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Pristine Praise

Pristine Classical (the world's leading historic recordings site) have written up the experience of using Gramophone magazine on the Exact Editions platform. The full editorial is here, and we quote an extract in which Andrew Rose explains how the iTunes Newsstand interface, and the Exact Editions digital magazine platform works for him:

The iPad's news stand is a simple little app that Apple have recently built into the operating system. When you first touch it an empty set of shelves open up on the screen, just begging to be filled with reading matter. Fortunately there's a handy button to take you straight to the news store, where you can buy individual issues or full subscriptions to a variety of magazines and newspapers from around the world. Once you've bought one of these (and most offer a free trial issue to get you started) the magazine cover appears on your shelf.

Actually the shelf thing is a brilliant bit of nudge-marketing that really makes you want to fill its empty shelves, and so now I have four publications sitting there ready to read, including Gramophone at an annual subscription price which was around half the usual international rate. My daily paper - for which I now have the iPad subscription - is delivered as if by magic overnight while the iPad is asleep, ready to read when I get up in the morning. My Gramophone turns up on time every month. And because of the nature of my Gramophone subscription I can also read the same content on my web browser on any PC, and - at last! - copy and paste Rob Cowan's reviews directly into this newsletter rather than either scanning the text or retyping it. I've also been gifted every back issue going back to August 2010...

So as a user what's it like? Well, what you see is what you'd get with the print edition - every page in full colour (including all the ads). When you hold your iPad vertically the screen holds a full page, when you hold it horizontally it spins around to fill the width of the screen, making the writing bigger but requiring you to scroll the page down to read the full text, something that can be a bit of a nuisance is a story runs along a number of columns. In the vertical view this isn't an issue though the text can be a little on the small side - but then you can quickly and easily pinch and unpinch the screen to change your level of zoom, thereby resizing the text to suit both you and the page layout. The contents page has coloured links over the page numbers, allowing you to jump straight to an article, and you can also run a text search across the entire issue - which is how I know for sure that there are four instances of the word 'Pristine' in November's issue, of which three refer to us. There's also a little "page flick" button, enabling quick "flicking" through thumbnail representation of the pages, a button that takes you straight back to the contents page, and one other control button, which switches to a two-page view, for those with better eyesight than me! All in all it looks good, it's easy to read, it turns up on time, and it's saved me money and shelf space. What's not to like? (Pristine Classical Newsletter November 2011)

Rose goes on to explore the advantages and the options for independent music publishers who might want to sell magazines through iTunes. His view "And if you happen to be a magazine publisher who thinks this isn't for you, you really must read on..."

It intrigued me that this very positive review of the process of transferring well designed and graphically rich magazines to a digital medium should have come from someone with deep expertise in the business of transferring digital sound to online media. Maintaining the fidelity and the richness of the print experience is still a real challenge. As is the problem of fidelity and authenticity in sound recordings. The review is also timely since this week Exact Editions is now unveiling a portal through which publishers can explore for themselves the digital services that can enable magazines to achieve the best digital quality and access that we can provide. Magazine publishers who think that Andrew Rose may be on to something should turn their browsers to https://publisher.exacteditions.com/ and upload an issue of their magazine to conduct private trials with the platform whilst they consider the solutions proposed for their magazine. Either as a web edition, as a complementary service for print subscribers, an app solution for iOS or Android. And for many magazines all of those options will make sense.

Apple's Newsstand and Skeuomorphs

Apple's Newsstand was introduced with iOS5 and it is defined as 'a custom newsstand for all your subscriptions'. It puts all your periodical subscriptions in one place, a Newsstand, a folder, that 'lets you access your favorite publications quickly and easily'. At this stage it has three particular advantages for the user: first, it does the sorting for you and puts your subscriptions in the one folder, collecting them together on the iPhone/iPad (many of us are lazy about arranging apps); second, apps which are handled through this route will update automatically in the background when a new issue appears -- a big plus since many magazine apps are very slow to upload; third the front covers of the current issues are shown on the shelves of your newsstand, a fact which makes these apps rather more interesting and appealing than most app cover artwork. This is an especially strong point for magazines, many of which have outstanding cover designs.

This is all a fairly straightforward matter of iOS plumbing and 'issue management', but I just mentioned the Newsstand's 'shelving' and one of the most obvious features of the Newsstand is that it is presented to the user as a wooden, pine, racking system. Here is a glimpse of mine:
















This is a classic instance of Apple's 'skeuomorphism'. Skeuomorphism, originally a term from archaeology, is type of ornamentation where the design or look of the object helps the user to understand the function of the device or tool. Greeks made bronze jugs and vases that looked as though they had been made from coiled pottery, with curious twists and patterns, because these derivative ornaments helped the user to know which bit to grasp as the handle and how to direct the spout. iOS5 and its apps are riddled with skeuomorphism -- some of which goes over the top. Much of it incredibly helpful: paperclips that indicate an attachment, soft calculators that work like calculators, brushes that brush, cameras that have buttons and dials etc.

