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Monash University
Publishing
The future of publishing and the effects of the
digital medium on Sound Publishing House Inc.
2012
Prepared by: XXXXXXX
Assistant Technical Editor
Monash Professional Writers Inc. 
2  Monash University Publishing 2012
Table of Contents
2. Table of contents
3. Table of Figures
4. Introduction
5. Structure
6. Data Analysis
10. Literature review
11. Discussion
13. Recommendations
14. References
3  Monash University Publishing 2012
Table of Figures
Fig.1.1 Frequency of reading
Fig.1.2 Common reasons for reading
Fig.1.3 Preference for or against hard copy text
Fig.1.4 Preference for or against e-text
Fig.1.5 Factors most likely to influence decision to read
an e-text
Fig.1.6 Factors most likely to influence purchase of
hardcopy text
Fig.2.1 ITunes signifiant dates
Fig.2.2 Netflix revenue vs. Blockbuster
Fig.2.3 Advertising revenue of news
Fig.2.4 Estimated market shares of digital distribution
platforms
Fig.2.5 Estimated unique users of digital distribution
platforms
4  Monash University Publishing 2012
Introduction
Executive Summary
This report provides an analysis and evaluation of the current and
prospective state of digital publishing. Methods of analysis include
data analysis and literary reviews.
The report finds the prospects of the company in its current
position are positive if managed correctly. The focus areas
expressed within the report require further investigation with the
intent of providing pre-emptive action on behalf of management.
The focus areas are:
-  Customer service and competitive pricing
-  Reducing the impact of digital piracy
-  Creating a loyal consumer base market
The report also juxtaposes possibilities for text based distribution
with the successes in the field of digital distribution from other
media and focuses on the fact that the simple analysis of e-text
publishing has limitations. Some of the limitations include:
-  EBooks are a new concept
-  Data is hard to extrapolate
-  Lack of definitively dominant online e-text publishers to
draw comparison with
Background
With the rise of digital media, it is the responsibility of publishers
to not only recognise but to foresee the changes that will occur in
the publishing of modern media. The rise of the online market is a
both a blessing and a curse.
Online retail allows small and upcoming publishers to reach much
larger customer bases, providing a much greater opportunity for
financial success. However, along with this added financial
incentive comes a much more competitive market. If a publisher is
to succeed, they must be genuinely better competitors, as it has
never been so easy for customers to take their business
elsewhere.
With the rise of digital media, also comes the added threat of
online piracy. Although piracy generally does not affect smaller
publishers, it is something that must be addressed early in the
development of the business model in order to protect future
success.
Comment [m1]: You really need to
mention the client here: SPH
Comment [m2]: phrasing
Comment [m3]: singular/plural
pronoun!
5  Monash University Publishing 2012
Structure
This report will focus on three main areas
-  The viability of eBooks vs. Hardcopy texts from a customer and
publishing viewpoint.
-  The future of text-based publishing
-  Digital publishing with text-based media vs. other forms of
media
Scope
The rapid rise of the digital market raises many questions in
regards to the sustainability, profitability, and future face of text-
based publishing. It is the aim of this report to address these
issues, while also focusing on the needs and wants of the
customer to insure that they are provided with the best possible
purchasing experience in order to instil a sense of loyalty and
ensure a basis for a persistent market.
Research Methods
The research collected for this report comes in three primary
forms: data collected relating to the use and comparison of
hardcopy texts vs. e-texts; data taken from other media for the
sake of juxtaposition; and literary resources that will be used to
provide a more complete context to the ideas expressed within
this report.
The first form of data comes in format of a survey that was
administered to students enrolled in ATS1298, Professional
Writing at Monash University, in the second semester of 2012.
The Demographic details of the participants were not collected
with this survey but all respondents are tertiary students and the
majority whom are between 18 and 25 years of age. The total
number of respondents was 37, and there were 10 total
questions. In this survey the habits of the students were
calculated with them choosing the answer most suitable to
themselves.
The second form of data comes from external sources relating to
the digital industries of: television/movies, news, music and video
games. The purpose of this data is to corroborate possible
solutions in regards to the future of text-based publishing.
