Friday, October 21, 2011

McClatchy reports its earnings down 21% as revenue falls an additonal 8% in the third quarter of this year

The publisher of the Miami Herald and Sacramento Bee, McClatchy, reported its Q3 earnings today and the report is not pretty. McClatcy said it was still profitable, earning $9.4 million in the quarter, but that was 21 percent down from the prior years performance.


The culprit continues to be declining revenue which fell 8 percent in Q3 to $300 million, from $328 million in the same quarter last year, according to the Associated Press report. Even digital revenue fell in the quarter, though this was attributed to the print-digital bundled advertising. McClatchy says its stand alone digital revenue rose 9 percent.

McClatchy, along with Gannett, has been a picture of doom and gloomy pretty much every time earnings are reported, but shares of McClatchy's stock are actually up 9 cents today to $1.64 per share. But then again the market is booming today – up over 200 points – due to news from Europe of another bailout for Greece and the news that the administration has said it will be sending all troops from Iraq home in time for the holidays.

Update: I edited out some snarkiness that was placed at the beginning of this post – just to be nice on a Friday afternoon.

Personal technology and the media business: outsiders have no idea how bad things really are: a few tips on how you can keep your personal publishing tech up-to-date

One memories I have of working in the publishing industry as a publisher in the B2B industry is the seemingly never-ending battle for improved technology.

Back in my newspaper days we didn't worry about the age of our laptops simply because we didn't have any. The first computer that entered Hearst's Los Angeles Herald Examiner that wasn't part of the front end publishing system was a Compaq Desktop computer that sat in the ad director's office. Because I was the only one that the ad director knew actually owned his own home computer (an Apple IIe) I was asked to come in and turn the thing on. No one else was allowed to touch the machine, so fearful was he that something would go wrong.

By the time I move to Chicago and worked at a smallish B2B publishing firm it was common to give publishers, editors and sales people their own computers – Macs for the art directors, PCs for everyone else. It wasn't until I moved to Cahners (which changed its name to Reed Business Information while I was there) that I realized that I was doing things wrong.
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Missing from this photo is my iPhone, my MacBook Pro, my 3 external hard drives, 2 printers, scanner, etc.


You see my father was an auto mechanic. He was a damn good one, apparently, because auto dealers would try and steal him away from other dealers – always Ford. His rule, and the rule of most mechanics, is own your own tools – they are your lifeblood.

Most people in the publishing industry use whatever garbage is given to them by their company – and it is usually garbage. A few years ago this was a real problem when the computer industry was churning out more and more powerful computers and the software industry was upgrading their wares each year. Today, this isn't quite as much a problem unless you are a designer – nothing is worse than working with the first generation of Creative Suite when you really know you need CS 5.5.

As an example, my ten year old MacBook Pro is still functioning fairly well. A year earlier, when they were not released with Intel chips, and the computer would be all but worthless.

But today's mobile and tablet products are caused havoc with editors, publishers and publishing executives. I can't tell you how many stories I have read about a new magazine or newspaper app that does not contain any screenshots other than the ones handed out by PR firms. A few paragraphs in and one can tell that they actually don't have their own iPad or iPhone to work with – they are just winging it.

The problem, of course, is that if you wait until your boss approves you for new technology you might be of retirement age. So what do you do, other than win the lottery (in which case you'll stop working in the media business anyway)?

First let's talk about computer hardware. Why do you really want to own your own? Maybe you don't, even today my wife continues to deal with Dell's that break down and need to be replaced (she's have a half-dozen PCs to my one Mac). But if your company won't, or can't supply you with a workable model you may need to take action.

If you are a PC user you are in luck, they're cheap. Even a decent Sony Vaio, which tries to replicate the MacBook Pro look in plastic, can be affordable. Best Buy routinely offers zero finance on new purchases – with 18 months to pay off a $700 or $800 machine you might feel this is not that painful.

Macs, of course, are a different story. But a decade ago, if you were an art director, you would need to buy a top end Mac. Today, the only ones who really need a Mac Pro are in the film or music industry – if I can run CS on my mini I would think an iMac or MacBook Pro will work for anyone in publishing. (If are on a Mac Pro, don't show this story to your boss.)

Both Best Buy (and other retailers) and even Apple (though a deal with Barclays) offer financing deals. But the computer I'll be buying next, a 13-inch MacBook Air is still over $1650 when you add in the Apple Care – and you'll want that Apple Care because you'll be on your own otherwise. Zero percent financing is nice, but making those payments on what your boss pays you will still probably be painful, right?

Many publishers, though, have wisely begun to compensate their employees who go it alone, figuring that this is a cheaper route than buying new equipment themselves. Often you can get a portion of the money you spent back each month through your expenses, sometimes up to 50 percent or more of what you paid. Take advantage of these programs if they are available.

Of course, any expense like this may be a tax deduction as long as you can prove that you really did need to have the equipment for your job. If you maintain a home office you are probably already claiming unreimbursed employee expenses, if not you will be now. One word of warning, though, keep good written records.

Mobile and tablet equipment is a whole other can of worms since most employers won't provide for this type of hardware, or compensate you for buying it yourself. Today an iPhone, or at least an Android phone, is a must. If you are walking around the office with a flip phone I'd suggest hiding it.

A tablet, though, would be considered a luxury by most media executives – they aren't. How can you write about the media business, or really understand where it is going without one?

Apple is not much help, though at $499, at least an iPad is competitively priced. Look in the refurbished section of the online store if you are desperate – a first generation iPad will cost you $399 (right now they say "special limited time price", which either means "until they last" or "watch for a new product soon").

Amazon's new Kindle Fire is only $199, but if you own an older Kindle there is even better news: Amazon has started a trade-in program that will give you back up to $37.75 on a Wi-Fi 6" Kindle (if it is in new condition) or up to $135 on a Kindle DX.

To find the trade-in store, search for Kindle trade-in program on Amazon.com.

I'd talk about software except art directors know just how expensive this area is. My only advice is to save up your pennies and hope for the rare, or not completely unknown, discounted upgrade offers that occasionally come down the pipe. A year or so ago I was able to upgrade my copy of Creative Suite for a significantly discounted price. I'm glad I jumped at the chance because the software shipped by Adobe came with all new licenses.

