Asia Sentinel

What struck me most about Bhutan’s experiments with accelerated democracy and plural media is the romanticized idealism behind both. There is so much hope inspired by so much innocence.

Managers - Only 10% effective anywhere?

All government Information departments, media owners and editors declare their commitment to “inform, educate and entertain” citizens. While all other varieties and formats of media content are designed and targeted for consumer interest, NEWS is not.

Old business model was license to print money Newspapers rode the wave of annual demographic growth, rising literacy and consumer affluence for 200 years. Since WWII the explosion of advertising in the USA made the metropolitan newspapers rely heavily on advertisers for revenues. That was replicated in other developed and developing markets. Publishers discovered that under-pricing copy sales boosted circulation growth and magnified advertising income.

Print advertising continues to dominate revenue share at most newspapers. There is little annual growth in mainstay print revenues while digital revenues (*averaging 8-10% at most press currently*) are growing robustly across other promotion channels. Janet L Robinson, President & CEO of the New York Times Co. articulated the scramble to find new revenue sources recently: *"The rethinking of our business models has been driven by the desire to achieve additional revenue diversity to make us less susceptible to the inevitable economic cycles."* Robinson seems unduly bothered by the boom-bust paradigm when print, in reality, is being disconnected steadily from advertising budgets irrespective of economic cycle. One silver lining for *NYT* is the successful paid conversion of the free digital content. Departing digital chief, Martin Nisenholz (*retiring Dec 2011*) added revenue from a loyal audience without loss of visitors. Nisenholz created a metered paywall which kicks in after a certain level of access frequency. It does not stop daily accesses. It does not inconvenience news skimmers. L Gordon Crovitz, former publisher of the *Wall Street Journal* and founder of the Journalism Online Press+ Service explains why: *"Until recently, technology was limited. Publishers had to choose either a paywall where everyone must pay, or be fully free. New technology lets publishers charge only their most engaged readers who value unlimited access."* * * Crovitz makes the point that the marketplace for news is very crowded and *"no publication has a monogamous relationship with its readers."* A total block on unpaid access will only destroy a newspaper's digital profile and future. *Cities - where newspapers prospered (till now)* Metropolitan cities have anchored profitable newspapers for two centuries. Cities are magnets that aggregate affluent consumers. Marketers invested heavily in advertising to city residents. Metro newspapers rode the gravy train. That formula has come apart globally, undone by next generation 'digital natives' fully on Internet and mobile channels. The urban wealth is still in the city but marketers by-pass newspapers to connect these digital consumers. Newspaper single-copy sales have tanked. Advertisers are migrating to new platforms where the youth congregate. The deflating twin ballasts of affluent readers and big-budget advertisers, sink top and bottom lines of metro newspapers. There is little chicanery left to play. Consumer marketing is also shifting to semi-urban communities for expansion beyond the overworked metro markets. This trend is most pronounced in India, The Philippines and Indonesia. As metropolitan newspapers stretch to explore growth in semi-urban space, they discover their product, cover price, overheads and city habits inappropriate for ex-metro markets. Community newspapers operate on an entirely different logic of local relationships, neighbourhood content, meagre advertising revenues, low-cost production and tight geographic distribution. Community press has to live on the surplus from cover-price - the opposite of metro strategy which is to under-price product to encourage copy sales - to justify premium advertising rates. Advertising revenues used to make up the cover-price deficit comfortably. City newspapers need radical re-structuring to be able to survive in community newspaper habitats. Successful transitioning from metro to community space is rare. Community press has to build from the ground up, in the right context of service and relationships. *Every trick to pump up the numbers* Annual circulation growth was the lever for ratcheting advertising rates. It was a simple formula: declare an annual percentage increase in copy sales and jump advertising rates. Where you can get away with it, add on a percentage for annual cost inflation too! A small increase in rates translates to magnified gross revenues and profits. What a happy way to run a business! Especially as the annual demographic readership increase came so predictably. Things have not been so easy since the Internet disrupted information flows from the mid-90s. Consumers could receive real-time news alerts free through e-mail portals and mobile service providers. Smartphones and free Internet search connected content to consumers, independent of newspapers. The newspaper industry responded with cut-price subscriptions and bulk sales in cahoots with complicit distribution agents, to game circulation audits. It also dumped discounted bulk on schools, clubs, airlines and hotels, to camouflage the hollowing-out of paid readership. The fakery could not be sustained. Advertisers eventually twigged that the print channel had stopped growing. Marketers instinctively bail out of any channel in terminal decline. And that is exactly what they are doing in a measured way, as they experiment with videos, ...

