Friday, October 26, 2012

The focus begins to shift to the future of the Apple TV; that huge bank account might start to come into play

Corporations can be a lot like some people: despite being filthy rich, some people are never satisfied. If Apple ends up like this it could destroy them, so maybe it's time for Apple to unload some of that cash in an area of importance to them.

One place Apple might spend a portion of that $121+ billion in cash they are sitting on involves television.

Apple's hobby, the Apple TV, has always been an important product to its customers. My own daughter; for instance, when asked a hypothetical question, which would you rather have cable TV or the Apple TV, chose the Apple TV.

At $99, the Apple TV is a great impulse buy – one of the few Apple products that can be bought in that fashion. It doesn't surprise me that the product is proving to be a sustainable product line. Owners of iPhones, iPods and iPads find that sharing photos, streaming music and video to the Apple TV can be habit forming, part of modern family room life.

With the next generation of iPads released in the fall, rather than in the early spring, many think Apple is clearing the decks for a television related release in the first quarter of next year. I have my doubts, but admit it's possible.

Apple doesn't need a new product, though, it has a pretty good one now - one that can be improved and expanded.

But if Apple is to break into the TV business, I feel there is no doubt that Tim Cook will need to utilize its vast wealth to make it happen.

Any actual hardware release would have Apple entering a field where manufacturers are actually exiting. Much like PCs became, the television set makers have become basically assemblers who set features, software and the like. Then have the sets built in China with off-the-shelf parts. It is a low margin business, and Apple hates low margin businesses.

Remember, Apple likes to make money off of hardware, settling on low margins on its media products, apps, and the like. The only way Apple makes an actual television is if they can price it at a premium. (Amazon, on the other hand, is making low to no margin hardware to build its retail business.)

For the Apple TV to grow up, however, one thing is required: content.

Most analysts - and we all know how good those guys are - believe that Apple will go the traditional route and negotiate with the content providers to get the needed programming.

Apple could negotiate with the networks themselves, or a more likely partner would be the cable providers. If Tim Cook thinks this is the way to go he may end up very disappointed. The cable guys fear Apple for good reason, and they have locked in the networks. Today, to simply launch a streaming app, the networks have to get the buy-in of the cable networks. If you want to watch HBO on your device you must sign into your cable account to do so. HBO and the other networks make their profits from the licensing fees they get from the cable providers, burning that bridge won't happen without a good reason.

But Apple is in the position to buy into the market if it wants. Money still talks. But the deal has to be too good to turn down.

There are at least two other options, though. Apple could open up the Apple TV to third party developers. This would provide content, though much of it would be of lower of lower quality. (I know, lower than current television content? You have a point.)

An open television provider would revolutionize the medium. To do so, Apple would have to position the Apple TV as something other than standard television, it would be a form of broadcasting. Otherwise Apple would be risking its current content deals which give the film and TV guys a bit of exclusivity on the Apple TV. The film studios do not compete with Joe Schmoe filmmaker directly. That kind of content is exiled to the YouTube app.

The other option is simply to buy the content. Apple has so much cash that it could easily buy many media companies, be they broadcasters, film studios, or publishers.

All it takes is money, which is why I would bet against any of this coming to pass by the spring. Apple is not run today by an eccentric founder, but by an operations guy who approved a dividend for shareholders. Tim Cook would need to stand up and say to the world that profit is not his number one priority. He would have to be, in other words, Jeff Bezos. Imagine what Amazon would do with $121 billion?

The New York Times has now updated both its iOS apps to add in live election coverage in time for Nov. 6 election

The New York Times had previously launched a mobile app specifically for coverage of the upcoming elections, but the paper has moved to make sure its main mobile and tablet apps now have a live election coverage section, as well.

Last week the NYT updated its mobile app to add in the live election section, and now the tablet app has been updated, as well. Of course, the problem with the NYT's digital media strategy is that few readers will be using both due to the high cost associated with buying both the mobile and tablet editions.

The idea the NYT seems to be pursuing is that there is one brand, the NYT, and no matter what platform you choose, you are getting the NYT.

On the surface, this would seem to make sense, and it certainly promotes the brand. So what's the problem.
The problem is that it is limiting. If all that is available to buy is one product, basically access to the NYT website, in whatever form it takes, then the potential is limited. I think this is being reflected in the company's performance.

Yesterday The New York Times Co. reported that its Q3 profits fell 83 percent – and while the fall in profits can be mainly attributed to a comparison with the previous year's boosted performance due to the sale of investments, what can't be ignored is the continuing slide in revenue.

Advertising revenue fell 8.9 percent, and digital did not grow (it, in fact, fell). To grow revenue the company needs more digital real estate, and a stronger commitment to advertising sales. But the publisher appears to be moving in the opposite direction.

Thursday, October 25, 2012

Apple reports earnings that disappoint analysts, but iPad sales may be the area of biggest concern going forward

It not often that a company reports record profits and revenue and gets hammered for its performance. Apple today said that it had generated $10.944 billion in operating income, versus $8.710 billion the year before. Revenue, too, increased to $35.966 billion, a 27 percent increase.

But Apple said it sold 14 million iPads in the quarter, and while that number is also up, it leaves the company short of the 100 million mark Tim Cook said the company achieved when it rolled out the iPad mini. Obviously the Apple CEO was counting sales already achieved in this quarter.

(It should be noted that not one analyst came anywhere close to getting iPad sales right. Each wildly overestimated sales, then scrambled to lower their estimates following the iPad mini launch event. Nonetheless, each continued to be wrong, showing the amount of stock pumping that continues in the financial markets.)

Q4 is not a particularly great quarter for Apple's tablet sales as it follows the launch that occurs in Q3. But this is the first Q4 where iPad sales are actually below the previous quarter, a troubling sign.

