When I started my business, someone from the electronics industry claimed "it's a complete rip-off" to sell our newspaper at NT$20 per copy, while others' newspapers were generally priced at NT$10. The claim stemmed from a failure to understand that B2B professional information costs much higher than B2C information. Evidently, newspapers are nothing more than a tool to convey information. In terms of cost, it is simply a losing business. But I regard our newspaper as a form of direct mail "loaded with knowledge."
IDC publishes quarterly PC and mobile phone shipment statistics, giving us a general idea of industry trends. But if you want to get more information about specific enterprises, you'll have to pay a proper price to get different research reports. When I was in charge of MIC more than 20 years ago, research reports on PCs or monitors were priced at about US$8,000 to US$10,000. They also provided regional market reports. Their research reports on European PC market study were priced between US$5,000 and US$10,000. With different positioning, these reports are certainly different from the general media and magazines in contents and perspectives.
Are they expensive? I think they are reasonably priced. I even think these consulting firms are very helpful in helping IT enterprises understand global trends. Multi-million dollar enterprises who cobble up their own research reports without outside help may end up wasting their internal manpower. They may even misinterpret industrial trends and miss opportunities in empowering employees and reaching corporate consensus. In my understanding, reasonable budget spent on information purchase should be 1/5000 to 1/10000 of total revenue. The top 10 Taiwanese IT companies with over US$10 billion in annual revenue each spend NT$50 million (US$1.81 million) to NT$$80 million a year for all kinds of information. In the era of massive data output, enterprises face a challenge to learn how to consolidate useful information, share benefits with employees, and justify every single dollar in their business practices.
DIGITIMES, which has a print daily in Chinese, is in fact a platform that creates a large amount of information. In the Internet age, we could discontinuing the print publication. But the broadsheet newspaper allows senior executives to quickly browse through daily major news reports. Different from other online news outlets, our paper lets readers know that we deliver nearly 100 industrial news reports a day. If you take into account the costs of editing, printing and delivery, the print publication is an "unrewarding" business. But the purpose of retaining the print publication is not for sales revenues, but for serving customer needs instead.
There are often big differences between customer perceptions and practices, especially in the consulting service sector. It is considerably difficult to become a successful professional information services company without knowing how to define business models and value of services. In the Internet age, the boundaries are gone, and we need new business models.
(Editor's note: This is part of a series by DIGITIMES Asia president Colley Hwang about industry research work.)