Creativity, leadership and innovation have entered the lexicon as 'must-have' words in the management manifesto. No chairman's annual report is complete without them peppered into the text. Like "people are our most important asset" was in the 90s. It is fashionable and trendy for managers to drop these terms at every staff meeting. Every era has its buzzwords for organizations. These are ours at the turn of the 21st Century. Industry forums, blogs and white papers discuss innovation as process improvements to design, speed, convenience, cost etc. or as derivative advancement of products and services. What distinguishes true 'innovation' from product & process improvements? Breakthrough innovation is disruptive. It renders current ways of solving problems obsolete. It redefines the problem and its solution. It creates a new product, service and market that never existed before. Typically innovation leaves most consumers befuddled about what it is and why it was created. Early adopters explore the myriad ways in which it can be used, almost as a fan club. The iPhone re-defined the mobile voice communication tool as an entertainment centre for music downloads, videos, broadcast news, social networks and email communication. It introduced touch-screen navigation of applications. It enabled a platform for developers to generate 'apps' for the Apple Store. Apple built a dynamic eco-system around the iPhone. Here you can witness a breakthrough device designed to do much more than voice-connect, surrounded by a creative community of apps developers, a high-margin revenue share model and a growing library of games, apps and functionality from one trusted source. The strict Apple review process eliminates malware and immature submissions. Approval by Apple guarantees quality and integrity to consumers. It frees developers from the burden of marketing their products globally. Users can access a rich store of apps. Is it any surprise that iPhone users have little reason to switch brands? Can innovation be 'managed' within a corporate culture of conformity? A typical enterprise is a hierarchy of managers, committees and approvals processes dedicated to preserving status-quo. Members work their way up the ladder by following orders and avoiding anything which may upset their superiors. They are rewarded for toiling in their groove. An enterprise is 'efficient' to the extent that it has a high degree of predictability and shared behaviour. Any member of the organization who exhibits a questioning attitude to established procedures is considered a deviant and dangerous. The system is designed to promote conformity and penalize challengers. In that sense it shares similarity with gangs, cults and religious movements. There is retribution visited on any who question. That was how management as we know it evolved - from the dawn of the industrial revolution, to ensure factories mass-producing widgets could be efficient, consistent and scalable. It was a command-and-control logic that worked for widgets. Alas, this is hardly an environment for creativity and innovation to flourish in a post-industrial, always-connected, digital world of information available to all. Even more bizarre is the idea that innovation can be managed within such a framework! It is comic to see naive CEOs and HR managers add creativity, leadership and innovation to their list of attributes to be rated in performance appraisal forms by managers trained to instinctively shoot all three on sight. In too many organizations, the annual appraisal process itself is a sick joke stoically implemented despite all evidence to the contrary. None below believe it to achieve anything other than pretend a scientific method to justify biased distribution of bonus, increments and promotions. It gets so weird that an artificial bell-curve is force-fitted on small units of staff so that exactly 50% fall either side of the central measure. Normal bell curves occur only where data from sufficiently large populations can be randomly sampled. It is statistically impossible to have a 'normal' curve represent selective and small populations. This statistical distortion is a classic stupidity implemented by otherwise intelligent managers. If anything, a competent sub-population of managers should show a positively skewed distribution or the enterprise is in deep pooh! The appraisal process is like a cult ritual at the alter of some deity. The terrified victims fall on their knees and pray for deliverance. The appraisal forms are carried about reverently by HR priests and preserved like the Buddha's Tooth in Sri Lanka. Worse than the pointlessness of it all is the thousands of hours wasted by managers across the organization twice a year (yes a mid-term appraisal is mandatory). How does a rigid hierarchy of conformists embrace the disruptive nature of innovation? Those being appr...