Newsstand app launches slow to a trickle as users await the next wave of publications

New app launches into Apple's Newsstand are taking on a familiar pattern: an immediate rush of new apps followed by a trickle of launches before the next wave of apps appears.

Whenever Apple launches a new version of its mobile operating system there is a small rush of apps that get launched immediately, then there is a lull as the rest of the developer community begins creating new apps.


The U.S. "Newsstand" and the French "Kiosque".


But with the launch of iOS 5, Apple had previewed its new OS early enough that many publishers could be ready of launch day. Future Publishing, for instance, had over 50 new magazine apps ready to go. Other publishers were able to simply update their existing apps, adding in Newsstand support which moved their publications from stand alone apps into the shared space that is Newsstand.

As of this morning there are 292 publications available inside the US version of Newsstand (iPad store) – there are a few more in the French version which is called Kiosque. This is only a few more than could be found a few days ago, indicating that the initial rush of apps is over and now we can expect a lull as both publishers and developers decide whether they want their existing publications inside the Apple app.

I would guess that the most exciting publication launches into Newsstand won't be the appearance of more local newspapers, or legacy magazine brands, but the appearance of indy magazines created specifically for Newsstand.

While game developers were immediately excited by the prospect of being able to create third party apps for Apple's platform – which was opened up to the developer community in mid-2008 - the publishing community has been more hesitant.

But journalists, independent publishers and others were immediately drawn to the idea that the launch of the iPad last year could spur the growth of indy magazines and news products. But the big hold up has been affordable digital publishing solutions. While this remains a problem, the situation may soon improve – or at least that is the hope.

Newsstand, as well as other changes implemented by Apple, could also solve the issue facing B2B publishers: how to design tablet editions that remain free for their controlled circulation audiences without offering their magazines free to everyone.

Apple has never addresses the whole issue of controlled circulation – I wouldn't be surprised if no one at the company even understands the concept. But Apple now allows publishers to offer their content free to existing print subscribers, while charging everyone else. This is actually the model that trade publications have employed for years: if you are in the industry you get the magazine free (at the publisher's discretion), but if you do not qualify then you must pay for a subscription (not surprisingly few end up buying a paid subscription).

Retweet: Don't expect a smaller iPad any time soon

Writing for Wired, Christina Bonnington yesterday wrote about the swirling rumors that Apple might release a smaller version of its iPad. The rumors are "swirling" because one bad rumor inevitably will be picked up by other sites as link bait. (I really should start doing that here. Just kidding).

Bonnington gets a group of people to dismiss the rumor including Forrester analyst Sarah Rotman Epps who says "We expect Apple to maintain its premium price point on tablets ... Apple will not allow Amazon to dictate the terms of competition — Apple makes its own rules."

But the best reason not to expect a smaller form factor is contained in a quote from Ross Rubin, an analyst with NPD: "The company is enjoying strong sales with the iPad, and it could be difficult for developers to make their iPad-optimized apps look at home."

One can debate the merits of smaller tablets (and larger smartphones) all you want, but Apple is the one company that truly seems to understand that the success of its platform is based on the support it gets from the developer community – hence the rebirth of the Tech Talk World Tour. Nothing I've seen so far tells me that Apple is preparing its developers for smaller displays.



Latest Apple rumor is that the company will begin making iPads in odd, variable, fun shapes. Developers cry foul.


One reason a smaller display doesn't make much sense to me is that the other tablets sporting a 7-inch display are more rectangular in shape, better for viewing video. The iPad is squarer, which makes it not quite perfect for many applications, but workable for everything. If Apple were to go smaller it would most likely stay fairly square in order to help developers port their apps over to the new form factor.

But the biggest reason to dismiss these rumors is simply that currently Apple has something everyone else wants: a simple, two-tiered, consistent platform. Adding a third form factor wouldn't make things impossible for Apple, but it would certainly make their iOS more Android-like – fragmented.

By the way, I recommend reading the comments to Bonnington's story. They could easily be attached to a political story in the WaPo – two sides talking past each other.

Thursday, October 20, 2011

Late afternoon odds & ends: Cash just ain't good enough in Louisiana; the GOP finds a way to like Big Government

It's Thursday afternoon and news from the media world is pretty sparse. But that doesn't mean there isn't craziness elsewhere. Here's a sampling:

It looks like Louisiana is trying to duke it out with South Carolina for home of the crazy. A recently passed piece of legislation makes it illegal to pay in cash for any second hand transactions.

Want to buy some used clothing at Goodwill? Now you have to pay with a check or credit card.

"We're gonna lose a lot of business," Danny Guidry, owner of Pioneer Trading Post in Lafayette, told KLFY10. Pawn shops are apparently exempted as they already have to keep records of their transactions.



Speaking of the crazy and South Carolina: Sen. Jim DeMint (R-S.C.) has filed an amendment to a bill related to agriculture and transportation that would make it illegal for doctors to discuss abortion over the Internet or through videoconferencing.

Nancy Keenan, president of NARAL Pro-Choice America, said that "under Sen. DeMint's extreme plan, if abortion came up in that doctor-patient conversation, the woman and her physician would have to go to a separate communications system. He's calling for an abortion-only version of Skype. It is impractical, ridiculous, and, most importantly, bad for women in rural or remote areas who would not be able to discuss the full set of options with their doctor."

Last week the House passed the so-called "Let Woman Die" bill that allows hospitals to refuse to provide emergency abortion care even in situations where the abortion would be needed to save the woman's life.

Obviously, none of these bills are expected to pass the Senate, at least not in the present Congress's term.



Lisa Brewster, who works for Palm and tweets @Adora, pointed in a tweet to this video hommage to Windows Phone 7:



Brewster writes "Thank you, webOS fans, for never creating anything like this." A bit catty perhaps, but she certainly has a good point, don't you think? (Yep)

Apple will conduct a series 9 mini developer conferences: iOS 5 Tech Talk World Tour 2011

Apple has relaunched its Tech Talk series of events this year, after taking a year off. The events are mini, one-day developer conferences where developers can learn more about iOS 5, iCloud storage, AirPlay and other topics. There is also wine and cheese at the end of the day.

