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'the people formerly known as the audience…'

If you are even remotely plugged into the digital media debates of our time, you’ve probably encountered Jeff Jarvis, author of What Would Google Do and a persistent openness extremist. Despite my description of Jarvis’ views, I happen to find much of what he says compelling, and I particularly liked the way he recently expressed his dissatisfaction over the iPad.

An overreaction? Probably. But I can certainly get behind his rationale. Jarvis believes the iPad’s limited ability to create content is a deal-breaker. I agree. The new Web is all about creating and sharing, not passively consuming. In particular, I like the way Jarvis’ expresses this sentiment in his resent talk at re:publica 2010 in Berlin (about 37:00 on the timeline):

“The problem with the iPad is I couldn’t see a use for it…That scares me: that we move back from a world where we, the people formerly known as the audience, become an audience again.”

Also, check out his comments on why the media loves the iPad (read: because it gives them back the control that the Internet has democratized).

Don’t get me wrong; I’m not a Jarvis fanboy in every respect. However, I do think he forces us to consider our preconceived notions about digital media, and his arguments, if not compelling, at least serve a provoking pedagogical function.

News media's pre-launch love affair with Apple's iPad

Media companies have big plans for Apple’s iPad. Just ask Wired Magazine and Adobe.

Of course, Wired is far from the only publication seeing dollar signs in the iPad’s glossy reflection. The New York Times Media Group has been struggling over the best subscription price to offer for their iPad distribution system — anywhere from $10 to $30 a month. The Associated Press recently announced “AP Gateway,” a division focused on developing new content and distribution models for mobile devices, and you better believe an iPad app is top on their to-do list. The Wall Street Journal and Condé Nast also have plans to harness the tablet’s potential using custom applications.

Media companies seem to think the iPad holds the answer to what ails them, namely the trouble getting people to pay for content. On the iPad, they propose, people will be willing to subscribe again.

Time for good-news, bad-news. On the positive, news media seem for once to be anticipating a trend. Perhaps as a result of the lesson they learned from their belated entry onto the Web (link to 10,0000), media companies have picked up the pace, announcing iPad applications before the device even hits stores this April. Traditional media is not known for experimentation, and any willingness to innovate is refreshing.

The bad news is, even though they’re lined up behind an Apple device, there’s no guarantee big media’s dreams of a workable subscription model will come to fruition.

Wired seems to be a good example of what I’ll call the “enhanced content” model. They propose offering subscribers an enhanced reading experience — whether through value-added content or better content management — will justify the monetary exchange. Most people, myself included, believe this to be a good approach. Traditional news content has become undervalued, so it falls to news media to find ways to increased content’s value to readers. Of course, there are other approaches, but this seems to be the most straight-forward and the one well represented by Wired’s current iPad strategy.

In the case of The New York Times,  the application they plan for the iPad will reportedly be something similar to the New York Times Reader currently available for personal computers. However, the company may charge twice as much for the same functionality on the iPad. While moving the same content to a different device may qualify as innovation, I believe it does so in definition only. The move to iPad does not justify, in my eyes, such a jump in quality, and does not fall under the enhanced content approach.

In the end, I think — and hope — many companies will take the initiative to enhanced content. However, this means radical shifts in the way news media operates, bringing in new innovators, programmers, and designers. Legacy media’s ethos — and wallets — may not fit the change. At least for a Wired subscriber like myself, it’s refreshing to see the edgy tech-magazine continuing to innovate on what could be the future of magazine content. As for the rest of the news media, without innovation, their love affair with the iPad may be a one-night-stand.

AP Gateway goes mobile, plans to serve iPad content

The Associated Press announced Friday it will soon create a new business unit called “AP Gateway” to focus on distribution of content to mobile platforms such as e-readers. Here’s a copy of the full press release via Tomorrow’s Book.

While the scope of AP Gateway will extend beyond e-readers, the predominance of the iPad in its announcement is certainly a vote of confidence in the new Apple platform.

Also notable was AP CEO Tom Curley’s statement on the nature of mobile content:

“Rather than just repurpose our content across formats, we now have a real opportunity to innovate and create differentiated experiences of the news across formats that will excite all of us, from producers to consumers of news.”

Now, I’m not so naive that I don’t recognize this is standard boiler-plate for news ventures today. No one endorses simply repurposing content anymore. However, as the iPad and e-readers gain importance in the eyes (and wallets) of news companies, the possibility of reader-specific content could soon become reality. In my opinion — and arguably the AP’s opinion — the iPad may have the market draw to kick of that trend.

Doing the Math: NYTimes details price of publishing e-books

New York Times writer Motoko Rich did something my j-school professors nostalgically refer to as “doing the math.” Rich’s article, “Math of Publishing Meets the E-book,” lays bare the costs publishers face in the evolving world of e-book sales. The main question Rich tackles is this: do publishers save enough through eliminating printing costs to justify reducing the price of e-books? While on its face, the answer appears to be yes, Rich still reports that publishers are weary of shifting costs during the print-to-e-book transition.