Sales may have been impacted by the launch of new Kindles, or it may be a sign that the market is maturing. It may also serve to explain why Apple chose to refresh the iPad this quarter rather than wait until after the holidays.

iPhone sales, though, are a bright spot, with sales of 26.9 million units, a 58 percent growth over the prior year. Not surprisingly, iPod sales are down 19 percent, as many users are phasing out use of the device in favor of their smartphones.

Mac sales only grew 1 percent, though one should be reminded that many PC makers are seeing declines in sales overall. Nonetheless, the slow pace of growth here has to be disappointing as Apple has been steadily taking market share in this area.

Unlike Amazon, Apple's guidance is pretty precise: "Looking ahead to the first fiscal quarter of 2013, we expect revenue of about $52 billion and diluted earnings per share of about $11.75," said Peter Oppenheimer, Apple’s CFO in the company's earning statement.

Apple cash currently stands at $121.3 billion.

Amazon reports a $28 million operating loss on sales of $13.81 billion, up 27% for the quarter

Is Amazon a mismanaged company that can not turn a profit despite generating enormous revenue – or a company acting like a start-up, building its franchise by building customer relationships and growing revenue?

The answer to that question will probably determine what an investor thinks the Q3 earnings report just released.

Amazon reported that its revenue grew in the quarter by 27 percent, to $13.81 billion. But the company, which had warned investors that it would record a loss this quarter, did so. Q3 of 2012 saw the company lose $28 million versus last year's quarter income of $79 million. (By way of comparison, Apple's last quarter saw its revenue grow by 22 percent, though its total numbers were higher.)

"Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point," said Jeff Bezos, Amazon's founder and CEO said in its statement.

In fact, that earnings statement reads more like a promotion piece, with much of it dedicated to selling the features of the Kindle Fire versus the recently announced iPad mini.

While Amazon's stock is getting hammered in after hours trading, Q3 is not that important a quarter for the online retailer compared to the one coming up.

Amazon's guidance, though, is pretty worthless as the company is claiming its income in Q4, which will include the holiday season, will be anywhere from a huge loss to record profits. The company made $260 million in Q4 of last year.

Amazon also said that the company expects revenue to grow in Q4 between 16 and 30 percent, also a pretty wide amount – maybe that is why investors are hurting the stock, it is hard to invest in a company that is not very transparent. Nonetheless, Bezos's strategy of undercutting other Android tablets has established the company as the only serious player in the tablet market other than Apple, though Microsoft clearly wants in the game very badly.

It's time for the ad teams to launch their own mobile and tablet digital products at newspaper companies

I came up in the newspaper and magazines at a time when the ad people were calling the shots. Today I think it is the suits that are running the show, though the content folks like to flatter themselves into thinking they are.

During the eighties and nineties, the ad folks created the new sections, determined the folio sizes and launched new products. The idea was that nothing new could be created unless it could produce nice looking P&L. Today it is possible for a newspaper chain to launch dozens of tablet editions with absolutely no business model attached to it, with little space reserved for ad space, and no requirement that the reader pay a subscription.

OK, so be it. But that some of the best opportunities for digital media are being ignored because the power has shifted to the content guys.

It's only been four years since Apple opened up the iPhone to third party apps, and only two and a half years since the iPad launched, already open to developers. But I must admit something: I'm already getting bored.

Newspaper executives have always been a pretty unimaginative crowd, but things seem to have gotten worse. Most newspapers that have launched apps have taken a conservative approach, generally apps that mimic their websites, or else replica editions of the print newspapers. Where the apps are pretty good, like those from NewspaperDirect that are both replica and native, the apps are still taking a "me-too" approach.

And if finding profitable digital solutions is the Holy Grail of the industry, then why is it that practically no new mobile or tablet products have launched that are exclusively drive by the ad guys.

Look at the NYT: it has six iPhone apps and two iPad apps inside Apple's App Store. Only its real estate app could be considered ad driven app. But that is better than Gannett that has 87 different mobile apps, some for newspapers, others for its broadcast properties. Other than the ill conceived DealChicken, an attempt to capitalize on the daily deals fad, it has nothing that was clearly designed by the company's revenue side.

Part of the problem, of course, it that few newspaper companies have become developers themselves. In an industry where they would never consider outsourcing its printing or editorial, outsourcing its future is common. Because of this, few inside a newspaper office understand the potential of adverting tied to geolocation, paid news notifications, directories and buyers guides.

The solution is for the ad guys to launch their own products, outside the efforts of the editorial department. Where one side refuses to experiment, the other side needs to relentlessly push the envelope. With ad revenue declining across the board, driving new digital revenue not only will improve the paper's bottom line, it may well save their jobs.

Microsoft official rolls out its Windows 8 platform and its Surface tablet; Bonnier Corp. and The New York Times announce support and new apps for the platform

Microsoft CEO Steve Ballmer conducted a low key Windows 8 event today, no histrionics today. The event officially marks the launch of the newest version of the operating system the Redmond, Washington company hopes will attract consumers on both PCs and tablets.

The event also served to kick off sales of Microsoft's Surface tablet, which will be available starting tomorrow.

The key to the success of the newest version of Windows will, of course, be whether and how fast developers begin to support the platform.
With Apple's iPad dominating the tablet space, and iOS and Android fighting it out on mobile devices, the open question is whether Windows can find a large enough market share to drive profits for Microsoft going forward.

Both magazine giant Bonnier and The New York Times today unveiled support for Windows 8.

