Fred Wilson's Shopping List.

Fred Wilson, a vc at 'a vc', always has his finger on the pulse. But he may be missing something with his recent blog, I Prefer Safari to Content Apps On The iPad. Part of his message is that he would rather have free stuff through the web than pay for things through the app store, so you could say he has produced a non-shopping list. But we most of us do buy stuff from the app store and I think he has also craftily compiled a little public shopping list of a different kind. Mind you he certainly makes some reasonable points. Here are most of them:

1. Content apps treat pages as monolithic objects. No cut and paste.
2. There are no links to other content apps in mobile apps
   
3. No multi-tasking, so no multi-paging.
4. Every newspaper, or magazine, seems to have to invent a new interface
5. Sometimes the stuff I pay for in an app is free on the web
6. No connections with social media
7. You can't search content in apps (not with Google, sometimes not with anything)

Rather than get all defensive and point out that some of this is not true for Exact Editions apps (our apps do link to mobile apps, eg postcodes link straight to Google maps, and phone numbers are live to the iPhone. Take a look at the Congleton Chronicle app which has masses of live postcodes and phone numbers that do stuff on your iPhone/iPad. Our book and magazine apps do search their own archives, including issues not sync-ed to the iPad/iPhone). Moving gracefully from defensiveness to engagement, we can admit that he has a good list and Exact Editions already is one of the platforms that newspapers and magazines can use straight off the bat, no need to invent another UI if you pick up this one that magazines and people are already using. That scratches off point 4; we have a mini-platform that others can use!

But take another good look at the list. These are mostly solvable problems. Aren't these shortcomings obvious and tempting targets for app developers? Does anybody think that we are going to see a static picture of app development here? I have my doubts about Fred Wilson's blog, he really is a vc (venture capitalist). His blog helps his investing and distills wisdom from his experience of investing. He seems to be half out of love with his iPad and half in love with it. He uses his blog to change his mind. He uses it to think aloud. So he is not really complaining about the state of the app store, he has just produced a list of juicy targets that start-up companies in the mobile app space are going to have to address.

Take if from me, Fred has just given us the shopping list for the technologies and the companies that Union Square Ventures is going to invest in next. I would say that number 6, the interaction between apps and social media, is really a very ripe fruit. For two reasons. First, it is indeed a huge and gaping chasm in the apps universe, for the e-commerce system that Apple are building needs much more social interaction. Sure Twitter and Facebook have produced their first and very creditable apps, but getting beyond the app as 'account window' is the next step. Leveraging the plethora of apps out there is the challenge and entrepreneurs will crack it first. There is a lot of disruptive potential in getting hold of that space (software dilineating and inventing the appropriate mobile relationships between Facebook, Foursquare, content, location, music, app e-commerce and advertising). And, second, Apple will not be good at holding on to this territory for itself, much though it may wish to do so. Apple might hang on to mobile content search for its apps and to a good chunk of mobile advertising within apps but it can't/won't do the social graph for itself (far too crafted, planned and inflexible, though I would leave to see Steve, Mark and Ev in the same room).

If he hasn't already done so, I am sure that Fred will turn his list around and go looking for companies that are tackling these problems/opportunities on the iPhone and the Android platforms. But he is also missing the key change which the discovery of apps has thrown in the path of publishers. Once we start thinking of books or magazines as apps that can do, at their next iteration must do, some of this stuff (link social groups, facilitate and reciprocate Google searches, copy content, remind via citation, collect usage and reactions, or work with and through other book-apps and magazine-apps) publishing becomes a much more dynamic relationship between author and consumer. Apps are at the heart of this change and will encourage us to stop thinking of content as format-bound (boring old 'files'), but rather to view digital publications as media for engagement. Go for it Union Square Ventures. Show Fred how his apps should work!

The WIRED app -- Who is in Charge?

I recommend the WIRED Magazine app. If you have an iPad (it will not run on an iPhone) and have been a Wired reader do get the app ($4.99) to make up your own mind about it. These are some of the things I most like about it:

• Gorgeous graphics and 'interesting' design -- we will get on to that.
• Excellent and pithy articles on topics that any iPad owner will find interesting (lots of stuff: eg Steven Levy on why and how tablets will work)
• Helpful navigation through the 'layout' mode for viewing the whole magazine in article strips (icon at top right)
• I liked the interactivity in the Mars article (but its hard to read/navigate because a bit lacking in stability - patience!)
• Great ads and they are all there, sometimes with links
  

There is already quite a bit of controversy about the Wired app and it has had a painful birth. Originally, Conde Nast and Adobe were working together on a prototype that would have used Flash and the expectation was that Apple would support Flash directly on the iPhone OS, or that the Adobe cross-compiler solution would do the business. Steve Jobs shot down this idea. So they have clearly had to cobble together something pretty fast, abandoning a framework that must have cost them a lot of time and effort. The resulting app is massive (500 Mb) and has some obvious misses -- no search! But they will surely be able to improve the delivery when they move forward. Here are three important links if you want more insight into the reactions and the controversy:

1. Adobe's blog, welcoming the arrival of the app: 'The future of magazines is now - and it starts in a tangible way with the WIRED Reader.' (They must know that isn't right, they know that this version of the Wired app was a rescue mission and pretty much lashed together when they had to come up with something fast. Adobe do not come out of this whole affair at all well. They do not have a 'road map' for magazine publishers and had better come clean on that. See Bill McCoy's comments).
2. Interfacelab (Jon Gilkinson) has many astute comments and insights. Its also rude verging on insulting: "Sure, it’s a print designers wet dream – but it really should be a consumer’s wet dream. And it most certainly is not that." Gilkinson's answer is to put the business back in the hands of the web designers at Wired HQ and deliver the whole thing in HTML5. The circulation director or publisher is going to reject this proposal as there is some sign that users will buy apps, but not so much that they will buy 'urls'.
   
3. Print designers wet dream? Well try Oliver Reichenstein's blog at Information Architects to find out why it isn't that. This blog even brought in some thoughtful comments from one of the type designers consulted by Wired over the design of this issue of the magazine (Jonathan Hoefler)

Reichenstein's critique gets very detailed and very nerdy, but it is truly surprising that he focuses on the typography, not on the images, illustrations and navigation. His key point is foreshadowed in this objection:

But text is a different story. It needs a lot of rhetoric skill and typographic care to do what it should: to communicate. On the screen things become even more complicated. While WIRED journalists and graphic designers are still at the top of their game, the typography and the interaction design of the iPad app doesn’t come even close.

So Reichenstein presumably thinks that magazines should be root and branch re-designed for the iPad. "You can’t design iPad apps in InDesign and export them as flat files. That’s nothing short of amateurish. " But of course you can design magazines in InDesign and then export pages to an app, and this is a very strange comment unless you believe that magazines need to be re-designed in precise and granular detail for iPads. InDesign does not exist to design iPad apps, it exists to design magazines and other forms of document. But it is equally inevitable that most documents will now need to be read, used and presented on iPads (iPhones, Android devices etc). So a modern magazine, newspaper, book, catalogue etc better look good or 'reasonably OK' when it is rendered on some of these devices in widespread use. The transition has to be automatic. No text designers involved. Does anybody seriously think that text in magazines needs to be designed and then redesigned for each and every piece of consumer computing technology that comes along. Will magazines need to be 'redesigned' for next year's Android and then again for the 2012 super-iPad? So that they can support different screen resolutions or styles of 'text flow'? Magazines do not need to be redesigned for the iPad, their use and their usability as digital objects has to be understood before they are transformed to an app platform. This is not primarily a task for text designers, or even for magazine designers.

Wired has always had a deliberately various, bold, edgy, contrapuntal visual design. It has been a notable strength of the print magazine. The variety and confusion has worked so well in recent years partly because it apes in print the choice and chaos of the web; each Wired story carrying its own design conventions or layout, as though we were tipped into another web site as we turned the page. Each article node with its own style-sheet. I suspect that the post-modern jokiness and anarchy of Wired's visual design, which works so well when it is a print-only magazine, may be something of a weakness when it comes to its digital existence. Perhaps, as it heads to a new digital existence on the iPad and whatever comes next, Wired will need to forsake the promiscuous hurly-burly of the designer's chaise-longe for the sobriety and solidity of the app store.

Reflecting on this Wired app, which it has to be said is a bit of a 'curate's egg', I have been asking myself who has been driving this project forward? Adobe may have been at one stage, but they seem to have driven this proposition off the road (see Bill McCoy Wired is Tired). Conde Nast appears to have given the leadership role to Wired's distinguished designer Scott Dadich, but getting the digital strategy right is not merely a design decision, it is not just a technical decision. The project should now be driven by the publisher, even better it should be driven by the circulation director of the Conde Nast group. One can understand why Wired would be one of the first magazines from Conde Nast to have its own app, but whatever solution or platform is chosen for Conde Nast's magazines should really be one that can deliver across the group. Si Newhouse must have expected his premier publishing company to have chosen the best strategy for digital magazines by now. The solution is overdue and I think/hope they will get it right soon.

Exactly and Precisely

Exact Editions began with the goal of delivering magazines, issue by issue, as subscription services for web browsers. For various reasons, some of which I may have forgotten and some of which are deeply ideological, we took the view that the service had to be a pure web service. Every page of every magazine should be rendered as a web page, so that it could both link and be linked to. This is still the underlying, database-driven, system that underpins the apps that Exact Editions delivers for the iPhone O/S.

It is a year since Apple accepted our first app and it appeared in the app store (a year and four days), so it may be a good moment to take stock and review progress. One thing to say, loud and clear, is that we think Apple has built a great system. A system that is great for publishers, good for developers and very good for consumers. Apple gets stick, and its share of mockery, (and we occasionally mutter oaths under our breath when they inexplicably delay approval of a great revision to one of our/their apps) but they are doing a great job. Thank you Apple and thank you also for designing and building the iPad! The iPad is the crowning glory of the system that Apple has constructed and it is going to be very good for magazine publishers.

