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2 Sub City News Sub-cultural updates for travelers Group 8 Axel Violon, Camil Manuel Hesse, Mette Larsen-Kaasgaard, Camilla Boel og Signe Hamann-Pedersen

3 Table of Contents Executive summary 3 Concept report 4 Product 4 Values 4 The reader segment 5 Subscriptions 5 Content 6 Visual identity 6 These are the subjects covered: 6 Content providers 7 Destinations 7 Market positioning and competitors 7 Business structure 9 Business Model 10 Customer segments 10 Value proposition 10 General outlines for end reader 10 Customer channels 11 Customer relationships 11 Revenue streams 12 Key resources 13 Key activities 13 Key Partnerships 13 Cost structure 14 Business Environment 16 Industry Forces 16 Competitors & Substitute products/services 16 New Entrants 17 Suppliers and other value chains actors 17 Key Trends 17 Societal and cultural trends 17 Technology trends 18 Macroeconomic Forces 20 Global market conditions 20 Capital markets 20 Commodities and other resources 20 Economic infrastructure 20 Market Forces 21 Market Issues 21 Needs & Demands 21 Switching costs 21 Revenue attractiveness 21 References 22 Appendix 1 23 Appendix 2 25 Appendix

4 Executive summary Congratulations! You are the winner of a trip to Barcelona! How lucky can one be?! You start searching for information about Barcelona. Off to the bookstore, where all you find is static information about history and some old recommendations. Then you check out the Internet for travel and news sites, but you realise that it is a jungle to manoeuvre in. Until you come across the website Sub City News! Here you can get information about European cities and see a current monthly issue, with local news from the culture underground: Local news combined with an up-to-date travel guide For a small fee you can even subscribe to access passed issues, which gives you the possibility to dive into the subjects you find the most interesting: Sub culture, urban development, local politics, entrepreneurship and entertainment. Even though Sub City News is not filled with noisy advertisement, it is great opportunity that you can subscribe and read the issue without advertisement. It comes to your attention that the content is provided by local bloggers and institutions. The articles are in-depth and grasp the local news, while you as the reader are able to supplement with comments, ratings and reviews. Local news and information that you could otherwise only access, if you turn to the right people on your destination! You realise that with Sub City News you have finally found a multi-destination service, which prepares you with an updated overview for your vacation. You sign up right away, certain about coming back again before your next city holiday! Figure I: An example of how Sub City News could look like 3

5 Concept report Product Sub City News is a web-based news service that is, like a magazine, issued every month and covers the subcultural news in a range of cities across Europe. The webportal entrance is an international overview with cover stories and an interactive map, from which the city of choice can be navigated to. Sub City News places itself on a cross-platform between local news and travel guide, engaging into these markets with attitude and the goal to attract young travellers around the globe. Small local units in different cities have established networks to the locals in order to provide the rest of the world with interesting and nuanced sub- and cultural news. These local text- or video bloggers and photographers are the main content providers along with in-house staff containing journalists and editors. The monthly issue becomes alive through encouragement of the readers to comment, discuss or share articles within their favourite social networks. The service is subscription based, which makes it possible to raise the standard for quality and reader expectations. There is a print function that allows the reader to take the pages of interest with him and allows quick and easy access to the news, while travelling offline. The issues of Sub City News will be written in English and the given native language of the chosen destination. Values When travelling we find value in acquiring knowledge that is unique, specific to our interests and with an authentic flavour wrapped around. We also find value in following developments of the places of remote family and friends. We find value in using one service that provides all of that, fast, in high quality, at low costs. We see that today the online news industry is, much alike the rest of the web, drained in a loud soup of information and commercial advertisement. It is still rather difficult to find content of particular interest without spending a fair amount of time searching the web. Even harder is it to find products with certain amount of quality and continuity that are not newspapers, covering ones place of residence. The notion of providing balance between the quality of the content, the visual identity and the advertising has moved towards the side, where lay-outing is being slaughtered for the benefit of marketing, thus not offering clues for the quality and authenticity of the content. It seems that there is a general perception (also on the web) that a lot of things should be for free, including news. This is only possible, when granting advertisers this platform of intrusion and spam. We are interested in creating a trustworthy service that provides you with news, produced by locals and about the local. News that is critical and nuanced. We believe in the willingness of our readers to pay for good and authentic content, and thereby raise their level of expectation. 4