Bonnier will be launching 16 of its magazine titles through the Windows Store. The titles being launched on the platform are Popular Science, Parenting, Saveur, American Photo, Field & Stream, Flying, Outdoor Life, Popular Photography, Sound + Vision, TransWorld Ride BMX, TransWorld Business, TransWorld Motocross, TransWorld SKATEboarding, TransWorld SNOWboarding, TransWorld Surf and TransWorld WAKEBOARDING. The company said it will roll out its remaining brands over the next six months.
"This new collaboration with Microsoft provides us with an incredible new platform to reach readers across various devices," Terry Snow, CEO of Bonnier Corp. said in its announcement. "We believe it also allows us to connect with a new audience, expanding our reach and further building our brands for long-term success."

The approach the publisher is taking here is interesting. Each of the new apps are free and are built off the content of the magazine title's website rather than creating simple replica editions of the print magazines – though that could certainly come later.

On iOS, Bonnier's Technology Group has been using Mag+, which the Swedish publisher assisted in developing. The rest of the titles have taken a more replica edition approach. Bonnier has not been a big player on the Android platform, and through Amazon the publisher sells Kindle Editions.

The New York Times also announced products for the Windows 8 platform. The NYT will have a new news app starting tomorrow, again built off of the paper's website content, and will also have a Bing News app in partnership with Microsoft.

Current digital subscribers will be able to log into the accounts for access, which nonsubscribers will have access to the Top News section within the app and will be able to use in-app purchases to acquire a digital subscription for full access.

"The introduction of these two apps for Windows 8 demonstrates our commitment to bringing our journalism to our readers on the platform of their choice. Whether they are on desktop, laptop or tablet, or they are browsing through the top headlines on the Bing News app, The Times’s journalism will be there to help readers better understand the world they are living in," said Denise Warren, general manager, and senior vice president and chief advertising officer, The New York Times Media Group.

Journal Register Company nears completion of its tablet edition launches with the release of six new iPad apps

The Journal Register Company is like one of the those old movies where the train wreck in shown in slow motion. You know what is coming, but it is hard to turn away from the disaster occurring before your eyes.

The company, which is now under the PE firm umbrella known as Digital First Media, is the darling of the digital media crowd. It exemplifies everything that its proponents like in modern newspapering: it's solely focused on content, disdains advertising, has declared bankruptcy multiple times, and has celebrity consultants on board.

Once the company folds altogether, there is no doubt the executives and consultants will continue to be seen on the lecture circuit for years to come.

Today the company released six new iPad editions for its portfolio of daily newspapers, pretty much concluding its launch cycle.
The new apps are The Record for iPad, Daily Tribune for iPad, The Morning Sun for iPad, Oneida Dispatch for iPad, Middletown Press for iPad and the Register Citizen for iPad.

All of the apps are identical and were developed by Spreed. Each takes the content from the newspaper's website and reformats it into a tablet app. They, of course, make no business sense whatsoever, but when the whole idea behind a company is to pretend to be digitally savvy, well, it gets the job done.

The apps are free, the content is free, and in the apps I saw, were complete ad-less (though now that the ads have launched there is new real estate that can be sold.).

The only winner here is the developer who sold the apps, and if Spreed has a deal to sell some space, they have also been able to create an ad network (something other mobile developers have done, as well).

Aquafadas updates its viewer app for iOS; released as companion to updated inDesign plug-in

Customers who are using the Aquafadas digital publishing platform will want to check their app updates this morning. The Montpellier, France based technology company today has updated its reviewer app.

myKiosk for iOS serves as the viewer app for the Adobe InDesign plug-in based platform. The app has been updated today to add in support for search within magazine issues, and to improve page swipe behavior within the apps.

There are also a series of bug fixes that are included in the update which was released as a companion to the release of version 2.5 of the system.

Aquafadas was just recently acquired by Toronto based Kobo, the company that once worked hand in hand with now defunct book retailer Borders.

"Kobo’s arrival is amazing news," Aquafadas CEO Claudia Zimmer said two weeks ago when the acquisition was announced. "Thanks to this acquisition, publishers who use Aquafadas Digital Publishing System benefit from an easy and scalable solution that will provide access to a new distribution channel in addition to other channels: Kobo’s platform and its 10 million registered users. We will benefit significantly from this partnership and amp up development to deliver more innovative tools. By working together to further enhance the Kobo product line-up and the creation of rich-media content, Kobo and Aquafadas will take digital reading to a new level."

The New York Times Co. reports Q3 earnings: profits fall 85%; advertising revenues, print and digital, fall 8.9%

The New York Times Company this morning announced its Q3 earnings and reported that profits for the company's third quarter were $2.28 million, a drop of 85 percent from the same time period one year ago. Profits, though were boosted one year ago by the sale of investments.

The New York Times Co. reported an operating loss of $143.6 million in Q2 due to the write-down of goodwill at the About Group.

Third quarter ad revenues were dismal, despite the election season, with total revenue declining a bit less than one percent to $449 million. Advertising revenue continues to be the problem, with ad revenue down to $182.6 million, a decline of 8.9 percent.

Print advertising at The New York Times, The Boston Globe and The International Herald Tribune, declined 10.9 percent, and digital advertising performed no better, falling 2.2 percent.

"While our results for the third quarter reflect continued pressure on advertising revenues, total circulation revenues rose, led by the ongoing expansion of our digital subscription base," said Arthur Sulzberger Jr., the chairman and chief executive of the Times Company, said in the earnings statement.

The New York Times Co. recently named Mark Thompson as its new president and CEO. Thompson had previously served as the BBC's director-general. Seen as a political animal, Thompson has no print or advertising background, having spent his entire career at the U.K. broadcaster, all of it on the editorial side of the business. This all does not bode well for a media company dependent on ad revenue, both digital and print, to turn itself around.

Amazon updates its iOS Kindle eBook reader app

Apple updated its own eBook reader app this week, iBooks, and now Amazon has updated its own iOS reader app to add in some nice new features.