6  Monash University Publishing 2012
Data analysis:
Figure 1.1 Frequency of readers
Figure1.2 Common reasons for reading
Figure1.3
Preference for or against hard-copy text
Figure1.4
Preference for or against e-text
Fig1.1
? Frequent- >1 hour, daily
? Semi-frequent- >1 hour, 3x per week
? Regular- <1 hour, 2-3 times per week
? Occasional - <1 hour, <2 days per week
? infrequent - <1 hour, per week
Fig1.2
? pleasure or relaxation
? formal study
? paid work
? informal study
? no distinction between study, pleasure
and work (reading for work, study or
learning is enjoyable)
While there was a general spread
amongst respondents, 51% state that
they would read for at least an hour
three times a week.
The reason given for this number can
be largely attributed to the study needs
of the students with 54% of students
citing formal study as their main reason
for reading.
Preferences for figure 1.3 and 1.4 were
calculated through emotional
responses on a scale of 1-5.
1 – Not at all preferred, would avoid
2
3
4
5 –Would always prefer this format
Respondents answered that they
strongly preferred hard copy texts in
fig.6, from this it can be assumed that
fig.5 responses would be inverse to
this.
However, it seems that while the net
responses for eBooks were negative, it
was not proportional to the positive net
response to hard copy books. This
suggests that perhaps the respondents
were not so much critical of eBooks as
much as they were drawn to the
hardcopy medium.
7  Monash University Publishing 2012
Figure1.5
Factors most likely to influence decision to read an e-text
Figure1.6
Factors most likely to influence purchase of a hard-copy text
Fig1.5
? Free, and the hard copy was not
freely available
? Easier to access than the hard-copy
? Was required for study or work
? Short
? Attractively presented and laid out
? simple (that is, was not about
something complicated or
technical)
? written well, regardless of content
or complexity
? Other
Fig1.6
? A free e-text, or library copy, was
not available
? The topic was particularly
interesting
? The text was 'required' reading for
work or study
? The content was complex
? The text was long
? The hard copy was attractively
packaged and well laid out
? Was not too expensive (eg. not
more than $40)
? Other
When it comes to the reasons for e-
text preference, roughly 75% of
respondents cited the accessibility
and requirement as their primary
reasons (Fig1.5), however it should
be noted that as the respondents
are tertiary level students, that cost
should be considered a primary
factor in regards to the accessibility
of the product, which provides
another 13% to the total number of
respondents using e-text our of
accessibility and convenience.
Similar things can be said about
hardcopy books, except that 35% of
respondents would prefer the
tangibility of hardcopy if the text
material was found to be
interesting.
8  Monash University Publishing 2012
Music
Figure2.1
April 3, 2008  iTunes Store surpasses Wal-Mart to
become largest music vendor in the USA
October 10, 2012 iTunes Store reported to have a 64% share
of the online music market and a 29% share
of all music sales worldwide.
?  http://www.apple.com/pr/library/2008/04/03iTunes-Store-Top-Music-Retailer-in-the-
US.html
?  http://www.cepro.com/article/itunes_dominates_download_market_streaming_audio_
grows/
Movies/TV
Figure2.2
Newspapers:
Figure2.3
ITunes’ success can be attributed to
strong artist endorsement, cheaper
prices, greater selections,
convenience of purchase and
integration between store and
media players.
In figure 2.2 it can be seen that in
2004 Blockbuster was averaging an
annual-revenue of ~$6 billion and
has since bankrupted. Netflix on the
other hand, has seen a steady rise to
a $2.2 Billion per year revenue.
While blockbuster was averaging
~$5-8 per movie rented, Netflix
offers a ~$10 per month subscription
based model allowing users to
‘borrow’ any TV series or Movie they
want, but they are limited to a
certain amount of ‘borrows’ at any
given time.
While the revenue from newsprint
has been steadily decreasing, the
online ad revenue is increasing as
the market lead to an eventual
convergence between the revenue
of print and online news text.
9  Monash University Publishing 2012
Video Games
Figure2.4
Figure2.5
As can be seen from figure 2.4,
Steam is comfortably leading the
market in digital distribution
focusing on videogames.
In the case of video games and
Steam’s success, there are two
underlying factors: community and
cost. In figure 2.5 it can be seen that
a surge of ~2 million users joined the
steam community in the space of a
single year.
Steam worked to capitalize on their
strengths by focusing on online
game play allowing members to play
with friend and to use their servers
as a form of instant
messaging/online chat medium.
Steam also pioneered the ‘gifting’
strategy, by which a customer can
buy a product for someone else’s
account.
