Apple's Terms of Trade Finally Win Acceptance with Magazines

Suddenly the dam seems to have broken and the major consumer magazine publishers are lining up for iPad editions sold on subscription through iTunes.

In the last ten days, Time Inc, Hearst and Conde Nast have all announced moves towards selling their leading consumer magazines as subscriptions on the iPad. They are also offering free iPad access to their existing print subscribers, a simple and very necessary step as we have been emphasizing for months.

In disclosing these new offerings the major consumer magazine companies have been stressing that Apple has been willing to make concessions and to grant flexibility (see reports of such by Peter Kafka at AllThingsDigital). I expect some modest concessions have been granted, but on matters of detail and to help with 'bedding in'. Apple has not had to modify its developer contract or bend on its commission terms. Apple has the whip hand and, more to the point, Apple will not make concessions on issues that put obstacles in the way of the successful operation of the iTunes service. Apple will not make concessions which force it to re-write its end-user license agreements. Apple will not make deals with magazine companies on its 30% commission when it has been completely impervious to the pleadings of the music publishers on royalty rates. The bald and uncomfortable truth for these giants of consumer publishing is that Apple is not going to do deals. Apple is not going to cramp the economy of iTunes for the sake of the magazine business. So what follows?

1. Magazines will sign up to the iPad service in a growing avalanche. Now that the big 3 of the US consumer magazine business have moved over to the Apple way of doing business, we expect that most major magazine companies will move over to producing iPad apps for their key magazines.
2. Within 12 months iTunes will contain many more iPad magazine titles than has ever been collected in one physical kiosk or emporium. Finding titles in such a rich product mix will become more of a problem. But magazines are better placed than most categories to thrive since magazine titles are (usually) so clearly branded and so distinctive.
   
3. The magazines in iTunes will be offered primarily on a subscription basis. Hitherto iPad apps were being offered on a single issue basis.
   
4. The major consumer magazines in all the major national markets will soon be offering iPad apps through iTunes and they will also be offering free digital access to their existing print subscribers. Magazines will do this because in that way they retain more control over their subscriber base and can avoid having all their subscription services handled by Apple. They retain, indeed enhance, the crucial relationship that they have with paying customers.
5. The prices for digital magazines within iTunes will be pitched at increasingly aggressive levels, Bloomberg Business Week costs $36 per annum. The Esquire iPad app will apparently cost $19.99 pa. Apple's pricing rules mean that international pricing will level-down to the best home market subscription offers (US subscription prices for consumer magazines are low in comparison to European prices).
6. These recent announcements have all been focussed on the iPad. Conde Nast and Time Inc are committed to producing iPad apps, it is not clear whether the iPhone market is being by-passed or merely temporarily left behind.
   
7. Android apps also appear to be taking a back seat. It will be interesting to see whether this week's Google I/O, now in its second day, has any mention of digital magazines. Not much sign of them in the opening sessions.
   
8. The apps that are being produced for the iPad bear a remarkable similarity to the print product. The idea that a magazine app needs to be something radically different from the page-oriented, highly designed and issue-based package that we all know, is losing ground. Most magazine publishers cannot afford to run two parallel design, production and editorial processes.
   

There is no question that the iPad is a very good device for reading digital versions of print magazines. The magazine publishers have, of course, realised this from the outset. They are now beginning to realise that Apple's terms for trade are not so bad. When Amazon brings out its Android tablet I suspect that these same magazine publishers may find that the Amazon terms of trade for digital magazines are just as unyielding, and perhaps in some ways worse than those that Apple have set before them. My first take on the Amazon app developer rules certainly caused me to blench.

Measuring Digital Engagement

Mediaweek has a report on a lively panel discussion of digital magazine auditing at yesterday's PPA annual conference:

...during the ‘Magic Numbers’ panel session, Tye (James Tye, CEO of Dennis) called for industry measured data to be produced faster rather than waiting on the "perfect", multi-platform measuring solution for brands.

Tye said that despite the iPad "being around for a year now", Dennis has not been able to tell its commercial partners officially how many readers download its magazine iPad editions, such as Mac User.

"My worry is we have a system built on the past five decades, we need to build it faster and more reactive to what the customer want," he said.

"The iPad has been around for a year now, yet only now can we start to think about including it in our future auditing certificates", he continued. "As an industry I think we’ve got to learn to move quicker than that." MediaWeek 'PPA 2011: ABC under fire for 'five decades old auditing system'

Rupert Turnball, publisher of Conde Nast's Wired, also had some highly pertinent questions for the magazine audit organizations: "we are interested in measuring engagement and influence and the ability to amplify messages, and that's not measured at the moment." That is certainly something that advertisers and big brands are deeply interested in when it comes to digital media. The problem that the magazine industry faces is that there are plenty of solutions, and an increasingly perplexing range of digital advertising metrics (Google Analytics, Adobe Omniture, Hitwise, Flurry etc), but none of them are specific to the magazine industry. Since none of the digital advertising platforms (Google, Yahoo/Microsoft, Apple, Facebook .... etc) are specific to the magazine industry, none of the digital audit tools that are evolving will be specific to the magazine industry. Perhaps the most useful role that the magazine-specific audit bureaux could now play is to recognise that there is no longer a sensible role for narrowly magazine-based audit functions.

Digital advertising is multiplatform and multipolar and so it follows that the audit role has to integrate with the best tools across the web and mobile marketplace. Digital magazines have extraordinarily rich potential for advertisers, and influencers, but the challenge is to find a way of demonstrating and leveraging this without resorting to the simplifications of the one page audit certificate.

Time Leads the Way

According to the Wall Street Journal, Time Inc and Apple have reached agreement on the provision of free magazine content to print subscribers.