The first event will be in Berlin, Germany on November 2, with the rests as follows: London, November 7; Rome, November 9; Beijing, December 5; Seoul, December 8; São Paolo, January 9; New York, January 13; Seattle, January 18; and Austin, January 23.

More information and online registration can be found on the Apple Developer site – direct link. Space is limited, so if you are interested I would move fast. You will, of course, have to be a registered Apple developer, and it helps if you already have an app in the system.



More Apple developer information:

The latest version of Xcode 4 was posted to the developer site on October 12. Also, the latest iTunes beta is now 10.5.1 and includes the iTunes Match beta.



Final thought: you may wonder why I thought it important enough to write a post about the Tech Talks. But a few months ago I was given an invitation to attend a conference from one of the digital publishing solution companies. I looked at the invitation and thought to myself "hey, why not? This is a great idea, and a good way to learn more about their system."

But I failed to read the fine print and was rather embarrassed to find out that the session was not free, in fact it was outrageously expensive. Here was a vendor that charges an arm and a leg for their software trying to gouge its customers even more by conducting sessions for a profit. I was outraged. But more importantly, I decided that this company was not one I wanted to work with.

Lunchtime mood breaker: Jazz Icons Series from Mosaic

Before the music industry moved from LPs to CDs, so much fine music went out of print, especially jazz. In 1983 Michael Cuscuna and Charlie Lourie launched Mosaic Records to try and rectify the situation by releasing box sets of out-of-print jazz, all pressed on high quality vinyl and with well researched booklets. The Mosaic releases were (and are) limited editions as the company signs deals with the originating record label that limits the amount of time they can market the recordings.

Once the CD became the dominant format, record labels began to see that they could profit from re-releasing material from their back catalog and many older recordings again became available.

That didn't stop Mosaic Records, though, the company continues to issue important releases every year.

Yesterday I received an email about their latest project, a collaboration with David Peck and Tom Gulotta from Reelin' In The Years to market that company's fifth series of DVDs. Jazz Icons Series 5 is a six DVD set made up of some amazing material, all of it recorded live in France.

The first DVD features the John Coltrane Quartet recorded in 1965, presumably live at the Festival Mondial du Jazz Antibes, performing A Love Supreme and Ascension. Other DVDs feature Thelonious Monk, Art Blakey & the Jazz Messengers (with Wayne Shorter), Johnny Griffin, Freddie Hubbard and Rahssan Roland Kirk. Quite a set of DVDs.

"When Tom told me that they were thinking about the 1965 Antibes concerts by the John Coltrane Quartet that included the only public performances of "Ascension" and "A Love Supreme" and a little known 1969 color program of Thelonious Monk alone and free-associating in a Paris TV studio, I said sign us up!" Michael Cuscuna writes in the promotional email.

The box of 6 DVDs will be released on November 8th and is priced at $99.98 (strange price, couldn't they have added that extra penny?). And no, TNM gets nothing for promoting the set, I just like the work being done at Mosaic Records.

The Weather Channel updates its iPad app, new design is heavy on animation and buggy for original iPad owners

The Weather Channel has updated its iPad app, creating a new look for its popular feee application, but also a few new problems for those who update their apps.
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PhotobucketThe newly update The Weather Channel® for iPad sports an all new design that adds in a rather silly spinning globe, but also more animation and design elements. Whether you think the app looks gorgeous or a bit artificial will probably depend on your own tastes.

Some users, however, are already complaining about the new crashing or loading slowly on their first generation iPads, a common problem of recently updated media apps.

Another issue is the amount of RAM Apple continues to use in its iOS devices – far too little to handle some of the new apps being released for the platform.

The New York Times says it has 324,000 paid digital subscribers, reports quarterly profit of $15.7 million

The New York Times this morning reported its earnings for the latest quarter ending in September and said it has earned a profit of $15.7 million versus a loss of $4.3 million last year.

But advertising revenue slipped badly, down 8.8 percent, as the company said national and classified advertising declined. It also said that the About.com group's performance "proved particularly weak". Financial results were significantly helped by the $65.3 million pre-tax gain from the sale of the company's stake in the company that owns the Boston Red Sox.

The NYT also revealed that it now has 324,000 paid digital subscribers, and that this number does not include the 100,000 readers who are getting access to the digital products via the sponsorship by the Ford Motor Company (that includes TNM). The number of digital subscribers grew over 15 percent in the quarter.

As the NYT began its experiment with paywalls on March 28 of this year, the real test will come next year as annual subscriptions expire.

Morning Brief: Former Libyan leader Muammar Gaddafi died of his wounds; Stephen Alexander named chairman of Immediate Media Co., the new publisher of the former BBC Magazines; new survey on digital reading habits

Reuters has just broken the news that former Libyan strongman Muammar Gaddafi has died of wounds suffered when he was captured.

"He was also hit in his head," an official representing the National Transitional Council said. "There was a lot of firing against his group and he died."



Exponent, the private equity company that is the new owner of the 33 former BBC Magazines divested, has announced that Stephen Alexander will be the head of the new company formed to manage the titles, Immediate Media Co. Alexander was formerly chairman of EMI and Odeon cinemas.

The magazines that form the new publishing firm include such titles as Radio Times and Top Gear.

According to a report this morning in The Guardian, Immediate Media will have its headquarters in west London and will have a staff of around 450.



Readex, the magazine readership survey company, has released an interesting press release yesterday. John Gruber would probably save it as "claim chowder" for later amusement.

Titled Readex Research Survey Finds Professionals Not Replacing Print With Digital, the press release talks about a survey that Readex conducted that asked professionals which media they regularly use at work.

The survey results not surprisingly said search engines were number one at 77 percent, while print magazines and e-newsletters came in second at 74 percent each. Web sites, digital editions of print magazines and other forms of media trailed at between 55 percent and 36 percent.

"The results help publishers prove to advertisers -- whose ideas regarding usage may be terribly wrong -- that professionals haven't replaced one media form with another," Steve Blom, Director of Sales and Marketing at Readex said in the press release.

The survey was conducted between September 2010 and May 2011.