The Kindle reader app continues to have one of the longest app names in the business – Kindle – Read Books, eBooks, Magazines, Newspapers & Textbooks – but the app was the preferred book reading application for many readers until iBooks got a nice improvement. But Amazon knows a lot of customers like to buy media from them, but then access that material on an Apple device, so the company needs to keep up.

The app update this morning adds some new font options. With the update, eBooks now will have a "Publisher's Font", the suggested font to use with the book. Another new font has also been added to the choices, Caecilia.

The most important updates, though, are support for Japanese, including vertical text and manga.

Amazon has also added its "X-Ray for Textbooks" feature to the iOS app. X-Ray allows the reader to access important terms and more.

Amazon describes their feature this way on its website: "X-Ray allows readers to explore "the bones of a book." Tap on any page as you read to find chapters and locations that mention ideas, characters, and important places, as well as background info, biographies, and more from Shelfari and Wikipedia."

Wednesday, October 24, 2012

Trade journal Adweek launches a hybrid iPad edition launched into the Apple Newsstand

It is an open secret that the advertising, newspaper and magazine trade industry trade publications have been terribly behind when it comes to digital. None of the major titles have launched interesting mobile or tablet platform products – trailing the industries they are supposed to be leaders in.

But now Adweek, the advertising trade journal which is now published by Prometheus Global Media, has its first tablet edition. The new app, Adweek Magazine, is a hybrid app, at least for now.

The term hybrid app, which I have coined, means that the ads found inside the digital editions are the same as you'd see in print. In this case, because of the shape of the print edition of Adweek, the ads float a bit on the tablet's display.

The editorial pages, however, are reformatted for the iPad. This creates an easier to read digital magazine, and is then able to employ the scroll-within-a-story and swipe-to-the-next-story approach which is common with most natively designed digital magazines.
Adweek, as the name implies, has the problem of recurring weekly deadlines. Magazines like this sometimes take a purely replica approach to creating digital issues, but Adweek had done well here to produce a better digital magazine for its readers.

"Adweek readers – key industry thought leaders – are changing how they consume content, and tablets are increasingly becoming an indispensable information and entertainment too,' writes Adweek's editor James Cooper. "We want to change right along with them."

If you are outside the ad industry you may be pretty shocked at the price of admission. A monthly subscription to the iPad edition of Adweek is priced at $7.99, and annual subscription is $79.99. Individual issues are priced at $4.99 a piece. The print edition can be had for $99, so it is a modest discount.

Adweek's main competition is, of course, Advertising Age (or AdAge). AdAge has an aging mobile app produced by a third party in the App Store, and nothing available for the iPad. The publisher, Crain Communications, appears to have a fragmented, unfocused digital strategy. A couple primitive apps are in the App Store under is corporate name, while the only mobile apps come from that third party vendor.

AdAge may be the leader in print, but Crain appears little interested in the new digital platforms, creating huge opportunities for its smaller competitors.

Here is a brief walk-through the premier iPad edition of Adweek:

Guardian News & Media expands its own digital 'Select' network with addition of video syndication network

Guardian News & Media today announced that it would launch a private syndication portal that would monetize its digital video portfolio to the Guardian Select publisher network.

The new portal is being created in partnership with Rightster, a video distributor.

The Guardian Select is one of those very good ideas that seems, at least from this side of the pond, to be very clumsily pieced together. In essence, the idea is to gather together independent websites and blogs into one network of sites for advertisers.

The two keys to success then would be that the network is a visible entity containing sites of importance to readers, and that The Guardian's digital sales team would be able to then successfully represent the entirety.

A good example of a network that works is SB Nation, a sports network owned and operated by Vox Media. Each of the sites works on its own, or in combination with others. The individual bloggers benefit from the added exposure of being part of the whole, as well as through the technology changes the parent entity can provide. SB Nation is a very top down organization, however. A recent redesign was implemented across the network, whether individual sites would want the redesign or not.

The key, however, is the audience already attracted to the individual sites or blogs. In other words, is The Guardian good at the curation process? Also, is it good at digital ad sales?

Guardian Select is currently made up of 150 sites, grouped into 15 verticals. The Guardian is claiming over 234 million unique monthly users and 287 million page views worldwide, a very healthy network. Combined with the traffic The Guardian's own sites attract, the network claims to be able to sell over 579 million page views to advertisers.

The Apple iBooks app introduces several good new features, and one that has users a bit uneasy

The new Apple iBooks app update finally appeared in the list of app updates for users. Though the app update was touted by Apple CEO Tim Cook during yesterday's product launch event, the update did not actually appear in my list of apps to be updated until this morning, others saw it earlier.

The app update for iBooks 3 brings in lots of new features that authors and publishers can take advantage of. There is also one new feature that some readers are complaining about.

The complaint involves Collections, the area where the user can organize their bookshelf. The default settings give the reader three collections: Books, Purchased Books and PDFs. The iBooks user can add new collections, basically a new folder, if they want. These new collections can be deleted at any time by the user, but the original three collections can not.

Some users are complaining about the new Purchased Books area. The thinking is that they do not like having all their purchases displayed permanently.
The strangest thing about the new Purchased Books collection is that it appears to be editable, but in reality is not. Attempts to delete books there proved impossible, which is probably is what is annoying users. Apple is saying they know what is best for the user, a very Microsoft thing to do.

Other new features introduced with the update will be very useful, though.

There is a new Scroll theme that will allow books to be scrolled through rather than have to flip digital pages.

Also, free book updates are now possible. This makes iBooks function more like the Newsstand and is a feature that I am sure will be utilized a lot by publishers, especially textbook publishers.

Readers can no look up word definitions in German, Spanish, French, Japanese and Simplified Chinese, a feature that came with iOS 6.

