Friday, March 12, 2010

The iPad and Tablet Publishing: the key to success is experimenting with revenue models right at launch

Today you can go to the Apple web site and place your order, pre-order really, for an iPad. The first iPads, the WiFi model that lacks 3G, will be delivered on April 3rd and you may start see them showing up at your local Starbucks that day -- the start of tablet envy.

For newspapers and magazines, this is potentially the start of a new medium. For now, its just another way for readers to access online content.

The business model of the iPad is simple: the iPad is an app deliver system, the same way a cigarette is a nicotine delivery system. The iPad does not make phone calls, and because it is not always online -- since you need a WiFi connection, or when the 3G model is available, a data contract with a carrier -- the main utility of the iPad is running application written specifically for the device. The New York Times, for instance, should have their app available from Day One, as will some Condé Nast magazines.

For those publishers waiting to see what happens with readers like the iPad, the only way readers will be able to access their publications will be via the Safari browser. For them, the iPad will simply be another online device that takes readers to their web sites. The business model, therefore, is not different than regular online publishing: sell banners and models, and whatever other monetization the site offers.

For the tablet publishing pioneers, the real challenge is grappling with the new medium that is being created: tablet publishing.  Tablet publishing is not publishing on tablets -- after all, since tablets will have browsers this is simply online publishing -- but application tablets: applications written specifically for an e-reader, whether that is an iPad, the Kindle or any other reader that enters the market.

I don't think the New York Times gets enough credit for their commitment to the form. In most cases, major media companies come late to the party, entering after the some early adapters have proven the merits of the form.  In the case of the Times, publisher Arthur Sulzberger has been right out front in stating that the Times will be among the first to offer an app specifically written for the device.

Just yesterday Sulzberger laid out the philosophy the Times will embrace. The iPad is also going to be a critical part just the way the Kindle's a critical part. At the end of the day we can't define ourselves by our method of distribution. What we care about at the end of day is our journalism, our quality journalism," Sulzberger said at the Bloomberg BusinessWeek Media Summit.


☜ Starting today, Apple is accepting pre-orders for the iPad.


For the Times, the future is the paywall -- or at least until they shift directions again -- and although I disagree with the merits of the paywall, I don't think the Times is crazy for trying.  The metered paywall model is a reaction to the realities of web publishing: costs may be lower than print, but so is revenue due to the lack of subscriptions and the limits of current web advertising methods.

So what about the iPad? Will the Times create a reader like their iPhone app -- no, we already know that won't occur because the screenshots we've seen already show that the Times sees the iPad as being more  like web publishing than mobile publishing. The two biggest questions will be "will the Times charge for their iPad app"? and "will the Times look different from what we already see in print or online?"

This is where it is important to look at other publishers.



By now most media folk have seen Bonnier's Mag+ video -- if not, go here -- or the videos produced by Wired or other publishers. In the videos one sees that some of the major magazine companies are already recognizing that tablet publishing will be different from both print and online.
I don't think the New York Times gets enough credit for their commitment to the form.
Like print, tablets allow the reader to casually browser the product, to linger over long form stories -- or at least that is the thought. But like web publishing, there is the ability to embed video, to create graphics that are interactive, animated.

In the Bonnier Mag+ video, design partner BERG's Jack Schulze argues that the flip book "metaphor" of page turning does not work for online or tablets compared to the idea of scrolling.  So what we end up with on a tablet would be that content might be consumed like a print product -- leisurely, in depth -- but laid out like an online product.

Along with demonstrations by Hearst and Condé Nast, what we see is the publications on a tablet can be far more interactive and animated than print, but can lend themselves to long form, engaging content, unlike the web.



But how will publishers make money? Will the reader have to pay for an iPad app? Or will the app lead the reader to a paywall where the reader must subscribe? Or will there be a single-copy model?  Yes, yes and yes. All of these will be experimented with.

And then there is advertising . . .

I think advertising is the key. How can you read GQ or Vogue without the ads? From the day the iPad was introduced by Steve Jobs, the advertising community has been having its own conversations about tablets. Some, like Phil Johnson writing at AdAge.com see the iPad as a huge opportunity. "With Apple's announcement of the iPad last Wednesday, publishers may have just gotten a reprieve from their death sentence, and agencies may have just been handed a convenient way to get into the content business."

"Why would the iPad be significant for marketers? Because it creates a whole new channel for sharing content with consumers, and it also begins to define a new creative medium that can become part of a communications strategy," Johnson writes.

For some, iPad advertising will be tied to mobile advertising and shares much in common with the iPhone. But that form is also in its infancy, and frankly, does not offer the potential for as rich an advertising form as the tablet -- or print. For others, there are opportunities to think outside the box and create uniqued forms.

For newspaper and magazine publishers, the golden solution would be some answer to advertising declines -- some way to get advertisers excited again about their mediums. The iPad and future tablet readers do offer some hope in this area.

Recommendations:

First, don't launch a tablet product that you think will depend on advertising without . . . advertising. Like a magazine launch, make sure that very first issue contains the kind of advertising you want to see in the future. This means publishers, and most importantly, the sales staff, will have to work intimately on the launch. Now is not the time to make the web and mobile media mistake yet again: creating the new products in a bubble, delegating the decisions to someone without ties to editorial and advertising.

Second, if you want to charge for your application plan for it upfront. Apple does not allow publishers to charge for their apps without being part of the developer program. Sadly, publishers have been online and mobile for sometimes more than 15 years without realizing that they are now in the technology field. Hire developers, hire programmers, hire data people, if you can. If you can't, understand that you are severely handicapped and seek out vendors that can act as your own outsourced technology team.

(Desktop publishing has worked to separate publishers from the tech side of their businesses. I am old enough to remember hot type: every publisher also needed to have in-house expertise in printing technology, trained professionals who understood setting type, the presses, etc. With the advent of desktop publishing many of these areas were delegated to the printer. All one needed were a few art directors who understood Photoshop and Quark and they were in business. Today, a publisher can still outsource their programming to app developers, but the real innovation will come from the companies that bring it in-house and exploit the fact that this is not just about content generation, but also about creating unique products for a mini-computer.)

According to paidContent.org, Hearst is moving full speed ahead on a paid app strategy.  The reporter, David Kaplan states the case: "In immediately charging for the apps, Hearst also believes it can avoid what major online publishers now perceive as an early mistake; that is, relying primarily on ad-support instead of transferring the newsstand price structure to the internet." Hearst's strategy, according to Kaplan, is to combat the crowded app field on iTunes by having a high volume of apps themselves. I believe, however, that this points out the weakness of a paid app strategy: too many apps going after too few buyers. For large media first that can promote their apps effectively, this strategy could work. For smaller publishers, this presents a marketing challenge.

Finally, Apple's iPad is only the beginning of the medium. It's not the first tablet, it's not the first e-reader (Amazon does not share its Kindle sales figures, but everyone assumes they have sold thousands of the units.). but Apple's iPad will transform tablets the way the iPhone transformed smart phones. But as soon as you feel comfortable with the idea of launching a publication specifically for the iPad you will have to think about HP's tablet, Microsoft's Courier, etc. It's the nature of publishing today. Embrace it.



iPad mania: another concept video, this one from De Telegraaf, a Dutch newspaper. The video was posted yesterday on YouTube. You can find this one and other demo videos on the TNM channel under Favorites.

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