Here’s the much-simplified price layout:

For an average, $26 hardcover, a retailer typically pays the publisher $13. Of this, the publisher pays:

  • $3.25 to print, store and ship the book
  • $0.80 for cover design, copy-editing and typesetting.
  • $1 for marketing (may be higher or lower depending on title)
  • $3.9o in royalties to the author (about 15%)

Out of the remaining $4.05, the publisher must pay overhead for editors, designers, office space and utilities before taking a profit. Any profit may then be used to recoup unrealized author advances.

For the e-book, Apple has agreed under the proposed “agency model” to act as a agent/retailer, taking 30% commission of the price determined by the publisher. So, for a $12.99 e-book, the publisher starts with $9.09. From this they pay:

  • $0.50 to convert text into a digital file, typeset and copy edit
  • $0.78 in marketing
  • $2.27 to $3.25 in royalties to the author (debate rages on over whether the 25% royalty should be calculated using the gross revenue or the consumer price)

This leaves $4.56 to $5.54 for the publisher before any overhead.

Doesn’t that make e-books more profitable? Maybe. This simplified snapshot leaves out revenue recouped in sales of paperbacks and shifting sales margins. Remember, e-books only make up a small percentage of publisher revenue — 3 to 5 percent — and if that begins to increase, publishers could be trapped with the printing costs of their old model and the revenue of the new, e-book model.

Where have I heard that one before? Oh yes, in newspaper industry printing costs. In the near future, publishers may face the same dilemma many newspapers are grappling with now: at what point do you stop the presses and go entirely digital?

NYTimes: Who gets the iPad — print or web?

February 17, 2010 Leave a comment
New York Times on the iPad

Can NYTimes replicate iTunes?

There’s nothing media-rumor sites hate more than blatantly generalizing people who read the New York Times (read: sarcasm). But that said, it’s long been a foregone conclusion that NYTimes readers overlap considerably with the iPad market. Thus, the Times became a major proponent of the new platform — and the potential for new subscription revenue.

However, according to reports coming out of Gawker and various other Apple-rumor sites, the print and digital newsrooms over at the Times disagree over who gets to claim this new territory. The print division calls dibs on the ground that the iPad will do nothing more than distribute the same paper format offered through physical media. It argues subscriptions should cost $20 to $30 a month — presumably equal to a print subscription — to avoid a massive exodus from the paper to the pad. (I guess we’re just ignoring that the paper is available free online until 2011 and that the iPad eliminates all printing and distribution costs?)

The digital operation has proposed a more-reasonable $10-per month subscription, and is promising interactive post-paper features regardless of the final pricing outcome.

Obvious questions aside, what seems like a prima-facie “turf war” could actually be a deep philosophical question for the future of news media on e-readers. What is the product? Is it simply another way to distribute the paper, similar enough with traditional print to justify higher pricing? Or is it something new, requiring a new pricing model and marketing focus?

My inclination — and what I suspect will be others’ as well — is to view subscription apps as something new. Fancy new distribution models for the same product won’t justify use, in my opinion.

However, as is Apple’s legacy, premium distribution and software might make a difference, e.g. iTunes. The music industry was struggling to combat illegal downloads before Apple’s music infrastructure completely reversed the trends, proving that people will pay for music downloads if it is wisely priced and convenient. Could the New York Times pull off the same thing on Apple’s new platform? I think it’s possible, but it will take precision marketing, content design, and a leap of faith.

iPad an iReader?

February 2, 2010 Leave a comment

Apple released the long-anticipated iPad last week to tremendous hype. From Apple fanatics to juvenile humorists, we all held our breath as Steve Jobs revealed the device that months of rumors had promised would be the end-all device and the new hip tool to tote around.

But as the tweets and blog reviews came to a boil, the blogosphere seemed decidedly mixed. Publications like Wired released a lists of problems that come down to the realization that Apple left so many features out of the iPad — not to mention compatibility with all those adapters — that many people viewed the devise as a huge step backward.

However — and here I’m getting to the meat of the story — there is one feature debuting on the iPad that struck me off guard: iBooks. Apparently, Jobs means for the new iPad to become a prominent e-reader device. With its larger, glossy screen and the new iBooks store (an iTunes-esque download store), the iPad could be in a great position to bring convenient e-reading to consumers. Of course, Apple insists the iPad offers much more than e-reading, but this striking feature has many publishers and news organizations drooling over possibilities.

Will the iPad work as an e-reader? Price is certainly an obstacle. Even the cheaper, wifi-only version will run consumers a cool $499, the G3 model $829. The extra price may be justified by the fact that, after all, the iPad is more than an e-reader. However, because the device can only run one application at a time, it might as well be just another e-reader while running iBooks.

Compatibility is another potential problem. Apple has cultivated an infamous reputation for locking users into proprietary hardware and software. I can only imagine the frustration of trying to transfer my downloaded e-books to another platform.

One thing the iPad has that Amazon’s Kindle and other competitors never quite grasped is the all-important cool factor. Owning the latest Apple gadget will always be a priority for some, and that market impetus may be enough to grab dominance.

In addition, many publishers seem eager to have their content associated with the iPad. Print news media in particular will be looking for a way to monetize content on a platform of users they suspect will be willing to put up with the extra expense. Of course, answers will have to wait until the official release date, April 2010, but that won’t stop speculation.