And probably the best new feature is the sharing feature. A reader highlights a portion of text, then the options pop up that include Copy, Highlight, Note, Search, Share and Speak.

The Share options allows the user to email, message, tweet or Facebook the text to others, as well as simply copy the text for use elsewhere.

Starbucks developers struggling with both Apple's iOS 6 and building for the iPhone 5

The Starbucks customer card was precisely the type of payment card that Apple had in mind when it launched its Passbook feature with the launch of iOS 6. But the latest updates have only brought troubles for the giant coffee retailer.

Over a month after the launch of both the new mobile operating system, and the introduction of the new, larger screen version of the iPhone, Starbucks app has had to be updated several times due to new bugs introduced.

Today the Starbucks app was updated once again and the list of fixes are getting longer, not shorter.
What's New in Version 2.5.1
• Fixed multiple crashing bugs
• Fixed issue with store hours not displaying
• Removed sound from stars dropping in cup
• Multiple other bug fixes
Despite the updates, one of which did bring the Passbook feature to the app, customers are complaining still.

The most common complaint is probably the least important, that the app still does not have support for the iPhone 5's longer display.

But users are still complaining about the app crashing which is either a sign of bugs, or the need of users to delete the old app before installing the new one.

Look for yet another app update very soon.

Tuesday, October 23, 2012

The iPad mini: larger tablet than other 7" tablets will make it more attractive to buyers, but price could inhibit others

I'm not sure I owe anyone a beer. A year ago, when the rumors first started that Apple might launch a small tablet, I expressed my doubts that Apple would pull the trigger. I was right in that no small tablet appeared for the holiday season last year. I was wrong that Apple wouldn't eventually launch a "mini".

But this new iPad really isn't a 7-inch tablet. With a display that is 7.9 inches in size, and a screen resolution that is exactly that of the second generation iPad, the new iPad mini is something in between. And that, I feel, will make it possibly a very attractive tablet choice for many consumers.

Apple also introduced a fourth generation iPad today, as well. But other than a faster chip, the gen 4 iPad really is not any different than the iPad I use every day. The reason for the launch was simply to get the iPad into the holiday shopping season.

With Tim Cook, pleasing Wall Street has increased in importance, it appears.

As for the new iPad mini, it certainly seems like a great product, with its bigger size, better OS (than the competition) and larger app store than other tablets. But the tablet also comes with a larger price tag, as well. One wonders if the price originally was going to be below the magic $300 mark, but was raised simply because other than the Kindle Fire, no real competition for the iPad has yet to emerge.

At $329 for the 16GB WiFi model, and $459 for 3G, the iPad mini is not a bargain.

But Apple learned long ago that being the low price leader generally means being the profitless assembler of other people's components. Apple is feeling no pressure to undercut anyone so long as the public continues to clammer for its products.

Publishers can all but ignore the new iPad mini and yet still benefit from it. Because it has the same display resolution as the second generation iPad, 1024 x 768 at 163 pixels per inch, media app developers need not compensate for the new tablet.

Going into today's presentation, I wondered if the best magazine and newspaper apps for the new tablet would be those that were designed for the iPhone. Digital magazines such as the British Journal of Photography's iPhone edition, which use Mag+ for both its tablet and smartphone editions, might be the answer for the new iPad mini. Or so I thought.

Now I'm not so sure.

At 7.9 inches, the new iPad mini is not so mini. This means that a natively designed magazine app might be just fine on the new tablet. But it might not, as well. Each publisher will have to decide this for themselves. I suppose it possible that a publisher could launch two differently designed iPad apps, with one specifically labeled as designed for the mini. It would be more work, of course, so only the design obsessed developer-publisher might go this route.

Apple's CEO Tim Cook also announced today that the company had sold its 100 millionth iPad. Approximately 40 percent of iPad sales are in the U.S., so it is pretty easy to figure you Apple's penetration of the market here. If the iPad mini proves a hit, media app developers might have to decide which display is their primary target: the retina display of the iPad, or the 7.9 inch iPad mini.

Replica makers, of course, don't have to worry about this. Most magazines that appear on smaller Android tablets are replicas – hard to read on a new iPad, impossible to read on a small Android tablet. Amazingly, Google has let this all happen, not doing much to make sure nicely designed publications are available on tablets running its system.

After the holiday season we'll see what kind of traction Apple can get with its new iPad mini, and whether launching a fourth generation iPad now will actually lead to a slowing down of sales of the larger tablet. There may be some risk here that by fragmenting its tablet offerings, and by launching a new original sized iPad now it will dampen the demand overall for its larger tablet.

Apple unveils updates for both iBooks and iBooks Author

As expected, Apple today unveiled updates for both iBooks and its software program iBooks Author. Because the new iPad mini will sport the same resolution display as the second generation iPad, there is no need for a major revision of either program due to the new iPad.

So the updates for both programs will probably be quite a disappointment for many eBook developers. The biggest change that could have occurred to iBooks Author would have been support for the iPhone and iPod touch, but Apple did not add that today, and as a result continues to be missing a major opportunity.

The biggest problem with iBooks Author is simply that it does not play nice in the sandbox. Developers of eBooks want to sell their books inside Apple's iBookstore, but they also want to sell them as Kindle Editions, and other formats.

But while there are good technical and commercial reasons why iBooks Author will not support these non-Apple platforms, the fact that a developer will need another solution in order to get their books onto an iPhone means that iBooks Author is solely lacking as a design platform.

The good news, as mentioned above, is that because the new iPad mini is essentially a second generation iPad, but smaller, means that no new platform has been introduced today to complicate things even more.