Now let's forget about the fact that Readex, a company that conducts surveys for print magazines might be pushing a line that is meant to help their business. Instead let's actually take these results seriously.

First, e-newsletters came in at 74 percent – have you ever seen an e-newsletter that wasn't digital?

Second, the survey asked about work reading habits – tablets and eReaders are most often used at leisure time, to read a tablet edition at work the professional would have ad to replace their computer with an iPad (and remember, the survey was conducted between September 2010 and May 2011, how many iPads were in the market at that time?).

To me, Readex's own results tell a story that is the opposite of their own headline: the migration to digital platforms is happening very quickly. The fact that five months ago 54 percent of those surveyed were already telling Readex that they regularly looked at digital editions of print magazines is an amazing statistic.

In the end, even Readex admits that what the survey really says is that their is media fragmentation occurring and that advertisers will need to take the new digital platforms into account when constructing marketing plans.

"These results maintain that marketers need to gain exposure over a variety of media, and that focusing on a single medium neglects a portion of the market," Blom said.

Wednesday, October 19, 2011

Publishers face rate increase and a iffy partner in the USPS; industry objects to current postal reform proposals

Yesterday's announcement that the USPS would be raising its rates by 2.133 percent was hardly unexpected by publishers. Everyone knows that the post office is losing billions each year, after all.

But a rate increase won't help the USPS anymore than another meeting between French President Sarkozy and German Chancellor Merkel won't solve the Eurozone crisis – real action is what is needed.

Right now Republicans and Democrats continue to fight over USPS reform: one side wants to raise the premiums for USPS employees and allow the USPS to significantly raise its prises, while threatening to restructure labor agreements (austerity), while the other side wants to allow the USPS to get into other services and correct its over payments to employee retirement accounts (growth and austerity). You can guess which parties support which positions – but that is really not very important since nothing is getting done anyway.

As it stands now, the Republicans in the House have gotten a Postal Reform bill through the Oversight Committee, but strictly on a party line vote. That means the bill should eventually pass the full House, but then we have the Senate (where Senator John McCain (R-AZ) has introduced a companion bill).



Today The Association of Magazine Media (MPA) reacted to the report issued last week that looked at Periodical costs. The MPA "strongly" disagreed with the study's findings and expresses concern about the possible elimination of the Periodicals Class. Most importantly, the MPA is obviously concerned that the USPS might significantly raise the rates paid by publishers, so called "captive rate payers", in order to subsidize rates in area were the USPS competes for its business, such as express mail.
A systemwide rate cap would leave captive rate payers completely at the mercy of USPS monopoly power. The Postal Service could increase prices on disfavored classes (particularly those, such as Periodicals, that represent only a small percentage of total mail volume) as much as it wished, as long the USPS offset this by increasing prices on favored classes by less than inflation (or reduced those prices outright). USPS could gouge captive mailers, all the while retaining its monopoly powers, including its legal monopoly over the mailbox.
If you are not familiar with the Republican proposal that cleared committee the summary can be found after the jump.

Athens News reports Greece in 'grip of massive strikes'; newspaper launches 'live blog' to cover events

The English language daily newspaper Athens News is stating that Greece is "in grip of massive strike" as protesters began a 48-hour general strike earlier today, called to protest austerity measures instituted by the government.

Protesters showered police with stones and fire bombs on the steps of the parliament building, forcing them to retreat. The boom of tear gas canisters fired by police rang out over Syntagma Square while black smoke curled into the air.
The Greek newspaper quoted on a 17 protester: "We have no future here. All young people want to go abroad and they are right to do so."


Anti-austerity protesters in Athen's Syntagman Square. Reuters photo.


To cover the ongoing demonstrations, Athens News has set up a live blog which you can follow here. According to their latest posts the police have used tear gas to clear Syntagma Square, the central location often used by the protesters. It is current past 7 PM in Athens, and while reports are that the vast majority of businesses were shut down by today's strike, it appears unlikely that the demonstrators intend an occupation-type demonstration.

Will the ability to launch free tablet magazines put pricing pressure on paid pubs, especially inside Newsstand?

The one thing magazine and newspaper publishers hate to see when they visit their local newsstand (assuming they still have a local newsstand) is the presence of free publications. After all, won't buyers be tempted to grab a free publication rather than folk over real money for their own products?

The same issue arises when one considers Newsstand.

This morning I received notifications for new issues of several free magazines. While paid publications like The New Yorker and others reside in my own Newsstand app, I know there is plenty to read there already without having to pay for additional reading material.

In one short week I've already stocked my Newsstand with so much material that buying additional magazines or newspapers seems overkill.

This issue has faced print publishers worldwide for quite some time: too many publications, too much access. The rise of tablets only makes this situation worse. While the introduction of the iPad, and now iOS 5, allows for independent publishers to realize their dreams of less expensive publishing, as well as access to a international audience, many major media firms will find themselves with new challenges.
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Distro, the new tablet magazine from Engadget, offers free issue inside Apple's iOS 5 Newsstand.


Of course, this is precisely what some in the publishing community feared, that magazine and newspaper publishers would face a new reality much like the music labels experienced with the launch of the iTunes stores. But could it be any other way? Was there really any way to avoid the march of the New Media platforms?

In only 18 months we have seen the creation of a whole new ecosystem of publishing with most of the big name publishing houses trying to find their way in the new environment – some enthusiastically, others haltingly. But there is still another universe out there made of other publishers, and pretty much the entire trade publishing industry, which is yet to even begin to launch mobile products, let alone tablet editions.

I think it may be safe to say that the new digital platforms may be more disruptive than even I envisioned – and I find that both exciting and more than a bit frightening.

Rodale really, really cares about your abs (as well as selling magazines through Apple's Newsstand)

Emmaus, Pennsylvania based Rodale, Inc. has joined the parade of magazine companies that have adopted Apple's Newsstand model, launching new apps for Woman's Health, Prevention, Runner's World and today for Men's Health. Each of the apps are exclusive to the iPad. (Rodale is making Android apps for smartphones, but offers no tablet editions of their magazines for the Android platform at this time.

Rodale is the only company I am aware of that produces one magazine for both men and woman, then uses replace to substitute "he" for "she" in order to produce two separate magazines (just kidding, I think).

