Saturday, April 24, 2010

Week in Review

Short reads for a Saturday morning:

• This week was all about newspaper firms reporting Q1 earnings, and the spin that usually accompanies the results. The New York Times Company, McClatchy, Media General, Gannett, Lee Enterprises and Journal Communications all reported similar earnings: net income up thanks to cost cutting, print revenue continued to decline, but at a slower pace than last year.

Publications like B2B Editor & Publisher took the spin and ran with it, demonstrating once again why many trade publications have lost credibility.
• I didn't review the Time Magazine app when it first came out mainly because it is wasn't exactly revolutionary. But three weeks after the launch of the iPad, and the iPad app store, it is obvious that Time's strategy of releasing a new app every week is paying dividends: the app is consistently in the Top 20 of paid news apps (even though each week's app is tracked individually). Despite the uproar over charging $4.99 for the app (that is, giving no discount off the cover price for the tablet version), the app is doing very well and proving to be a very smart marketing move.

• Two posts revolved around Amazon and the Kindle this week.  The first one talked about my conclusion that the iPad will be a boon for Amazon's Kindle store as Apple iPad users discover that they can continue to buy their books from Amazon and enjoy them on their iPads. I did just that when purchasing Alan Brinkley's new biography of Time Magazine founder Henry R. Luce, The Publisher.  My second post reported on Amazon's Q1 earnings: sales up 46 percent, profit up 62 percent.
• Four of RBI's 23 closed magazines got new life when Brian Ceraolo formed a new company, Peerless Media, to take back the Supply Chain Group. The new company will now take over the titles Logistics Management, Modern Materials Handling, Supply Chain Management Review and Material Handling Product News.

So much for the idea that Reed didn't want to sell the titles, huh?

• Blue Toad released a load of iPad apps for Modern Luxury this week -- eight on Thursday and another on Friday (they were actually released to Apple earlier, of course, but this is why they made their appearance in the iTunes store).  The apps are simple flip books, without additional new content added to the issues (like audio and video, for instance), but they are easy to use and so far appear not to be as "buggy" as apps released by some other digital publishing vendors.

We still await the first awe-inspiring iPad magazine app, however.

• Flyp did not make into the tablet era, apparently. Flyp Media announced that due to a lack of funding, and unable to survive off of its advertising base, it is shuttering its flip book, web-only magazine.

The news brought back memories of Balthaser Studios, and their pioneering first web site. The Shockwave animated website premiered in 1999. This being the age of dial-up, Balthaser's animated site would take forever to load, then would explode on the screen, shocking the uninitiated, and proudly proclaiming that this was the future of the Internet. It wasn't. And Macromedia was acquired by Adobe and the rest is history, as they say. The web may be filled with Flash videos and animations, but by-and-large, the web is not the kind of place envisioned by Balthaser back in '99. But for a rush of nostalgia, go visit the original Balthaser Studios website.

Friday, April 23, 2010

Photoblogging Friday - 16

An ugly week of earning reports from newspaper companies has ended and the only lesson to be learned is that which could have been learned from Trading Places: invest in pork bellies and frozen concentrated orange juice.

Yesterday I stumbled upon the American Memory site that houses photographs from the Chicago History Museum. The Photographs from the Chicago Daily News 1902-1933 is what got be thinking that it would be nice to include a photograph here for our traditional Photoblogging Friday feature.

Clarence Darrow, DN-0077499,
Chicago Daily News negatives collection,
Chicago History Museum.

The Chicago Daily News was an afternoon paper that published for a bit over 100 years and closed about two years before I finished getting my J degree -- essentially ending any chance I had of getting a good job at a daily newspaper in the Midwest (so off to LA for me).

The two photographs I've selected are of favorite subjects of mine: Clarence Darrow, seen during the original trial-of-the-century, the Leopold and Loeb case, and Ty Cobb, baseball's greatest hit-for-average star. Growing up in Detroit, Cobb was as a local hero -- until I learned his story and discovered the man was from Georgia and a true SOB.

Ty Cobb, SDN-051967,
Chicago Daily News negatives collection,
Chicago History Museum.

But one thing you could say about Cobb was that he knew what to do with his money. Cobb started investing in Coca-Cola way back in 1907, the exact same year this photography of him was taken, eventually securing 20,000 shares and a couple of bottling operations. There is no record of Cobb investing in a newspaper company.

Barnes & Noble updates NOOK OS; adds web browser, Read in Store streaming, and two Android games

Barnes & Noble released a significant update to its Nook reader OS, 1.3, adding a few features, and promising to release an app for the iPad in order to keep up with Kindle.
The NOOK has its fans, especially those who prefer the e-ink reading experience and are not looking for a device that can play the kinds of graphically complex games that Apple's iPad is known for.