Starting Monday, subscribers to Sports Illustrated, Time and Fortune magazines will be able to access the iPad editions via the apps, which will be able to authenticate them as subscribers. Time Inc.'s People magazine already had such an arrangement, but readers of most publications have had to pay separately for the iPad version regardless of their subscriber status. Time Inc in iPad Deal with Apple

This is a very sensible move, but it is not clear that Apple has had to give any ground. From the get-go Apple has made it clear that it was fine for publishers to sell digital subscriptions which include app deployment, and perfectly all right for them to supply free or 'complementary' app facilities to print subscribers. We have been pointing at this open door here and here and here.

At this point Time's 'free' app access is limited to print subscribers in the US, and Time Inc are not currently offering 'subscriptions' to customers who buy through iTunes. This has perhaps been the one point where Apple has granted Time Inc some leeway. Buying the Time magazine app issues one-by-one is a lot more expensive than buying an annual subscription from the publisher, since there have always been masses of 'bargain' offers for Time print subscriptions out in the market, all of which now include app-rights (for US subscribers), Time Inc is not strictly playing by Apple's rules. Not by a long chalk, since Philip Elmer-DeWitt, at Fortune, can buy a Time sub for 28c an issue, as opposed to the $4.99 per issue available through iTunes. My guess is that Apple's concession was to 'allow' Time a period of grace to get its subscription offering for iTunes customers in place in time for the June 30th deadline that Apple has imposed. Apple might just conceivably have offered Time a month or two additional grace period. But I will be very surprised if Time Inc has not totally fallen in with the Apple way of doing things by the beginning of September. Apple is not kidding around on its rules or its 30% commission. On its iTunes page Time says that 'subscriptions will be available later', though at the moment the app only enables single issue purchase.

Where Time leads, Hearst, Conde Nast, Meredith and the other big players will follow. Competitive pressures will ensure this. Print subscription revenues in the next few years are of major relevance to publishers who see their advertising revenues wilting. The other major consumer publishers will soon understand the tremendous incentive that Time, Fortune and Sports Illustrated are giving to their print subscribers by offering complementary digital access on the iPad (these rival publishers will ruefully compare the brick-bats they are getting on their iTunes customer evaluations with the delight shown by Time's subscribers). At this stage the Time Inc circulation director will wonder whether he really needs to give Mr Elmer-DeWitt an Ultronic Multi-Functional Global Clock Radio when he is also throwing in complementary iPad access with the print bundle? At this stage the potential revenues from digital subscriptions begins to seem interesting and the cost of cheap clocks looks excessive. The second penny will drop when the consumer publishers realize that in offering complementary access to iPad users, they will inevitably have to offer a similar deal to Android users....... and finally, recognition will dawn that these are our customers before they were Apple's; not Android's, heaven help us not Amazon's, and accordingly we have to treat them well on price and access. We have to own them by serving them and recognising them and so long as these customers continue to want our print magazines we actually have an unexpected strength in the market. Time is leading the charge....

Conde Nast Needs to Redouble its Bets on the iPad

AdAge is carrying a story that suggests that Conde Nast is pulling back from its out and out commitment to iPad apps. With hints and whispers that its initial forays have not been working too well. An anonymous company source opines:

"It's a shift," one Conde publisher said. "The official stance was we're going to get all our magazines on the iPad because this is going to be such an important stream. The new change is maybe we can slow it down. In my opinion it makes Conde look smart because we have the ambition, but we're not rushing."

"They're not all doing all that well, so why rush to get them all on there?" the publisher added. AdAge: Conde Nast Taps Brakes....

The piece has a sufficient concrete detail on Conde Nast's plans and intentions to suggest that the story stands up. So what has gone wrong? Nearly everything.

Conde Nast's mistakes can be divided between mistakes about the direction of the technology, and mistakes about the kind of success that digital magazines should be aiming at on a new tablet platform. First, mis-taking the direction of the technology:

1. For no good reason at all, Conde Nast assumed or hoped that Apple would back-track and embrace Flash before launching the iPad.
2. Conde Nast has relied too much on an alliance with Adobe and a fallacious confidence that Adobe's knowledge of the design and content management process in print production would somehow enable Adobe to come up with a winning magazine app work-flow. But Adobe's Creative Suite software solutions for building apps seems to be unreasonably cumbersome. Too slow and too complicated and in most cases the finished article is disappointing as an app.
   
3. Conde Nast (and most of the other big magazine publishers) have expressed the hope that Apple would gradually 'loosen up' and provide publishers with access to consumer usage data sufficient to support the existing advertising revenues that magazine publishers depend on. The idea that digital advertising revenues and metrics will be controlled by the magazine publishers is a major delusion (incidentally even less likely to be realized in the Android tablet market which many consumer publishers are gazing at fondly).

Although Conde Nast made some very rum bets on the technical direction that the iPad platform was headed; the worst mistakes they have made have been strictly publishing gaffes. Here are three:

1. It is tempting to think that you can charge your existing subscribers MORE for delivering an iPad app. Tempting but fatal. First, because your existing subscribers will feel that they ought to have free access to stuff that they have already paid for in print (see the comments on the iTunes page for the New Yorker iPad app). Second, because publishers who price their digital offerings as though they were competitive with their print offerings will lose print subscribers: if a publisher treats his print and digital editions as though they were 'substitutable' purchases and prices them accordingly, he will find that the market treats them as substitutable. Above all, publishers have to look at this from the subscriber's point of view. The point of having digital and print editions is that you capture your subscribers from two different directions, not that you force them to choose between print and digital.
   