The new app for Men's Health is offering single issues for $4.99 or an annual subscription for $23.99 through Apple's subscription system.

Unfortunately, Rodale did not build into its new apps the ability to sign into their print accounts to avoid paying twice, essentially forcing readers to choose between print and digital. This may be a conscious decision on their part, but is the wrong way to go about accomplishing the migration. Instead, the publisher would be better off making sure the reader is faced with two identically priced options, allowing them to choose digital without angering them by paying twice.

The new app does offer a 75 MB sized preview of the November issue. While some other publisher are just offering a few pages to preview, Rodale is offering a healthy chuck of the magazine to entice readers to subscribe – a good marketing move.

What Newsstand offers magazine readers is the ability to browse issues (assuming publishers include nice sized previews like Rodale) without being forced to buy the single copy price – without building in previews you are missing one of the key advantages of being inside Newsstand. Developers of Newsstand compliant apps would be very wise to use Rodale's example when building their own apps.

Oh, and don't forget to write about abs, they are apparently very important. (Don't they have something to do with car brakes?)

Morning Brief - focus on mobile: Motorola is back again with the Razr, this time running Android; RIM says it will unify its platform with BBX, but with no launch date

The WSJ's All Things D has a quote from Google's mobile chief Andy Rubin stating that the company plans to manage their new acquisition, Motorola, "at arm's length". While there is reason to be highly skeptical of such a claim, maybe the reintroduction of the Razr is evidence of this.

Just as General Motors keeps the Buick brand alive, Motorola too believes their Razr brand still has some value. First launched in 2004, the Razr was one of the first thin cell phones, sold as a fashionable phone – that is, until smartphones began to take over in 2007.

Now the Razr is returning as an Android phone.

"It was the first innovative phone that was thin — I can see why they would use it," said William Lozito, chief branding officer at Strategic Name Development, in a Chicago Tribune story this morning. "But I think initially, consumers are going to associate it with a tired brand."

The new Droid Razr's specs are pretty impressive – 1 GB of RAM, an 8 megapixel camera, 1.2GHz dual-core processor, an HDMI output port – but it is running an older version of Android (Android 2.3.5, known as Gingerbread), and will be priced at $299 with a two-year contract.

I have my doubts about this move, but then again, people still buy Buicks, right?



Speaking of legacy brands: Research In Motion revealed a new operating system that it wants to drive its next generation of BlackBerry smartphones and tablets. Called BBX, the new OS was announced at its developer conference in San Francisco yesterday.

Unfortunately, the announcement will hardly get developers excited to begin creating for the the new platform as it was not followed up by launch dates – a continuing practice of many companies today.

"If they had introduced a BBX device that would be ready to go tomorrow, people would be jumping up and down," the WSJ quoted Sina Sojoodi, a principal engineer at Xtreme Labs Inc.as saying. "But they didn't, so that was a bit frustrating." No kidding.

But the move is still a step in the right direction – a unified OS across its product lines. If RIM can accomplish this, as well as deliver attractive new mobile offerings, it stands a chance of being an important platform for developers who see Apple's consistent iOS platform as still the easiest to develop for.

Tuesday, October 18, 2011

Apple Q4 misses analyst forecasts, but both revenue and net income grow; 11.1 million iPad units sold in quarter

If there is one thing the financial community has in common with the media community, it is that their industry analysts and consultants are equally ridiculous. Whether it is a news consultant packing up their iPad and shipping it back because he considers it useless, or a researcher claiming iPad sales numbers, just tune them out and move on.

It turns out that Apple ended up selling 11.1 million iPads this last quarter, 1.6 million more than in the summer, but not the 13 million units the analyst at Digitimes projected just this morning (don't worry, he'll be back making projections by tomorrow morning).

Right now the financial press is in shock: Apple missed the analyst's earnings forecast (though not its own guidance). Revenue was $28.3 billion, lower than what the analysts expected so, of course, the stock is getting hammered in after hours trading. Strange, since it was the analysts that were wrong, not Apple. Oh well.

So, let's compare Q4 2011 to Q4 2010 and Q4 2009 to see how Apple really did – remember, this last quarter that just ended is their fourth quarter:

Revenue Q4 2009: $12.2 billion
Revenue Q4 2010: $20.3 billion
Revenue Q4 2011: $28.3 billion

Earnings per Share Q4 2009: $2.77
Earnings per Share Q4 2010: $4.64
Earnings per Share Q4 2010: $7.05

When you look at these numbers what do you see? I know what I see. But if investors really want to dump the stock they are more than welcome to do it. I missed out buying AAPL when it was at $14, after all.

Oh, one more thing to note about Apple: they now have $81.6 billion in cash, as well short and long term marketable securities. That is slightly more than TNM has in the bank (but only slightly).

Apple to announce earnings after the bell; Digitimes report projects that iPad sales will be around 13 million units

Apple Inc. will report its fourth quarter earnings after the markets close this afternoon. Apple's fiscal starts in October and ends in September.

Earlier today Digitimes reported that its senior analyst James Wong says Apple will report that it sold around 13 million iPads in the quarter, a healthy 36.8 percent growth, but still below its own internal goals due to the sluggish economy. Wong also projects that iPad competitors will post disappointing growth over just over 10 percent.

It almost goes without saying that the track record of "analysts" is pretty miserable, but clearly Apple will have another blowout quarter, and whether they report iPad sales of 10, 13, or 15 million units, the iPad remains the only game in town. It also should be remembered that when Apple reported that it had sold 5 million units at for the same quarter last year tech writers were astonished that the company had reached that level of success so soon after the products launch. (The iPad was launched at the beginning of Apple's Q2 in 2010.)

Revenue for the quarter is expected to be just below $30 billion, but what really boggles the mind is what Apple could do for total sales in Q1 2012 – that is, this year's holiday sales season. With a new iPhone out in the market, a still much in demand iPad 2, and brisk selling MacBook Airs, the company may be one of the few to blow out its holiday sales numbers in the middle of a weak economy.