Hong Kong will be given its third Chief Executive since the handover in 1997 of the British territory to the People's Republic of China. It could be Bland (Henry Tang) or Earnest (CY Leung) in March 2012. The new CE's term will commence 1st July 2012. The right to choose the next Chief Executive is confined to a 1,200 college of electors which will be in place by December 2011. They represent 0.01 of HK's population. Each 'constituency' of this electorate is assigned a fixed number of block votes. Any candidate wishing to be considered for CE has to collect a minimum of 100 nominations. It is a rubber-stamp assembly to legitimize Beijing's nominee, very much in the mould of politics on the mainland. The 1,200 electors strain keenly for smoke signals from Beijing on whom to vote for. They would rather not back the wrong horse. The 'small-circle' Election Committee consisted originally of 800 members. In June 2010 legislators voted to increase its size to 1,200 members. This was a concession by Beijing to soften the public ridicule of the process for the most important job in Hong Kong. Some members of the pro-democracy camp supported this 'reform' on the understanding that it will be totally abolished by 2017. They want the next CE to be elected by universal suffrage. No one is sure if the Election Committee will be disbanded next round as there are mixed signals from the administration and silence from Beijing. Beijing has been at pains even before 1997 to assure Hong Kong's businessmen that no change will be made to its pro-business policies. The 1,200 member CE election committee aggregates chambers of commerce, New Territories villagers, professional bodies, pro-Beijing organizations (NPC deputies, CPPCC members) and other narrow-interest groups. Many are known in HK as 'rotten boroughs' created for the purpose of stacking the deck. They have limited self-interest agendas and are easily shown whom to vote for. A situation of two CE candidates, both approved by Beijing, is a new one. This will really tax the electors. Beijing may eventually wish to harness both in some form, while it gauges both the small-circle and public support for the candidates. HK citizens locked out of choosing their leader Hong Kong's 7 million residents are out of the loop. They have to watch in bewilderment as this 'Theater of the Absurd' plays out over the next nine months. In a free election, it is unlikely that either candidate would have a chance of being elected. The first chief executive, the hapless Tung Chee-hwa had his second term curtailed for failing to push through the infamous Article 23 Security Bill. About 500-700,000 Hongkongers from all walks of life poured out on 1st July, 2003 to march peacefully against the Bill. Tung was shell-shocked and his masters in Beijing even more so. It caught all the expert advisers off-guard. The outpouring of mass disapproval against this attempt to curb Hong Kong's freedoms of assembly and press, was deeply felt and profound. ATV, HK's second TV station, has been acquired by mainland owners. Recently the head of RTHK, the public service broadcaster was replaced by a civil servant with no journalism or broadcast experience. Students at HKU were roughed-up by police with plain-clothes mainland security personnel present during the visit of a high mainland official. All these add up to genuine disquiet about the freedoms that Hong Kong residents take for granted. Hong Kong citizens are additionally facing unaffordable housing, rising inflation, confusion about Cantonese versus English-medium schooling, the depreciating currency (it is pegged to the US Dollar) and policy-paralysis in government. They despair over the administration's seeming unwillingness to use its massive foreign reserves and healthy fiscal surplus to address systemic, long-term social problems. The administration is pushing to spend billions on a joint bridge infrastructure project with Guangdong Province and to add a third runway to HK international airport, amidst expert misgivings about the need for or commercial viability of these schemes. This lopsided prioritization reinforces the long-held suspicion among HK residents of collusion between property developers and bureaucrats, to the detriment of ordinary people. Hong Kong is a city suffering from prolonged absence of political leadership and a coherent programme. People are weary, impatient and losing faith fast. Henry Tang (Bland) waits to be appointed CE Henry Tang Ying-yen is a classic silver-spoon scion of a textile tycoon. His father, Tang Hsiang Chien escaped to Hong Kong from China in 1950 in the aftermath of the 1949 victory of Mao's communist forces and made his fortune as a textile trader. HC Tang was subsequently nominated to the standing committee of the Chinese People's Politicial Consultative Conference (CPPCC) which is the advisory body to the nation's legislature, the N...