6 The reader segment The readers of Sub City News are typically young people (20-40 years) of both genders, to whom travelling especially to cultural destinations is important or because they have family or friends abroad. Not only is this segment interested in sub- culture, but it actually gives them a sense of belonging to the cities in-crowd and is therefore crucial to maximise the outcome of the trip. Young travellers are eager to get in contact with young local people, to share common interests and experience and broaden cultural backgrounds. We consider Sub City News as a good starting point for tracing these interests and backgrounds, validate them and pass them along to your network. Vacations to sunny beaches or sport resorts are different: the classic travel guide with least expensive... or best value... tips applies. Many in our customer segment travel once or twice a year to a foreign city and thereby build grounds for the continuance of our service. They are people who don t mind spending little money for good quality and tailored news and information regarding their interests and travel behaviours. Their English skills and their Internet usage is above average. We have created three personae to describe the usage of Sub City News in different context (Saffer, 2010): René is a computer engineer from Quebec, Canada, who is going on a long distance journey. Next month René is going to visit his brother in Copenhagen, Denmark, together with his family. The family is going to stay for two weeks, and is eager to visit some of the popular tourist attractions, but also to visit small and unknown places. They visit the Sub City News website, read the in-depth monthly issue, and get oriented on interesting things to see in Copenhagen. Michael is a successful art director from London. He has earlier lived with his girlfriend in Copenhagen, Denmark, when he was in his early twenties. The relationship didn t last, so he went back home to London to start up his own business. However, he became really fond of Denmark, and uses Sub City News to keep up with what s going on on a regular basis. Henriette is a teacher, who lives in Copenhagen. She likes to go abroad twice a year, mainly to other European cities, or to go on trips with a predefined content, such as opera, art exhibitions or modern ballet. For her next trip she is uncertain, where it is going to, so she wants to search for a destination. She goes to Sub City News in order to get inspired, to see what s moving around in Europe, and to get information on upcoming events. See appendix 1 for full description of the personae. Subscriptions As mentioned earlier Sub City News is subscription based, which by all means doesn t mean that one can t read it for free. The current edition is available for free, accompanied by subtle advertisement. The free version includes to begin with all functionality, such as rating, commenting and discussing. Once a solid reader-base is established these features will be reserved for subscribers only. Sharing and recom- 5

7 mending are obviously free features, since they gain the spreading of the service. The subscribed versions are commercial free and have the additional print features. They also allow full access to past issues and the archives. Monthly subscriptions are either paid for three months or a year in advance, for a price of a coffee. We believe that the value of a subscription of Sub City News exceeds its costs and will therefore be appreciated by its base of readers. To that the magazine format has a string of advantages, which can motivate subscriptions. It generates tension and excitement towards the outcome of the next issue and gives something to look forward to every month. Most topics and featured articles will find the attention of the readers, due to the time gap between the issues and the fact of pre-payment. Content curators have made a choice for the reader, on what is most interesting and therefore no one is lost in the information overload like on many other news sites. Another aspect of financing this service by subscription is to make the reader appreciate the local efforts that have been made, by actually paying for that work. This process can harbour important opportunities for local content providers to actually pursue journalism. Content The contents of Sub City News cover a niche within news, with focus on subculture, local politics, urban development, entrepreneurship and entertainment. These subjects are chosen, because they match the interests of the customer segment and because they reveal the cultural capital or status of the cities. Besides the in-depth articles Sub City News promote cultural events, present ratings and reviews of both experts and readers and feature a calender of selected upcoming events. The timing of the articles and the subjects should possibly precede mainstream media attention, in order to keep the readers authentic expectations intact. These are the subjects covered: Subculture: Street art, underground music, upcoming artists, exhibitions etc. Local politics: Political development, city finances, political strategies Urban development: Architecture, city planning, city history etc. Entrepreneurship: Design, start-up businesses, young creatives, platform of growth Entertainment: Events, concerts, museums, nightlife Visual identity The purpose of this short paragraph is to constitute the importance of reflecting upon the values of the product compared to the needs of the segmentation. Since Sub City News is about subculture in large cities, the graphical style and layout must not be shy, but appropriately edgy in order to satisfy its readership visually. The goal is to ensure local independence and trends, while simultaneously maintaining a globally unified face that statues certain corporate and entrusting values to the readers. Typeface and layout are expected in cutting-edge magazine style, covering various themes or colours for the different monthly issues. 6

