Saturday, March 27, 2010

Apple to announce new mobile ad platform on April 7 Mediapost reports; will iAd be Apple's 'next big thing'?

Mediapost is claiming that Apple will announce its 'next big thing', a new personalized, mobile advertising system. The platform may be called iAd and will be unveiled on April 7 according to the report, four days after the launch of the iPad.

If true, congratulations to Mediapost on the scoop.

According to the report, the advertising platform is being called "revolutionary" and "our next big thing". Mediapost could give few details, and if their sources are correct, I'm sure developers or Apple personnel would be leery about divulging too much. Nonetheless, this move would be logical as Apple acquired mobile advertising company Quattro Wireless at the beginning of the year.

If tablet publishing is to take off, the iPad may need to have its own advertising platform to differentiate it from other forms of web or mobile mediums. Advertising can already be embedded into content through the traditional methods -- web based, app based, etc. But creating interactive advertising that makes iPad publications more valuable that traditional web advertising could spur the growth of the tablet as a platform. It would also, of course, be a profitable new revenue line for Apple.

Leeks concerning the iPad and Apple's mobile advertising plans have been minimal. Both Apple and Google have grown into such giants that few publishers or developers dare break silence. That makes this amusing story suspicious since neither company does anything casually.

Week in Review

Short reads on a Saturday morning:

• iPad pricing was the issue of the week. With users set to receive their iPads starting one week from today, publishers that want their products available in the iTunes app store need to submit, price and get approval of those apps. A WSJ story slipped in a reference to their iPad pricing strategy at the end of a story concerning magazines and the iPad. Stating casually that the WSJ would charge iPad users a $17.99 a month subscription fee, a fee higher than what the journal is current offering readers for a combination of both the print edition plus online access. Was it a trial balloon, or Rupert Murdoch giving Apple the finger. (Later that week the WSJ ran a critical story about Apple's board of director.)

If to prove that Murdoch was deadly serious about paywalls, Murdoch's UK newspapers, The Times and Sunday Times announced that it would begin charging web readers £1 per day, or £2 per week for access to their online news. Will Tories start reading the more liberal Guardian? (Sorry, that was a joke.)
Image and video hosting by TinyPic
• App makers are gearing up for the iPad, as well. On Monday I interviewed Handmark's Jon Maroney, senior veep of mobile publishing, about what the vendor had up its sleeve. Handmark is already a leading developer of mobile apps for publishers, supporting not only the iPhone but other platforms such as Android and Blackberry. Maroney appears excited about the move to tablet publishing stating that "the whole beauty of the iPad is that you can pull in all kinds of additional information. We're going to see an explosion of innovation over the course of this year around that." The Daily News recently launched an iPhone app (iTunes link) developed by Handmark. It will be interesting to see if the paper is among the first on Apple's tablet, as well.

• Not everyone is jumping on board, of course. Although large publishers like HarperCollins, Hachette, Penguin, Macmillan and Simon & Shuster have all signed agreement to sell their books through Apple's iBookstore -- set to launch the same day as the iPad, April 3 -- Random House has decided to opt out for now.

To recap, for those just waking up, there are several ways one can sell their books on the iPad: through Apple's iBookstore and their selling their own individual apps through the iTunes app store.  The iBookstore will employ an "agency model" where the publisher sets their own price and receives 70 percent of the transaction, with Apple grabbing a 30 percent commission. This is the model Apple has used inside the app store to great success.
Image and video hosting by TinyPic
The other way is to develop your own apps, something Penguin Books CEO John Makinson (the gentleman to the left) said his company will explore. The disadvantage of this approach would be the development costs -- each book would require the creation of a new app. The advantage, though, would be that each book could receive special treatment -- adding multimedia elements like audio and video, as well as interactivity, even games. Also, because product would be unique, they could sell at a premium.

I might add that there is no reason a publisher couldn't take advantage of both models. One could sell a text and picture only version of a history book for the standard $9.99 in iBookstore, for instance. Then sell a much higher priced app version, complete with videos and interactivity, through the iTunes app store. The record labels already do this to a certain degree.