Every time Apple reports its numbers I am reminded of the brilliant move made by executives at B2B publisher Cahners (later renamed Reed Business Information) who decided in 2000 (or so) to replace all their Macs with PCs because "Apple was going out of business". The art directors all complained, but since the media executives knew better, it was decided that buying hardware from Apple was a bad investment.

Introduction of Newsstand leads to two million app downloads for Future Publishing; the number of newspapers inside Newsstand remains small

Future Publishing waited until the introduction of Apple's latest mobile operating system update to launch tablets apps for its portfolio of magazines. But when iOS 5 hit the street so did over 50 magazine titles, all inside Newsstand, Apple new app for magazines and newspapers that use its subscription services.

The results, Future Publishing says, have been incredible: over two million downloads of this magazine apps in just under a week.

“Future had sold more digital editions in the past four days through Apple’s Newsstand than in a normal month," Future UK CEO Mark Wood said. "It’s clear that Newsstand creates an amazing opportunity for publishers – and I’m committed to continue driving our brands through this great new distribution channel."

Newsstand requires that you use Apple's in-app subscription services, though the subscription price can be set to Free, especially useful if you are a controlled circulation B2B title. But Newsstand also allows for publishers to include several pages of sample content to entice buyers, a feature a lot of publishers and developers have so far failed to take advantage of.

“We plan to include more sampler issues in every magazine container in coming weeks, as well as uploading high price-point bookazines and premium one-shot titles,” Wood promised.



As of today there are 280 periodicals to be found in Newsstand, but surprisingly very few newspapers are currently available. The Guardian launched its first tablet edition on the day iOS 5 launched, and the New York Times updated both its iPhone and iPad apps in order to appear inside Newsstand.

Hearst's San Francisco Chronicle also issued an update to make its app Newsstand compliant, and The Oklahoman also jumped on the Newsstand bandwagon.

But as of this afternoon I counted only 13 or 14 newspaper apps that are Newsstand compliant (I'm sure I missed a couple), and many of those come from Exact Editions whose replica editions were made eligible for Newsstand by the vendor.

Only France Soir is from France, The Guardian from the U.K., and there are several German language newspapers who have issued new apps or updates to appear in Newsstand including the Berlin paper Der Tagesspiel and WirtschaftsBlatt from Austria.

Part of the reason for this is that in the U.S. many newspapers have launched free apps that mirror their websites more than their print editions, and in Europe several newspaper groups have publicly claimed that they would avoid dealing with Apple when it comes to sharing revenue from subscriptions (how's that working out for them so far?).

The New York Times recent web traffic numbers neither confirm nor contradict the paper's paywall strategy

At a recent conference in Austria, Jim Roberts, assistant managing editor for digital, revealed that the New York Times continues to see growth in its online readership numbers despite the launching of its paywall.

"I argued against it," Roberts told a UK journalism site. "It was a position that wasn't extremely popular throughout our newsroom but I really worried a lot that our audience which we had worked so aggressively to build would shrink a lot."

In his talk to Journalism.co.uk's Rachel McAthy (read the whole story here, along with an audio clip), Roberts said that the paywall strategy has worked out well so far, much better than he anticipated.

"I'll say its panned out great, to be honest," Roberts said. "Listen, we wanted the New York Times to continue to be open. We really felt like there is an importance to having an open web – there is no question about – and we wanted to be part of the open web, but we wanted to develop another stream of revenue."

To date, the NYT's paywall has generated 224,000 digital subscribers, according to Roberts, though it is unknown exactly how many of these are actually paying as the paper has offered some subscriptions for free as part of an advertiser marketing program. Over 750,000 print subscribers have also registered to access the content as part of their paid subscription package.

These are all fairly good numbers and indicative of the fact that the paywall was well designed. As a result, web traffic at the NYT continues to grow. "In September of 2010 versus 2011 there was a 2.3 per cent increase to a total number of 34 million of U.S. uniques," Roberts said.

But it should be remembered, though, that the Times had, before the paywall, been reporting web traffic increases of over 10 percent. On the other hand, 2011 is not an election year, a time when web traffic typically spikes for news organizations.



Everyone in the newspaper business would like a final verdict on paywalls, but I don't think that either this piece of news coming out of the World Editors Forum in Vienna really gets us closer to answer. I know advocates of paid content strategies have a lot riding on the NYT's efforts, but the NYT, along with other papers such as the WSJ, are in a unique position to institute paywalls because of their positions as leaders in their fields.

Further, the strategy the NYT is employing, with its metered and very leaky paywall, allows for readers to access content easier than a simple subscriber wall.

But don't get me wrong, I'm still a fence sitter on this issue. I applaud the Times for experimenting with their paywall and predict that it will stick, at least in some form. My skepticism continues to center around the idea that any local newspaper can create a paywall, even a leaky one, and succeed. A newspaper has to be able to answer the fundamental question "why would a reader pay for access to our site?" and answer it honestly – a very difficult thing to do for most newspaper executives.

Magazine comings and goings: Virgin's Project magazine leaves content agency Seven for new joint venture; the Wolff will no longer be at Adweek reader's door

The content agency Seven late last week announced that they will no longer be working with Virgin Digital Publishing on Project, the tablet-only magazine that garners quite a bit of attention, if not actual financial success.
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Launched in November of last year, Project was, and hopefully will remain, a good example of the new platform with its use of cover animation, and inventive layouts and design.

Now, however, Project will be rolled up into the merged units of Virgin Digital Publishing and Other Edition Limited to form a new entity, Virgin Interactive Publishing.

Hopefully the new Project app, which incorporates Newsstand is not an example of the work that can be expected. The new app deletes all your previous purchases and, at least on a first generation iPad, crashes and just plan fails to work. Absolutely nothing ruins the reader relationship faster than releasing an untested, buggy app update that replaces a perfectly good earlier app.

In fact, one fears for this new joint venture. Other Edition recently launched 10 new Newsstand compliant apps into the App Store, all with drab, plain wrapper icons – about the most unattractive icons ever created. The magazine app descriptions range from full informative to just going through the motions. One wonders if Other Edition just couldn't be bothered or if this is some sort of statement of the company's esthetic (maybe an hommage to the days when porn was delivered in plain paper wrappers).