The new NOOK UI includes additions to the five icons displayed along the bottom, adding Games, WiFi, Audio, and the browser.

The most significant addition is the WiFi-only web browser which is based on the Android web kit, bringing NOOK users an experience more in-line with some smartphones -- unlike the text based Kindle web browser.

The 1.3 update gives owners two Android based games, Chess and Sudoku, which gives you a bit of an idea of the kinds of games that will work best on the Nook. To exploit the update Barnes & Noble has produced a television ad, something of a departure for a company which has not been an aggressive marketer in the past.

Time Magazine: the weekly release of iPad apps exploits the marketing potential of Apple's iTunes store

April 3 was launch day for the iPad, a day where around 300,000 or so customers received their tablets via UPS, unboxed them and immediately began downloading apps. Time Magazine was one of the handful of publishers that was ready to go from Day One.

Time took advantage of the opportunity by putting Steve Jobs on the cover -- a not so subtle move on the publisher's part, but one that certainly got the attention of iPad owners. The reviews for iPads owners was mixed -- nice app, but $4.99? -- but iPad owners were hungry to test out their new tablets and Time was there to take advantage.
For many iPad owners, the idea that a publisher would price their app at print levels stings a little. But Time, like the WSJ decided not to discount their first tablet product. The WSJ, though, decided to create a free app, but then charge a bundle for a subscription. The result is that the app has been a popular download, as well as a generally panned app. Of 590 reviews in iTunes, 62 percent of reviewers have give the WSJ app a one-star rating -- the lowest possible.

In the end, though, one has to admit that Time's strategy of launching a new app every single week is marketing genius. The biggest issue facing app developers who create iPhone and iPad apps is that it is easy to get lost in the iTunes app store. Unless you have created an app that can generate instant buzz and have your app listed in the top seller's list, an app can quickly get lost among the thousands upon thousands of other apps available.

Upon release, a new app will appear on the first page of its category, but after a few days will drop off that first page and most likely into obscurity. But the Time app, because a new one is released every week, always is visible, always listed on the first page.
In addition, because Apple counts individual app sales, not the cumulative sales of all of Time's app sales, it is clear that the weekly release strategy is working. No single issue of Time leads news app sales, but the publisher has all four of its apps listed in the Top 20 of paid news apps. Further proof that the strategy is working is that the April 12 issue, the one all those early adapters downloaded, is not their best seller to date -- that goes to last week's issue, April 26.

The newest issue, May 3, is already listed as the 13th highest paid news app. The Time strategy seems to be working. And judging by the reviews, users are already used to Time charging $4.99 an issue.

Ultimately, Time will have more competition in the iTunes app store. But Time's first mover strategy has been a success. The app itself will need to continue to evolve as iPad users are generally disappointed in the efforts of newspaper and magazine publishers so far. The lack of interactivity and creativity in design has only reinforced the notion that publishers are too conservative in their approach to tablet publishing. But Time's decision to launch early and often has been a great marketing move.

Update: Bill Keller, executive editor of the New York Times has his own review of Alan Brinkley's new biography of Henry R. Luce, the founder of Time Magazine, entitled The Publisher.

On Tuesday of this week, I wrote a piece that was ostensibly about Amazon's Kindle store and how it might actually be helped by Apple's iPad. But the genesis of that post was the first review of Brinkley's biography of Luce, published the previous day in the NYT and written by Janet Maslin. I am currently reading The Publisher on my iPad and will report back on the experience. I think, though, that Maslin's and Keller's reviews will more than suffice.

ABC Interactive promotes third party mobile platform; Verve Wireless gets nod from auditer

In one of the strangest press releases I've read in a while, the Audit Bureau of Circulation's interactive unit announced that "it is teaming with Verve Wireless to audit newspapers’ mobile content delivered via the Verve publishing platform". Times must be tough at the ABC for them to so openly support one mobile vendor.

I assume that the ABC will treat newspapers served by other mobile publishing platforms fairly, so maybe this is the first in a long line of "ABC partners with so-and-so" press releases. In any case, Verve Wireless's PR team should be congratulated for the marketing coup.

The bottom line, of course, is that newspapers are blowing it with mobile the same way they blew it on the web. The growth of RSS readers for mobile devices is evidence enough that mobile phone and tablet users want newspaper content. There is already money being made in mobile news, its just not going into the pockets of media companies.

Thursday, April 22, 2010

Amazon blows out its numbers; Kindle Store now has more than 500,000 books; no word on Kindle reader sales

Just yesterday morning I wrote a post where I said that Amazon should thank Apple for saving Kindle. I was referring to the Kindle Store and their new app, not the actual Kindle reader. The reason was simple: Apple's iPad made buying books from Amazon even easier and more enjoyable. Sure Apple's iBooks might sell a few books, but Amazon was quite capable of competing with Apple in book sales, just not in developing hardware.