• The NAA put out is final report on the state of newspaper advertising for 2009 and it was down right ugly: print revenue declined 28.6 percent. Additionally, online advertising declined for the second year in a row -- by 11.8 percent in 2009 reflecting the dismal economy. This makes the fourth year in a row that newspaper print revenue has declined, and the seventh down year in the decade.

• On the bright side: neither RBI nor Nielsen Business Media announced major divestitures this week -- not that there is much left of the two formerly major B2Bs. But don't expect this to last as RBI, in particular, have several groups that would be very attractive to buyers. Any PEs out there want to invest? Just give me a call.

Friday, March 26, 2010

Photoblogging Friday - 12

For the second week in a row I've had to set aside a Photoblogging Friday post put together by our photography editor Dean Brierly. Dean is in Japan this week and his photograph from Jeff Alu will appear here next week. Last week we replaced that feature with a look back at the work of the great civil rights era photographer Charles Moore who died last week. This week we remember Jim Marshall, the great photographer known for his shots of rock and jazz musicians from the sixties and early seventies. Marshall died Tuesday night in New York.

In 1964 an already fairly well established young photographer moved back to San Francisco from New York and set up shop. “I drove a car cross-country, and moved into a small apartment in North Beach," Jim Marshall said in an interview for the magazine Double Exposure. “I was getting fairly well known and started shooting all the rock shows. I started doing some work for a small magazine out of L.A. called Teen Set, and did some of my most important shoots for them."

Top, left: John Coltrane, shot for the Prestige LP Settin' the Pace.
Bottom, right: Janis Joplin, Winterland 1968
Photographs © Jim Marshall

His timing could not have been better. He had once lived in the City and had taken some of the best shots of the great John Coltrane for Ralph Gleason, then the music critic for the San Francisco Chronicle.

Marshall seemed to be everywhere in the rock scene after that shooting the first U.S. tours by Cream, the Who, the Beatles. He was at all the important rock events of the era --  Monterey in '67, Golden Gate Park in SF, Woodstock in '69 -- and his LP cover shots for the Allman Brothers Fillmore East LP and others are iconic.
Image and video hosting by TinyPic
Marshall's shots were the result of a bit of luck. “He asked me for directions to a club. I told him I’d pick him up and take him there if he’d let me take his picture.” In addition to Coltrane, his shots of Miles Davis and Thelonius Monk are among the most famous of the jazz musicians.

For a while he lived in Greenwich Village where he took photographs of Bob Dylan, Joan Baez and others. He returned to San Francisco where he remained the rest of his life.

Best Buy gears up for iPad sales; should publishers go retail? packaging publications like software

Eight day until launch and Best Buy is gearing up to start selling Apple's iPad tablet at stores that current have dedicated store-within-a-store space for Apple products.
Image and video hosting by TinyPic
MacRumors is reporting that the retail giant does not plan on opening early on Saturday, April 3 to accommodate iPad buyers as the store already enjoys a near monopoly on iPad retail sales -- buys can also pre-order the tablet on the Apple web site or go to an Apple retail store, as well.

As more and more publishers begin to get into the applications market, building apps for iPhones, Android, and now for the iPad, publishers find themselves involved in retail sales in a way they have not been before. Suddenly their newspaper or magazine is competing not only with other publications, but with games, business software, and music, video and movies.
Image and video hosting by TinyPic
I entered the newspaper business at the tail end of the golden years, a time when newspaper still spent money on radio and TV advertising, when soliciting for readership door-to-door was still the norm. My first professional job after getting my J degree was answering calls coming into the classified department after radio ads played our commercial (Two lines, ten days, five dollars!).

Now, newspapers are putting their product into the iTunes store, a place that contains no promotional space, and waiting for readers to find it. Sure they are letting their existing readership know about the app by printing a one inch story in their print editions, or putting up a button ad on their web sites -- but come on! its time to market!

The first time I saw those iTunes gift cards at a retail store I thought Apple had lost their minds. Why buy this card for $25 when all one needs to do is go online and buy what you want? My closed mind didn't realize they were targeting parents who wanted to give a their kids access to the online store where a credit card would be needed. The gift card, though, gave those under 18 the ability to create an account and get $25 worth of credit.