8 Content providers Sub City News is written mostly by local bloggers or other journalistic talents. They are the people, who know what is going on in the city, which enables them to contribute to the service in an intellectual and nuanced way. We will try to pay for these articles, but consider Sub City News to be a stepping stone for young writers or students and thereby formulate this trade off. Freelance or amateur photographers are also considered to be main producers of the content. With the growing of videoblogging, small features could be an interesting source of ongoing content. Another source for providing content are the municipalities and cultural institutions in the cities. They have great communication staffs, issuing press releases and other public material, which can be used or be of inspiration. Collaborations between Sub City News and these institutions can be motivated by giving access and exposure to one another. Once Sub City News gets into a more established state, in-house journalists and content producers could fulfill bigger roles, than the editorial work they do in the beginning. Setting up the content like this, is made both from an economical point of view, but mainly to sustain a local approach to news. - Local news produced by local people. Destinations Most European capitals or large cities are suitable to make Sub City News a success. In a starting phase five promising cities would act as core destinations, where Copenhagen also serves as main office. These cities could be: Barcelona, Berlin, Paris, Amsterdam, London, Vienna or Brussels. The main criteria for choosing the destinations are the cultural capacity, the newsworthiness, a high number of tourists and recruiting the ground troops. More exotic places like Lisbon, Istanbul, Helsinki or Edinburgh could add some flavour to the variety of destinations. Once this process is repeated a few times, acquiring new cities will be done with less effort. One could imagine that future projects could emerge globally in places like San Francisco, Mexico City, Sidney or Tokyo. Market positioning and competitors With Sub City News we would like to bridge the gap between local news and online travel guides. There are many major news and media companies, that have local news sections, but they constrain the radius of relevance within their own country (mostly USA). Local news is generally treated like global news, meaning that they don t seem to have any distinct local characteristics. The format it is found in is the typical news portal style: infinite columns of articles, lots of junk ads and layouts that look very much alike. On the other side of the spectre, there are online travel guides, such as LonelyPlanet, Timeout or Tripadviser, which all provide multi-destination information. They are all run by the travel industry and try to sell other products than the websites themselves. We are addressing the travellers segment and provide them with news instead of travel information. News are more frequently updated than regular travel guides, so the choice of the web as the platform for the service emphasizes this dynamic approach. The service provides in-depth articles and lets the reader be able to have a discourse and reflect on them. This makes Sub City News an ongoing, living site, compared to travel guides, which leave no room for self-reflection to the user. 7

9 TRAVEL GUIDE TripAdvisor WikiTravel Lonely Planet Politikkens - The trip goes to Governmental Insitutions - Foreign Ministry VisitCopenhagen Inflight Magazines USER GENERATED OUR CONCEPT AOK ESTABLISHED COMPANY Media Companies VJ Movement Media providing multidestination information Media providing information for a single destination LOCAL NEWS Figure II: Positioning Map Shows where tourist may seek information (of all kinds) about their destination. Travelguide = Reviews, static information and history about tourist attractions, hotels, restaurants etc eg. cultural experiences Local News = Dynamic local news on all sorts of topics: breaking news as well as indepth stories. Figure 1: Positioning Map Shows where tourist may seek information (of all kinds) about their destination. Travelguide = Reviews, static information and history about tourist attractions, hotels, restaurants etc eg. cultural experiences Local News = Dynamic local news on all sorts of topics: breaking news as well as indepth stories. 8