2. Like most consumer publishers, Conde Nast have been looking at the apps market as though it was a completely new opportunity. When fundamentally a magazine app has to be the magazine, and this gives the publisher real strength if they can leverage the resources in their back issues and the archive. Far too many consumer magazines have ignored their archives when producing apps. Yet the archive is something that can most easily be given new impact and immediacy from a digital perspective. Since Conde Nast already has a fabulous archive for eg The New Yorker and Wired, they should have designed their apps to take advantage of this richness.
3. Conde Nast is still not selling its iPad apps on subscription -- now presumably as a mark of its displeasure with Apple for not providing sufficient access to consumer data. However much Conde Nast may be irritated by Apple's firmness/intransigence, it should be selling subscriptions to iPad and iPhone users, not selling one issue at a time. The iPad is most certainly and obviously a market for selling subscriptions. Music companies know this, games companies know this, film and TV companies understand this. Magazine publishers are good at selling subscriptions and they also know that it takes time to build subscriber momentum behind a magazine. If the Conde Nast management wastes two years from the launch of the iPad in not-selling-subscriptions their successors and heirs will pay a bitter price for this intransigence and this slow start.

Final thought. The next iPad, call it iPad3, will come out next year. The chances are it will have much better graphics and a screen with higher resolution ('retina display'). There is a growing perception that Apple is getting to a kind of 'escape velocity' with its iPad offering, so that competitor tablet platforms, lacking manufacturing volume and the pressure hose of iTunes, will find it very difficult to compete with Apple. The effective competition, when it comes, may well be from the low end, or from quarters other than the mainstream media experience epitomised by consumer magazines and iTunes. But Conde Nast wants to play at the high end, which is where Apple will probably be the strongest player for the next few years. Conde Nast needs to have its magazines on the high end tablet platform when it moves to the next level in 2012. It needs to wake up fast.

Consumer Publishers - What Apps Can Do For Them by Emma Bradfield

This was the title of a seminar I attended at the London Book Fair yesterday, presented by Ros Wesson. Ros highlighted the interesting shift that consumer publishing has made from a B2B to B2C model through apps.

Whereas previously, publishers were protected from readers’ reviews by a buffer, consisting of book distributors and sellers, the advent of the App Store has moved them to the front line, in direct contact with users and their make-or-break verdicts.

Although this sounds terrifying, it is a small price to pay considering there are no printing or shipping costs involved with apps. In fact, being so close to your audience can be turned into a positive. App developers can receive feedback directly from their users, such as on iTunes or via email, and this can be used to inform future app updates.

Indeed, Exact Editions encourages feedback from its subscribers. We’ve had lots of enquiries asking for the ability to sync more than one issue for offline reading and about the possibility of an Android app. These are just two examples of subscriber feedback which we will be implementing shortly.

As Ross suggested, positive iTunes reviews can then be used within the app descriptions themselves to encourage further app installations. There’s nothing like ‘consumer-quoted confidence’ to generate a buzz around an app and five star reviews should be used as valuable marketing collateral both within iTunes and without!

Are Magazine Apps like Games on the iPad or more like Books?

Bloomberg Businessweek produced a pretty effective and straightforward app for the iPad earlier in the week. And it got predictably mixed reviews from the magazine app critics. Grudging and faint praise, at best. Here are some typical gripes from Techcrunch:

It is a perfectly serviceable magazine app. But it is underwhelming. There are no extra photos beyond what’s in the magazine, or even much in the area of additional multimedia other than a video intro every issue by one of the editors about how cover they chose the cover, and a couple audio interviews to accompany columns by Charlie Rose and Tom Keene. Erick Schonfeld Bloomberg Underwhelms with iPad App (Demo)

Erick Schonfeld's reaction here is very typical of the criticism that magazine apps tend to attract. The critics seem to assume that a magazine app should really be something else. Its got to be more than a magazine. Heck, otherwise what is the point? No extra photos, not enough additional multimedia, just the magazine..... It is as though the magazine app needs to be specially designed and uniquely conceived for the iPad platform. In much the same way that computer games need to be adapted and versioned for the hardware platform on which the game will be played.

We should look more closely at this question of what else a magazine app ought to be, other than the print magazine. But, first, consider how unusual this approach is. Content publishers do not, for the most part, look at the iPad and say, "How can we become something completely different on this device?" Hollywood does not think that films on the iPad need to be a qualitatively different entity from the film that one might see in a cinema or via a DVD. The point is rather that via the iPad the consumer gets an experience which is in someways pretty much as good as having the art-house experience (or not quite as good as, which is why we still like going out of an evening). Book publishers are not expecting books on the iPad to be qualitatively different from the books that get published on paper. Can you envisage the fury that would result if the Stieg Larsson books were not the same in their iPad editions as they are in print? Throw in an extra chapter? Have an extra deviation in the plot, an optional app-loop with more time in Australia or Poland, or additional detail on how to apply or remove tattoos, handcuffs, ride motorbikes etc? Publishers and readers are pretty sceptical about iPad app books that merely chuck in various bits of video/visual over-matter, or even passages with the author reading the book. These so-called 'enhanced editions' have something of the air of cosmetic surgery. Messing the book up is not going to do anybody any good, the sag lines show up pretty fast. Why should we not expect magazines on the iPad to be magazines? Just as we expect films to be films? The Exact Editions platform does support and facilitate bonus media for publishers who wish to make their magazines more interactive and use multi-media elements, but it is not clear that this is what readers expect from their apps. Most magazine publishers are sensibly enough avoiding the gimmicks, but many self-appointed app experts, consider that magazines should be something different. Qualitatively better on the iPad and radically different.

