Racingpost.com

Racingpost.com is the online branch of the Racing Post brand – a daily British sports newspaper which devotes large amounts of print space to horse racing, greyhound racing and football. The paper was founded in 1986 by Sheikh Mohammed Bin Rashid Al Maktoum as an alternative to Sporting Life but has since gone on to garner a significantly larger reader base than its rival, with current circulation at about 80,000, rising to 150,000 on big race days like the Derby or the Gold Cup weekend. Racing Post first ventured online in basic form in 2000 but didn’t start its larger e-commerce operations until 2002 – relatively late compared to other e-commerce vendors.

It’s latest website, complete with a subscription service and payment system, was launched in June 2009 and is regarded as a fresh and novel business model for the modern age. This essay will examine the reasons for its implementation and initial success.

When the site was first launched, it provided articles and opinions often duplicated in the printed version of the newspaper. As the site grew, it began to house a database of racing results and also provided up to the minute information (something which traditional print media lacks). Online only articles started to appear as the site gathered traffic (Racingpost.com was ranked 6000th within the UK on Alexa in 2006).

The aim was trying to develop “audio and video content with paid-for content forming a key strategy”. Now the site offers customer personalisation in the form of live racecards, race videos, news archives, bloodstock and tipping services. Racing Post are keen to state themselves than members can “still access over 90% of the website free of charge”. However, this hadn’t stopped membership to paid for content approaching 10,000 in the three months since the relaunch, with over 25% of subscribers opting for the £200/yr “premium” package which allows access to over 500,000 pages of historical information.

In contrast, the Sportsman was launched in 2006 as a rival to the Racing Post, but  folded within 7 months. Roy Greenslade, writing in the Guardian, argues that the paper never “had a niche” and that there was a “huge time lag [between] the paper’s launch and the online version”. He says the site “[wasn't] the most user friendly, despite its newness”. Interestingly, the now-defunct site simply has a paragraph explaining the fate of the newspaper and a timeline detailing the series of events from March to October which led up it being placed into administration. Perhaps this is the primary reason for Racing Posts dominance – it’s brand, it’s image as well as it’s loyal followers. It’s ability to embrace technology and modern e-commerce practices has ensured it has remained the market leader from it’s online launch to the modern day and ensures it is unlikely to suffer the same fate as the Sportsman.

The website itself must be partially attributed to this success. If we examine the site according to WebQual (see appendix A), the site scores favourably. It is easy to navigate, opting for a traditional navigation bar with which to separate the elements of the site. The colours are neutral with a focus on function over form and hence are an appropriate choice for the type of site. The site opens quickly and works correctly in an array of browsers. The homepage is littered with `top stories` for the days racing action – most users will want to access this first so making it accessible on the front page can only aid interaction. A key qualifier, according to WebQual, is whether the information a site presents can be trusted as believable and accurate. In the case of Racing Post, this is certainly true – the site and the brand depends and prides itself on the accuracy of information and small mistakes cannot be entertained, especially in such a fast moving environment. For example, printing incorrect results from a race could have disastrous consequences for customers and would almost certainly affect customer retention. Depth of information is important too – the site doesn’t bombard casual viewers with lots of information, instead allows customer search and navigate to find their own ‘level of information’. Anyone can register for a free account, which allows basic access to lots of statistics. When providing personal information, the site feels secure and handles financial information whilst adhering to modern encryption techniques. The sites casino and poker rooms are regulated in accordance with gaming law.