Update: the updated iBooks Author is now live and is being labeled as 2.0. The update can be found in the Mac App Store and is 219 MB.
What's New in Version 2.0
• Create new gorgeous portrait-only books
• Embed custom fonts into books for complete control over text appearance
• Add even more interactivity with new Scrolling Sidebar and Pop-Over widgets
• Support for mathematical expressions with new native equation editing using both LaTeX and MathML notation
• Automatic optimization of media for iPad
• Improved support for embedded audio, including the ability to play an audio file by tapping an image
• Improved publishing workflow, including automatic sample book creation and pre-publish checking
• Additional Apple-designed templates
• Version numbering for books
• Enhanced to take advantage of the Retina display on the new MacBook Pro
• Performance improvements
• Usability improvements
Here is Tim Cook introducing the newest version of iBooks Author, that should be available for download in the Mac App Store this afternoon:

Sun-Times releases digital magazine for its Chicago Bulls coverage, though app released without issues available

The Chicago Sun-Times is continuing to release digital only products into the Apple Newsstand to take advantage of the new opportunities to reach readers. Its newest digital magazine will feature its coverage of the Chicago Bulls, the app being called Bulls Extra by Chicago Sun-Times.

The new app is the fifth iPad app for Sun-Times Media, and the second to be released recently. Bears Extra was released in early September to house its coverage of the Chicago Bears (see post here).

The new app seems to show the commitment the new owners, Wrapports LLC, have towards launching new digital media products.
The new app, however, has been launched without any live issues to be found inside. Since it is hard to be sure when an app will make it through Apple's app review system, this sometimes happens. But if the new digital magazine is anything like its Bears app, the publication will be built using the Mag+ platform.

Unlike its competitor in the Chicago Tribune, which is also using the Mag+ platform to create digital magazines, the Sun-Times is offering its digital magazines free of charge. Readers can find the digital magazine app in Apple's Newsstand and can subscribe to both Bulls Extra and Bears Extra free of charge and have their issues download automatically to their iPads.

Apple adds Apple Events to its Apple TV channel offering, will stream mini iPad event today

I'm quite sure that many media observers will dismiss this as a minor thing, but Apple's adding of a new channel today to its Apple TV menu hints at the future of television.

Apple has added an Apple Events channel which will live stream today's product introduction event. The ability to add, subtract and rearrange channels on the fly makes these types of distribution products unique. I have to assume that Google and others can do the same with this own TV products.

The Apple event, which will begin at 1PM EDT, will most likely be used to roll out a new smaller version of the iPad. We will also most likely see additional hardware, as well as a new version of iBooks. Hopefully, we'll also see an updated version of iBooks Author that will allow publishers to create eBooks for the new tablet (and possibly the iPhone, as well – though I've seen no rumors to support this).

As rumor of a new, smaller iPad heated up, the rumors of a new Apple TV has died down. Despite the fact that the holiday shopping season is close at hand, few believe that Apple will launch its own television hardware. Instead, the Apple TV remains the main product in the category. Users, such as myself, are loyal fans of the product, but its potential is clearly not being realized. No third party apps, for instance, are allowed on the Apple TV, and the offerings remain limited to Apple's own TV and movie offerings, Netflix, sports channels, and a few other options.

As only newer versions of the iPad and iPhone can mirror their screens to the Apple TV, Apple may be waiting for updated mobile hardware before opening up the Apple TV to new features, and most importantly, to developers.

Future PLC releases over 60 app updates for its Apple Newsstand digital magazine apps

The U.K. publisher Future PLC today has released over 60 (I count 64) app updates for its stable of digital magazines. The publisher has 112 apps for the iPad in the Apple App Store, and 73 that will work on the iPhone and iPod touch. The company has far fewer titles available in Google Play or the app store in

While Future was one of the first to launch a native app for the iPad with its release of the original Mac|Life app designed with the help of Balthaser Studios, the company has pursued pretty much a replica edition strategy in order to get its portfolio of magazines into the App Store. As a result, the company last month said that they had sold over £5 million in digital editions since Apple launched its Newsstand a year ago in 2011.
The apps that have been updated, which are too numerous to list here, include Photography Week, PlayStation: The Official Magazine, and Mac Life Magazine.

Each of the apps list generally the same update: support for iOS 6, support for the iPhone 5 if the app is currently a universal app, and new digital magazine features.

Despite the claim of success, readers have complained about the apps crashing, the fact that the app editions are replicas, and the cost (though many of these complaints are from users who don't seem to understand that while the app may be free they are expected to pay for issues once inside).

The strategy to go replica may have allowed Future to make its titles available to readers throughout the world, but it appears to be limiting their success as readers look elsewhere for better designed and easier to read publications.

Monday, October 22, 2012

Apple's mini iPad event may launch much more interesting things for publishers than just a new tablet

I'm not a big fan of small tablets. OK, let me correct that: I hate small tablets. This weekend I attempted once again to fire up my Kindle Fire as the iPad was in use by another member of the family.

It took all my self control to not throw the things across the room.

The problem was that what I wanted to do on the Kindle Fire was not what it is good at. While watching video and reading books is a good experience on the small tablet, browsing and productivity is terrible. There is a good reason they don't make 7-inch iMacs.

So the mini iPad event tomorrow would be of no interest to me if Apple only launched a small tablet and called it a day.

Rumors have been around for over two years that Apple would launch a small tablet. I said it wouldn't happen simply because Steve Jobs said it wouldn't. That was good enough for me. But I also believed then, and do today, that a small tablet is not as good a palette for publishers. My opinion has evolved on that point, though I still prefer a larger sized display for newspapers and magazine.

I owned an early edition of the Kindle reader and thought it a good product – though I will admit that I rarely used it. (TNM had a Kindle edition for a while but it was pulled as readers did not flock to it.)