Exactly was our first app and it remains in some respects the lynch-pin of our offering. Through it anyone can read sample digital magazines on the iPhone/iPod Touch/iPad and they can access their own Exact Editions account to read the current and archived issues of magazines that they subscribe to. We have been steadily adding functionality to Exactly in the course of the year. Six months ago we added content sync-ing so that the latest issue in an account could be stored on the iPhone/iPod Touch. This ability to sync has greatly improved the readability and speed of interaction with the apps on phones. Currently we have a further improved version of Exactly with the Apple approval process and this will allow double-page spread viewing and navigation on the iPad. Exactly will continue to improve as we move forward and as the Apple O/S develops -- multi-tasking is one of the features that Apple-followers are looking for in the imminent release of OS/4.

Exactly is a lynchpin in the Exact Editions product offering, but from our initial exploration of the iPhone platform we had taken the view that most magazines will benefit from having their own 'branded' apps in the iTunes app store. We have recently started viewing this complementary development of branded apps as a kind of co-relative of the Exactly proposition. Whereas Exactly allows the user and the subscriber to read and access her magazine subscriptions on the iPhone platform exactly as digital counterparts to the print subscription, the branded apps solution allows the publisher to project the title precisely branded for the iTunes market place. For the consumer a branded app works precisely as the Exactly app works, but with better branding for a particular magazine or title. But for the publisher the branded apps project the PRECISE brand associated with the magazine (or book).

Exactly is a 'white label' solution, it is neutral between the brands of the magazines that might be viewed through it, but the precisely 'branded apps' target and carry the design of the particular magazine. We are not going to make the 'precisely' label even a sub-brand for Exact Editions, because we think that the specific brands for the magazine itself is what matters to the integrity and brandedness of magazines. Precisely is an extension of the underlying Exact Editions app platform, a non-brand or place-holder for magazines that need their own brand in the iTunes economy. And that is the key point about the 'precisely' proposition, a magazine app which is branded for the magazine itself can be moved into the iTunes app store, with its own price, its own content offering, its own front cover etc....The magazine publisher who can place the magazine directly in the iTunes app store takes advantage of the existing brand recognition of the magazine itself and by selling subscriptions through the efficient Apple system the brand is of course further developed. Having the magazine directly in the iTunes app store, means that the magazine app can be sampled and bought by the 70 million people who already have iPhone O/S devices. The magazine sits directly in iTunes and there is no need for the subscriber to come to the content via the Exact Editions web service.

There are some additional immediate gains from this approach. First, the magazine app can be sampled (and in this way the App store becomes a very effective digital kiosk where some parts of the magazine can be browsed before the title is bought). Second, magazine subscriptions can be sold as 30-day subscriptions, which is a huge advantage because the iTunes market is still quite sticky about buying apps for $15 or $30 (typical prices for annual subscriptions) but much more accommodating about buying subscriptions (albeit only for 30 days) at the price of $1.99 or $2.99 that might seem appropriate to a publisher who sells print subs at $15/30. The Apple system of in-app purchasing works fine, and the low threshold for subs and renewals at modest prices are huge advantages of the iTunes e-commerce system. Apple is getting a lot of this stuff right!

A Summary of the Strengths of the Exactly/Precisely Platform

Exactly has:

1. Full digital fidelity for magazine issues and archives
2. Interactivity and in-page and in-issue navigation (live links for urls, phone numbers etc)
3. Search
4. Offline syncing
5. iPad and iPhone support

Precisely has all of that from Exactly and more:

1. Full digital fidelity for magazine issues and archives
2. Interactivity and in-page and in-issue navigation (live links for urls, phone numbers etc)
3. Search
4. Offline syncing
5. iPad and iPhone support
6. Branded app name
   
7. Branded icon
8. Branded splash screen
9. Branded app-store presence
   
10. Current issue preview
11. In-app purchase
12. 30-day subscriptions
13. Data on consumer up-take
    
14. Revenues from iTunes
    

That is all rather a big deal for magazines that want to have their own direct presence in the iTunes economy. The Exactly/Precisely platform can get a magazine up and running in the app store within two or three weeks (allow at least one week for the approval process), and most magazines which look for a strong consumer presence should be doing that now! However, we do emphasise to our partner publishers that we are offering them a branded solution from an underlying technology platform. We are not building customised app solutions. Sure there are plenty of choices and there are many issues where there can be some fine-tuning, but the platform is database driven and largely automated. It works the way it works.

Exactly and precisely that way.

What is Apple's Mission Statement?

We all know Google's mission statement: "to organize the world's information and make it universally accessible and useful." (Google: Company Overview). Amazon has a vision statement that you may have encountered: "Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online." (Amazon: Corporate FAQ's). I bet you did not know that Apple has a 'sort of' mission statement on its investor relations pages:

"Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone."