Well, today Amazon posted their Q1 earnings and it was a blow out. Sales were up 46 percent to $7.13 billion. Net operating income rose 62 percent to $394 million. All-in-all, a fantastic earnings report.

The Kindle app on the iPad

Amazon continues to not report its actual Kindle e-reader sales, though the company was more than happy to brag about the growth of the Kindle Store itself. Amazon now has over 500,000 books available in Kindle editions. The company has also introduced a self-service vehicle so that publishers around the world can upload and make available their books in Spanish, Portuguese and Italian to customers worldwide in the Kindle Store. The Kindle Digital Text Platform previously was worked for English, French and German.

Apple's iPad was introduced on April 3, so any iPad effect will not be learned and reported on until July. But since Amazon does not report Kindle reader sales, the next report will not have to compare Kindle sales to iPad sales. It will be interesting to learn, though, if the iPad has led to an increase in Kindle Store sales of books and periodicals.

McClatchy offers up confusing report: declining revenue, severe cost cutting and debt restructuring continues

Update: I guess there are franchises in worse shape than a newspaper. The Pirates, for instance, who lost 20–0 this afternoon to the Brewers, no less.

Our round-up of newspaper company Q1 earnings reports continues with McClatchy's poorly received report today. The company reported a net loss of $2.2 million, which includes discontinued operations.

In fact, because of McClatchy's debt load, and high severance costs, it is hard to get a picture of the true health of one of the industry's most over leveraged firms. In February, according to McClatchy's report, the company issued $875 million of 11.50 percent senior secured notes due in 2017 and used the money to repay bank debt and repurchase a portion of its outstanding debt. There is something about that 11.5 percent number that gives me the chills.

The most important number to watch remains ad revenue which showed continued declines of 11.2 percent -- better than the previous year's 20.5 percent decline, but higher than what other newspaper firms are reporting. Possibly this is because of their exposure in California, but it could also be the result of digital advertising only growing 2.2 percent in the quarter -- again, below the performance seen elsewhere.

"Even though we expect advertising revenues to be down in the second quarter, we believe the ad trend will continue to improve. We will remain vigilant on costs, but the savings run rate going forward will be lower than we experienced in the first quarter because we have cycled over the major restructuring initiatives implemented in early 2009," Gary Pruitt, chairman and chief executive officer reported.

McClatchy shares were trading down about nine percent in active trading.

Modern Luxury releases iPad apps through Blue Toad

Blue Toad, the digital publishing company, launched eight iPad apps in iTunes today for their client Modern Luxury. All eight apps are for the Modern Luxury city magazines.
Neither BlueToad nor Modern Luxury seem to be making a big deal of the apps as neither are promoting them on their web sites -- BlueToad does not even mention that they offer publishers the service.

The eight apps are for CS Magazine (Chicago), DC Magazine, Rivera Magazine (Orange County), Rivera San Diego Magazine, The Atlantan Magazine, Hawai'i Magazine, Modern Luxury Dallas and Houston Magazine. All iPad and iPhone apps for BlueToad can be found here (iTunes link).

Can you tell this is a "luxury" magazine, not targeted at us media folk?

The BlueToad apps are load their issues in a timely fashion. In the case of CS Magazine the app immediately asks for permission to push notifications -- this is a setting inside the iPad that allows third parties to send information, alerts etc. There are already some complaints from iPad users about developers abusing notifications, though I doubt either a publisher or their developer would use notifications in this way. In any case, turning off the notifications permission is easily done inside the iPad's settings.

The first editorial spread: pgs 80-81.

Page loading is fairly quickly, though it can seem a little slow if you are trying to quickly scan the issue. The assumption is, at least among New Media people, is that iPad reading with resemble print in that it is a leisure time activity -- not at all liek the web. My experience after three weeks that this assumption has proved 100 percent correct. My iPad is used far more after working hours and during the weekend when I have to battle my kids for control of the device. They play games and watch videos; I read newspapers, magazines and books, and watch as my Bay Area teams lose again (it's going to be another long season for the Giants and A's, I'm afraid).

The menu includes an ad index with direct links to the issue page and the
advertiser's website, as well as a page with thumbnail views of the pages.

The BlueToad apps are a good additions to the flip books the company offers publishers for their web sites. But I remain torn about the whole concept of flip books. I've never bought into the idea that readers enjoyed reading magazines in this way on their computers as web usage shows that users search and scan on the web rather than linger over these electronic versions of the print editions. Flip book vendors, of course, vigorously disagree.