That Kindle was turned in for a Kindle Fire and, frankly, I regret the decision. But I do admit that a 7-inch tablet is a good size for reading some eBooks, especially ones without much or any interactivity.
My guess is that Apple feels the same way, because tomorrow's event may well center on books.

The tech and rumor sites have taken a single instance of a French book containing a reference to iBooks 3.0 to mean that a new version of the book software will be released. It's not a stretch, I could have told them that the next version of iBooks, currently at iBooks 2, would be iBooks 3. I mean, it doesn't take a genius, does it?

Apple launched iBooks 2 and its iBooks Author program in January of this year. Since then Apple has only released one update for iBooks Author. Apple latest update for the iBooks app came last month in order to make the app iOS 6 compliant. Otherwise, Apple hasn't done that much with the programs. It's time for an update.

I think I care more about iBooks Author than I do any new tablet. For instance, if Apple were to launch a new tablet and NOT update iBooks Author, it would mean that Apple doesn't see its new tablet as a home for interactive textbooks – that seems impossible to me.

Currently, iBooks Author can not create an eBook that can be read on an iPhone. When I write that I almost can not believe it myself. It seems so unlike Apple. They won't make the same mistake again, will they?

Another rumor concerning iBooks is that the program could be coming, in some ways, to the Apple TV. I find it a bit hard to believe that Apple sees people reading books on their flatscreens, but the ability to display elements contained inside an interactive eBook on a TV seems a logical extension of Apple's goals for education.

Currently, if you want to display a page inside an iBook on a TV one would have to mirror the display of the iPad. It's not difficult and works to a certain degree. But there are better ways to use a television in education.

There is still a long list of things we are expecting from Apple that continue to allude us: opening up the Apple TV to third party apps, a magazine or newspaper authoring system along the lines of iBooks Author, extending iBooks Author to the iPhone, multiple accounts on iOS devices, etc.

We'll see tomorrow what Apple has for publishers other than simply throwing another small tablet at the market.

Retweet: The 'Revolution' at The Tampa Tribune will feature lower salaries and buyouts

If you are in the newspaper business you no doubt read Jim Romenesko's newish website. That is why I don't make reference to much of his material, I am assuming a reader has already seen the item. But this memo Jim got a hold of is of special interest to those who have been watching the destructive behavior of the private equity companies that have been buying up media properties for the past decade or so.

On October 8 TNM ran a post about the sale of the last Media General newspaper property, The Tampa Tribune, to Revolution Capital Group, a Los Angeles private equity firm that also has interests in Lawrence Schiff Silk Mills, a manufacturer of bow ties, and Dove Professional Apparel, a manufacturer of medical apparel. The inference was that this wouldn't end well.

Today we learned that it wouldn't start well, either.

The new owners have issued a memo that starts out "Re: Pay adjustment and voluntary severance program."

The memo goes on to offer a "voluntary program" to buyout any employee that wants out. The company says it might reject your request based on "current business needs" but otherwise they'd like to see the back of you.

As for those who like working and getting a check, the new owners have more news. "In addition to the severance program to help us re-align costs to revenue, we will also be adjusting individual pay rates, effective immediately."

That's it, no new ties for the employees, not even a surgical mask – just an offer to let you go, or a cut in pay if you're not interested.

While the tech community repeats its print is dead mantra, and paid shrills speak at industry event to say that in fact print is not dead two kinds of owners taking control of the industry. One is the private equity firm, the other is the owner who wants a media outlet for political/business reasons.

The new PE owners are not much different than many of the newspaper execs still around who employed roll-up strategies to build their newspaper empires. These execs targeted locally owned daily newspapers, reasoning that these papers would have higher payrolls. The new owners came in and began chopping heads and consolidating operatings. The strategy built profits in an era when newspapers dominated local and regional advertising, but we are now seeing these companies failing as they have little resources left around to develop digital media products.

The other new owners really have no interest in profiting directly from their new newspaper holdings. They want to influence voters and politicians. A newspaper that can help convince voters to vote in low tax, no regulation politicians can make millions for its owner in other ways.

More and more the newspaper business in the U.S. is beginning to look like Europe where almost all newspapers are tied to a business interest, or a political party or individual politician.

On the bright side, I predict that soon we'll hear less about the death of newspapers, and more about how the nation might be better off with fewer of the newspapers that are still around.

The rise of the designer-publisher: mobile and tablets platforms gives production & development staff a leg up

One of the common criticisms of the newspaper and magazine industries that I often heard coming up in the business was that the editorial guys were being shut out. The top offices at many publications were filled with ad guys.

As a result, the typical publisher often has little to no editorial experience, leading to many editors to claim that their bosses did not understand the business. Of course, many publishers used to claim that their editors were good at editing and writing for their publications, but were clueless to the actual dynamics of publishing a profitable publications.

The rise of web publishing, I would argue, shifted the balance towards the content guys. Advertising experience took a back seat when launching a website became easier, and attracting clicks was the name of the game. 'Paid content' has been the mantra of a whole new generation of editors who believe that the reader will support their publications, and see advertising as the old, debunked model.

Scott Hotaling has 13 mags inside
Apple's Newsstand, though reader
reviews are mostly critical.
Again, the contrarian point of view is that the industry has lost the ability to attract and selling advertising, leading to a sharp decline in profitability.

The growth of mobile and tablet platforms, though, is seeing the rise of a new breed of publisher - the designer (or developer) publisher. To launch a tablet magazine, for instance, all a person needs is a grasp of desktop publisher and the willingness to pay for digital publishing solution. For those with development experience, even this isn't needed.

That doesn't mean that content or a revenue model is not needed, just that coming from outside of these two areas is not preventing those who can design or develop from turning into self-publishers.