That doesn't get me too far. It sounds more like an overly-potted history than a mission statement, it is also somewhat out of date, since it doesn't even mention the latest revolutionary step: the iPad. I subscribe to the view that Apple has incredibly ambitious goals which it probably does not even articulate to itself. It is determined to invent and own the high end of consumer computing, which is going to be the only safe place for a computer manufacturer to be in five years time (see Charlie Stross on "The Real Reason why Steve Jobs hates Flash", or as John Gruber has it 'The iPad really is The Big One: Apple's reconception of personal computing' from "This is how Apple rolls").

So Apple's mission may be so audacious that it would be unwise to articulate it fully. But it may also have crafted its trajectory in such a way that it does not become too obviously monopolistic. Apple wants to revolutionize the world of personal computing (that is what Jobs and Wozniack did first time around in the 1970s) and yet the company does not obviously want to monopolize the market. Carving out the high-end, deluxe end, of the consumer market should be enough. Is that the way that publishing will work in the future? There will be a high-end platform for those who like to buy into Apple standards, and a more chaotic, Android, world of confused standards where stuff is cheaper, where there is more stuff and wilder stuff (including Flash and porn) but perhaps also less reliability and consistency?

My own iPad

I have been watching my colleagues use an iPad at the other end of a Skype conversation since April 5th and earlier in the week had a chance to actually use one for the first time. It doesnt take any time at all to get quite used to it! Now I am back in Italy and my own 'Italian' iPad was awaiting me -- there is actually hardly anything at all Italian about it, except the Italian in the iTunes store. Apple's minimalist design means that they really dont have to do much at all to 'localize' their products. According to La Repubblica one hundred thousand iPads were pre-ordered in Italy alone. Since the device has had overwhelming demand in Japan and the UK, it must be clear that Apple will very soon have sold their second million iPads. Not bad for a device that is still only 2 months old.

The first apps downloaded to my system were of course the Exact Editions apps. My first purchase was of the Pages application from Apple, closely followed by the Wired app. I will look forward to browsing and reading the Wired app this weekend.

I was interested to see that the Wired app is only available for the iPad. We have taken the view that users will often want to read stuff on their iPhone and since this can be done pretty effectively with the Exact Editions system we obviously offer users both (they subscribe to a single app, a universal app, which can be used on either type of device). On the other hand it has to be said that magazines really do look MUCH better on the iPad, perhaps there is a perverse logic in requiring that the magazine app should only be readable on the less common, the more expensive, device. I am not sure what we would say if a publisher (say an Art publisher) specified that they ONLY wanted their book or magazine to be sold for an iPad audience. I guess we would go along with it.... It is certainly interesting to note that our universal apps have been mainly downloaded by iPad users. The figures are close, but since April 1 our apps have been going to the iPad:iPhone audience in roughly 51:49 ratio. Given the overwhelming superiority of the iPhone in terms of numbers of users that is a fact I find somewhat amazing.

Publishers Weekly as an iPad app

And of course as an iPhone app. Available here.

This week's issue is available in its entirety for free through the app, and for the next three days of BEA the Publisher's Weekly daily specials will also be freely viewable within the iPhone/iPad apps.

The decision to develop this app was taken at short notice (less than two weeks before it was needed) and we were perhaps fortunate that the Apple approval process came through just in time for the BEA show -- which is by far the biggest American book trade exhibition/conference.

Being able to read the daily specials, is clearly a boon for visitors and exhibitors who may not want to carry the printed version with them, but it is even more of a boon for those who might not be able to get to the show and would like to participate in the event from afar.

Here is a screenshot from the iPad version, the screenshot shows the 2 ways in which the user can navigate the magazine issue. First, the traditional contents page (with hotlinks from the page numbers to the listed articles) and second, the 'pageflow' navigation slider, which many users prefer as its so fast on the iPad.

Apple's Bite and Weisberg's Confusion

Jacob Weisberg, a distinguished journalist and Chairman of the Slate Group, has an article in this week's Newsweek which crystalises and epitomises some of the confused reactions of the magazine industry to Apple's iPad. Apple's Bite: publishers should beware the iPad is a clever but crass and logically inconsistent article and I recommend it in full for its cleverness and its instructive inconsistency. In a nutshell, Weisberg's position seems to be that the iPad is potentially a game-changing device but it is a poisoned chalice for publishers so they should avoid it:

The iPad is a gorgeous appliance and I wouldn't bet against it, or be without one, in the short term. But content creators ought not to delude themselves about Jobs's efforts to replace the chaos of the Web with his own velvet prison.

Weisberg's argument really boils down to three propositions:

1. The iPad is so good for web browsing that many of the first generation of iPad apps are feeble in comparison. Many magazine and newspaper apps are 'exorbitantly priced' steps backwards and away from the web.
   