Thursday, March 25, 2010

More on Random House's iBookstore aversion

Here is a nice update from BNET on the story concerning Random House that I posted yesterday. The issue remains the agency model Apple will be using for its iBookstore app that will make its appearance the iPad's launch day, April 3.

Bob Garfield moves on from ad reviews; will continue Advertising Age 'Listenomics' column announced today that Bob Garfield will end his weekly ad reviews for Advertising Age, but will write a column concerning the "digital revolution". His often funny, always insightful reviews have been a mainstay of the news magazine for 25 years.

In addition to his work for Advertising Age, Garfield has been the co-host of On The Media, the weekly news program prodcued by WNYC and heard on many NPR stations. Brooke Gladstone is the co-host and managing editor of OTM.

A few days ago this profile of Garfield appeared on Business Insider.

WSJ to provide test case for paywall advocates; iPad version to cost $18 per month; more than print version

Well, this is what I was waiting for: an honest to goodness test case -- and Rupert Murdoch and the WSJ appears ready to give it to us.

For months, advocates for paywalls have been wasting pixels claiming that free must go away if journalism is to survive. Those holding the opposite position have wasted an equal amount of pixels claiming those that advocate for paywalls are, well, nuts.

So, if this Wall Street Journal story is to be believed, the financial news titan plans to charge $17.99 per month to iPad users for the privilege of reading their journal.


There is nothing like an extreme case to prove a theory, one way or another. If the WSJ had chosen to charge $2.99 a month both sides of the paywall argument could feel vindicated. $2.99, after all, is like giving it away. The iPad version would become the preferred format for those that like the device and want to save money.

But at $17.99 a month you really better want the iPad version of the WSJ because you can find a better price right on the WSJ web site. For $140 a year, the WSJ will sell you both the print and online versions of the paper.

I suppose an argument could be made that Murdoch is not providing paywall advocates a good test case because $17.99 is outrageous. And the more I think about, the more that might be true. (rats)

Wednesday, March 24, 2010

NAA data confirms that 2009 was a disaster for newspaper ad revenue; a decade of print declines

The Newspaper Association of America produced its final report for 2009 and they show that overall newspaper print revenue fell 28.6 percent over the prior year. Classified revenue continued to fall off the cliff, declining 38.1 percent to $6.179 billion dollars.

In general, newspaper print revenue is now at levels not seen since the early '80's, with interactive advertising not able to significantly moderate the declines.

Sometimes a chart is all you need to see for you to understand the story:
Image and video hosting by TinyPic

☜  The NAA annual revenue report paints a grim picture for the industry. Chart by TNM.
Click for larger view.

"Last year was certainly a difficult one for newspapers and other advertising-related businesses — a fact that is no surprise to anyone who lived through what many economists have appropriately termed The Great Recession,” wrote John F. Storm, the NAA's President and CEO.

Online advertising, which the association began tracking in 2003 declined for the second year in a row, though by a somewhat more modest 11.8 percent. It marks the second year in a row, however, that newspaper online advertising has declined following early years of robust growth.

Newspaper revenue has enjoyed steady growth with rarely more than one negative year in a decade.  The nineties started out poorly due to the recession that year, but every year until 2001.  2009, though, was the fourth year in a row that newspaper revenue declined. But it is the pace of that decline that must worry newspaper publishers the most. The modest decline of only 1.7 percent in 2006 increased to 9.4 percent in 2007, and was dwarfed by the 17.7 percent decline in 2008.

Worse, while classified may be the most declining category, national and retail advertising is not performing much better -- national declined 26.2 percent last year, and retail advertising declined 24.2 percent.

The NAA's Sturm tries to be upbeat. "The buzz we have been hearing – that ad trend improvement is continuing into the first quarter, that advertiser demand has been firming as the economy stabilizes and that publishers are feeling more confident as they look ahead into 2010 – is definitely encouraging," Sturm wrote on the association's web site.