There are things magazine apps can do better than print magazines, for the most part these are qualities that come from having a digital magazine. They are not specifically iPad/appy tricks and affordances. And Bloomberg Businessweek certainly gets some of these things right:

1. The app carries with it an archive of previously published issues
2. The app supports search across the archive
3. The app is free to existing print subscribers (for its loyal customers the iPad app is a jolly good bonus -- making that work for your readers is simply good publishing)
4. The app has significant potential for sharing and commenting (email, Twitter and Facebook)
5. Bloomberg provide real-time news and share price feeds linked to mentions in the articles, for all the major corporations with stock ticker labels.
6. This is an app with the potential to grow and evolve in interesting ways
   

Bloomberg have done a pretty good job with their first iteration of the iPad app of the magazine. Bloomberg Businessweek should not be judged by the standards of Angrybirds or Mad Skills Motocross. There are some problems (yes, mistakes) with the Bloomberg Businessweek app, but a lot of magazines would do well to take a good look at the solution they have come up with.

Amazon, Apple and Google

John Naughton has a terrific column Amazon's new Cloud Drive Rains on everyone's parade in yesterday's Observer:

"Impetuosity and audacity," wrote Machiavelli, "often achieve what ordinary means fail to achieve." If you doubt that, may I propose a visit to the upper echelons of Apple, Google and Sony, where steam might be observed venting from every orifice of senior executives? If you do undertake such a visit, do not under any circumstances mention the word "Amazon".

.......

Behind the scenes in the US, though, there has been frenetic activity, with Apple, Google and Amazon racing to get into the streaming business. Apple has cloud services, customers who are used to paying for music, a good range of mobile devices but no licensing deal for streaming. Google has terrific cloud services and millions of Android devices but no music store customers and no licensing deal. Amazon has cloud services, a music store, paying customers, a terrific e-commerce operation, and access to Android devices. But it also had no licensing deal with the record labels. John Naughton Observer, 3 April, 2011

This last sentence is not exactly right. Both Amazon and Apple already have digital distribution deals with the record labels; its just that Amazon's existing digital distribution deal is in crucial respects rather better and more permissive than the Apple deal. Ironically, and again crucially, Google does not have an agreed license, though it has been negotiating hard for months and the Amazon chutzpah may well make it harder for Google to get the deal it badly needs. Amazon has been selling digital music since 2007, so it does have a licensing deal with the labels and the Amazon deal is actually rather more favourable to streaming than the digital distribution deal that Apple was granted some years earlier. The crucial point about the music distribution deal that Amazon has, is that it allows Amazon to sell and deliver 'unencrypted' MP3 files to consumers -- and Amazon's new Cloud Drive is just allowing consumers to store their files in the cloud, rather than on a hard disk. Amazon already has a license to distribute (most) music to consumers through the web in a form in which music can easily and simply be stored in an individual consumers 'music locker'. Amazon's license with the record labels, is not ideal, but it is workable for streaming music and gives Amazon good leverage. It is not ideal because, Amazon's rights are currently restricted to the US (or in practice restricted to the US where individual content shifting is explicitly approved by the courts), and because without more leeway from the licensors Amazon may have to maintain individual Cloud Drives for each consumer (it would be more efficient to have individual libraries where common tracks were represented by 'tokens' rather than full copies). Apple, on the other hand, has distribution deals with the music labels which are explicitly tied to Apple's commitment to encrypting music in the way that is proprietary to Apple, and which limits music to devices recognised by the Apple DRM. Apple, we should assume is still significantly hobbled by these agreements. Having to encrypt all 'streaming' music in the DRM specific to iTunes is the major factor delaying Apple from introducing the 'cloud based' iTunes that it knows that it ought to be offering. A music streaming service needs the freedom for music to be delivered to a device as many times as it may need to be played, but Apple being lumbered with 'Fairplay', its download-tracking, DRM for iTunes clearly needs some permission, some wiggle room, from the music companies for this to happen. Amazon came along much later with its request for a music distribution deal, and the music companies were so desperate to have some competition for Apple that they agreed to Amazon's terms which give them more scope for internet-based distribution.

One irony of this situation is that the roles are reversed when it comes to books. For books, the Amazon distribution rights are more clearly dependent on their commitment to DRM and to a proprietary format. Amazon was the innovator in the ebooks space and Apple was playing catch up, so the publishers were less insistent in their negotiations with Apple on the requirements for DRM. The Apple iBooks standards are less proprietary, more open to industry standards than the Kindle. Apple seems to be cast (perhaps unwillingly) in the role of bad cop for music, whereas Amazon is looking like good cop in the music sphere and 'bad cop' for books. Google would love to be playing the role of good cop in both markets, but it is not clear that it has the necessary leverage. It needs to come up with a proposition for the record labels, that is good for consumers and wrong-foots both Apple and Amazon. That may not be easy.

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.

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.

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.

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.

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".

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.
   

Apple's Powerful Position

It seems as though the blogosphere is only now waking up as to how extraordinarily powerful Apple's position with the iTunes/iOS/iPhone/iPad stack is. Apple's critic's (and in this case the most effective critics are significantly long-time supporters) are concerned that Apple is over-reaching: the objections are focusing not on the level of Apple's commission (though plenty of people think that 30% is too high) but on the way that Apple's rules appear to reach through to 'regulate' the way in which its partners can price services outside the iOS platform. Marco Ament,

A broad, vague, inconsistently applied, greedy, and unjustifiable rule doesn’t make developers want to embrace the platform. Subscriptions and the new in-app purchase requirement Marco Ament.