So, is a flip book better on the a tablet? No doubt. A casual reading experience, like that with the iPad, lends itself to this solution. Publishers who work with Blue Toad will be happy to be able to say to advertisers that their product is available on the iPad, and advertisers will be happy with the way their ads look.

The only issue is are publishers serious about tablet publishing, or only taking the easy way out by letting a third party handle their tablet products? The issue of CS Magazine I downloaded did not contain any embedded video or audio and contained no direct links to additional content. This may work for now, but already iPad users are complaining of the lazy approach publishers are taking with tablet products. The iPad offers publishers a larger creative pallet, but few are taking advantage. This is one reason it is disappointing that Wired's app is not yet available in iTunes, possibly caught up in the war between Adobe and Apple.

Update: Blue Toad has gotten another iPad app for Modern Luxury up on iTunes today (April 23), this one for Angeleno.

New York Times reports results in line with industry; improved net income through cost reductions

The roll call of earnings reports for the newspaper industry continued this morning with the New York Times Company reporting improved earnings.

The company reported net income of $14.1 million for Q1, compared to a loss of $74.3 a year ago.

But total revenues were down 3.2 percent, meaning that the improved bottom line was, like other newspapers companies that reported Q1 earnings, the result of continued cost cutting. The Times reported that total advertising revenue was down 6.1 percent, while circulation revenue increased 3.5 percent. Expenses were reduced by 18 percent overall.

“Once again strong cost control was a leading contributor to our improved operating performance in the quarter. The aggressive actions we have taken to permanently re-engineer our cost base in recent years are evidenced in the 18 percent decline in operating expenses. While we will remain vigilant in managing our costs, we expect these savings trends to moderate during the remainder of the year," said Janet L. Robinson, president and chief executive officer.

“Strong growth in digital advertising revenues, which rose 18 percent, significantly offset a 12 percent decrease in print advertising and held our total advertising revenue decline to approximately 6 percent compared with the first quarter of 2009," Robinson said. "“Our results clearly demonstrate the positive impact of transitioning into an increasingly multiplatform company, as we continue to extend our content to new devices and our reach to new audiences. Online advertising revenues have become a much more significant part of our mix and made up 26 percent of our advertising revenues in the first quarter, up from 20 percent in the prior year."

It is no doubt a good thing to see revenue falling less precipitously than last year -- but print revenue, in particular, is not growing dramatically at newspapers. As I wrote earlier this year, ad pages fell across all print media segments last year -- just at different rates. The question many had was would a recovery mean growth for everyone? I speculated that the recession was merely making both newspaper and B2B media problems worse, but that the economy was definitely not the source of the problem alone.

Now, in 2010, we are starting to see improved financial performance, but no real growth in newspaper print revenue. Some trade magazines, in the meantime, are seeing dramatically improved ad page counts, but these magazines are generally the leaders in their industries (and representing vibrant industries). As a result, many B2B pubs are seeing only minimal improvement in performance -- not enough to offset the huge losses they suffered in 2009.

The best run newspaper and B2B firms will most likely survive 2010 and, if they invest in new media products and initiatives, will see real growth down the line. For the others, 2010 will not see the kind of dramatic turnaround some had hoped for.

Morning Brief: Pay those freelancers!

I wonder what Demand Media would think of this? The Australian Competition and Consumer Commission has issued a draft ruling proposing to grant a group representing freelance journalists the right negotiate minimum pay rates. The group, the Media Entertainment and Arts Alliance, wants to negotiate deals with Fairfax Media, ACP Magazines, News Limited and Pacific Magazines.

"While the publishers have not supported the application, under the proposed authorization they remain free to choose whether to negotiate with the MEAA or deal with journalists individually," ACCC chairman Graeme Samuel said.

The publishers have not supported the application? I'm shocked.

The number two owner of US newspapers is now a bank: JP Morgan Chase. Chase, of course, owns the debt on the Tribune Company, Freedom Communications and the Journal Register. Maybe financial regulations being proposed in Washington will end up preventing banks from making such risky investments, right?

It looks like the melodrama that is Canwest Newspapers may finally be ending. Torstar Corp. appears to be the favorite to buy Canwest Global Communications Corp.’s insolvent newspaper assets, according to the Globe and Mail.

The Globe and Mail also has an interesting story entitled Why private equity avoids newspapers.

"Jonathan Nelson is bearish on the future of newspapers. He’s far from alone in that camp, but what Mr. Nelson thinks of the dead-tree media actually matters. In fact, Mr. Nelson’s distaste for tabloids and broadsheets is shaping the auction of CanWest’s newspapers, and just may end up playing a role in delivering 11 big city dailies into the hands of Torstar Corp. Mr. Nelson is the founder of Providence Equity Partners..."