The report can be viewed, and a spreadsheet downloaded from the NAA web site.

Online video ad performance increases as creative quality improves; CPMs are better, as well

TBI Research continues to do great work releasing an interesting report concerning the performance of online video advertising.

The industry research firm reports that online video viewing more than doubled last year, attributing the increase to the availability of more quality content. In addition, online video advertising is finally coming of age "supporting the 30 percent to 50 percent 2010 revenue growth most analysts forecast". (But don't get me going about analysts.)

TBI Research's findings include:

  • Viewing/Sellout increases are driving much of the industry's growth, as well as small rate increases.
  • YouTube is getting "double-digit" pre-roll CPMs, and is finding it easier to sell, as well
  • The entertainment category continues to lead the way -- no surprise since they already have the video -- but other categories are starting to spend
  • Online video advertising is enjoying better click-through-rates than regular display
Image and video hosting by TinyPic
Rory Maher, CFA, of TBI Research, writes that the executives the firm talked to attributed the better performance of online video to better creative, and improvement over the many online video ads that were basically repurposed television ads played online. The report concludes that the improvement in performance should help sustain the growth in CPMs for online video advertising.

Random House opts out of iBookstore for now; fears they just can't help themselves, will cut prices too low

Random House has decided to stay on the sidelines for the launch of Apple's new iBookstore. Their worry? That Apple's agency model, where book publishers set their own prices, will lead to the publisher cutting their prices, thus reducing margins.

Set to launch April 3 in conjunction with the arrival of the first iPad tablets, the iBookstore uses an "agency" model where publishers set their own prices.  The publisher gets 70 percent of sales, while Apple pockets a 30 percent commission.  This is the model Apple has used for its iTunes app store to great success. HarperCollins, Hachette, Penguin, Macmillan and Simon & Shuster have already signed on.

According to the Financial Times (sub. req.) Random House chief executive, did not exclude the possibility of reaching a deal before the iPad goes on sale on, but said the company "was treading carefully" fearful the new sales model would erode margins.

Thanks to sales from mega blockbusters like Dan Brown's The Lost Symbol and Stieg Larsson's The Girl with the Dragon Tattoo Random House was able to post sales for 2009 that were basically flat against the prior year. "With no sustained worldwide economic upturn in sight, we are facing another tough year, with very cautious, highly selective booksellers and book buyers," Mr. Dohle wrote in an internal memo, according to Crain's New York.

Ironically, Random House's chief executive also wrote that “it is imperative for us to grow both [the digital and print formats] simultaneously.”
(Updates after the jump.)

Huffington Post signs on with veteran Detroit independent ad pro to make pitch to the Big Three

Ken Stubblefield, the Detroit area media veteran, has landed the Huffington Post. His firm, Focus Media & Marketing, will be representing the online news organization to the Big Three.

paidContent, which seems to be confusing the Focus Media rep firm in Detroit with the company of the same name in China, makes a big deal out of the move. To me, Huffington Post's chief revenue officer, Greg Coleman, is simply doing what many publishers used to do regularly: bring on the people necessary to get the business.

It has always been the case that having a Detroiter who knows the ropes improves one's chances at securing business from the auto companies. Interestingly, I think this is changing. My experience making a call on Ford and GM while representing an online video company showed that being in New Media knocks down a lot of doors, while the print reps continue to face the traditional challenges of selling to media people who are used to knowing their reps on a first name basis.

More importantly, this is a sign that old media practices are still relevant in a New Media world. Rather than being satisfied with covering interactive agencies internally, Coleman is bring on veteran help where needed.  While the business coming out of Detroit has declined over the years, it appears to be stabilizing, and looks to grow this year. Stubblefield currently represents the Modern Luxury brands, as well as representing Detroit for the Break Media Network. Prior to forming his own firm, Stubblefield represented Hachette Filipachi Magazines in Detroit. He stable of media clients has included such media firms as Ziff Davis,, Primedia, Saveur and others.