From an accessibility standpoint the website is caught between providing an information heavy service yet still making it simple enough to use for older or disabled users. The Nielsen Norman group who conduct research into user-entered design estimates that 20% of web users are affected by usability issues and account for $25 Billion per year in e-commerce transactions which is a number “no company can afford to ignore”. In extreme cases, poorly designed websites may face legal action. In a landmark and somewhat bizarre case in 2006 (National Federation of the Blind vs Target Corp), the NFB argued that Target’s website was “inaccessible to the blind and therefore violates .. the disabilities act”. The barriers given in evidence included “lacking alt-text” (a code that allows blind users to `hear` a description of an image), “inaccessible image maps” and “required the [sole] use of a mouse to complete a transaction”, therefore alienating blind people. Target responded by arguing that “no civil rights law apply to the internet”. The court denied this motion, saying that Targets’s website was a “service, privilege or an advantage to Target’s physical stores”. Target settled the dispute for $6m.

One would assume that Racing Post would take precautions to avoid such lengthy legal disputes (although the lack of physical outlet stores would probably mean no case could be made against them anyway). Regardless, the case highlights the importance of modern websites catering not just for the blind but for all disabilities and ages. It is a UK legal requirement under the Disability Discrimination Act 1995 (revised 1999) that “service providers are required to provide auxiliary aids and services where this would enable or make it easier to use a service. Service providers are required to change practices, policies and procedures which make it impossible or unreasonably difficult to access a service.”. For Racing Post, this is extremely difficult. However, the site does provide alt-text on images and racing information is divided logically so that a screen reader should be able to make use of the information without major problems. The audio-visual content of the site (which has improved since the June 2009 relaunch) also expands the experience for users with accessibility problems.

The site is trusted within the racing community, a fact demonstrated by the large number of sign ups to the subscription based model. Perhaps this is mostly due to it’s well known brand image and it’s reputation for reliability. Racing Post does not act as a bookmaker themselves, although they are heavily affiliated with many high street bookmakers. A popular column that runs on the site and in print  is ‘Pricewise’, the alias of tipster Tom Segal. After a profitable run of Saturdays where Prisewise was very successful, the bookmaker William Hill listed it as an excuse to city bosses as to why their profits were down. When bookmakers started adjusting to Segal’s predictions, Racing Post introduced ‘Pricewise Extra’, which is “billed as [his] response to the betting that bookmakers release on Saturday morning .. [it] comes too late for the print edition but is at the core of the online service” that subscribers pay for. When charging for content, the site has to make sure it is of the “highest quality.”. It is this type on online only, last minute content that is at the heart of Racing Post’s new e-commerce model. According to WebQual, community experience is also important when accessing the quality of a website. However, I believe it is fair to not give a significant amount of weight to this qualifier – the site is not designed to be a community network nor is it catering to enthusiasts who want to interact with others – there are plenty of forums online catering for this already. Racing Post has user accounts with many of them as representatives of the site. The site is simply designed to be the online authority on horse racing (however with the June 2009 relaunch the site has also diversified into reality betting and politics).

Johansson and Mollstedt, in their paper exploring Amit and Zott`s original value creation concept, suggest that the four dimensions in the original model (efficiency, lock-in, complementaries and novelty) should (when considering Internet only businesses), “not only be used as value creation sources, but moreover as value evaluation “dimensions”. The reason for this being “due to a growing focus .. on complementaries”. They conclude that the value is the “sum of all values that can be appropriated by the participants”. In Racing Posts case, this theorem sits well. Value is created in the four areas outlined above, which I shall examine soon, but the Internet only e-commerce operations which Racing Post have undertaken means that it’s “first mover” status is assured hence value is inherently heightened. The complementaries and other sources the site offers are all improved due to this “first mover” status.

The efficiency of the site is not only measured in speed and customer satisfaction. Amit and Zott argue that “efficiency can be gained through cuts in costs of transactions”. Racing Post, by handling more transactions per customer online than it could ever hope to do with traditional media means its online venture is a key service when considering the efficiency of it’s overall operations. Put another way, the relatively small cost of the IT infrastructure to support these transactions when compared to the potential number of subscribers it could handle is small and the system could generate net profits for the company. Efficiency can also be improved with “up to date information”, something which the Racing Post relies upon by the very nature of the site.