And another shrewd critic

If I am interpreting this correctly, I can’t bring myself to see it as reasonable. Not only do businesses have every right to price their products on the open market as they see fit, .........
I also don’t see how it’s even remotely enforceable. Are Apple staffers seriously going to check every vendor website for sale prices on a regular basis?

I think a great deal of this drama could go away if Apple dropped section 11.13 ....... (about pricing away from iTunes).... Your prices on your store are your business; just don’t be a jerk and advertise the difference all over ours. About This Whole Subscription Hubbub Matt Drance

John Gruber, usually very loyal and positive about Apple, notes at Daring Fireball that he agrees entirely with Drance.

It is unlikely that Apple will do much about this hullaballoo, except perhaps to clarify that the rules are not going to be enforced in an aggressive and over-reaching way. The trouble is that it is not obvious how they can be enforced in a clear and unarbitrary way and if there is too much fog and vagueness that could be a real bane for Apple developers. It is almost inconceivable that Apple will back off the 30% commission (the music publishers have been griping about it for years), so we had better get used to it.

There is another feature of the Apple infrastructure that needs to get some critical attention. The available prices. The App Store Pricing Matrix has 85 levels (99c to $999.99) and ranges across currency bands ($, Can$, Aus$, UK£, Yen etc). The matrix could be host to a few problems which someone in Apple needs to think about:

1. Will this pricing matrix become the default pricing regime for all cultural services and software? If the rules say that a publisher has to price stuff outside iTunes at a price equivalent to or higher than the Apple pricing matrix, is that not going to appear in a very poor light when the regulators come and investigate?
   
2. Are Apple sure that there is not scope for a price level beneath 99c or 115¥? Is it 'offside' for a developer to offer 49c or 99¥ specials? The 99¥ price 'looks' pretty good to me. No restraint of trade investigation will like the Apple rule which says that virtual stuff is either sold at 99c or given away. Apple may not want to sell apps at less than 99c, but if Disney want to do 49c apps off its own e-commerce system, why not?
   
3. Then there are prices at the high end, off the Apple scale. There are B2B magazines with extraordinarily high personal subscription rates. There are excellent, technical, specialist and very influential magazines (finance and law) sold on subscription that cost as much as a safari holiday, many of these will work well as iPad applications. At the moment the Apple matrix does not stretch to those subscription levels (for the annual sub). I suppose that the publisher can at least comply with the rules by offering a monthly sub at $299 (weekend in Paris), but should it not be feasible to offer an annual sub at $2,999 (7 days in Kruger National Park)? There may be few takers at the high end, but Apple is not averse to 'high ends' that will attract a 30% commission.
   
4. The really devilish problem is that currencies move. I don't think that the Apple app pricing matrix has yet been revised, but at some stage it will need to be. The Australian dollar will shoot through the roof, or the British pound will sink like a stone. When that happens and the prices in the Tesco downloads store start jumping as a direct result of a new Apple Matrix that will be a political hot potato.
   
5. Worse still, when currencies move (they do) and the matrix has to be rearranged, there will be enormous disruption to the 'self renewing' subscriptions in the iTunes ecology which Apple has now introduced. Prices will not self-renew if they change. This circuit-breaker is very correctly a rule in the Apple pricing system to protect consumers. At some point the matrix will become very misaligned with the real world of fluctuating currencies and Apple will push through some revisions. Revisions which may be mildly annoying to consumers but hugely damaging to developers who have come to rely on renewals.
   

Some of Apple's critics write as though the company had room to duck and dive. Such criticisms are misguided, Apple's project is so well integrated and so interdependent that it can not turn on a sixpence. Whilst many consumer magazine experts are complaining about Apple's rather meticulous oversight of app developers and some big companies are hanging back, reluctant to sell their magazines through a system that gives them little consumer data, there is every sign that iTunes and the next generation iPad will continue to excite the market. If the Apple critic wants to look for a silver lining in this situation, she can rely on the fact that an extraordinarily successful marketplace with huge momentum and profit margins approaching the 30% commission, will attract ferocious competition. Somebody is working, in a garage, on a scheme that pulls the rug from under the 30%. The inflexibilities and rigidities in the rather large pricing matrix may be one point of attack.

Aligning app with print with web

We learn a lot from support. Yesterday we had this message:

Really great job with the ipad edition!
I'm an old fan of the mag -since 1997- and is just marvelous to have it in this digital format. I have the XXXXXXX group at last.fm and a group at facebook with some people -if you like to have the admin pass to this communities please tell me, i think you'll do a better job to mantain it.

I'm a webdeveloper with 10 years in the field, i think the web presence could be more aligned with the print version -taking advantage of the digital interaction- and the overall image of the magazine. If you could be open to accept some suggestions i'll be happy to send you some of my ideas...

We certainly welcome David's ideas and appreciate his appreciation. The thought that really caught my attention is that the 'web presence could be more aligned with the print version -taking advantage of the digital interaction- and the overall image of the magazine.' Because this appears to be pointing to a deep strength of magazine publishing in a digital age. With clever design, good interfaces and solid platforms, it is possible for a magazine to be the same magazine (recognizably the same to its loyal readership) in the very different manifestations that it has in the app format on the iPad, in the rather different guise it may have as an iPhone app, or as an Android app (different again for phone or tablet), on the web, and of course in print. Through all these manifestations it seems that there is a key value to keeping the magazine aligned with the print edition/version. The magazine as an app is different from the print edition (so it is wrong to view it as a mere replica) but it is stronger if it is recognisably the same magazine, albeit an edition with greater interactivity, searchability and findability. Keeping the web presence aligned with the print edition and the app version(s) is a core value.