2. Apple is trying to retain all (or almost all) the customer data and may share very little of it with publishers: "Such domination of the relationship with readers would be no less a disaster for publishers than it was for the music industry."
3. Apple is acting as a censor in deciding what content should be available within the app store. "And Cupertino is more puritanical about nudity than the Vatican itself."

But these points don't hang together, if the first is really true and the iPad is going to be much better for web browsing than for enjoying apps which represent and contain magazines and newspapers we can forget about magazine apps. If the iPad really is a step backwards -- "Don't go there!" -- the other points are simply irrelevant. The iPad will not be a good environment in which to deploy magazines and newspapers as apps and so can be safely ignored. Concentrate on making the web services work. The fact is many of the initial apps are crude and have been put together in a hurry without the opportunity for effective prototyping and testing, but these multifarious apps are getting better very fast and most of the features that Weisberg wants from newspaper and magazine apps will be coming.

Weisberg probably knows this, and he is at least in part seduced by the iPad (as have been most magazine publishers who see it) so he goes on to develop his critique of the Apple political economy. Apple gets to decide what development tools will be used on the iPhone O/S, Apple will invent and will develop a new advertising system which will be deployed within apps (iAds), and Apple will make decisions about what magazines to include or exclude and some publishers may prepare special sanitized content for the Apple system (eg the Playboy app which has no nudity!). But these complaints are pointless and otiose. Publishers may complain about the Apple system, but they should get on and use it, as many publishers are. Weisberg's complaints about the advertising system are particularly bizarre. The proposed iAds system will be especially attractive to magazines - the ads promise to be engaging, to be incremental to the performance of the apps which contain them, through their richness they will attract major brands and will be of especial relevance to the advertising budgets that like print magazines (the launch ads will cost in the region of $1 million per campaign, $10 million at launch). The Apple system has much more promise of effective 'trickle down' to magazine budgets than we have seen from Google search ads. Weisberg complains that the advertising system will siphon %40 off the top. But let us note that this still means that %60 of the advertising spend remains accessible to publishers. They should be there to catch it when it falls.

Weisberg is right that too many publishers are under the illusion that the Apple iPad may permit them to simply replicate their existing business model (irreparably holed under the water-line by the internet) on the iPad platform. It will not do that. But publishers who care about their magazine brands should ignore Weisberg's jeremiads. They will rush to develop their magazines and newspapers as apps and they will not be disappointed to have done so. The key point that Weisberg is missing is that the iPad really is a new market, and it will not be the last. It will help publishers to sell magazines and subscriptions to newspapers and it will introduce new types of sponsorship and advertising revenues for content owners. But no publisher will put all their eggs in the Apple basket. What Weisberg should have said, the warning that he should have posted is this: the Apple system will probably succeed and if it does so it will not be the last such technology driven new market, so publishers need a strategy for progressive digitization of their core assets. There will no longer be one circulation figure and the BPA and ABC solutions will not be helpful in these new domains. Publishers need to get used to the idea of modular distribution. They may well need to develop content solutions which are specific to the iPad/iPhone, different solutions for the web, for Android, for games platforms or for social networks (Facebook or Twitter). The challenge that publishers will have difficulty in meeting is this: how can they design and produce 'digital magazine' solutions which meet the needs of these very different audiences and technological environments. Publishers who respond to the iPad opportunity by building an iPad app (or better a 'universal' iPhone/iPad app) also need to think about how this new development impacts on the way they are using their existing web presence. They need to keep an eye on Android and Blackberry app environments. They certainly cannot ignore these choices. If Weisberg means by his 'beware' that publishers should ignore the iPad, his advice is lousy.

Book Pricing, the iPad, and the Bvlgari Book

Some months, shortly after the iPad was announced, John Sargent, CEO of Macmillan published a much discussed and influential blog on the pricing of books and the 'agency model'. This was influential because it articulated the reason why Macmillan (and most of the other large publishers) were going to use the advent of the Apple iPad as an occasion for reasserting publisher control over the pricing of books. Digital books that would be sold through the iPad's iBook store, but also for reasserting control over the pricing of books that would be sold by Amazon through their Kindle. Publishers through the agency model would set the price of the book to be sold to end users and allocate a set percentage of that price to the distributor/retail channel, or technology partner (30% is becoming the norm for distribution share). Amazon by implication would no longer be allowed to set, and to lower, prices to $9.99. Amazon would have to put up with some loss of control and a higher but pre-determined margin.

The ructions caused by this blog posting are on-going, but the comment that most struck me in Sargent's blog was an aside and a promise:

I have not addressed illustrated books or books for young children. That will be a topic for the future as the technology advances beyond e-ink screens. John Sargent Macmillan Blog

We have not heard any more about the special case(s) of illustrated books or books for young children. But why should they be different? Why should the pricing and availability of books of different types be subject to quite different considerations? Well no doubt a part of the answer is that illustrated books (and many children's books are essentially illustrated) will not work well on e-ink screens. Mind you the iPad is not an e-ink screen, but I suppose one could say that the iBook store does appear to be catering for books that would otherwise be suitable for e-ink screens. Illustrated books and some other types of high-design books are evidently not suitable for the iBookstore or the e-Pub format used by most e-ink devices. So illustrated books do seem to be a bit of a special case and more suitable for deployment as free-standing apps directly in the iPad system.