First mover status generally means that novelty and lock in are easier to attain. Racing Post created a unique and valuable service for racing affectionados which stood them in good stead when it came to monetising the huge amount of data they had, despite lots of the site still being free. When the project was started, there were no other competitors. To current subscribers, a recurring monthly payment with the leading provider of statistics is enough of a lock in to dissuade them from trying other, smaller competitors (for example flatstats.com or  horseracebase.com). Psychological investigations have shown, even before the advent of e-commerce, that a loyalty of reward programme can be highly motivating and have a “significant, positive effect on customer retention”. Racing Post adheres to this advice by offering discounts for repeat subscriptions or long term packages. The online casino which Racing Post also lends it’s name to offers users a points structure for repeat play and upgraded (personalised) customer support for larger players – exactly the same rational as “comps” in traditional brick and mortar casinos.

In terms of novelty, the site is appealing for new customers who are able to access video archives, podcasts, blogs and comprehensive historical results once they sign up for a free account. With basic membership, subscribers receive analysis of each days `card` (each meetings races). With tipping membership, priced slightly higher at 9.50GBP/month, subscribers receive up to the minute news and “in running” advice. Racing Post also offers, as an additional service, a subscription to Racing UK – a live TV channel which subscribers can view on their computer. It is these novelties together that create a sense of value for the customer. They have no need to go elsewhere or use different sites as Racing Post has catered for their information, tipping and live stream in a seamless transaction. This is certainly lock-in value creation; perhaps Racing UK could even be considered a complementarity (it’s given extra value when bundled with tipping packages).

Since Racing Post’s definition of complementaries is limited in the offline sense (they have no physical stores) their horizontal integration with other products and services is especially important. The site contains adverts mainly to bookmakers but also to other areas of the site which Racing Post administer themselves, such as “PDF newspapers”. Customers who create an account with a bookmaker after being referred by Racing Post are a good example of network theory, in which “complementarities can be expected to increase value by enabling revenue increases”. In this case, the customer is more like to purchase a Racing Post subscription now that he has an account with an online bookmaker. Chris Cook notes that “the relationship between racing’s daily paper and the bookmakers is always likely to be a close one” Furthermore, the complementary that Racing Post has offered in this instance has increased the efficiency for the customer who through network generators now has “access to products and services that are complementary to the primary product of interest”.

It is clear that Racing Post  in its online form have taken a significant step towards creating a highly valued e-commerce model. It is not usually easy to monetise sports betting content and many companies have failed in doing so. SportingLife.com attracts record numbers of visitors but it’s parent  company, PA Sporting Life, still reported losses of 4 million pounds once some of it’s content was monetised in 2001. Racing Post seems to have had initial success. A stable e-commerce business model and the reputation of the brand should ensure that it does not suffer the fate of the “Sportsman”. Once the novelty of the subscription service has worn off (it is, after all, only 6 months old in its current format) a truer test of the value of the e-commerce model will be seen.  Regardless, the model is an interesting concept and clearly highlights the advantages of a unique service (novelty) when attracting customer to online content.

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A) Webqual table for Racingpost.com

Criteria	Score	Weighting
I find the site easy to learn and operate	6	6
My interaction with the site is clear and understandable	5	5
I find the site easy to navigate	5	6
I find the site easy to use	5	6
The site has an attractive appearance	6	5
The design is appropriate	5	5
The site conveys a sense of competency	7	5
The site creates a positive experience for me	6	4
Provides accurate information	7	7
Provides believable information	5	4
Provides easy to understand information	4	5
Provides information at the right level of detail	7	5
Presents the information in an appropriate format	7	6
Has a good reputation	7	6
It feels safe to complete transactions	7	7
My personal information feels secure	7	7
Creates a sense of personalisation	3	5 (depends)
Conveys a sense on community	3	5 (depends)
Makes it easy to communicate with the organisation	6	5
Overall view of the site	6	7

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