There is a natural temptation to look at digital technology as replacing analog modes. This is happening, but as the physicality of the print object is becoming obsolete it also seems as though we are finding ways in of reinventing and repositioning analog devices (books, magazines) as virtual objects in a digital framework. This is why books and magazines and newspapers are likely to survive as reading objects in a world of apps and digital reading systems.

Apple Launches its Subscriptions Service with the iTunes App Store

Apple two days ago announced its content subscriptions service with a Press Release.

Subscriptions purchased from within the App Store will be sold using the same App Store billing system that has been used to buy billions of apps and In-App Purchases. Publishers set the price and length of subscription (weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly). Then with one-click, customers pick the length of subscription and are automatically charged based on their chosen length of commitment (weekly, monthly, etc.). Customers can review and manage all of their subscriptions from their personal account page, including canceling the automatic renewal of a subscription. Apple processes all payments, keeping the same 30 percent share that it does today for other In-App Purchases.

“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. “All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple. Publishers must provide their own authentication process inside the app for subscribers that have signed up outside of the app. However, Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app. In addition, publishers may no longer provide links in their apps (to a web site, for example) which allow the customer to purchase content or subscriptions outside of the app.

At Exact Editions we think this is an important development which will help to grow the market for digital magazines. Especially on the iPad. It will also have effects on the market for other subscription and content services: newspapers, film, music, TV and perhaps books. Some publishers and distributors in those markets have been complaining. But magazines are different, they understand subscriptions and know how to sell them direct. There is one particularly simple and clear point in the memo that is crucial for magazine publishers. It bears repetition:

Publishers who use Apple’s subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers. Since Apple is not involved in these transactions, there is no revenue sharing or exchange of customer information with Apple.

In Steve Jobs's exact words:

“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”

The invitation is very plain. Publishers are being encouraged to produce branded apps for individual magazine titles, to market them within iTunes and to provide free access to their existing print and digital subscribers. Publishers who do this must provided an "authentication process inside the app for subscribers that have signed up outside of the app." This is the precise service that Exact Editions has been providing for our partner publishers since August 2010. The fact is that publishers (through the fulfillment houses and distribution houses that work for them) already know their market. They know who their subscribers are, and magazine publishers have proved pretty competent over the years at recruiting new subscribers.

Should publishers be more concerned about the possibility that Apple may be taking too much through the 30% commission it will levy on purchases made through Apple's e-commerce system, or welcoming of the fact that Apple enjoins publishers to keep 100% of the revenues from services which are being partly executed and delivered on the Apple platform? Publishers may be worried by the gravitational pull of the iTunes system, but one should consider this: if the gravitational pull is so strong, perhaps the sales will be also?

Maglet Losowsky and iPads Reclaimed

Andrew Losowsky has peered into the glass of the iPad and decided that the world of magazine apps is half empty. So we feel it necessary to cheer him up a bit and fill the glass. Andrew pens his blog at The Hospital Club -- one of Covent Gardens best watering holes -- offering us a swig from the bottle in his first paragraph, a convenient summary of his position:

Twelve months ago, the magazine industry was shouting from the rooftops that the iPad was going to be their saviour - but it turns out that all those people lining up to buy one weren't doing it solely to pay for glass-coated editions of Marie Claire. Sales of maglets (magazines on tablets - geddit?) have been far below the costs of developing these apps, and public reaction has been underwhelmed at best. What went wrong? Six things, actually.The Truth Behind the Failure of iPad Magazines

But if you look at the six points he makes it would appear that the glass is really half full. There have been some mistakes - as is surely to be expected with an innovation as startling as the iPad - but there has also been some progress. Take a look at his problems

1. Publishers are Selling the Same Content Twice. This is clearly a big mistake. But there is no compulsion on publishers to adopt this posture (that they have done so, is largely the result of a separate battle that they have been fighting with Apple about the ownership of user-data). Some publishers, all those who work with Exact Editions, have opted to offer free iPad access to their existing subscribers. There is nothing in Apple's terms and conditions that says that publishers cannot do this, or that digital magazine access has to be sold exclusively through iTunes. Apple's mooted new system for in-app subscriptions will surely encourage more publishers to adopt this attractive way of selling subscriptions, though it may also require that digital/app subscriptions are sold through iTunes.
   
2. There are not enough iPads out there. Only 15 million in the nine months! Since Apple will sell perhaps another 40 million this year, and no market analyst predicted, prior to launch, that Apple would sell more than 7 million in the first year, this is a glass rapidly filling up before-we-can-get-organised, point. Come on Andrew this is surely a reason for publishers to get their skates on!
3. Maglets are competing with everything else on the iPad. Yes indeed, "....magazines no longer have the benefit of being at the centre of our cultural lives. They have to work harder than ever to grab our attention and force their way into our habits, a task that's all the harder when they reside on a fully connected device that contains the latest news from thirty seconds ago..." Which is also a reason for magazines to see if they can persuade consumers to use them on iPads just as they use them in their living rooms. Magazine publishers did not chuck in their hands when the TV invaded the living room, innovative publishers will see the iPad as a similar challenge. Glass half full.
   
4. Separate App Syndrome. I think Andrew misses a key point here. Magazine publishers have made a big mistake in designing magazine apps as though each issue was a separate app. This is a valid complaint, but not the point that Losowsky makes, and it is one reason for the disappointing showing of several magazine apps. It is also one reason why magazine publishers have felt that they should market and sell magazines on the iPad one issue at a time, failing to see that selling subscriptions through, or without, iTunes is clearly the way to go. Magazines as apps work very well as branded apps in iTunes partly because magazine titles often confer superb branding and findability on the product (Marie Claire, Elle, Vogue and also niche titles Literary Review, Opera, Index on Censorship). But the branding should cover magazines in their entirety: past issue, current issue and future issues are ideal to function as branded apps in the customer's iPad. This is a glass that needs to be very full -- including the archive.
   