This might improve your view of private equity firms until you sit back and think about all the investments PE firms have made this past decade in B2B publishers, installing the usual group of CEOs (it has to be determined by musical chairs, no?), etc.

EBay founder, Pierre Omidyar, had launched an online news service in Hawaii called The news service charges $19.99 per month for a membership. No word on whether that is the final price, or whether lower bids will be accepted.

"It's really critical to help find a new way to do journalism that connects with ordinary citizens in a better way," Omidyar said Tuesday. "I think that is what's been lacking. Because the industry has been preoccupied with its own decline, it hasn't had the opportunity to reinvent itself. "As a new startup, we have the opportunity to reinvent that and bring journalism back into the center of conversation."

Journalism back into the center of conversation? Great, sounds like another conference is being lined up.

The launch of the iPad in Europe is approaching and developers are beginning to get their apps into iTunes. A French app, that I'm sure Apple loves, appeared today: Mac4Ever HD from EureKOO.

The app is so new that there is only one review so far in the app store. The reviewer gave the app a five star rating and wrote "Application génial, tout comme sa version iPhone. Mon site préféré sur l'actu Mac et Apple enfin sur mon iPad." Couldn't have said it better myself.

Final thought: article after article I've read the past two days discusses or mentions the idea that newspapers are looking for something, like the iPad, which will be the answer to their woes. Reading these stories made me realize that many of these folks must not have been around during the times when newspapers were enjoying 35 percent margins because they would know that what made this happen was a lot of people selling -- selling ads, selling subscriptions -- and none of it was being done by journalists.

In fact, as any publisher can tell you today, good journalism costs a lot of money (which is why bad publishers always look there first when cutting costs). When I was a circulation director we sold newspapers by going door to door, the work being done by a department mostly made up of housewives who worked part time. They did a fantastic job representing the paper, and they did it by telling potential subscribers about the coupons that could be found in the paper on Wednesday and Sunday, and other things journalists rarely think about. So if journalists want to continue to attend conferences where they discuss the magic formulas for saving their newspapers I say go ahead -- they weren't really the main drivers of financial success in the past, and they won't be in the future -- but they sure do talk a good game.

Wednesday, April 21, 2010

Death of Flyp brings back memories of Balthaser's original website and the idea that the web would be animated

The AP reported a couple of days ago that Flyp Media would be shutting down its online magazine due to a lack of funding, and the inability of the online magazine to survive on its generated ad revenue alone.
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Flyp represents on one side of the electronic publishing world, an example of the idea that web publishing should incorporate multimedia, Flash generated content, and the like, to create a more engaging, interactive, animated publication. The other side would argue that the web is a search and find medium that does not lend itself to leisure reading.

Way back in the early days of Shockwave and the Internet, the design studio Balthaser created a web site that blew a lot of people away with its wild animation. Founded in February 1999, the studio's original Balthaser web site is still online -- sort of like a displayed relic in an exhibition of the history of the Internet. Of course, part of the experience, back in 1999, was waiting the ten to fifteen minutes necessary on your dial-up connection for the animation to load before your ten inch screen finally jumped to life.
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The original 1999
Balthaser web site.

I was working at McGraw-Hill in The City in '99 and those were the days of The Industry Standard, VC funding, rooftop parties at Internet start-ups, IPOs, full employment, a booming economy, and a Federal budget surplus -- in other words, it was a long time ago.

Back in 1999 I thought Balthaser was on to something -- maybe this crazy web site was the future of the Internet. A few of my admittedly old school colleagues thought it was fun but totally a gimmick. In the end, I suppose they were right. The web was not going down that road.

Ten years later, here we have another company demonstrating the future of web publishing, clearly on the side of the argument that says the web can be the kind of place envisioned by that first Balthaser web site.

Today we have the iPad, and the promise of tablet publishing, where readers will surely spend more time with their electronic publications -- as they do with print. Was the proper place for an electronic publication like Flyp on a tablet? Maybe, but then there is that whole Flash issue, right?

Jumptap partners with Medialets and Crisp Wireless to create new mobile ad platform along with new ad formats

Apple may be moving forward with its own iAd mobile ad platform, but that does not mean that other mobile ad platforms are sitting still, or that other networks won't be used on iPhone OS devices.

Jumptap today announced that it has partnered with Medialets and Crisp Wireless to create its own mobile ad platform: Unified Rich Media Ad Platform. According to the company the platform "gives advertisers and publishers a single point from which to run diverse rich media ad units across multiple devices, technology platforms, browsers and publishers -- all from one ad network."

