Tuesday, March 29, 2011

Why Magazine Apps Have to be Subscriptions

The major consumer magazine publishers are backing themselves into an extraordinary corner with their reluctance to engage in subscription transactions on iTunes. Conde Nast for example will be selling magazine issues as apps, one issue at a time through iTunes, requiring existing subscribers who want to read their magazine on an iPad to repurchase an issue to which they may already have access through a print subscription. That the customer already has a print subscription counts for nothing. In fact, things get worse. To judge from the help pages, in iTunes, customers who have bought one of the latest issues of a magazine through the iPad, may be asked to 'repurchase' a previous issue that they had already bought for their iPad, to go through the motions including keying in their iTunes password, but they will not be charged for it. The problem that Conde Nast have created for themselves here, is that they do not have a way of knowing whether or not someone has previously bought a specific issue of the magazine, because the previous purchase was made through iTunes and Apple, not Conde Nast, keeps track of iTunes customers. Conde Nast are trying both to sell single issues, through iTunes, AND meet the expectations of users who should have access to earlier issues when they buy a new number. Conde Nast are by no means the only consumer magazine publisher getting their knickers in a twist over this. When there really should be no problem at all. All subscribers to a magazine should have access to the magazine for the term of their subscription through all available means.

The first point that we should notice is that Apple themselves takes the view that if a customer already has access to content, they should have access to it on their iPod Touch, iPad or iPhone. This is not controversial it is just good customer relations. Furthermore Apple makes absolutely sure that a customer who has access through their iTunes account to content on one Apple device, has access to that same content on the other devices connected to the same account (exceptions of course if the content cannot run on the other devices). Apple, in other words, takes the view that subscriptions are fungible across Apple devices: up to five devices per iTunes account. Why on earth have consumer magazine publishers not taken a similar view, why not grant that customers who subscribe in print should also have access via their iPad? Magazine publishers should view personal subscriptions as fungible across print, web and digital devices. Magazine publishers must do this if they want to retain any hope of continuing to control their subscriber data. Magazine publishers generally have a very good picture of who their subscribers are, they have databases that carry up to the minute information on subscribers, so granting them access through an iPad app is not a tricky issue. Is it not a kick in the teeth for your existing print subscribers when you tell them that they have to buy another subscription, or another single copy sale, to read their magazine on the iPad? Will it not be another kick in the teeth when customers are told that they have to buy another subscription for their Android phone/tablet? Or their Web O/S device? There will soon be many customers with Android phones who also happen to have iPads. If there is going to be a competitive tablet/mobile out there in a few years time (at the moment Apple looks like the only game in town, but we can hope for competitive variety) it will be incumbent on publishers, or purveyors of content subscriptions, to offer platform-agnostic subscriptions. Apple is unlikely to extend the hand of subscriber friendship to Android, so the publisher has a privileged position in this battle of platforms selling subscriptions that cross hardware boundaries. Look at the success that Amazon has been having with ebooks by straddling hardware solutions with the Kindle.

The second point to note is that Apple have said that it is perfectly OK to provide free access to print subscribers from the iTunes platforms.

“Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Steve Jobs, Apple’s CEO. Apple Press Release 15 February 2011

And of course, newspaper publishers are working in this way (the New York Times, the Wall Street Journal, The Times and the Financial Times all reward their print subscribers with free access to the web or app versions of these papers). As indeed are most of the magazine publishers who deliver branded iPad/iPhone apps with the Exact Editions platform.

It may be said that these major consumer magazine publishers are taking this extraordinarily unfriendly position in relation to their print subscribers (similar policies are being pursued by Hearst, Time and Meredith -- consumers are being expected to buy single issue iPad apps even if they have valid print subscriptions), because they are trying to 'protect' and defend their print subscriptions (those numbers are vital both for the income generated and for the circulation base which attracts advertising revenue). But this is clearly nonsense, print subscription numbers are going to be strengthened and defended if print subscribers are also enfranchised for the iPad and other tablet editions that are no doubt coming. Trying to persuade your loyal subscribers that they should pay for the same content twice over is a losing proposition, and it is certainly adding grievous insult to injury to encourage those who have paid twice over, that they need to go through the motions of a 'repurchase' one more time. Small compensation indeed, that the customer who has already paid twice for an issue will not in re-syncing his previously purchased single issue, be paying three times over. Apple, at least, knows better.