It is surprising that we have not yet seen more high-design books implemented as free-standing apps in the iTunes system. The iPad is eminently suitable for rendering beautiful illustrated books. How will the pricing work when they arrive? Will beautiful virtual books on the iPad be priced higher or lower than other books?

There is an argument for saying that beautiful illustrated books will be much cheaper as digital books on the iPad (or on Android tablets etc) than they will be in print. Perhaps the clever strategy now for a publisher of beautiful books would be to move rapidly up-market, towards a luxury option for printed books, whilst simultaneously making digital versions of the books available at highly competitive prices. This strategy would chime in with a prediction from Alberto Vitale that printed book prices should rise as digital book prices inevitably fall:

"a book that sells today for $27, $28.95 may be selling within the next two to five years at anywhere between $37.95 and $45."

"Eventually, I believe the market will bear the higher price -- publishers will have to experiment with the price. The economics of book publishing are not very good now," Vitale said, adding he did not expect "appreciable resistance" from consumers to higher hardback prices.

Vitale further predicted that the cost of e-books will drop ........ "E-books will become the equivalent of the mass market. Mass market is not down market, it's just a market accessible to a larger number of people. That's why I believe e-book prices have to be lower than they are today. The consumer is not stupid, he knows the e-book is a lot more economical to produce than a regular paper book," (See full article from DailyFinance).

This is pretty cogent thinking. I think it is especially persuasive for highly illustrated beautiful books. For the following reasons:

(1) Whatever publishers say, the pricing of printed books has something to do with the costs of producing and manufacturing them (the official line is that pricing should be set by market expectations, but in practice all publishers pay attention to unit costs when setting print prices). The costs of printing and manufacturing the marginal, or run-on copies matter to the traditional publisher. Especially is this true for high quality illustrated books which have very good paper and complex printing. Good colour costs if the book is to be manufactured. Colour costs nothing in the digital case. In fact the marginal cost of another digital reader or licensee is essentially zero as it is with any digital book. The run on cost of all digital books is essentially zero. There is no reason that big and beautiful digital books should cost more than any other kind of book, mass market or otherwise. There is no cost penalty for being a big book, or having full colour throughout if the book is digital.

(2) Furthermore the perceived value of a print book will be increased if the standard of production and of reproduction is increased. From which it should follow that the price of the print product should be increased to the point that the 'exclusive' and 'exceptional' value of the physical object is enhanced. Physical books of high quality should increasingly be priced according to the rules of Bvlgari and Gucci, not according to the standards of Marks & Spencer or the Gap. Publishers of such books: Thames &Hudson, Phaidon, Yale, Rizzoli and so on will find it profitable to improve the quality and reduce the print runs for their best books, because

(3) Selling relatively cheap digital editions will not only increase the market reach of beautiful books, it will also help to sell the more expensive printed books. There are potentially large markets for beautiful digital books at prices in the region of $5-$10, merely for reading, even though the printed book may cost $50-$100. Very attractive physical books will be very attractive digital books, especially as the quality and fidelity of electronic devices surpass that of the iPad, which they will. Larger digital sales will in effect promote the desirability of exclusive and less affordable printed editions. Customers who might like to possess a very expensive book, and to handle it, to put it on their shelves, or to collect it, are more likely to do so if they have already seen and probably purchased a digital version of the book.

(4) For as Vitale so eloquently observes, the consumer is not stupid. The consumer knows that the marginal cost of a digital book is close to zero, just as she knows that the cost of beautifully produced printed volume may be close to the manufactured cost of a Gucci handbag (ie quite possibly less than 10% of the price that may be charged, but a lot more than zero).

Of course this argument does not completely follow if there is a significant degree of substitutability between beautiful printed books and the same book as a digital edition. But there surely is not? If a physical book is valued because it is expensive, because it can be handled, because it is potentially rare and collectible it will not be substituted by a digital edition which is none of these things. I suspect that we shall soon see some quality art publishers putting this thesis to the test and they will do so, because for many of the best illustrated books there is quite a large audience that merely wants to read or consult the beautifully produced virtual object. For the beautiful book that is merely going to be read there is no case for charging more than $5 or $9.99 or whatever becomes the 'normal' price for a digital book. I agree with Vitale that this 'normal' price will soon be coming down. Partly because consumers are not stupid, but also because competition is at work and lower prices will sell more books. Always has done. Always will. But there still should be a very nice market for the beautiful physical book. Why not? We also like beautiful handbags.