10 Business structure To accommodate the needs of our customers and to differentiate us from our competitors, it is important that the content we deliver is not superficial, but sufficiently grasp the local sub news. This requires employees who are on home ground, wellupdated in the sub culture milieu and know which resources to contact and use. These employees are the biggest asset for Sub City News. Therefore our organisation must have an organic structure that involves decentralised units for each destination offered by our service. The work process in each unit can be characterised as project oriented. Each unit is responsible for their own destination with everything that this involves: assemble, create and edit content; web management and quality assurance; sales and marketing activities with local institutions and businesses. Strategic planning, web development, accounting and HR will be centralised in a head office, and will thereby constitute the established organisation. The advantages of this business structure are that you invite to transverse and crosscultural communication between the different destinations and thereby share bestpractices and knowledge about sponsoring, marketing, design and networking. Furthermore, you empower the personnel to make decisions, work independently, to be responsible for own unit, and motivate to be engaged in the company s revenue stream and welfare. With a structure where each unit functions as self-contained departments, the overall financial system is less vulnerable, because the units will not effect each other. One of the disadvantages is that it might take some time to implement this decentralised structure due to national diversity. For example measured on Geert Hofstede s Cultural Dimension, where for instance the Power Distance Index and Uncertainty Avoidance Index could be an issue, if the specific destination is used to operate with strict hierarchic organisations and work on specific prescribed assignments (Hofstede, 2009). 9

11 Business Model The business model is based on the business model canvas from Business Model Generation (Osterwalder & Pignuer, 2009). Customer segments The customer segment can be divided into two major groups: the reader and the B2B clients. This Multi-sided platform brings these two interdependent segments together, creating value by facilitating the interactions between the two groups. General outlines for end reader City travellers (who is traveling to explore the destination or to visit family or friends) Aged years Both genders Urban citizens Travel 1-3 times per year English language skills Regular to experienced users of news sites on the Internet; use social networking sites or other co-creation sites. Cares about quality in content and usability on websites Interests: Urban culture, urban development, entrepreneurship, politics The business to business clientele are exchanging publicity space for money. These are local institutions and municipalities, together with companies from the travel industry, who are interested in making advertising on the local destination site. As Sub City News is a service, which is very focused on the value that we bring to the readers, a creation of a marketing manual will be mandatory to provide and guarantee a both relevant and interesting, but yet local advertisement content. This business segment is interested in branding the destination the best and most effective way as possible, and thereby gaining more tourists with a positive attitude towards the city. Value proposition As described, Sub City News cares to publish high quality content; local content produced by local people. Sub City News brings value to the segment by bringing a monthly issue, which quickly gives the tourist an overview of the most interesting stories within the local culture and urban development. A monthly issue makes it achievable only to focus on the most interesting and important in-depth stories, and thereby sort out all the noise, which you, as an Internet user, is bothered with when surfing. 10

12 Sub City News works for the convenience of the reader, which is key, so they won t need to browse around hundreds of tourist sites, or be dependent to meet the right local people on spot to tell what is happening in their local community. Another evident value proposition Sub City News offers, is the foundation of customer loyalty. As Sub City News services several destinations, the user has the motivation to keep returning to the site, but for different travel purposes. The current monthly issue is for free, to make an extra added value to travellers, who just want a quick overview for their upcoming travel or for those wanting to evaluate the content before subscribing to the service. A subscription to the service is at a price of DKK 15,- (EUR 2,-) per month, which allows access to the archive and extended functionality. At the beginning, every reader will be able to comment and rate the articles so we can quickly get some content. But as soon as we have enough subscribers, we intent to reserve this functionality to subscribers only, to add a motivating factor. Customer channels The distribution of Sub City News is based on a website, meaning that it is accessible when being connected to the Internet. We assume that travellers read or print out the monthly issue of Sub City News, while planning and preparing for their vacation. Some people may not be aware of their need of Sub City News before they actually stand in a foreign airport or railway station. Sub City News in the form of a smartphone application is therefore an inevitable development of the website. Creating awareness worldwide for a global enterprise is a huge mouthful and can be very expensive. The most obvious communication channel to reach our segment and to brand our value proposition is to use all the existing online social media networks. A lot of corporate media companies already have integrated Share on Facebook buttons ending each news article, and many companies in the service industry, such as restaurants, local shops etc. are also doing this. These are inevitable and invaluable tools, when creating awareness, because it has no costs, just as word-of-mouth communication. The local bloggers producing content to the site are of course a huge asset and great ambassadors, since many of them have great networks of people following them already. Moreover it seems common that bloggers around the world discussing the similar topics follow each other, which hereby gives great exposure and awareness to the site. This will be characterized as reaching the segment, through partner channels. Within direct communication channels, e.g. where we pay to get exposure, there are many obvious places to call for attention. For instance, advertisement by the gate in the airport, at the railway station or in a travel magazine, where a 2G bar-code is visible to gain access to the application. Customer relationships Multiple customer segments require different types of customer relationships. The reader operates on a website, which includes some self-service elements and automated services, such as user profiles and extended functionality due to the monthly subscription fee. Simultaneously, there is a large base for a co-creation environment, 11