Amazon tackles Apple

"Amazon.com, Inc. (NASDAQ:AMZN) today announced the launch of Amazon Cloud Drive Amazon Cloud Player for Web and Amazon Cloud Player for Android. Together, these services enable customers to securely store music in the cloudand play it on any Android phone, Android tablet, Mac or PC, wherever they are. Customers can easily upload their music library to Amazon Cloud Drive and can save any new Amazon MP3 purchases directly to their Amazon Cloud Drive for free." from Amazon Press Release 29 March, 2011

This is going to be a protracted and complex tussle and Google will join in. Doesn't look as though there is going to be an iPhone app, but the Amazon Cloud Player for Web will presumably work fine through any web page...... Safari has a role.

Are we laying odds on the outcome? I think of the web as the mat on which these wrestlers are having their match. Chances are that the web wins in the end. The audience are the audience.

World Military Wrestling Championship (via Wikimedia commons)

P.S. The man in blue may look like he is going to lose. But that was not the outcome.

Monday, March 21, 2011

Apple's Magazine Newsstand

There are strongish rumours that Apple is preparing to launch a magazine-oriented, specialist Newsstand solution, similar to iBooks. The rumours gained some credibility when Mike McCue, Flipboard's founder, made the suggestion at SXSW in an interview with Kara Swisher. I havent seen the interview but the Guardian had a report:

I have no inside information but wouldn't be surprised if Apple did their own newstand similar to iBooks......
We are assured that McCue has no inside information, but McCue sits on the board of Twitter; Apple and Twitter are surely talking, Flipboard is highly regarded by Apple and there can be little doubt that an eBooks/iBooks style of magazine kiosk would be very advantageous for Flipboard and for Twitter. Indeed there might be strong synergy between a free and promotion-oriented Flipboard giving access to magazine subscriptions generated by {iMagazines, or iKiosk, or whatever Apple choose to call their mooted storefront}. So, maybe Mike McCue was flying a kite or tugging its string. It would be very helpful to Flipboard if there was a stronger and more reliable stream of 'ebook style' magazine issues channeled through iTunes, rather than the indigestible and quirky chunks of Adobe-Illustrator apps that seem to be favoured by the large consumer publishers. I don't think Apple is likely to be very happy with the Adobe-InDesigned efforts that we have seen so far.

Co-incidentally there was a slightly different rumour in Gadget Daily News, that Apple might be aiming to encourage a bit more standardisation and reliability in the digital magazine space by developing some magazine publishing templates. According to Gadget Daily News this will be 'implemented by the end of the year'. Maybe. Maybe not. I doubt that it would take Apple anything like so much time to develop such a tool if it decided to build it.

What are the key problems that Apple might wish to tackle to improve the position of digital magazines in iTunes? There are principally three issues that could be addressed:

  1. Distribution
  2. Presentation
  3. Production
Which if any of these problem areas is it likely that Apple may be planning to address? I think we can dismiss the distribution solution straight away. Apple believes that it has built a perfectly reliable and usable digital magazine distribution system already. The latest move to introduce a new system for in-app subscriptions to magazine content is all that is needed. Apple considers that with the iPad, the app store, the 200 million iTunes accounts, and the new subscription system, it has done enough for magazine publishers already on the distribution front. There is, admittedly, another perplexing digital distribution system to be solved (building digital magazines that can be distributed painlessly via iPhone, iPad, Android, WebOS, the web, etc, etc as many viable digital channels as possible), but Apple is not going to do anything about that.