Sniping at anti-corruption crusaders will not save Congress Party A sustained campaign of sniping at the leaders of the anti-corruption movement by senior members of the Congress Party, speaks of policy confusion and lack of leadership. What is it designed to achieve? Two members of Anna Hazare's campaign team were found to be guilty of fiddling expenses (Kiran Bedi) and diverting donations (Arvind Kejriwal). That gave the Congress Party opportunity to ridicule the anti-corruption campaigners. Lawyer Prashant Bhushan, another key member, opined that people of Kashmir should decide whether they wished to stay in India, be independent or switch to Pakistan. That is a 'sacred-cow' issue with most Indians. He was assailed in his office by thugs believed to be members of an extreme Hindu fundamentalist organization. Team Anna are on the back-foot and divided. That does not absolve the Congress Party of accountability for corruption in government. A corrupt government smearing anti-corruption campaigners does not win it sympathy from a public fed-up with civil servants and politicians who abuse their positions. The weak prime minister out-manoeuvred by powerful political warlords signals administrative dysfunction to voters. There is no one in the driver's seat. This is a lame-duck government which will in all likelihood be turfed out at the next general election. Corruption works for everyone except the dispossessed The victims of India's systemic corruption are the powerless masses who can't get relief from policemen, government clerks or elected representatives. The middle classes are annoyed that they have to grease palms at every turn. The rich leverage it to bend the system to their benefit. State legislators and parliamentarians see it as their ticket to amassing wealth by exerting influence on government contracts. Corruption works for everyone except the dispossessed. What incentive for Parliament to pass Jan Lokpal Bill? None. About 25% of sitting parliamentarians are convicted of crimes or pending charges. A larger proportion manage to benefit without legal trace. Indian 'black money' estimated at more than US$1.4 trillion is stashed in Swiss Banks. The last thing India's political class wants is public scrutiny of its methods of enrichment from public finances. Thanks to the Right to Information Act (RTI) which was forced on the government in 2005 by an earlier public campaign, activists can request sight of documents, memos and contracts which were previously inaccessible. That data can be quickly distributed through social networks to name and shame the guilty. The politicians deeply regret passing the RTI Act. Prime Minister Manmohan Singh recently floated a trial balloon saying the RTI needs to be reviewed as it inhibits civil servants from appending notes and comments to proposed Bills and projects. It slows down the normal functioning of government. That brought a torrent of protest from social activists, amply magnified through TV talk shows and press commentary. Taking lessons from the effect of the RTI Act, the political class is in no rush to pass the Jan Lokpal Bill lobbied by activist Anna Hazare. It is a severe tool designed to rid India of its Neta-Babu (bureaucrat-politician) nexus through swift justice meted out by a citizen's Ombudsman and his avenging angels. It gives corrupt judges, ministers, civil servants and legislators little legal privilege. It is punitive and extreme to a political class used to distorting legal process to escape responsibility. Hazare warns Congress Party of election risk Anna Hazare has warned that if a strong Jan Lokpal Bill is not passed into law by the Winter session of parliament, he will tour all the states where by-elections are due and re-ignite public anger against Congress Party candidates. That is no idle threat. The public fury that was triggered across the nation by Anna Hazare's fast in August has not gone away. India's voters are restive. And the game has gone well past the stage for the government to invoke security as a cover to lock him up. Congress Party strategists are toying with parliamentary process and legal punditry to water down the Lokpal Bill and starve budget allocations for the ambitious central and state anti-corruption machinery. By a clever combination of toothless legislation and budgetary under-provision, politicians of all parties hope to escape dismissal, seizure of assets and jail. What is the point of getting elected if you cannot leverage your position to become a millionaire? ENDS

Newspapers yield only 13 percent of News Corp operating income Stock analysts and investors of News Corporation are dismayed at Rupert Murdoch?s obsession with newspapers. Many feel the chairman wastes his energies on ?old media? instead of focusing on the much larger cable and movie businesses. Newspapers contributed 13% of News Corp operating income for 2010. Press contribution has been in straight line decline over the past 10 years. News International (the UK newspaper subsidiary) in fact lost US$126 million in the financial year ending June 2010.