10  Monash University Publishing 2012
Literature review
The rise of eBook ownership
According to a Pew Internet study (2012), eBooks have seen a
drastic rise, particularly in the last 2-3 years. In 2010, 5% of
Americans owned a tablet computer, and in 2012, this number
rose to 19%. As Sound publishing house is hoping to establish a
successful market, it is crucial that there is a strong focus on the
digital market. The Pew internet study also found that 91% of
Americans over the age of 16 were considering a future purchase
of a tablet computer, with 10% of the respondents planning a
purchase within the next 6 months.
The cost of eBooks vs. Hardcopy
Another major factor in the rise of eBooks will be the price. The
price of e-text needs to be considered on two levels. The first is
the initial purchase of the e-reading device, and the second
purchase comes from the actual purchase of the wanted text. The
cost of an e-reader/tablet is seen as a considerable deterrent for
many people. However, as the technology improves and
production is made to be more efficient, it can be assumed that
the pricing will drop to a more agreeable level. The secondary
purchase is on average, much cheaper than the purchase of a
hardcopy text. The cost of an eBook can sometimes be only a
fraction of that of a hardcopy text
According to a press release from isuppli (2012) the 32gb IPad 4G,
only costs $364.35 to manufacture, despite retailing at a price of
$729. This is largely due to the fact that apple makes a large
portion of their profit from their hardware range. However, this is
not the case for all tablet and e-reader manufacturers. An article
in the LA Times (2011), stated that the Kindle Fire produced by
Amazon cost roughly $201.70 to produce, but only had a retail
price of $199 which meant that Amazon was actually expected to
take a loss on the sale of every tablet sold. This much lower profit
margin is attributed to Amazon’s focus on the sale of their eBooks,
which are greatly helped by the presence of the more affordable
Kindle products. To this extent, Amazon has chosen to forgo the
potential profit that can be made from their tablets, in order to
expand their dominance over market. The highly competitive
market of tablets and digital readers can be expected to play a
large role in the reduction of costs, making digital reading much
more accessible.
Comment [m4]: Capitals?
11  Monash University Publishing 2012
Discussion
E-books vs. Hardcopy text:
While the evidence from the data analysis suggests that many of
the respondents still prefer the hardcopy format over e-text
(fig1.3, fig1.4). This does not seem to be because of the fault of e-
texts, but rather due to the strengths of hardcopy texts. 100% of
the respondents questioned were students, and 54% of them citing
formal study as their main reason for reading (fig1.2), it can be
inferred from this that the study habits of the students plays a
large role in their reading habits.
From a student perspective, hardcopy books allow students to
easily highlight and make notes for their studies, which as can be
expected, is a major benefit to physical text. However much of this
is offset by the rise in accessibility and more competitive pricing
that can potentially result from the increased publication of text in
digital format.
It should also be noted at this point that the ‘comfort’ that many
respondents claimed to have with hardcopy text may not always
play a factor as children are increasingly being introduced to digital
media at a much younger age, with iPads and eBook readers now
available in many schools, and many universities beginning to rely
on online journals and resources. From the literature review, it can
also be seen that digital reading devices will become commonplace
in 21 st century households.
The future of text-based publishing
When talking about the future of text-based publishing there is at
the present time a severe amount of doubt. As previously
mentioned, reliable data is very rarely more than a decade old, and
this short timeframe does not provide enough of a sample space to
be considered accurate.
The digital revolution is just that, a revolution, and as such much of
the changes that are taking place within the publishing world can
be considered new and uncharted waters. Almost all reliable data
is less than a decade old, and such a short timeframe cannot be
expected to provide extrapolative insight into the future of the
publishing industry.
To this end, it is important at this point in time to consider the
wider context of digital media when discussing the potential of e-
texts
Comment [m5]: Commas?
12  Monash University Publishing 2012
Digital publishing with text-based media vs. other forms of media
In order to improve the quality of discussions within the scope of
text-based publishing it is therefore imperative to look towards
other media, so as to maximise the usefulness of the lessons learnt
within the past decade. While the problems faced by publishers of
other media may not be identical to that of text-based publishing,
there are certainly similarities. Because other publishers have
faced (and in some cases overcome) these problems, it is possible
that Sound Publishing House may learn from the way in which
these mutually exclusive companies have mastered their specific
niches.