The presentation problem is another matter. The variety, illogicality, diversity and plain bugginess of many magazine apps is rather shocking. So, it is quite possible that Apple is working on some standards or templates that may bring a bit of order to the chaos. Apple may produce some exemplar iTunes solutions which show how well digital magazines can work as iPad apps (cf the Garageband app that they produced for iPad 2). But I am not convinced that Apple's investment in digital magazines will go much further than that. It doesn't need to, because Apple has already built and 100% owns the best digital magazine platform, the iPad. Furthermore the rules of its distribution and e-commerce system require that digital magazines sold through its service pay a 30% commission to Apple, so there is really no need to invest heavily here. This has always been the strong point in the Apple position. It owns a platform that other parties wish to play on. There is a lot of innovation and experimentation going on in the digital magazine space on iOS devices and Apple benefits from this whatever the outcome.

It is when we get to the last problem area: production that the chances of Apple intervention are most unlikely. Consumer magazines are still produced in an immensely complicated, labour and design-intensive process, under considerable time pressure and with very diverse inputs and requirements. The workflow is still very much in thrall to a print output. Developing new databases for content management and high-design work-flow is not the kind of business that Apple wants to be in. The diversity and chaos of publication-oriented content management is even worse in the newspaper business, so we can conclude that it is most unlikely that Apple will build solutions that are intended for this kind of intricate deployment. Apple is not going to build a tool which takes high-design print-oriented inputs and explodes them into multimedia apps. Apple may have been willing to take a friendly look at the way that News International was building its bespoke-for-the-iPad Daily app. It is not probable that Apple's software engineers are going to spend time figuring out how the New York Times manages or streamlines its manifold production issues.

So Apple may show us how some magical magazine apps will work, but if they do, the chances are that the fireworks will be highly specific to the iPad. They may involve intimate and innovative use of the touch interface, the gyroscope and new sensors in the iPad 2, or 'social' effects through Twitter, Facebook or Facetime. If Apple is going to do something with magazines it could be highly innovative if they exploit the capabilities of the iPad 2. If they do that they may add another twist to the distribution dilemma facing magazine publishers: should digital magazines now be designed primarily or even exclusively for the iPad? Or should they also be designed for access and use through other devices and above all through the web? Apple has a huge lead in the tablet market-place and it will use that lead to develop the primacy and superiority of iTunes content. Raising the bar on the expectations and 'quality' to be found in iPad-specific magazines is one way of making the 'distribution dilemma' faced by the magazine publishers even more acute.

Wednesday, March 16, 2011

iPad Usage is Shooting Through the Roof

We yesterday introduced a straightforward way for our publishing partners to access Google Analytics reports for any of the individual titles that we host for them. Data is available in the amazingly atomic detail supported by Google Analytics, for each title, issue, and page. Also, Google makes it very practical to select specific date ranges, whereas the data we had previously collected from our own logs was lumped together in coarse monthly buckets. The traffic data is aggregated for each magazine, so there should be no privacy issues. Furthermore, each publisher has access to his own data, and stuff that is generic or 'cross publication' is not reported via the Google system. The data spigot for each magazine can be switched on as soon as a publisher sends us their Google Analytics code.....

I love the way Google Analytics can provide flexible geographical breakdowns of the data it aggregates:

33 visits from Bari and 71 from Bologna.

Whenever we collect data on our users we are surprised by the extent to which the iPad is making such a big difference to the digital magazine business. Here are a few data points:

  • In the last year we have had more visitors to our website from iPad users than from the iPhone (this time a year ago there were no iPads anywhere outside Apple)
  • These iPad users read/access twice as many pages as iPhone users
  • The iPhone usage has also shot up in the last year. Six times as many visitors this year as in the previous 12 months.
  • iPod usage is also significant and is at about the same level as Android usage. Much smaller than iPhone use but, surprisingly, slightly more sticky (both Android and iPod are slightly stickier than the iPhone)
  • Blackberry and Symbian use is low, and Windows barely registers (guess that is Windows 7?)
  • Our aggregate visits from mobile users (March 14, 2010- March 14 2011) have increased more than 10 times from the previous year (1000%+)
  • Looking at one particular magazine which has been quite popular on the iPhone/iPad, it has had over 20,000 freemium app downloads in the last year and roughly one in 6 of those freemium downloads has led to a sale.
  • We regard 1 in 6 as a good conversion rate. The conversion rate for different magazines varies enormously.
  • Price is a big factor in the conversion process.
  • iPad sampling has marginally outdistanced iPhone sampling. This is really surprising since there must be at least 10 times, perhaps 20 times, as many iPhones as iPads in the market for this particular magazine (which has mostly a UK circulation).
  • We do not yet have relative conversion rates but we would expect the conversion rate to be significantly weighted to the iPad -- we know this from smaller samples.
I guess it is possibly worrying that Google know so much about our system, our traffic and the usage of our publisher's digital assets. Google know so much about all of us. But they do make it easy for web site owners to find out what they know! Apple must have just as much detail on the use of the apps we provide for iTunes, but like all other Apple developers we have access to very little of what Apple must know about the usage of apps.

On the other hand our publishers are now in the position that they have access to what Google know about the digital distribution of their magazines and something of what Apple know. Google and Apple are pretty much ignorant of the other guy's data. At Exact Editions we see it as our task to help publishers get their digital magazines on as many platforms as possible and to maintain an overall control of that distribution and data. That ultimately gives publishers a position of some strength.

Monday, March 14, 2011

Jobs and Lyotard: How Magic Flummoxes

I first began to wonder whether Steve Jobs has been reading Derrida, Foucault and Lyotard when he introduced the first iPad. Now that we have his presentation of the iPad 2, I am more than ever suspicious that Apple have been tracking late twentieth century Parisian cultural philosophers. Lyotard has been especially influential on Apple through his articulation of the concept of Post-Modernism. An analysis of Steve Jobs's presentation will show that we have some straightforward correlations between the Jobsian postulate of the Post-PC device and Lyotard's elaboration of Post-Modernism.

  • First, we should note that the "Post-PC" landscape is not a denial of the PC, or even a commitment to the replacement of the PC. This would be a crass misunderstanding: PC's are not gone, they are overtaken and in certain circumstances no longer appropriate. But they are still with us. Please note: Apple makes perhaps the best PC, certainly the strongest brand of high-end personal computer; Apple's shareholders know this and treasure it. Apple will not remove the Macintosh from the market. Nor did Lyotard reject modern and contemporary forms of art. Lyotard's espousal of 'post-modernism' was not rejecting 'modernity' or the modern, but he was attacking an ideology of 'modernism' and an aesthetic that goes with it. He was highly selective and preferential in his espousal of particular styles and forms of contemporary art, architecture and literature. The Post-PC landscape, situates and deprecates the merely PC landscape, but it does not reject personal computers they are given particular emphasis and and non-exclusive value and appreciation. Some of the other stuff becomes more important in a post-PC landscape. Much as Lyotard advocated and championed the work of Duchamp, Barnett Newman and Cezanne, Steve Jobs will have us be quite picky about the Post-PC PCs that will make the grade. The Post-PC environment is one in which we will use many devices to provide computational resources, including personal computers, even laptops like the Macbook Air, built by manufacturers who know how that landscape works.
  • Second, we note the highly charged and symbolic meaning that Apple attach to the 'magical' qualities of the iPad and other iOS devices. Apple devices are not 'magical' in the sense in which witches potions or sorcerers' spells are magical. Apple's devices are not mysterious or mythical, since 'magical' is no more a supernatural term for Apple than 'the sublime' was a theological term for Lyotard. Jobs's 'magic' and Lyotard's 'sublime' are both core values, with a primarily aesthetic and emotional freight. There is in both cases a preference for arresting and startling simplicity, lightness, abstraction, thinness (?) and functionality. The magic of the iPad works on us as the sublime simplicity of a Newman abstraction startles us. We are lost for words if not 'flummoxed' (an anglo-saxon concept, alas not immediately available to Derrida or Lyotard). Magic should flummox but it does not break the laws of physics.
  • Third, the Apple way of cultural transmission with iTunes is designed to provide a form of universal e-commerce and controlled accessibility which reinforces and deepens the commoditization of culture that Lyotard charts. iTunes precisely targets private performances, individual choice and the reproduction of all media forms (music, digital games, TV, film, photography, books, magazines and newspapers) in personal 'libraries': "the disintegration of narrative elements into “clouds” of linguistic combinations and collisions among innumerable, heterogeneous language games." (a sentence taken from Aylesworth'e excellent article on Postmodernism in the Stanford Encyclopedia of Philosophy) Lyotard foresaw and wrote the script for the loss of narrative focus and this post-modern move, exemplified in iTunes and the app store, to globalised and yet individually targeted mechanisms of cultural exchange.
  • A deeper look at the post-modernism of Apple's post-PC universe would need to consider the fundamental role of the independent developer and especially the API which both engenders and controls the activity of developers, apps and the digital performance of those apps in customer use. All of this commercial software superstructure co-incides with the Lyotardian annexation of the theory of performative speech acts so that language and cultural activity is both constrained and enabled by 'speech acts' and 'performative' social action.
Do we think that Tim Cook is boning up on Foucault, that Jonathan Ive has his head buried in Umberto Eco, and that Steve Jobs having absorbed Lyotard will move on to Deleuze? Of course not. But we do think that the theories of some of these post-structuralist philosophers is playing out in a curious fashion in the evolution of our information technologies. One of the least 'Parisian' elements in Apple's universe is the corporate insistence on control, selection and vetting which veers towards prudishness and amounts in effect to a form of censorship. This vetting of apps and publications for standards of taste and obscenity would have been completely inimical to most French philosophes of recent times. I don't think Lyotard would have approved. But he would have understood.