Why Magazine apps need to be Magazines

Stephanie Clifford in the New York Times takes A Peek at Vanity Fair’s iPad App

Magazines are actually pretty brilliant concepts the way they are,” said Vanity Fair editor Graydon Carter on Tuesday as he previewed his magazine’s new iPad app. “At the same time, we have a few bells and whistles that a magazine cannot provide.”

That is so true....

Its very important that there are a few extra 'bells and whistles' in the digital edition, but its also very important that the digital magazine should be the SAME MAGAZINE.

There are lots of reasons for this and here are two that underpin the Graydon Carter observation.....

Reason One: Publishers Cannot Afford to Produce Different Versions of the Same Issue

Magazine are brilliant concepts and they are also very complex products to produce. The digital magazine that is going to work on a week by week, month by month basis has to emerge from that complex and extensive process. For this reason we remain at least sceptical about the widespread practicality of the new narrative form developed for the digital app version of Popular Science magazine. If every magazine is going to be deconstructed and then put together in a different editorial context for its digital variant there will need to be a huge investment if magazines are to make the digital turn. It does not look as though the magazine industry, as a whole, has the appetite for huge digital investments. That is why at Exact Editions we have always seen it as our task to enhance the magazine but to respect its integrity. The kind of enhancements that we deliver automatically through our database are -- increased connectivity, lots of links to emails, urls, places and phone numbers mentioned in the magazine. Putting these links into the database and then through the browser onto the page the reader sees (metadata if you like) makes the magazine content more useful to the reader....

Reason Two: Readers Want to Experience the Same Magazine but they Want to do Digital Things with it

The key thing to respect in adding bells and whistles is to understand the context in which a digital magazine is going to be used. That is where useful bells and whistles come in. The user may want to search, the user may want to link, if the device on which she reads the magazine is a phone, then she may want to call the number that is in the magazine. The point about the digital magazine is that the context in which it will be used is digital, so it has to do the digital things well and simply. The same content, the same information but more useful because digital. So phone numbers in the magazine, or urls, should be clickable, and not just because making them clickable helps the advertiser (of course it does that). Phone numbers that you see on your iPhone absolutely clickable to call...it is strange the way that many apps do not respect this basic requirement. Those are the kinds of bells and whistles that users want and need.... but keep it simple. That is the first rule. And the second rule is to aim to automate the process as much as possible. These two rules are of course connected: if you keep it simple there is a chance that the process of enhancement can be automated.

Can a digital magazine be more than the print magazine? More useful, more mobile, more shareable, more engaging, more interactive? Sure it can, but publishers should never forget that the digital magazine has to do all that the print magazine can do for its users, first. The digital magazine should be able to do everything except there is no need for it to be re-cycled through a shredder for use as cat litter or fire lighters. That function can be left to the paper ancestor.

Is Apple Opening Up?

Apple has been accused of building a 'walled garden' in the iPad. That is not a metaphor that I trust too much; first, because Apple's garden seems to be rather subtler than that: it is more like a 'hedged' garden because the iPad has always and will always have a web browser, one that allows you to see any web page and you can't get much wilder and freer than that; second, because, unlike most publisher 'walled gardens', a large part of the Apple garden is 'free to access', and developers and publishers do not have to pay to offer stuff for free through apps running on the Apple systems. So using the 'walled garden' metaphor as a weapon to beat Apple with, seems to be both inaccurate and a touch unfair to Apple, which is really creating a hedged 'pay for access' inner garden with a large fringe of 'free' public park access. Good for Apple, Amazon and even more Sony, should have thought of this first: provide the space in which other ebook systems can be viewed and read, even the opposition. Apple does not get the credit it deserves for this third-party openness. We did not see Amazon creating the space for developers to produce third party apps to run on the Kindle until the on-rushing iPad chariot made this belated 'openness' a reactive move.

Furthermore it is at least arguable that Apple, in creating the e-commerce environment for the iPhone and the iPad (the app store) has the obligation to vet these products. Some of this is about making sure that malicious programs do not pollute the environment (there is so far no sign of viruses or malware on the iPhone platform), but also a matter of civic duty -- Apple no doubt sees itself in the role of a Walmart, or at least of the landlord of retail properties. So it may feel a need to regulate the type of services and products that can be offered through its pay-platform.

In a thoughtful piece at GigaOm Kevin Kelleher writes that Apple is already "losing control--and that's a good thing"

I’m willing to accept that Apple is trying doing the right thing for its customers. In one sense, Apple is like Walmart, or any retailer that excludes magazines and books with content it deems too sexual or politically controversial. But Apple is more than just a retailer — it’s the provider of a platform, and a wildly successful one. Apple can control its platform on a small scale, but as success expands that platform domain, the company’s control inevitably breaks down as it starts to create more problems than it solves.

The problems affect developers, content partners and consumers. To avoid having to explain its capricious approval system, Apple has retreated into an opaque cloud of inscrutability, making telepathy a vital skill for successful developers. As publishers large and small bring their content to the iPad, Apple’s murky morality may give them pause — or worse, lead to self-censorship. And curating controversial content in a way that leaves all parties unhappy is hardly a savvy way to market a hot new product to consumers.

