for advertisers, and it sells. This is the real part of the whole business. Forget about the few coins you hand out. Property developers budget millions of dollars in marketing campaigns, including placing ads in the front pages of newspapers. They are buying your attention.
People are most alert in the morning, best time for advertisers to get their notices. For instance, you hear a song from the radio early in the morning, and the melody will echoe in mind for the whole day. Every morning you grasp your favorite newspaper, you sell your valuable attention to it.
Advertising is the vital income source for newspaper publishing businesses. For profitable publishers, the adversiting revenue more than covers the paper costs and the salary expenses for reporters and editors. That's why some publishers do not care giving out newspapers for free, and some others publish them "cheaper than free".
Well, the next question is: "If my attention is so valuable, why do i still have to pay for some newspapers? The cash flow ought to be the other way around. The newspaper publishers should pay me for reading the newspapers, instead."
The easy answer it: "You pay for the contents, the breaking news, the investigative feature stories, the tips for jockey racing, soccer games and stock punting, as well as your favorite columns and the editorial."
i pay my respect to journalists who produce great contents. Good articles are invaluable. Sometimes, i come across wonderful articles which help me understand what is happening around me and guide my thoughts. How do you value this kind of articles? A pint of beer is sold for HK$40 in pubs. A good article should be worth as much as a happy hour with a buddy. Therefore, i am willing to buy a newspaper which carries a good article for HK$40.
But the reality is there is not any newspaper publisher making sustainable profits without advertising income. Even those newspapers with the best quality cannot depend solely on selling contents.
Therefore, you do not pay for the content. Back to the question why i have to pay for newspapers if i am indeed the supplier, i imagine a newspaper publisher would say: "Thank you for your $6, dear reader. Well, the advertising fees have taken care of our production expenses for the contents. The $6 you paid is for us to identify you as one of the serious suppliers of attention."
To boost advertising income, a publisher must boost the circulation of its newspaper. The easy way to boost circulation is to reduce the newsstand price. But that won't serve the advertising the best because it won't help them access to the best quality of attention. In an extreme scenario, if a publisher attached a HK$100 banknote to each copy of its newspaper, it must be able to sell as many newspapers as it wishes. Everyone, including me, will run to the nearest newsstand by dawn and sweep away as many copies as they can.
Yes, the circulation must be spectacular. But will the advertisers be happy to see that? No, they will not because they won't get more attention to their ads than before. Most probably, they would get less because, by the time the serious readers walk down to the newsstands, the $100-giving newspaper would have already been sold out.
Therefore, by handing out $6, you are acquiring a certification -- ISL 9000 required as an approved supplier of attention. While ISO 9000 is an industry standard for quality control, ISL 9000, which, out of my imagination, stands for "I Shall Look", would be a qualitystandard for the "attention" industry.
Still, there are unanswered questions: "Why don't free newspapers require ISL 9000?" "How does contents play their roles in this attention industry?" i will continue next time.
May 16, 2006
Copyright Quamnet
What they really go for are shopping coupons. The face value of those coupons far exceeds the price of the newspaper. For instance, one day, Sun Daily which is sold for HK$4 gave out coupons worth HK$20. You earn HK$16 for each copy purchased. If you bought 10 copies, you would sweep a profit of HK$160. That's why people are so desperate to buy newspapers that they go down the street at six o'clock in the morning.
On the surface, the phenomenon contrasts with the economic wisdom that "there isn't such a thing as free lunch".
Some newspapers, such as Metro and am730, are free of charge. Moreover, those attached with valuable coupons, such as Sun Daily, are actually cheaper than free. What went wrong?
Meanwhile, the free newspapers have generated a new kind of jobs-- the front-end newspaper collectors. i am not talking about those workers responsible for distributing free newspapers in the street. It is the reverse. There are some people asking you to pass the newspapers to them, if you have already finished reading them. One day, i was wondering why a middle-aged woman stood in the middle of the pedestrian and said good morning to everyone passing by. Later, i figured out that she is collecting finished newspapers. There used to be newspaper collectors only who collect large bulks of newspapers left in the recycle bins. But this new type of jobs is different in the way that the workers actively remind, or pursue to a certain degree, people to give away their papers.