5. Magazines are outside the digital conversation. This is indeed a valid objection, but in mitigation the magazine publishers (and app developers such as Exact Editions) can point out that this is a complex and rapidly developing field; better engagement and social interaction with digital magazines is certainly coming. The Exact Editions apps are already stuffed full of links to web pages and email addresses (and on the iPhone, phone numbers that the customer can call). Magazine apps can be highly interactive and they are increasingly becoming more so. Losowsky appears not to have noticed that the iPad itself makes it incredibly easy for a single 'page' or a JPEG to be emailed from any magazine app, it is not a matter of some publishers enabling this. There is nothing that the magazine publishers or the copyright owners can do to stop such informal sharing (which does not mean that magazine apps can be easily copied wholesale; that is a different matter). This is a glass to be shared.
6. The medium is nine months old. By which I am sure that Andrew Losowsky means that its really too early to be sure: "The truth is that we just don't know yet what varieties of format, design and interactivity will best serve each kind of content, and though some of the experiments in the field are fascinating, most of them are just irritating applications of over-design by people giddy at the possibilities of new formats." This is indeed a matter of the glass being half-full, and a point on which we can agree

Losowsky's excessively gloomy, more than half-empty, headline 'The Truth Behind the Failure of iPad Magazines' is perhaps belied by this concluding (half-full) optimism:

That said, this is still a genuinely exciting time to be working in media. Nothing at all can be taken for granted - except for the simple fact that there will always be a hunger for unique stories, told in a manner in which the text, design, images. and when necessary audio and video, combine to enhance our enjoyment and understanding of the story itself. This ability to make design part of content is the reason why magazines lasted in the first place.

I first noticed Losowsky's piece via an approving tweet, from Erik Spiekermann, perhaps the Lionel Messi of typographic design. This design discontent with magazine apps is not an odd-ball view, most/many good magazine designers are disappointed by the way that magazine iPad apps have been designed so far. My hunch is that the user experience and pleasure in magazine apps will improve as designers and publishers realise that magazine design and book design has to move to a more holistic and a more abstract level, perhaps when designers are less 'giddy' with the possibilities and more relaxed about the opportunities and the 'flow' that comes with touch interfaces. Technology is moving very fast and good digital magazines have to be conceived and conceptualised for systems and services that don't yet exist. From now on all pages are virtual, all stories have addresses, and all interfaces have to be intuitive. This is not a trivial set of challenges for a designer who aims at quality and effect.

On Making Digital Subscriptions Work

All Things Digital has an interesting essay by John Squires: Apple, Google and the Publishers: Here's How to Make Subscriptions Work. Squires used to be a senior executive at Time Inc and is founder of Next Issue Media a company that is stealthily developing a new approach to marketing and selling digital magazines on tablet platforms.

Squires echoes cries of anguish that have been coming from his peers in the consumer magazine industry:

In recent weeks, we’ve heard growing concern from magazine and newspaper publishers regarding the challenge of providing content for mobile media while preserving their print franchises. The concern is nothing new, but it’s apparent that content providers are at risk of losing track of their customers like toddlers in a shopping mall. Squires All Things D

Its news to me that magazine publishers care for their subscribers the way parents look after toddlers in a shopping mall. Squires goes on to say:

Devices like the iPad offer consumers a rich reading experience and offer publishers even more targeted advertising, but the revenue tradeoff as publishers navigate the path from print to this new world is lopsided–and not in a good way.

The problem for Squires is that he can't see the old business model working for publishers with the new digital magazines. Publishers are not going to be 'allowed' to track their toddlers in the ways in which they have been accustomed to do. Furthermore Squires doesn't think that subscriptions are going to work for digital publishers:

Isn’t selling your magazine through an app store and receiving 70 percent of the revenues a great deal? After all, magazine subscription agents and newsstands don’t return anywhere near that amount to publishers. But this is argument misses an important point. In iTunes and the Android Marketplace, there’s virtually no merchandising of magazine products. A magazine app must swim to the top of several hundred thousand other applications. And even in the context of a dedicated magazine store, the publisher won’t control featuring.The value of the brand must pull the consumer through to the purchase. And brands are expensive to build and nurture....Squires All Things D

So the litany of complaints continues. Despite the potential for a 'rich reading experience' life is going to be very hard for digital magazine publishers, they will have to (1) create the rich reading experience (2) support devices on various platforms (3) market their wares (4) do some 'feature control' of their own so that their magazines come to the top of the heap (5) build their brands and (6) figure out how this fiercely competitive and rapidly evolving world is going to work. Perhaps Mr Squires should look to the example of Rupert Murdoch and go and build a publication which will meet those challenges head on.

Squires's proposed solution for this difficult quandary in which the magazine finds itself is to propose some industry wide standard solutions (perhaps it will appeal to the likes of Google, Apple, and Microsoft because) "there’s a significant long-term advantage for the software industry to make friends with 150 million magazine consumers." As though these technology titans are going to reach agreement on standard procedures so that the magazine publishers existing business model can be replicated in the digital framework?