So the company is likely to reassess its control-freak tendencies as well. It has three choices: One, hold to the status quo; two, curate its platform, but add a set of clear guidelines as to what’s allowed and what isn’t, or maybe a curtained-off section for controversial apps; or three, adopt an open environment where apps are rejected only on technical considerations. The first will only add to confusion. The second might work if the guidelines are explicit enough. The third is the simplest, but involves giving up a lot of control.

My guess is Apple will go for option No. 3. Not right away, but in increments.....

I am not sure that Apple yet sees things this way but I reckon that they will soon have to do so. The second option (issuing clear guidelines as to what is or is not allowed) is going to be much trickier than one might suppose. Let us take the Walmart analogy seriously. Walmart operates supermarkets in the USA and the UK and it naturally sells different magazines and newspapers in those different chains. There is no doubt that the magazines and newspapers that pass as normal in the UK (or in Sweden or in the Netherlands) would be quite unacceptable in the USA. Is Apple going to develop different product ranges for these different markets? Is Apple willing to make the Sun available in the UK (its the biggest selling news tabloid, but with more nudity than is acceptable to Apple, or the US popular newspaper market)? But to ban it in the US? Will Apple really wish to maintain different cultural offerings for each regional market in which it operates? What about expatriates, will the Sun be purchasable by the Cupertino resident who has a UK iTunes account and credit card? Will there be a Saudi option as well as a mid-Western option, perhaps a Californian level of permissibility a bit lower (higher) than that for Arkansas? Once Apple starts looking at the detail of the discriminations that would be needed to service cultural and religious sensitivities in different parts of the world, I suspect that they will hastily withdraw to the high-ground of technical neutrality. "We are only a platform provider. Not an arbiter of morality."

But there is an even trickier problem for Apple to think about if they maintain this detailed control and vetting of content. Apple to its credit supports Kindle and Kobo and other generic ebook reader apps for free. Apple is most unlikely to withdraw its support for these rival ebook systems (and it would attract a great deal of hostile attention, perhaps from regulators, were it now to do so). These apps are freely available from the Apple iTunes store (perhaps with an age-related warning) but they can of course be used any ebooks from Amazon or Kobo (was Shortcovers) that the user cares to purchase direct from those suppliers. If the best, but steamy, edition of the The Perfumed Garden is available as an ebook to the Amazon Kindle user, it can be read on the iPad and the iPhone. These Amazon-sponsored ebooks are not being sold through the iPad or the iTunes store, but they are being read on the device. Is it conceivable that Apple is going to prevent Signet from selling its edition of The Perfumed Garden through iTunes whilst the very same translation by Sir Richard Burton can be purchased from Amazon? If Apple were to be seen to be banning books from the iBooks store which are widely available from other ebook retailers it would be grievously undermining its position as a book retailer. Its not taking a commission from the Perfumed Garden, but it is close to encouraging its loyal customers to shop elsewhere. The more books that will not be stocked the more customers will think to shop elsewhere. This reluctance is also damaging the publisher who is, on all the other titles sold through iTunes, paying Apple a 30% royalty (or agency commission). So far from being a 'walled garden' the iPad/iTunes system that enables users to deploy banned ebooks purchased from other suppliers is on the way to becoming a tunnel to the rival plantation. I reckon that Kevin Kelleher hits the nail on the head when he says "Apple can control its platform on a small scale, but as success expands that platform domain, the company’s control inevitably breaks down as it starts to create more problems than it solves." (GigaOm) These are problems for Apple itself.

Index on Censorship and World Press Freedom Day

Two weeks ago Exact Editions working with Sage launched an iPhone/iPad app for Index on Censorship. The free app gives access to a good sample of the magazine to its subscribers. Yesterday, in support of World Press Freedom day, Sage announced a week long reduction in the price of the paid for app (which gives the user a 30 day subscription). Until Sunday it is available for 57p/99c. And subscribers to the paid for app not only get access to the current issue in full, they can also consult back issues and search the archive. The press release about the offer notes that the current issue has several articles with a strong technology component (Google, China, Blogging in Egypt):

The March 2010 issue, 'Brave New Words', focuses on the development of technologies, from CCTV to Twitter, and the implications these have for free speech. "Index on Censorship plays a major role in protecting and promoting free expression, as does World Press Freedom Day," said Clive Parry, Global Marketing Director, SAGE. "This discounted offer with Exact Editions makes it easy for individuals to subscribe to Index online."

Here is a short video (70 seconds) showing the app in use on an iPad.




The video shows how fast the iPad is to load pages and to whizz through them using the Exact Editions page-flow tool. But the table of contents is also important for finding your way through a magazine such as Index on Censorship (nearly 200 pages).

Pageflow is also very helpful as a way of navigating fast on the iPhone.