Prometheus Global Media announced Monday that Michael Wolff is, as rumored, leaving Adweek. Jim Edwards, writing for BNet has fun delivering the news, writing a beat down of Wolff that Wolff himself could have written. Edwards sees the irony but that doesn't stop him.

Wolff was a ridiculous choice as editor to begin with; a high profile Hail Mary attempt to make Adweek relevant again. The choice did yield a great redesign of the magazine. But it also resulted in a website redesign that, while attractive, looks like it was created for 80 year old ad executives with failing eyes. With my large display I can read the headline and maybe one sentence of any story due to the gigantic fonts used.

The Adweek under Wolff was well designed and did, in fact, contain some interesting stories, while its rival, Crain's run AdAge remains drab. But reading a column by Adweek's editor made clear that Wolff was completely out of his element. It helps if you actually like the industry you cover. Prometheus discovered this sad fact pretty quickly.

The biggest problem, though, with both Adweek and AdAge, is that they are run by companies woefully behind in their New Media efforts. Like Poynter, Folio, Editor & Publisher and other media industry publications, you don't see the advertising industry books leading the way in launching mobile and tablet publishing projects.

Monday, October 17, 2011

Gannett reports print revenue continuing to decline, while digital revenue rose 10 percent

Newly installed CEO Gracia Martore got to deliver the bleak news today during Gannett's earnings conference call: revenue is continuing to decline.

Gannett reported that while total revenue fell 3.5 percent to $1.27 billion, print revenue continue to decline at faster pace, down 5.3 percent to $917.8 million in the last quarter.

"In the Publishing segment, again, a bright spot was the solid increase in Digital revenues. Softening economic conditions however, both here and in the U.K., contributed to a decline in Publishing segment revenues of just over 5%," Martore said in the conference call.

Gannett's new CEO could offer investors some good news, digital continues to grow – 10 percent in the last quarter.

"Our commitment to multi-platform sales resulted in company-wide Digital revenues of almost $275 million. That was an increase of about 10% from the third quarter last year and represented 22% of total company-wide revenue," Martore said. "Year-to-date, we've generated over $800 million in Digital revenue for the company, a 12% increase compared to last year."

Martore, who served previously as President and COO, took over for Craig Dubow, who resigned due to health issues on October 6.

Investors continue to hammer Gannett's stock. The stock fell 8.68% today to close at $9.99, down over 22 percent this year. In after hours trading the stock has edged back over $10 a share. Overall, Gannett still maintains a profit margin over 10 percent, and a market cap of $2.6 billion on revenue of $5.4 billion annually. To compare who an old media company like Gannett is valued by investors, it is interesting to compare it to a company like Apple that has a market cap almost four times higher than its annual revenue, or Microsoft which has a market cap over three times higher than its annual revenue.

Instapaper gets an important update to its universal app

If I were limited to just one or two third party apps on my iPhone or iPad there is no doubt that Instapaper would be one of the apps I chose. Even with the addition of Reading List to the Safari browser, Instapaper remains the gold standard.
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Today, after a bit of haggling with the app review team at Apple, Marco Arment has seen his latest update released into the App Store. Instapaper is a $4.99 app that works on both the iPhone and iPad, and the update is chock full of great programming work (as you'd expect).

The updated iPad app now sports a grid look, proving that Marco would probably have been one of the first to adopt the disco look in the '70s had been old enough. The grid, or as I like to say, boxes boxes boxes, is the design du jour of the tablet world, so I suppose it shouldn't be surprising that it would appear here.

In reality, the old look was a list, so a grid works just as well, I suppose. In fact, since stories are brought in chronologically, with the latest one first, the gird look makes sense – just as it makes absolutely no sense in situations where an editor is trying to show the importance of a story by placing it in a specific place and giving it more real estate than other stories.
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The new features also include such things as an app directory, to be found under Settings, that list apps that integrate with Instapaper (brilliant). In fact, the Settings here is a marvel. One could spend a fair amount of time just in Settings.

Of course, all the goodies that were in Instapaper before are still there, including Pagination that converts the page so that instead of scrolling within a story one can page flip.

I've always thought that Marco Arment needs to work for a major publishing company designing the quintessential media app. But updates to Instapaper are always appreciated so I guess we should be satisfied with that.

Maybach gets an update; app uses a replica-like publishing solution, but is solely designed for the tablet

This is the fourth of four short posts on tablet editions.

The second issue of Maybach Magazine, the tablet-only magazine from Tablazines, has been released into the App Store. Because Tablazines, the nom de plume of Chris English, publisher of another tablet-only magazine, Hoodgrown, utilizes a digital publishing solution that only allows for one issue to inhabit the app, the update for Maybach wipes the first issue and replaces it with the newest one.
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English is using PugPig's free publishing option that creates an app for free from your digital files. The company offers Apple Newsstand integration at a higher level, though that includes an annual fee of £4000 per license.

At first glance one might think that Maybach is a replica edition. But English has designed this, using Quark, only to appear on the iPad. As a result, the pages fit the display perfectly, and magazine flows logically (no two-page spreads cut off, for instance).

The app only works in portrait, which cuts down the size of the file. I think English should up the font size a bit and air out the magazine, too. After all, there is no reason to cut down on the number of pages of the issue since it is not being printed.

But like the new app from Engadget, Distro, this continues to be an interesting tablet-only magazine experiment. All Tablazines needs now is some ad support, a multi-million buyout from a big publisher!

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Left: the Table of Contents; Middle, the magazine's tribute to Steve Jobs; Right: a typical article layout.

Some digital publishing vendors try to shoehorn their products into the new mobile and tablet platforms

This is the third of four short posts on tablet editions.

There are as many flavors of replica editions as there are native apps. Some vendors start by creating a PDF-like version of the print publication and then load it up with live links, multimedia, and text versions that pop out to assist with reading. These are often quite usable and can be considered a legitimate option for some publishers who feel they need to have a presence on smartphones and tablets.
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Other vendors, however, start not with the print product when creating their new tablet editions, but with the digital flipbook. These tablet editions then try to recreate the online Flash-driven experience.

One vendor who is selling this vision of tablet publishing is Mygazines, a Toronto based digital publishing company. Their tablet editions are strictly reproductions of what has been placed online for the magazine with no other enhancements that make the magazines easier to read on a tablet.