Instapaper spills the beans; shows off its iPad app early; bookmarking app already a popular iPhone download

It's not April 3rd yet, but wise marketers are making sure that iPad buyers know about their offerings. One New York developer, Marco Arment, is showing off his iPad wares early.
Image and video hosting by TinyPic
Arment is the developer behind the very popular Instapaper iPhone app. If you are not familiar with it and own an iPhone I suggest you fire up iTunes and download it immediately. Instapaper allows you to bookmark stories you find online for reading later (the bookmark added to your browser says "Read Later", so I've heard people call the app by that name). Then, when you start the app all the stories are indexed for you to read in an easy text layout. The app also allows you to go to the original web version of the story if the article is graphics heavy and you feel you are missing too much.

Arment offers a free version as well as a Pro version for $4.99. The Pro version comes with folders, dictionary look-ups, tilt scrolling, a dark mode for night reading, and social network sharing tools.

Now Arment says he will be ready, possibly on Day One (April 3rd) to offer his iPad version. Pro users, who have already paid for the Pro version of the iPhone app will get the new iPad app for free, and presumably visa versa.
Image and video hosting by TinyPic
As far as I know, Arment is the first developer to announce that his app would be free to previous buyers. This shows that Apple's iTunes store will allow this type of transaction. (You can already download a previously purchased app for reinstallation, the system having a record of the previous purchase.)

What is fun about Arment's blog post is hearing him walk through his design and submission decisions.

The vast majority of developers are currently developing their iPad apps a bit in the dark, forced to use a simulator to view and test their apps. Only the big boys, the Times, WSJ, MLB and a few others, have been given actual iPads to work on.
When everyone else was stalling their iPhone development for months in order to redesign entire applications for the iPad, I made the obligatory cardboard prototype and mocked up a bunch of radical interface departures.

Ultimately, none of them were very practical. Some worked well, but only with ideal content (which, in practice, is rarely the case except in the Editor’s Picks folder). And I didn’t want to commit to any huge risks because I don’t have an iPad to test them on.
So Arment began working on his first iPad app contemplating is two options: releasing an app on Day One that "might be buggy or non-ideal in a few areas" or wait, and let iPad buyers use his iPhone version which doubles the pixels in order to compensate for the larger iPad display.

"The second option seemed more sensible at first. That was my plan at the beginning. But then I saw the pixel-doubled version of my app in the simulator. It sucked, and it was completely unusable by my standards. I don’t think I’ll want to run any pixel-doubled apps on my iPad in practice."

Tuesday, March 23, 2010

Court of Appeals lifts stay on FCC cross-ownership rules prohibiting media companies from owning newspaper and broadcast TV stations in the same market

The U.S. Court of Appeals for the Third Circuit has lifted the stay on the Federal Communications Commission's cross-ownership rules that prohibited media companies from owning a newspaper and a television station in the same market.

FCC under Chairman Julius Genachowski had asked that the rules continue to be frozen as the FCC was in the process of reviewing the regulations, but the court decided to lift the ban.

FCC Commissioner Robert McDowell said "I am pleased that the U.S. Court of Appeals for the Third Circuit has decided to move forward promptly with its review of the Commission's 2007 media ownership decision -- and to lift the stay that until today has frozen in place burdensome ownership rules that are many years out of date.”

The court will now proceed with hearing the case which was brought by CBS, Belo, Media General and Gannett. In the meantime, the FCC will continue with its 2010 quadrennial review of the media ownership rules. The commission plans to hold a workshop in at the University of South Florida in Tampa on April 20 to hear public comments concerning media ownership.

RealNetworks fights to get back in the game: introduces new mobile video platform for media & mobile operators

Real Networks announced that it is demonstrating its Mobile Video Portal (MVP) this week at CTIA Wireless in Las Vegas. The new platform is designed to be a "one-stop shop" for video, targeting media companies and mobile operators.
Image and video hosting by TinyPic
According to a release from the company, MVP can create apps and publish them for use on many mobile platforms: iPhone, Android, Windows Mobile, BlackBerry and Java. Additionally, the new new platform can create and publish mobile websites for viewing on most devices.