The first problem overcome is that of piracy. It can be assumed
that as soon as there is a market for a digital product that it will
become available through illegal means. In certain cases the piracy
rates of a product can be measured as a form of success and desire
for a product. Successful companies such as ITunes (fig2.1), Netflix
(fig2.2) and Steam (fig2.4) have been able to offset this by
focussing on service and community. When paying these
companies you are not really paying for the product (which can be
pirated for free) you are paying for the service and convenience. It
is easier and faster to download from these three legitimate
sources than it is to pirate, and they all boast considerable product
variety.
The second major problem comes from the increased
competitiveness within the online market. In this sense, it is
common for the successful publishers to rely heavily on
competitive pricing and the profitability that comes with running a
successful brand name and positive reputation. Added to this is the
requirement of any successful digital distributor to incorporate
smart design into their online stores. All three of the previously
mentioned successful distributers thrive in the field of customer
accessibility and satisfactions in regards to the navigation of their
online stores. This is also present with other successful digitally
based companies such as Google and Facebook, who have both
focused on minimalistic and simplistic design.
13  Monash University Publishing 2012
Recommendations
When dissecting the success of other mediums, it becomes quickly
apparent that from a publishing perspective that it is no longer
acceptable to simply sell a product. If there is a market for a
product then it is safe to assume that the product can be freely
obtained through illegal distribution.
The most successful publishers and distributers do not simply sell a
product. In the current climate of the online market, it must be
understood that a successful company does not simply sell a
product; rather, they sell a service. The successful online company
sells accessibility, convenience, faster download speeds, customer
service, the protection of malicious viruses that might be infected
within pirated copies and a wider range of products than can
otherwise be obtained. The successful online distributer is
proactive within the realms of customer satisfaction.
With physical stores, a distributor competes with the local market;
however, with digital stores the publisher may also be expected to
take on the role of distribution and sales in such a way that they
are able to compete with an international market. Publishing and
sales should always be managed with this in mind, and to a certain
degree, pirates should not be considered as market wreckers but
rather as major competitors for business. Lower prices within the
digital market means a lower amount of funding to provide quality
service and customer satisfaction, and prices should always be kept
relative to the user experience. It should always be in the mind of
the publisher that online customers are able to very easily compare
prices and services and they are also notorious for being fickle. If
customers can get better service for free or cheaper than what
they are currently paying for, they will leave. However this can be
used as strength by upcoming publishers. If sound publishing house
can balance good customer service with good prices then it is very
reasonable that the company will be able to secure a foothold
within the online market. This is provided that the company can
produce enough exposure to warrant an influx of customers, such a
goal can be achieved by investing in smart advertising and offering
bonuses and discounts to customers in return for
recommendations.
Comment [m6]: capitals
14  Monash University Publishing 2012
References
Pew Internet Study: The rise of e-reading, April 4, 2012
http://libraries.pewinternet.org/2012/04/04/part-3-americans-and-
their-e-readers-and-tablets/
iSuppli: New iPad 32GB + 4G Carries $364.35 Bill of Materials,
March 16, 2012 http://www.theaustralian.com.au/australian-
it/ipad-mini-costs-182-to-build/story-e6frgakx-1226510440270
LA times: Amazon's $199 Kindle Fire costs $201.70 to build,
November 18, 2011
http://latimesblogs.latimes.com/technology/2011/11/amazons-
199-kindle-fire-costs-20170-to-build-report-says.html
Cnet: What's the future of e-book pricing?, April 13, 2012
http://news.cnet.com/8301-1023_3-57412592-93/whats-the-
future-of-e-book-pricing/
Wired: Publishers Hustle to Make E-Books More Immersive April 9,
2012
http://www.wired.com/underwire/2012/04/future-of-ebooks/
The Telegraph: Reading the future: Digital books and what's to
come for literature February 17, 2012
http://www.telegraph.co.uk/culture/books/bookreviews/9086635/
Reading-the-future-Digital-books-and-whats-to-come-for-
literature.html
PWC: The future of eBooks
http://www.pwc.com/en_GX/gx/entertainment-
media/pdf/eBooks-Trends-Developments.pdf
Moodle Resource 1: Electronic Books
http://moodle.vle.monash.edu/pluginfile.php/868140/mod_resour
ce/content/1/Electronic_books_.pdf
Moodle Resource 2: Project Guidlines
http://moodle.vle.monash.edu/pluginfile.php/931088/mod_resour
ce/content/1/ATS%201298%20PROJECT%20REPORT%20GUIDELINE
S%20mp.pdf
 

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