Here at TNM, the most common publishing questions are coming from editors who are feeling a bit left out. They see lots of new titles appear in Apple's Newsstand, for instance, and want in the game. Many of the new titles, to be kind, are less than engaging.

For every well received new digital magazine appearing, such as developer Marco Arment's The Magazine: For geeks like us, there are other new digital magazines that are seen as shallow, or merely opportunistic. This isn't stopping those titles from launch, however.

But I am cautious about reading too much into all this. While the content guys have been supported by investors and other media companies, the designer-publisher is a new phenomenon. The key to successful publishing, print or digital, is still collaborative work among all three departments – editorial, advertising and production.

NewBay Media launches Nxtbook editions for its B2B titles acquired from Reed Business Inforrmation

Back on December 1, 2009, just before Reed Business Information began to close or give away many of its industry trade magazines, the company was able to sell off some of its titles to PE backed media firms.

NewBay Media, the publisher of music magazines such as Guitar Player and Mix Magazine, and backed by The Wicks Group of Companies, picked up Broadcasting & Cable, Multichannel News, and This Week in Consumer Electronics (TWICE). The company is following the typical roll up strategy, as it recently bought the music titles of Future US.

The RBI titles were probably attractive to NewBay Media because unlike most of RBI's books, these were paid circulation magazines (RBI said it wanted to exist the ad supported magazine field, so it kept Variety – though that, too, has now been sold off.)

Over the last week or so NewBay Media has now released digital editions for two of those old RBI titles: Broadcasting & Cable++ and Multichannel News++.

The app names might lead you to believe that these apps are interactive, possibly using the Mag+ platform – but you'd be wrong. These are replica editions made by Nxtbook Media, known mostly for its flipbooks. The apps are universal, meaning they can be downloaded for an iPad, iPhone or iPod touch.

In fact, all the NewBay Media apps found in the App Store are replicas, including their music magazine apps, and all are getting hammered by users – lots of one-star reviews.

One might think that a firm media firm like NewBay would be leading the digital charge, not being so backward in its approach. But there is a big difference between VCs and PEs. While VCs generally invest in start-ups, PEs dominiate the B2B industry. They employ either roll-up or divestiture tactics, so money to invest in digital simply won't be there – they want to buy up properties to grow the value of the company, then sell it all off later on. The future of digital publishing is hardly their concern.

What makes these two new apps a bit different, though, is that they are saddled with enormously high subscription rates. The other NewBay titles, being a bit more consumer oriented, have pretty standard annual subscription rates – Guitar Player Magazine++, for instance, will cost you $18.99 a year for the digital edition.

The digital edition of Broadcasting & Cable, though, costs $169.99 per year – a $20 discount over the print edition, but hardly a bargain.

There will always be paid shrills to sooth print publishers with the words they want to hear: Print is Not Dead!

Publishers are a pretty sensitive crowd. They don't like to be told, like Google is doing in France and Brazil, that they can't get their way. They expect everyone outside the business to feel threatened by their power, even when that power only exists in their own minds.

Today's Google News is dominated by word of newspaper endorsements. Most news consumers will only learn of these endorsements through the search engine – and readers simply don't care what these media outlets have to say. The WSJ, the Tribune Company and Murdoch's papers will endorse Mitt Romney, the New York Times and others will endorse Barack Obama, but no one outside the journalism world is paying attention. Newspapers are increasingly owned for the political power they supposedly have, rather than for possible profits, but that power is in the minds of the owners and a small group of politicians who couldn't imagine a world without print newspapers.

Meanwhile, when it comes to those businesses, publishers love to be told that everything will be alright.

Many of the new owners of print properties
bought for reasons other than potential profits
This is the time of year when they gather at conferences and hire the same group of media gurus to come in to hold their hands and tell them that "print is not dead."

As publishers gather to wine and dine, a steady stream of paid shrills stand up to tell these titans of the old media world what they want to hear. I'm sure it is soothing to many of them. But it's all a game. The big name gurus come in and tell them that the young'ens don't have a clue, get paid a few bucks, and everyone leaves the meeting hall feeling a bit better. Then it is back to the real world, a world where readers get their news through Twitter, Google News and just about anywhere but a paper left out on the curb.

I'm not part of the "print is dead" crowd, just as I am not part of the "digital first" crowd. But groups are trying to boil down a complex market into an easy to understand brew.

Print isn't dead, it is evolving. The future of print will be similar to the future of the horse trade: it won't go away, it will simple reduce in size and be limited to specialty publications, a few big players, and will be a niche product that way show horses are. The Mitt Romneys of the world will always read print products. But the rest of the world will move on simply because it makes sense to do so. Print is expensive, eats up natural resources, and is dependent on the postal service or old men in beater cars for distribution.

Yet ten years from now you can be pretty much guaranteed that if you will want a copy of a fashion magazine delivered to you that there will be a publisher who will be there to deliver one – and that print product will be profitable, as well. But the dozens of competitors to that title, competitors that once were profitable because ad dollars were once flowing to print products, will all be gone. In a world where only the leaders will survive, lots of print titles will disappear – at least in print.

It just makes sense. Just a couple of years ago, if you wanted to read the Spanish daily El País you had to either live in Europe, but be luckily to be near one of those huge metro newsstands that existed, but are disappearing. Today you can download EL PAÍS para iPad. What's there not to understand about the inevitability of what will happen to print.

But there are still millions of people around the world who daily enjoy some form of print publication. There is no reason to believe that ever with the growth of tablets that this won't continue. It took a decade for television to pass radio as the media box of choice in living rooms around the world (and radio is still here!).

That is why anyone that wants to claim that print is dead is also a bit wacky. They are talking in short hand. Print isn't dead, and most of them know it. It is evolving, evolving into something publishers don't want, a niche product – one with a limited audience, but an audience, nonetheless.