"Advertisers have an opportunity to capitalize on the personal, always-on nature of mobile devices with rich media ad units designed to interact and capture the minds and hearts of its users," said Adam Soroca, Chief Product Officer and General Manager of Jumptap, in a release. "Rich media campaigns are proven to drive higher levels of user engagement, more than any other media, with demonstrated increases in message lift association and higher CTRs."

The new mobile ad platform offers an array of advertising formats from banners and interstitials, to tap-to-video and tap-to-audio. The ad units promise to keep users within the original app, or on the original mobile website.
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Two of the new ad formats offered by Jumptap.
Top: Window Shade format. Bottom: the Full Page format.

Media General reports Q1 earnings: more print declines, losses narrow as costs are cut, broadcast gains

By now we pretty much know what the media landscape is going to look like in 2010: improving revenue performance for broadcast and electronic advertising; continued, but slowing declines in ad revenue for newspaper advertising; and improvements in profits due to cost containment.
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Media General was the latest to report Q1 earnings and their numbers are right in line with those that have previously reported (see post on Lee Enterprises and Journal Communications). Media General, owner of 23 newspapers and 18 television stations, reported a quarterly loss of $16.8 million, versus a loss of $21.3 million, in the same quarter of 2009. Broadcast revenue increased a little over 12 percent thanks to advertising surrounding the Olympics, but print revenue declined 9.4 percent. Like other newspaper publishers, Media General preferred to see the bright side -- print declines are moderating -- but these were still declines over 2009 numbers.

Clearly the economy is very slowly improving the picture for advertising. But advertisers are not flocking back to old media marketing solutions. Some have blamed the recession for poor print performance, others the Internet -- but it has been the combination of recession and media transformation that is killing print advertising. Those with diversified portfolios will recover quicker, as will those that have previously invested in mobile and other electronic mediums. Other media firms, though, who held back investments in the name of cost control, are now faced with having to hope for a print renaissance -- or, like RBI, are getting out of the game.

Adobe-Apple war gets ratcheted up a few notches

Adobe's Mike Chambers, writing on his personal blog, has spilled the beans: Adobe can not get Apple to approve its cross-platform compiler, Packager for iPhone,  and is therefore giving up on the iPhone OS platform. Chambers is the Principal Product Manager for developer relations for the Flash Platform at Adobe.

"We will still be shipping the ability to target the iPhone and iPad in Flash CS5," Chambers writes. "However, we are not currently planning any additional investments in that feature." In other words, Apple will get its way and Adobe will find another sandbox to play in.
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The war of words on the Internet between Apple and Adobe proponents has been entertaining for outsiders, but deadly serious for developers with a vested interest in app development. The arguments have been often nonsensical, with many developers in the Adobe camp accusing Apple of monopolistic behavior, while at the same time contradicting their statements by predicting that Apple will lose because of its small market share. On the other hand, Apple proponents have said the company should simply give Adobe the hand while failing to realize the gigantic opportunity it opens up for competitors to differentiate itself by supporting Flash in its mobile products.

Advice for publishers: keep your head down and stay out of the way. Publishers with plans for iPhone and Android platform projects will need to be careful when interviewing both internal developers and third party developers. Rather than simply taking "I can get your publication on all platforms" at face value, one will need to follow-up by asking "how will you do this?" In other words, will you be creating an app that the gatekeepers let it, or will I only find out later that there are approval issues?

Attention art directors: another reason to get your publisher to spring for the new Adobe CS5

At most small to medium sized publishing companies the two biggest issues art directors have is time and computers (hardware and software).

There is not much you can do about "time", a deadline is a deadline, right? But computer issues are often the most contentious. Trying to explain to your publisher or executive management why getting a new, more powerful computer, or getting the latest edition of Photoshop is a good investment is frustrating.

I thought about all the battles my art directors had trying to get new equipment and software -- I thought I was supportive because I recognized that upgrades in this area often saved time and improved quality -- but budget constraints most often won out.

So here is a little gift to those art directors about to go into the bosses office to explain why getting the newest copy of Adobe's Creative Suite software is a good idea. This video from Adobe's John Nack blog shows how you can tackle that old problem of getting hair to mask properly -- pretty amazing stuff.

Tuesday, April 20, 2010

Amazon should thank Apple for saving the Kindle; Amazon's Kindle app, that is, not the e-reader

I didn't buy a Kindle when it first came out, and probably wouldn't have purchased an iPad were it not for the promise of all those magazines and newspaper apps -- apps that have yet to appear, I might add. But I am a big time Amazon customer: CDs, DVDs. books, even hard to find food items -- Amazon should be giving me a rebate check for all the business I give them.
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But until the iPad I've never purchased an e-book. Today, however, thanks to the New York Times, and Amazon, I have bought my first e-book: The Publisher, by Alan Brinkley.