Monday, March 07, 2011

The Post-PC Digital Magazine

Steve Jobs got some attention last week with his claim that Apple, unlike most of their competitors, was now working mostly in a Post-PC world

I've said this before, but thought it was worth repeating: It's in Apple's DNA that technology alone is not enough. That it's technology married with liberal arts, married with the humanities, that yields us the result that makes our hearts sing.

And nowhere is that more true than in these post-PC devices.

And a lot of folks in this tablet market are rushing in and they're looking at this as the next PC. The hardware and the software are done by different companies. And they're talking about speeds and feeds just like they did with PCs.

And our experience and every bone in our body says that that is not the right approach to this. That these are post-PC devices that need to be even easier to use than a PC. That need to be even more intuitive than a PC. And where the software and the hardware and the applications need to intertwine in an even more seamless way than they do on a PC.

And we think we're on the right track with this. We think we have the right architecture not just in silicon, but in the organization to build these kinds of products. (Apple Event: March 2011)

The iPod, the iPhone and the iPad are all, in Jobs's view, Post-PC Devices. Apple has a particular vision of a Post-PC computing environment, and at some stage it will be challenging to deconstruct the vision with which Apple is building its Post-PC system.

But right now, it would be worth asking ourselves a Post-PC digital magazine should behave.
  1. A Post-PC digital magazine should be immediately accessible to a reader who is familiar with the print magazine.
  2. If at all possible it should be 'magically' the same magazine, but in some indefinable ways better.
  3. If a Post-PC digital magazine subscriber has a subscription to the print magazine they should also be entitled to access their magazine subscription on the iPad (this is one of those magical properties). If Conde Nast really thinks that Pre-PC subscribers will be happy to pay additional prices for Post-PC issues of the same magazine, they are living in a universe where tablet PCs have styluses. Quite clearly out of touch.
  4. The Post-PC magazine should be better in some 'definable' ways also: it should be searchable; it should link to appropriate web resources (urls, email addresses, YouTube, iTunes etc); it should be browsable, bookmarkable, likable (in the Facebook sense) and Tweetable.
  5. A Post-PC digital magazine should be a publication in which some advertisers will want to advertise (but I am not sure that I see how Apple thinks that magazine advertising in digital magazines could work). Digital magazines should be good places to advertise because they will attract specific and definable audiences of committed consumers. So there needs to be a Post-PC way for those connections to work....
There is plenty of work to be done as we put digital magazines on the way to being completely "Post-PC" publications. But Apple itself has some digging to do in getting itself into a thoroughly Post-PC posture. See "Dear Apple: You’re not “Post-PC” until you cut the cord".