These workers are not wearing uniforms. They are not hired by the newspaper publishers. They are not offering value-added services to help you conveniently unload your unwanted stuffs. They want your papers because the papers can be sold for money.
Papers are costly. Readers of free newspapers get papers free of charge. Even for paid newspapers, the wholesale price of newspaper cannot fully cover the cost of paper materials used, let alone the heavy overhead of the editorial departments. What a favorable deal for readers, as a consumer?
You get it all wrong if you believe what you are doing every morning is what it appears to be. You buy a breakfast and have it. Fine, you are a consumer of a meal. By handing the coins to the newsstands, you are not buying newspapers. You and all the other newspaper readers are not consumers at all.
The supply chain appears to be: raw information -> reporting -> editing -> printing -> wholesale -> retailing. No, the supply chain is actually the reverse of what it appears to be. You are the supplier -- the supplier of attention, eye-balls; the supplier of brain-space, memories, perceptions. Newspaper publishers actually work as the collectors, the aggregators of attentions and all the stuff. Their business is to sell these "goods" to advertisers including property developers, supermarkets, warrant issuers, watch companies, apparel retailers, etc.
In fact, attention is valuable goods for advertisers, and it sells. This is the real part of the whole business. Forget about the few coins you hand out. Property developers budget millions of dollars in marketing campaigns, including placing ads in the front pages of newspapers. They are buying your attention.
People are most alert in the morning, best time for advertisers to get their notices. For instance, you hear a song from the radio early in the morning, and the melody will echoe in mind for the whole day. Every morning you grasp your favorite newspaper, you sell your valuable attention to it.
Advertising is the vital income source for newspaper publishing businesses. For profitable publishers, the adversiting revenue more than covers the paper costs and the salary expenses for reporters and editors. That's why some publishers do not care giving out newspapers for free, and some others publish them "cheaper than free".
Well, the next question is: "If my attention is so valuable, why do i still have to pay for some newspapers? The cash flow ought to be the other way around. The newspaper publishers should pay me for reading the newspapers, instead."
The easy answer it: "You pay for the contents, the breaking news, the investigative feature stories, the tips for jockey racing, soccer games and stock punting, as well as your favorite columns and the editorial."
i pay my respect to journalists who produce great contents. Good articles are invaluable. Sometimes, i come across wonderful articles which help me understand what is happening around me and guide my thoughts. How do you value this kind of articles? A pint of beer is sold for HK$40 in pubs. A good article should be worth as much as a happy hour with a buddy. Therefore, i am willing to buy a newspaper which carries a good article for HK$40.
But the reality is there is not any newspaper publisher making sustainable profits without advertising income. Even those newspapers with the best quality cannot depend solely on selling contents.
Therefore, you do not pay for the content. Back to the question why i have to pay for newspapers if i am indeed the supplier, i imagine a newspaper publisher would say: "Thank you for your $6, dear reader. Well, the advertising fees have taken care of our production expenses for the contents. The $6 you paid is for us to identify you as one of the serious suppliers of attention."
To boost advertising income, a publisher must boost the circulation of its newspaper. The easy way to boost circulation is to reduce the newsstand price. But that won't serve the advertising the best because it won't help them access to the best quality of attention. In an extreme scenario, if a publisher attached a HK$100 banknote to each copy of its newspaper, it must be able to sell as many newspapers as it wishes. Everyone, including me, will run to the nearest newsstand by dawn and sweep away as many copies as they can.
Yes, the circulation must be spectacular. But will the advertisers be happy to see that? No, they will not because they won't get more attention to their ads than before. Most probably, they would get less because, by the time the serious readers walk down to the newsstands, the $100-giving newspaper would have already been sold out.
Therefore, by handing out $6, you are acquiring a certification -- ISL 9000 required as an approved supplier of attention. While ISO 9000 is an industry standard for quality control, ISL 9000, which, out of my imagination, stands for "I Shall Look", would be a qualitystandard for the "attention" industry.
Still, there are unanswered questions: "Why don't free newspapers require ISL 9000?" "How does contents play their roles in this attention industry?" i will continue next time.
May 16, 2006
Copyright Quamnet
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