The Times gets some credit: Janet Maslin reviewed the book yesterday, and the review can still be found on the home page of the Times web site. Being a former magazine publisher myself, not to mention the owner of this web site, I couldn't help but want a book like this one -- teh subject being Henry Luce, the founder and publisher of Time magazine. I didn't even get far enough to know whether Ms. Maslin liked the book -- I just knew this was a book I wanted to read.

OK, so do I go to Amazon's web site, or do I check out iBooks on my iPad? Actually, I was able to do both. Amazon had the book in hardbound and Kindle editions, but iBooks -- Apple's own app and bookstore -- did not have it at all.
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←  Maslin's review on my Mac, and the Kindle edition of The Publisher on my iPad.

Amazon's "Buy now with 1 click" button said it would deliver my book to my iPad -- the other option being to register a new Kindle, sorry no Kindle. Within seconds my new e-books was available for reading on my iPad (and my credit card was dinged).

Q1 earnings reports show many newspapers can return to profitability through cuts; but can they grow ad revenue?

Both the Journal Communications and Lee Enterprises reported earnings during the past two days, and along with Gannett, results show that major newspapers companies are getting back into the black, even as ad revenue continues to decline.
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"We generated a significant increase in operating earnings in the first quarter despite a decline in publishing and printing services revenue," said Steve Smith, Chairman and Chief Executive Officer of Journal Communications. For Journal Communications, print revenue declined 7.4 percent in Q1, while broadcasting revenue showed a healthy increase in revenue. Operating margins reached 10.4 percent, definitely below the industry average during the good years of newspaper publishing, but much improved over the prior year.

Lee Enterprises saw ad revenues decline 8 percent, as well. Again, though, Lee was able to increase profits through cost cutting. "We expect our revenue performance to continue improving in a still-rough economy, and we also remain focused on careful, long-term cost control," Lee CEO Mary Junck said in a statement.

Both companies are seeing declines moderate, but continuing declines over 2009 numbers are hardly encouraging news. Nonetheless, both companies are clearly in a position to survive the recession since they have made the cuts necessary to return to profitability.

The question going forward is can these companies invest in the new media ventures? or will they be short staffed and without the capital necessary to invest in new media production and development?

Vimov estimates size of iPad app market; developer has leading paid weather app in iTunes app store

Vimov, the developer of the Weather HD iPad app, believes Apple has created a billion dollar market for application developers. Their estimates may be high, but Amr Ramadan, general manager at Vimov, writing on the company's blog, backs up their estimates with some internal sales numbers.
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The Weather HD app sells for 99 cents and is a rather pared back app for those looking more for nice wallpapers than in-depth weather information. But the app was downloaded 3500 times on the first day alone. And while sales slowed following the iPad launch, the app is now the number one paid weather app available in the iTunes app store.

Just looking at one day's sales, Vimov estimates that the Top 1000 apps accounted for $372,649 in sales on April 15. For Apple, when gets 30 percent of sales, that's a six figure sales day. Overall, Vimov estimates that at its current sales pace, the overall market being created would equal $136 million in app sales in a year -- at the current level of 500,000 iPads in the field.  Total iPads sales estimates vary widely, but analysts expect sales for 2010 to be between 3 and 7 million units.

Apple announces that 3G iPads available April 30

Apple announced this morning that those who pre-ordered their 3G iPads will receive them on Friday, April 30. The iPads will also be available in Apple stores.

The 3G iPads, which also comes in 16GB, 32GB and 64GB models, will cost $629, $729 and $829 respectively. The 3G models do not require data contacts as Apple has negotiated pay-as-you-go pricing.

Glasshouse Apps has number one paid news app in iTunes; media companies conspicuous by their absence

You could see this coming a mile away: the number one paid news app for the iPad isn't an app from a media company but from a developer that aggregates news and puts in an attractive format.
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The Early Edition, an app from Glasshouse Apps, currently has the number one paid news app in iTunes for the iPad.

"I had to pinch myself this morning when I woke up and saw that The Early Edition had become the number 1 iPad app in the News category on the App Store," the Glasshouse Apps blog exclaims. "We’ve had such an incredible response from customers and we’d like to thank each and every one of them for shelling out and buying our app."

Glasshouse Apps has two other apps in iTunes: Barista and Cellar -- all priced at $4.99. The gold rush is truly on.

iPad users, hungry for media (after all, this device was sold as a media consumption device) are grasping for anything that will allow them to read their newspapers and magazines. As a result, companies like Zinio, who have done an excellent job developing and promoting their offerings are being rewarded by iPad users.

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Left: NYT story as seen in RSS feed. Right: original view within app.