RealNetworks believes its leadership position in the streaming media business will assist in the growth of the new platform. "With our current installed base for entertainment services, history in streaming, and track record of providing services that subscribers want and are willing to pay for, we believe we are well positioned to become the leading mobile video portal provider," said Ken Pecot, vice president, Technology Products and Services, RealNetworks.

Late this morning Vincent Guytán, product management director for Real Networks, helped explain the platform and its advantages for media companies.

"In addition to handling and managing the full turn-key solution for mobile video (ingestion, CMS, encoding, device profiling, storage, streaming/CDN, mobile website, ads, reports/analytics), Real also has iPhone and Android apps with tools that allow one to develop and publish these apps (plus apps for other platforms)," Guytán told me.

"A customer (media company or mobile operator) can create the app once in the tool and then publish it to many platforms including iPhone, Android, RIM, Windows Mobile, BREW, Symbian, Java as well as publish a Mobile Website all from the same tool. Our backend tools and app engine can translate and convert what is created in the tool to work as a native app on all of those platforms plus more via the Mobile Web," according to Guytán.
Image and video hosting by TinyPic
"Media Companies in the past would need to cobble together all the elements required to create and manage an app like the CDN, CMS, app development, ads, encoders, etc. and then have to wrangle these companies together when an issue appeared (app down, etc.) to find out where the problem resided. With RealNetworks, the customer has one company to go to for assistance and is reassured by our over 15 years of experience in video as well as our great experience in managing Verizon V CAST and AT&T CV mobile video services. RealNetworks brings all of the components together required to support a professional mobile video service."
Image and video hosting by TinyPic
My biggest concern was whether Real's new MVP platform would mean media companies are forced to create stand alone video apps, separate from their news apps, or whether they could integrate Real's technology into one versatile application. Guytán kindly answered that "our mobile video service supports the notion of external links that allows you to connect disparate servers’ content and media types into one cohesive app on our platform."

Although important for mobile apps for smart phones, this integration ability may be vital when these applications are translated for use in tablet publishing solutions.

Important questions to ask your advertisers before making the leap to tablet publishing

Surfing around the web this morning for subject ideas I went to Judy Sims's TypePad blog. A recent post concerns the questions you should ask advertisers before building your web site. I think even she would admit that asking these questions now is, well, a little late in the game for most publishers . But her post was targeted at "news entrepreneurs". (My site, was targeted at this group, but the lack of news and traffic told me it was too early to sustain a vibrant site for that audience.)

I thought her post was especially timely knowing that many publishers are looking to launch their first mobile applications and are looking at tablet publishing for the first time.

I like a lot of Sims's questions -- ones like Question 2: Who are your customers? or Question 3: Who are your competitors? or Question 9:  What would you do if you were me? These are great.

One question, Question 7: How do you want to be serviced?, needs I think to be rephrased, to say the least.

Her favorite is Question 10: What would be the dumbest thing I could do in your eyes? I like this, too.

My favorite question to ask a client in any advertising situation is always If you could land just one new customer, who would that be?  I like asking this because it accomplishes a couple of things: first, it points out exactly who they are after, then you can match it up to your audience data and proving that your product is reaching that target; second, it might reveal a market you were not aware of, or were downplaying -- for instance, government.

How often do publishers treat new product launches in the mobile media space as, well, new product launches? Most publishers see their iPhone apps as simply a product extension, simply a way to get their content in front of more eyes. Bad move. Each move into a new medium is a new launch. If you think of your new iPhone app as nothing more than an extension of your newspaper or magazine that is what it will be -- merely an extension, not a new revenue channel.

Sprint demos 4G speeds by using an iPhone to connect using Overdrive to create 'hot spot'

Some people think this Sprint commercial is a poke at Apple -- the iPhone owner is "Steve", and the Sprint guy takes a bite out of an apple -- but really I think this is not nearly as aggressive as Verizon's direct attacks on AT&T.