Tuesday, March 01, 2011

How Will the iPad Shape the Magazine Market?

JP Morgan estimates that 48 million tablets will be sold this year, and 80 million next year (with a value of $35 billion). The chances are that Apple will still be shipping a majority of the tablets sold next year (we still have not seen a credible competitor in the market), and certainly dominating the market this year and next. Apple has a very strong position.

Apple may not be the only game in town for much longer, but the lead is so significant and the tablet charge so powerful (denting the sales predicted for desktop, laptop and notebook PCs) that we predict that all major consumer magazine publishers will bury their concerns (real though they are) and succeed in offering most of their magazines as apps through iTunes. Since Apple's iTunes will have an audience of perhaps 100 million tablet users, spending perhaps $5-20 per month on apps, by the end of 2012 they will be stupid not to do this. Since Apple's dominance is unlikely to last (at some point competitive platforms will emerge for iTunes) many publishers will view their Apple embrace as strategic and temporary. But they will embrace, they will engage, and some features of the iTunes/iPad eco-system will shape the digital magazine market in significant and predictable ways:

  1. The market will be very global. iTunes is more global and more widely accepted internationally than most other digital marketplaces (Amazon, Netflix, Rhapsody, Spotify not to mention Hulu or Nook). In consequence magazines that appear as digital apps will find that they have a broader digital audience than they have been able to attract in print. This will be a particularly potent effect for strong niche titles (think: cycling, knitting, poetry, chess, mountaineering, green and music magazines).
  2. The globalisation of the market will also benefit magazines in all other major languages. Since iTunes with its 18 languages is already more multilingual than all the other digital marketplaces mentioned above.
  3. Price will matter. But the pricing situation in iTunes will be ameliorated by Apple's introduction of a system of recurring subscription payments for digital content. iTunes has been hugely more successful at monetising apps at the level of 99c or $1.99 than at $5.99 or $9.99. It is much easier to sell an app in iTunes at 99c, than at $9.99. It has simply been unfeasible to sell annual magazine subscriptions through iTunes at 'normal' subscription prices, because iTunes customers do not like spending $19.99 that way. iTunes is frictionless and easy for users just so long as the prices keep their head down. The great advantage for a magazine or periodical publisher is that the Apple system will make it easy to sell weekly, monthly or quarterly subs at prices which are 'bearable' to the lightly gliding fingers on the iPad touch interface. By offering customers renewable subscriptions Apple is leveraging itself out of the rather cheap 'sweet spot' in which most app sales have been stuck.
  4. The frequency of magazines may also be subtly shaped by the way we interact with our iPads. Weekly magazines seem to work well with the iPad -- is it because we tend to have device in our hands fairly regularly? Partly because of the pricing mechanism (weekly subs can be pitched lower than monthly subs), I suspect that weekly magazines will have a surprising comparative advantage over monthly magazines. The digital weekly on a tablet that you use intensively at weekends may be a stronger vehicle than the print weekly which arrives a day late and has in recent decades looked increasingly challenged as distribution and print costs rise.
  5. The extraordinary strength of magazine brands will play to the strengths of iTunes. Magazines are known by their titles (usually) and their brands are associated with their titles, their covers and their graphic style. All this can work well for magazine publishers and they will rapidly realise that the huge benefits that come from being securely branded and cherished in iTunes even compensates to some extent for the pain of the Apple 30% levy on all subscriptions sold through iTunes.
  6. Because magazine publishers are the guardian and creators of the brands associated with their magazines they will be especially sensitive and active in ensuring that their brands are well represented on tablet platforms, so whilst they will all embrace the iPad they will all be looking very anxiously in the direction of an alternative and complementary digital technology.