Monday, April 19, 2010

Pixel Mags brings the Pottery Barn catalog to the IPad; app development as a form of custom publishing

Pixel Mags is already a major vendor for magazine publishers who want to bring their magazines to the smart phones or the iPad, with over 100 apps in the iTunes store.  Now the company has become a kind of custom publisher by bringing the family of Pottery Barn catalogs to the iPad.
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An app for a major cataloger is both brilliant and logical. The iPad will be used by many owners as a leisure reading tool -- and browsing catalogs is certainly a leisure time activity for many.

Unfortunately, it doesn't appear that Pixel Mags tested their app because it is an absolute mess. Pages stutter across the screen, it is impossible to flip from one page to another. In short, this app is a disaster and is in desperate need of updating.

(Pixel Mags should be applauded for securing the deal with Pottery Barn. I always found that working with Williams-Sonoma was . . . well, not easy. So it is a bit strange that the company would have allowed an app to go out with their name on it that works so poorly. Too bad, I'd love to get my Williams-Sonoma catalog on my iPad -- but not like this.)

There is no need to embarrass Pottery Barn or Pixel Mags more by showing screenshots on the home page, but if you are interested, there are a few screen captures after the jump. When, or if, Pixel Mags fixes and enhances this app I will be happy to provide an update.

But there are more problems with this app beyond the programming -- believe it or not. It starts right on the opening image. In the lower right hand corner of the app is an ugly Pixel Mag logo. Why is it that companies that do this kind of work for customers feel they have the right to brand themselves? I am quite sure the people at Pottery Barn or their agency spent a lot time designing their catalog (or in this case, the splash page) -- without someone else's logo, I am quite sure.

From the perspective of a publisher, what is Pixel Mags doing for Pottery Barn? In a way, isn't this custom publishing?

In traditional custom publishing situations, a company works with an established publisher because the publisher has a printer contract, production capability, content resources, etc. In tablet publishing, however, who owns all these capabilities? The developer.

Reed presents B2B media industry a chance for fresh start; can a real New Media company rise from the ashes?

When a company like Reed Business Information decides to close some titles there are usually two ways the titles are resurrected: either the former staff finds some financial backing to buy up the assets and try to keep their titles alive, or a competitor swoops in to pick off the remains.
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A third way, however, is my hope: that a new company might arise from the ashes to take advantage of this opportunity. The third way would be for a new company to take these titles, their good brand names and customer loyalty, and create a New Media company that is less focused on the profitability of an individual print product, but on delivering B2B news and information using all the forms at the disposal of publishers today. In other words, a true cross platform publishing company that delivers content using print, web, mobile, tablet, and e-mail formats -- as well as other electronic formats now open to publishers (like e-books sold through Amazon and Apple, for instance).

In the late nineties there were investment firms that were created to make these kinds of investments. Sadly, the firms investing in B2B media this past decade have been private equity companies who believed they knew how to wring out profits from properties they felt were bloated. Who needs one publisher per magazine when a publisher can handle multiple titles? Who needs publishers at all?  (In my last position my name appeared on nine titles as either publisher or group publisher -- how crazy is that?) I can not imagine a PE, or traditional NYC based investment firm stepping up to take advantage of this situation.

What is needed, if I can sound biased, is a West Coast firm -- one used to investing in tech. A newly created company, one backed by an investment firm with contacts in the software industry is precisely what is needed now. The first B2B who can create its own apps, can sell e-books for the Kindle and iPad, who understands that its readers not only want content in different formats, but wants different content for those devices, will have the field to themselves.

(Disclosure: I was a group publisher at RBI for a short while, but not at any of the 23 magazines being shuttered. I did compete with several of the books, though, while at McGraw-Hill and SGC, and have kept close tabs on many of the others including the restaurant and lodging magazines because of a distant competitive situation.)

AP Stylebook gets an update: from 'Web site' to 'website'

According to the AP Stylebook, the correct term was "Web site". But that made no sense to me so this site has always used "web site", unless written differently in a quote. But now the AP Stylebook has been updated and "website" it is. Vive la différence.

Hearst close to deal to acquire iCrossing

Newspaper and magazine publishing company Hearst Corp. is close to acquiring digital marketing company iCrossing. The Wall Street Journal reports the asking price would be around $375 million.

"While going through the process of evaluating iCrossing's position in the market, we have spoken with, and entered into, non-disclosure agreements with many companies," iCrossing's spokesperson Dana Mellecker told Reuters.

Reuters speculates that the acquisition would be an attempt to grow its Internet advertising base. This is unlikely as any digital marketing firm that funneled advertising to its parent so transparently would lose all credibility. Rather this appears to be a strategic move to add properties where Hearst anticipates growth, as well as it have in-house digital marketing expertise -- both good reasons to close the deal.