The commercial is a bit confusing for some, the iPhone can't use 4G, its Sprint's Overdrive that it is essentially creating a WiFi hot spot that the iPhone can connect to. The real relevance here would be connecting an iPad to the Sprint network. But, of course, you can't use an iPad in a commercial for at least another couple of weeks.  But for now Sprint's 4G network is very limited, but that doesn't seem to be stopping the company from trying to use its advantage while it can.

Monday, March 22, 2010

Google announces it has stopped censoring Chinese search services; users redirected to its Hong Kong site

Google announced this afternoon that it has stopped censoring its search services in China. The move by Google will effect Google Search, Google News, and Google Images on the company's sites.

"Users visiting are now being redirected to, where we are offering uncensored search in simplified Chinese, specifically designed for users in mainland China and delivered via our servers in Hong Kong. Users in Hong Kong will continue to receive their existing uncensored, traditional Chinese service, also from," Google said on its official blog. ( header at right.)

Google explained its position this way:

Figuring out how to make good on our promise to stop censoring search on has been hard. We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement. We believe this new approach of providing uncensored search in simplified Chinese from is a sensible solution to the challenges we've faced—it's entirely legal and will meaningfully increase access to information for people in China. We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services.
The blog post was authored by David Drummond, SVP, Corporate Development and Chief Legal Officer.

Update: The New York Times now has the story on its front page, though it appears they are going by the blog post, as well,

Handmark ready to take on iPad challenges

Speaking to a magazine executive a week or so ago the conversation turned to mobile media and the frustrations faced when attempting to get their company to enthusiastically support the new mobile mediums. My suggestion was simple: you currently work with third party vendors on flip books, iPhone apps and other types of projects -- make these companies do the heavy lifting. A really good partner will want to keep their clients up-to-date and will embrace the new opportunities in tablet publishing.

One such company committed to assisting its clients in the new tablet environment is Handmark, a company I've talked about a few times in regard to their iPhone applications. (See this short post on their New York Daily News app.)

Last week the company publicly committed to supporting the iPad. “We look forward to supporting quality, innovative mobile experiences for iPad customers, leveraging our development expertise and relationships with major newspapers, magazines and other content providers,” Paul Reddick, CEO of Handmark, said in a release.

On Friday I spoke with Jon Maroney, Senior Vice President of Mobile Publishing about their iPad efforts. Prior to joining Handmark, Maroney was president of FreeRange Communications, a company Handmark acquired in January of 2009.
Image and video hosting by TinyPic

☜  Handmark already supports a wide range of smartphone platforms, now it eyes the iPad.

Handmark already supports the iPhone, Android, BlackBerry, Windows Mobile, Palm webOS, Kindle and other platforms, but the iPad clearly excites Maroney. "One of the things that is most interesting and most exciting about the iPad, from my standpoint, is how people are going to interact with this device isn't know. We are going to find out so much the week of April 5th," Maroney said.

The rush of new platform announcements does not faze Maroney.

"The reason you work with a company like ours is because the iPad comes out, and in six months there will be a software upgrade. And in the meantime there's also some new Blackberry's out, and that's going to break whatever works today. There's going to be new versions of Android coming out and more changes to the Android ecosystem. We take care of all that for you from a development standpoint," Maroney said. "And then the other side of it, of course, you work with a company like ours because we also let you monetize on these devices."

The line between creating partnerships and divesting capabilities can be very fine, indeed

One of the reasons I find myself no longer a publisher is that I have a very, very strong commitment to sales and driving revenue. Maybe I'm weird, but I like working with ad sales people. Like Lincoln's quote about General Grant -- "I can't spare this man; he fights" -- sales people are indispensable ("we can't spare these people; they sell").

But this is becoming a minority opinion, I admit, as companies downsize not only their editorial teams, but their sales teams, as well.  I've had more than my share of run-ins with media owners who think ad sales people are an expense completely separated from the revenue they bring in so they downsize their sales teams or outsource them.

A few years back I was hired by RBI, then Cahners, to turn around a couple of trade magazines.  It was a great job: magazine doctor. One of the magazines had been, at one time, producing $9 million in revenue. Back during these days the magazine had nine sales people.  Looking at the financials one could see that the revenue levels matched sales levels exactly: seven reps equals $7 million in revenue, six reps equals $6 million, and so on. It was also interesting to see that the decline in the number of reps didn't always occur after revenue had declined, but sometimes before. In other words, the surest way to decrease revenue on this magazine was to decrease the number of reps.  It was also the surest way to guarantee no growth.