13 from which due to the nature of the content will evolve commentaries and discussions, spread out through online social networks, such as Twitter, Facebook or Youtube. Regarding the B2B segment, a personal contact and relationship keeping is of crucial importance. It is as well a networking or outgoing activity, as well as a maintaining of fertile partnerships, as discussed in key activities. Revenue streams The revenue streams derives from reader subscription and from web advertisement on the site. To gain an overview of the income, we have made some estimations on subscriptions and advertisement. The current monthly issue is for free, while a subscription to one destination on Sub City News is at a price of DKK 15,- (EUR 2,-) per month. You can also choose to follow more than one destination at DKK 40,- (EUR 5,-). The table below shows, how many subscribers we anticipate to have for the x number of destinations over 5 years. The subscribers are divided into single destination and multi destination subscriptions. Merging the number of subscribers shows that from year 1 to 5 with 5 to 10 destinations an increase from to subscribers Year Number of cities Number of subscriber for single destination Subscription / month Year Number of subscriber for multi destination Number Multi destination of cities subscription / month Number of subscriber for single destination Table A: Subscriptions Subscription / month INCOME Number of subscriber for multi destination Year In Multi this destination table it subscription is seen that / month after years the 5.00 subscriptions 5.00includes % of the total 5.00 Advertising 12, , , , , income. Subscribtion 21, , , , ,296, Multi destination subscription 6, , , , , INCOME Total income 39, , , , ,776, Year Advertising 12, , , , , Subscribtion 21, , , , ,296, Multi COSTSdestination subscription 6, , , , , Total Year income 39, , , , ,776, Number of cities Table Employees B: Income / city Website - 10, COSTS Maintenance , , , , Year Number Buildings of cities 5-36, , , , , Employees / city 1-150, , , , , Website Content - 10, , , , , , Maintenance Marketing , , , , , , , , , Buildings Total costs - 36, , , , , , , , ,039, , Employees - 150, , , , , Content Year - 27, , , , , Marketing - 30, , , , , Balance - 213, , , , , Total costs - 253, , , , ,039, Cumulative balance - 213, , , , , Year Balance - 213, , , , , Cumulative balance - 213, , , , , Chart 1: Income 12

14 As described earlier, the web advertisement needs to be controlled and minimized, so that the reader perceive Sub City News as professional. Moreover, within the first years we cannot expect the B2B clientele to pay large amounts for advertisement due to the relative low number of readers. Consequently, the revenue streams from advertisement will include a smaller percentage of the total income; 8% within 5 years. This revenue stream can easily become higher, when the B2B segment is ready to pay more, due to a higher number of readers. Key resources Key resources will be divided into two groups, the first representing city units and the second the main office. Both have an office space to maintain, where in the city unit only a limited staff is necessary, since the content providers co-exist elsewhere (bloggers, etc. working independently). A marketing expert, a web developer and a networker/journalist are needed to maintain each units business. To start off we imagine 1-3 employees in each city, which means that ideally one person possess more than one of the above-mentioned qualifications. The main office includes a much larger staff, consisting of graphic designers, web developers, HR personnel, accounting and legal department. Human capital and intellectual resources dramatically influence this service, since knowing the right people is a core asset of this project. Therefore networking and maintaining relationships are crucial tasks to be executed on a daily basis. Key activities Key activities are divided into two main tasks: networking and content/editorial work. Networking describes the building and maintaining of relationships to the people on the ground, which include connections to the bloggers, journalists, photographers or people with insight and knowledge on local trends. Each city unit maintains these networks independently, ensures quality and creates its own newspaper. So the editorial/curator work is spread out to the different cities. Furthermore, each unit is also responsible to perform key account activities; making contracts with relevant companies and institutions interested in having advertisement on the site. They can negotiate as they wish, the important thing is that each unit is responsible for its own revenue streams. There is also a set of key activities regarding the main office. It is considered the heart of this enterprise, setting the stage for all the different destination units. The main office holds a strategic overview on all projects and handles the accounting, legals and HR. Key Partnerships Key partnerships can include a variety of businesses and institutions. There are different kind of partner relationships imaginable, ranging from local collaborations or beneficiaries on either side to business agreements and relationships. To keep the costs at a minimum, cultural institutions or municipals could serve as content contributors, gaining exposure on the site as trade off. The local bloggers are key partners to us, as they also serve as content contributors, but more importantly they bring the sub-knowledge about the destination to our readers. 13