Make what you can of John Squires' specific proposals. The second one astonished me: (the software industry should) "Create simple APIs that connect the handful of major print fulfillment houses to application storefronts so existing print accounts can be harmonized with digital access." Exact Editions has been doing almost exactly this for many of the publishers with whom we work. But note, such a solution has to work potentially for hundreds of print fulfillment houses (surely it is a sign of some Time-induced complacency to suppose that only the 'handful' of 'major' fulfillment houses count). It has to be general and generalisable. Furthermore the trick is to work with the APIs of the print fulfillment houses (not of the e-commerce store fronts), so the discussions have to take place between the publishers and the fulfillment houses and their IT houses and app developers. This sort of business has to be under the control and to the account of publishers for it to work the way they want it to. You do not attach conventional print subscriptions to digital subs -- which is what Squires on a strict interpretation is suggesting as the desired solution. You attach digital or app solutions to print subscriptions. That way the publishers (via their fulfillment houses) stay in control of the crucial customer relationship. There is no point asking Google or Apple to build your digital back-end. They are not going to do that, and furthermore the magazine industry really does not want them to do so. Which is where we started, with Mr Squires bleating that Apple controls too much data and will not provide access to the iTunes accounts of Apple's customers who subscribe to digital magazines. Why on earth should they? An iTunes customer who buys a magazine app from iTunes is an iTunes customer before she is a customer of the magazine app. The position is rather different with a subscriber who is already a customer of the magazine and the publishers can insist that their customers are treated with the respect and reciprocity that they deserve. They are already a subscriber to the (print) magazine and so should be offered free access via the app. The Economist got this right by providing free app access to all its existing print subscribers. Time Inc and the other big American consumer publishers is getting it so wrong by refusing to do this

Work around it, and start publishing digital solutions that customers want.....

The Daily is a Convincing App. But is it a Periodical?

I like The Daily rather more than I was expecting. I also think that it has a commercial chance; it is a gamble, but it is potentially a very significant money-spinner. A lot will depend on the execution. Murdoch is prepared to take a big punt on the newspaper's success, and like a good gambler he can do this because he is playing with a limited stake ($30 million in startup costs and $500k a week in running costs). He is not playing for break-even but for a significant win, which happens when he has 1 million or 2 million subscribers. That will take 18 months or two years to pan out, so at most $100 million is at risk. For News Corporation with its huge investment in print newspapers this is peanuts. The upside is that The Daily gets 2 million subscribers from which the subscription income is $80 million ($40 annual sub x 2 million subscribers), Apple's commission and sales tax may bring this net take down to $50 million but the running costs are $25 million. Also there is some advertising revenue which should help.

Murdoch's off the cuff comments at the launch were fascinating and engaged, and I heard them the same way as Peter Kirwan, blogging at the UK Wire, who also fancies the commercial prospects of the new title:

If this makes The Daily sound like a bolt-on addition to the media ecosystem, Murdoch is also dreaming of something much bigger. Away from his script, during an interview on Fox Business News yesterday, his words suggested a bid to promote cannibalisation of print audiences.

"I really believe that everybody in America who can afford one is going to buy a tablet," said Murdoch. Ultimately, he added, he would like The Daily to overtake the 26m audience attracted by American Idol on News Corporation's Fox network.

News Corporation executives may smile at the old man's hyperbole. But the intent is clear. What's more, Murdoch claims that he isn't phased by the prospect of cannibalising print audiences. "Oh, there may be some expensive changeover," he said yesterday. "Net-net I think we will get." Peter Kirwan: What's New about The Daily?

Murdoch is aiming a newspaper proposition at a market which can probably commit to the prices he is putting on it (99c a week or $40 a year). Because he has a clean slate Murdoch has been able to take a realistic view of what an annual iPad newspaper should cost. Net-net, I think he will get.

The Daily has a mid-market feel, a bit like USA Today (2010 circulation 1.8 million, and if I were in Gannett's boots I would move very fast to cut Mr Murdoch off at the pass with a snazzier app in the same class) and it will have a mid-market appeal. It is not very serious, it is gossipy, and the sports coverage impressed me; the illustrations are good and some of the diagrams and 360° photographs are excellent. There is much that one could question or criticize (see some very insightful analysis of the typography and design by Stephen Coles), the social interactivity is ham-fisted at launch, but I will be watching the progress of The Daily with interest.

Murdoch in answer to questions, left open the possibility that The Daily will in due course migrate to other tablet platforms, but it is for this year and next aimed fair and square at the iPad. Nevertheless it is in many respects designed and conceived in a rather conservative magazine fashion: as if it were a newspaper designed for a small format with lots of colour and a fair amount of interaction, snippets of video and short, punchy stories. Which is what it is, mostly produced with traditional print tools. The maganewspaper is, we may suppose, produced with InDesign and could almost be laid out as though it were a print object -- almost, but not quite, since as with other apps generated from inDesign the imposition would not work. The framework and the metaphor is still largely a print metaphor, but one re-scaled for the iPad's dimensions and interface. Like any app it can interact with the web and it condescends to save pages and bookmarks and links in suitably undistinguished web pages, but it is most definitely an app and a tolerably enjoyable one to navigate and browse.

So The Daily is a newspaper and an app, but is it a periodical? I only raise the question, because there is no way, at present, to move back to a previous issue (except through the rather drab web pages which are used for reference, bookmarking etc). The Daily is a daily event and not a newspaper of record which would have an archive of issues that can be opened and re-opened to review and re-read earlier content, so that one could again look at the 360° photograph of Tahrir square that they carried on February 4th (one can see the video carried on that day here). It may be said that a proper archive could be 'retro-fitted' once they get going; but I wonder whether this will happen or whether we will move to the idea of a digital newspaper being a more ephemeral publication (like a news web site) with no full archive? Shall we borrow a word from the French and call such not-for-the-record newspapers 'quotidians' rather than 'periodicals'?

I think that digital magazines certainly will retain their archives, and the apps which map them will have to figure out how the archive is presented and integrated alongside the current number. There is strength in that model and anchoring readers in the quality of your back issues has some commercial advantages.