I downloaded the apps for South Bay Digs Magazine, Stage Fashion Magazine, Network News Canada and MacDirectory, as well as their own promotional app called Going Digital.

The app for South Bay Digs simply failed to work as each time I attempted to download an issue to read I got an error message. However, the app creates a library area where you are given the option to read the publication online. This launches an in-app reader that allows you to get the pages streamed to you.

The problem with this, of course, is that you are delivered an issue that was not designed for the tablet's display but for print. Therefore, fonts are too small, and navigation is awkward.
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While one of ads featured some short audio, the rest of the edition simply does not take advantage of what a tablet can deliver for the reader.

Mygazines's own app, Going Digital, is built in a similar fashion to South Bay Digs. It, too, opens to a library page where you can download the issues or read online. What's kind of funny about Mygazines's own content is that it, too, does not fit the tablet page. Instead one gets pages that float on the screen, though the fonts are, at least, large enough to make reading the copy easier.

Obviously, TNM is no fan of replica editions. But I wouldn't call these replica editions. Rather the Mygazines apps are really replicas of replica editions – two generations removed from the art director's vision of the final product. The equivalent might be a Cinemascope movie that is "edited" to fit on a standard sized television screen, and then is streamed to a smartphone.

Arizona Daily Star releases first tablet edition that mirrors website rather than the print edition

This is the second of four short posts on tablet editions.

Not all new media apps are trying to mirror their print editions. Because RSS feeds from websites are easy to bring into apps, many newspaper apps are really much more extensions of their websites than tablet versions of the print edition.
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A good example of this is the new iPad app from the Arizona Daily Star. The Lee Enterprises owned daily serves Tucson, and until just a couple of years ago competed with the Tucson Citizen, before its owner, Gannett, closed down the print edition (it still has a web presence here).

Arizona Daily Star for iPad is a free app that mirrors the paper's website, as well as its business model. There is no Newsstand support, and reader who download the app do not have to pay to access the content.

A quick comparison of the news found in the print edition and the lead stories online shows that there the content varies considerably. The iPad app, with its refresh button, would therefore always mirror the website's content. As for the website, its design is really lacking, making this app a better option.
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The front page of today's Arizona Daily Star, courtesy of Newsseum.


I have written in the past critically of newly launched newspaper apps that do not seem to have a business model, lacking both subscription options, as well as advertising. This new app contains a banner ad along the bottom of the articles, as well as a rectangle ad placed rather unattractively square in the middle of the home page.

If I were leading this paper's digital publishing efforts I would have preferred to have called this app AzStarNet.com for iPad – not only because it is a more accurate reflection of the content to be found, but also to preserve the Arizona Daily Star for iPad name for a paid tablet edition with Newsstand support.

Otherwise, this is a very usable app for Tucson residence who want to read the website of the Daily Star on their tablets and who will prefer this design to the original website.

Apple promotes the new magazine apps that take advantage of its Newsstand app in iOS 5

This is the first of four short posts on tablet editions. The first looks at the new Apple Newsstand.

You can hardly blame Apple for wanting to promote the new features to be found in iOS 5. So inside the App Store this morning, whether you are looking for iPhone or iPad apps, Apple is showing off its Newsstand app, exclusive to iOS 5. (It's also showing off Cards, a new custom greeting cards program.)

To promote its new feature, Apple is doing several things inside the App Store: promoting Newsstand on the entry page to the store, and in select categories like News, promoting new apps that are taking advantage of the feature.

The importance of this for media professionals is to remind both publishers and developers that Apple not only owns the online retail store, but has the means to promote what it wants. Amazon, of course, has the same power. So while some media apps can still be found outside of Newsstand, those taking advantage of the new feature are getting the power of Apple behind them.

Morning Brief: The Economist releases app update that has users furious; Citigroup having troubles finding buyer for EMI Group; Donnelley and AMI expand relationship

The introduction to iOS 5 did not go very smoothly as Apple's servers suffered some stress, but in the end most iOS device users were able to finally complete their system updates.

Publishers and developers were also busy submitting updates for their apps to make them iOS 5 compliant. One app that was released late last week has their readers none too pleased.

The Economist for iPad admits to at least some of the problems:
Dear Reader,
This is an interim iOS 5 compatibly app update. If you have updated to iOS 5 this is a necessary update to allow you to continue enjoying The Economist. However, you may encounter some temporary functional issues that we are still working on. A more complete compatibility update will be coming shortly and we thank you for your patience.
 Temporary iOS 5 issues:
 Along with some cosmetic irregularities, Twitter-sharing has been disabled.
- The Digital Editions team
But some readers have also complained that the have lost their past issues, or can not log into their accounts. The "issues" the app has are a result of iOS 5 forcing The Economist to comply with Apple's in-app subscription policies. Now that Apple has introduced Newsstand look for The Economist to update its app so that it uses Apple's system.



The New York Times has a report this morning on Citigroup's efforts to see off EMI Group, one of the three big music companies that dominate the industry.

The story by Ben Sisario quotes Ben Rumley, a media analyst with Enders Analysis, as stating that the timing of the sale is not the best. Everything you read in the news indicates that it is difficult to raise financing for any business, let alone music. It’s not the greatest time to be looking for debt financing,” Rumley states.

The story says that Citigroup was looking for bids in the $4 billion range but have only received offers from Sony and BMG Rights Management that are half that amount.



R.R. Donnelley announced this morning that it has landed a big fish: American Media Inc., publisher of such titles as the National Enquirer, Shape, Men's Fitness, Muscle & Fitness, Natural Health, Star and OK!, will be expand its relationship further, raising its contract to $55 million in services.

Donnelley will be provide premedia, production and printing services, and the announcement hints at some digital services, as well.

We are very proud to continue this expanding relationship. The platform that we have built offers exceptional flexibility, with offset, gravure and variable digital printing and a host of related services," John Paloian, RR Donnelley's Chief Operating Officer stated. "More than that, it offers the resources to help take our customers to the future of content creation, management and delivery, with capabilities for faster electronic composition, custom publications, e-delivery, multi-channel marketing and revenue enhancement."