15 We anticipate the readers to take part in discussions by commenting articles or distribute content through social media networks, which therefore play a significant role in the partnership construct and this particular channel distribution of this product. Cost structure The costs of Sub City News are many, but the most apparent costs are for employees and content provided by bloggers, journalists or other institutions. City unit costs (fixed costs): Salaries and small office rent. Main office costs (fixed costs): Salaries, office establishment and website development and maintenance. Costs of content providers (variable costs): Content payment for each piece to journalist/blogger/media agency. COSTS Year Number of cities Employees / city Website - 10, Maintenance , , , , Buildings - 36, , , , , Employees - 150, , , , , Content - 27, , , , , Marketing - 30, , , , , Total costs - 253, , , , ,039, Table C: Costs Chart 2: Costs 14

16 Combining the revenue streams and cost structure, it shows that Sub City News will break-even in the fourth year, but yet again it should be considered that both revenue and costs are estimations, which should be backed up by more evident research. Year Balance - 213, , , , , Cumulative balance - 213, , , , , Table D: Balance Chart 3: Balance 15

17 Business Environment Industry Forces Sub City News is operating in two major industries, being the news industry and the travel industry, which makes an analysis of the industry forces less straight-forward. Looking at the positioning map (in the concept section), placing Sub City News compared to other players in both industries, reveals a basic visual understanding of the market the concept is operating in. Competitors & Substitute products/services We have not been able to find an organisation/platform who can be categorised as a strong competitor, as the combination of the content (local news and tourist information) and the fact that it is a multi destinations platform, is not seen in our research so far. Therefore many of our competitors or substitute products can provide our segment with either a multi-destination platform in the shape of a travel guide, recommending/reviewing accommodation, neighbourhoods, tourist attractions etc., while only local and single-destination media companies, individual bloggers, can provide local sub-news from the specific destination. This means that you either have to search several places for the information/service we offer, or that the content you are looking for is only present in the native language of the destination. Looking at Copenhagen as an example, visitcopenhagen.dk is of course a huge competitor. When the tourist have decided to travel to this destination, it provides some of the same content, focusing on cultural news and upcoming events in a travel guide manner. Visitcopenhagen is a part of Wonderful Copenhagen and Visit Denmark, which of course means that there is a solid organisation behind; Denmark s official tourism organisation, focusing on attracting tourist to Denmark and branding Denmark in general. Visitcopenhagen is just a single unit destination, so where we would have an apparent competitive advantage is, when a tourist have used our platform once, they know that we provide the same service for other destinations when they are travelling the next time. Moreover, our service is more differentiated and may appeal more to a niche segment, as defined with our personae, whereas visitdenmark/copenhagen is determined to satisfy the masses. Copenhagen is just an example of how we of course have competitors at each destination, meaning that the above description may as well be applicable to Barcelona, Edinburgh or somewhere else. 16