When I joined the magazine it was doing around $2.5 million and had just eliminated a sales position and now only had two reps. Job number one: bring in another rep -- one way or another.  I found that the easiest way to get a rep was to find one that used to rep two magazines but had had one sold out from under them. Now, only repping one book, they might leave the company unless we would give them more territory. I would find the publisher for that book at say "listen, you might lose your rep unless you can give them more to sell, why not let them rep my book?" Amazingly, it worked.

Many publishers and many publishing executives no longer have a feel for the ROI of their sales teams. Ten years ago it was common for a publisher to have to do a cost analysis for their teams: add salaries, commission, travel expenses and the like and divide that sum by revenue. A rep making $75K in salary, $25K in commissions, and $25K in benefits and expenses would need to bring in $625,000 to reach the 20% mark -- the amount usually paid to independent contractors.  That means, though, that a rep bringing in $1 million, and with their commission raised to $40K because of the added volume, now has a margin of 14%.  In other words, those last $350,000 in sales was the difference between a marginal position and a wildly profitable one.

That brings me to this story about ABC News and their agreement with Healthline Networks. Depending on your prospective, this is either the story of a news network that is partnering with another company to bring both news and advertising sales power to ABC, or a deal by one company that is shedding both editorial and advertising power, trying to maintain editorial quality while realizing that Heathline's sales efforts stand a better chance than their own.

Morning Brief: China warns or begs?; iPad & KIndle developments; PEs move into B2B again

An editorial in the China Daily states plainly that China can live without Google.

"China Doesn't Need a Politicized Google" reads the editorial, as if China's policies concerning censorship are not political. "Google's actions show that the world's biggest search engine company has abandoned its business principles and instead shows the world a face that is totally politicized."

So there you have it, China, that great bastion of capitalism wants to give Google a lesson in business principals.

This Sunday's NYT story on the iPad revealed the names of some of the companies that have received Apple iPads to work with during this window before the launch. Receiving an actual device from Apple is the company's way of separating out the elite from the rest of the crowd. In addition to the Times and Wall Street Journal, the story also mentions Major League Baseball. Their iPhone app has been one of devices most popular, and with the iPad's launch date so close to Opening Day, this makes sense. (The regular season kicks off April 4th with a Sunday night game between the Red Sox and Yankees.)
“People see this as an opportunity to do things that have not been done before and get that first mover’s advantage” – iPad developer
One of the developers quoted states that “there’s something about the newness of the iPad that’s driving an even greater level of excitement than what existed in the last year for the iPhone.” Raven Zachary, president of Small Society, is quoted as saying "people see this as an opportunity to do things that have not been done before and get that first mover’s advantage.”

Later this afternoon I'll be posting a story about one of those companies excited about iPad development, Handmark, a company mentioned here before (here and here).

The same Times story mentioned above talks about Amazon's own iPad app.

“We have actually developed a tablet-based interface that redesigns the core screen and the reading experience,” said Ian Freed, vice president for Kindle at Amazon. “Our team had some fun with it.”

And there you have the best description yet of why the iPad will win out over Kindle-like readers: the experience of both the developers and users is superior. (Which is why everyone expects Amazon to introduce a color version of its Kindle reader, one capable of rendering multimedia content quickly and attractively, as soon as it possibly can.)
Image and video hosting by TinyPic
Panelfly showing off iPhone and iPad apps.

The WSJ reported on the Sandow Media acquisition of the eight Reed Business Information magazines on Friday. Their story, here, reads like portions of the The Bible -- except instead of so-and so begat so-and-so, it reads so-and-so PE owns so-and-so B2B, who was sold by so-and-so M&A company. This one story includes the names of eight private equity firms and the ever present Jordon Edmiston Group, whose representative is quoted as stating that private equity buying is not at an end. Was that a threat?