18 New Entrants In general the entry barriers to retrieve the market, and create a web based communication platform, is low compared to for instance the industry of industrial production. The start-up capital need is only for the design and production of the platform, and then the major expenses are wages. On the other hand, the most important asset to retrieve this market, and being able to meet the needs of the target group, is human capital. Competences, knowledge and personality is pivotal to make this business work, as you need the right people, with the right network to be responsible at each destination. This is the primary key for this service, but also here when talking about if competitors can retrieve the same market serving the same target group. Another important aspect, when talking of retrieving barriers, is how easy it is for the user to shift to another platform/service. Users are very little loyal on the Internet, because it is easy and cost free to browse around on different sites. Creating customer value and customer relation is therefore crucial, and the best place to start is to have an easy and intuitively user interface. Suppliers and other value chains actors Our value chain is yet again dependent on human capital. As described above we are 100% dependent on key employees at each destination and their network to bloggers, local institutions and other influential people, who know what is happening at the destination and who can create content to our platform. Sponsors and partners are also part of our value chain as they, either through advertisement or for example integrated services as online restaurant booking, also provide the user with content about the destination, which the tourist might be seeking. Again, this creates value to the user. Key Trends The most important trends to research for with our concept, is our segments behaviour on the Internet, the consumption of news and their travel patterns and expenditures, e.g. the societal and cultural trends and the technology trends. This is evident to analyse, if the market is increasing or decreasing. The key trends are based on figures and facts from Denmark as an overview of the trends. With an international based concept as ours, of course it is crucial that key trends from each destination in question should be analysed in depth. Societal and cultural trends The desire for travelling is still increasing. Key trends in the Danish travel industry show a continual increase in the number of travels from 2005 with approx. 3,5 millions travels to 4,5 millions travels in 2007 (Appendix 2). The financial crisis have of course affected the Danish travel industry after these figures, but Copenhagen Airport 17

19 reports a general healthy growth of international travels since the crisis hit Denmark. A press release from Copenhagen Airport from February 2011 reveals a passenger increase of 9,1 % in 2010, and without the Ash-cloud closing the European air space, Copenhagen Airport would have exceeded the record year with the largest number of travellers. The number of local passengers travelling internationally increased with 9,5% in 2010 (CPH, 2011). As described, our concept primarily focuses on people, who are travelling to major cities or to visit family and friends. Figures from 2009 (Appendix 3, Table 9) show the purpose of the travel (min. 4 days), where it is seen that 17% of all outbound travellers are visiting family and friends, and 17% are going on city holiday. Comparable, table 17 (Appendix 3) shows the same figures but for travels less than 4 days. Here city travels and visiting family and friends includes the majority of 54 % of the travels. Last but not least 32% of all these travellers are between 25-44, e.g. belonging to our segment. This same age group uses an average of DKK per every short travel (less than 4 days) and DKK per every longer travel, and they are thereby the age group using more money on longer trips; 13% more than the age group In 2008 the travel expenses were 2,6% of the total annual expenses in an average household in Denmark (DST: Forbrugerundersøgelse 2009, 2010). Overall this indicates a huge and increasing market of travellers within our segment, and healthy buyer behaviour within this industry. Holding these trends up against our Business Model, it is clear that comparing the average travel expenses to the costs of the Sub City News service is very little. DKK 15,- (EUR 2,-) for the 1 month subscription is only 0,5% of the travel expenses for a short travel and only 0,2% of the expenses for a longer travel (+ 4 days). Also it may be evident to compare the price to the travel guidebooks, which you find in every book store. Definitely, there is a market for these travel book, such as Lonely Planet and the Danish Politikken - Rejsen går til.., and the price for such a book is approximately EUR 20,-, meaning 10 times the price of Sub City News. Technology trends Our segment s use of the Internet is of course crucial and inevitable to determine, whether our concept can be successful. General figures on the Danish people s use of the Internet provide a great overview of the technological trends. Today the Internet is used for all kind of purposes, for instance communication, seeking information, gaming, e-purchasing etc. As seen in figure III the most popular is writing and receiving s. But while the growth of this diffusion is low, other applications are in a huge diffusion growth such as using social networking sites and reading blogs. 18

20 Figure III: Trends in diffusion of selected forms of communication on the Internet (Danmarks Statistik: Befolkningens brug af internettet 2009, Danmarks Statistik: Befolkningens brug af internet aspx?cid=14039) In 2009, the amount of people reading blogs increased from 22% to 33%, at the same time as the amount of active bloggers was doubled from 9% to 18%. The amount of people reading or downloading online news increased from 62% to 74%, and 65% used the Internet to search for information relating to travels or overnight stays. Within the age group 20-39, there are some important numbers to be aware of. 44% are reading blogs, while 26% is writing content for blogs, which is a relatively smaller group compared to the years-old, but still much more than the average. 78% of our target group reads online news and 68% searches for travel information online, which also represents more than the average (DST: Befolkningens brug af internet 2009, 2010). Again it must be emphasized that these figures are from 2009 and a huge increase has without doubt changed the numbers applications and diffusion dramatically. 19

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