The fact that the newsstand is a pine shelving system is helpful skeuomorphism because we know how to arrange items on a shelf, we know how to 'read' a shelf, we understand that the objects on the shelf will remain 'there' on both phone and pad and we know that can pick up one, or several of these objects and dive into them. All of this maps the functionality of shelved stuff straight into our collection of subscriptions. All is well and good.

The problem lies elsewhere. The metaphor of the 'personal shelf' works well enough for an individuals collection of 6 or 60 periodical subscriptions. But it provides no help at all when we come to the other angle on Apple's new newsstand. The newsstand is not just a way of organizing an individuals collection of subscription, it is a new classification within the app store for periodicals which are consistent with the distribution and access rules that pertain to the individual-facing, personal newsstand within an iOS device. 'Newsstand' is a new and rather unusual category within the iTunes store itself, and only the apps which would work on the 'pine-shelf' personal newwstand appear there. A lot of newspapers and many magazines have not appeared in newsstand yet, perhaps because the developers have not yet got round to it, but others are not there because they never will be. Apps like Flipboard or Zite which aggregate magazine content will not be going into the newsstand, nor will news apps that are based on real-time newsfeeds (there is still a seperate 'news' category for apps which are not in Newsstand). The 'newsstand' within iTunes is not a section for all newsy apps, it is a category for periodical subscriptions which meet some very specific criteria. All existing print periodicals could be transferred to it provided that the publishers develop an app which matches these criteria, so it will soon be an enormous emporium of periodicals. In fact what iTunes now needs is some sort of virtual kiosk, which would allow the prospective purchaser to float past and search thousands and tens of thousands of prospective periodical titles that might be purchased. For this task the pine-shelved personal newsstand is no good at all. We need a very different metaphor for the mega-kiosk that Apple's iTunes magazine store is rapidly becoming.

I suspect that Apple will soon be wishing that they had chosen a more flexible, and a more scaleable skeuomorphism for their magazine collection that the individual selects for herself. A carousel or a cascade of front covers that could be more easily translated or analogised to the requirements of the global kiosk. Google a month ago put up an example of the kind of carousel interface that might work well for a global range of magazine titles.

Final thought: I have never liked the pine bookcase metaphor at all. I would never put my printed magazines on such a shelving system -- its too reminiscent of a dentist's waiting room. If Apple decides that it was the wrong skeuomorph, perhaps they should smash up the pine bookshelves and turn them into kindling?

Magazines that just work

Adweek has a nice piece on how the magazine BusinessWeek appears to be thriving. It has changed its name to Bloomberg Businessweek (is that really better?) and has a newly invigorated editorial and design approach.

So far, the Bloomberg money has bought signs of life. Businessweek has bulked up to an average of 66 well-designed editorial pages that offer a level of global business coverage not found among other weeklies. Ad pages are up 21 percent year-on-year for January through July, the rate base will soon be raised from 900,000 to 980,000 (approaching Forbes’ 1,020,000), and subscriptions are up 12 percent. The magazine now loses, according to Adweek sources, between $20 million to $30 million a year. (Josh Tyrangiel Means Business -- Adweek)

Bloomberg bought the magazine from the McGraw Hill company for $1 in October 2009.

The magazine also has a respectable app for the iPad, though I suspect that its not (yet) a key part of the revived magazine's business strategy. I find their app clever, but a bit too fiddly and confusing and its not on Apple's Newsstand which suggests that Bloomberg have not yet worked out whether they see it as an integral part of a digital magazine strategy or more of a trial balloon. But the resuscitation of the core magazine is a good story for the magazine business. A new owner has been bold enough to take a fresh look at the editorial mission, has seen the need for investment in editorial content and design quality, and the magazine is a lot better than it was 2 or 3 years ago. This week it has a tremendous article on Apple's extraordinary strength in supply chain management, investment and logistics. Now that they have the core magazine working really well, they can consider how to make it a digital success.

It could be that there are a good many magazines out in the market which are suffering from tired ownership (McGraw Hill had no real rationale for owning a consumer-facing business magazine). There are some excellent editorial and content propositions that could be revived by fresh investment and owners committed to developing subscription audiences. This will become a positive story for the magazine industry in the near future as publishers realise that digital magazine audiences can be very large and can be reached very efficiently through the iPad and other web devices.

Amazon and Apple in Asymmetric Competition

Today it is widely expected that Amazon will launch a 'next generation' Kindle. The rumor mill says that it will be called the Kindle Fire, it will be running an Amazon controlled and adapted version of Android 2.1, it will be priced 'competitively' a bit lower than the basic iPad, it will have a smaller form factor than the iPad (7") and may look much like the Blackberry PlayBook, but above all it will be a new and better way of consuming the books, films, music and other digital media properties that Amazon successfully sells to its large consumer following.

Many observers think that Amazon has perhaps the best chance of competing with Apple in the 'tablet space', which increasingly looks as though it might otherwise become an Apple preserve. As David Streitfeld in the New York Times points out, one of the reasons that Amazon has a chance is that it is not a straightforward competitor but an asymmetric competitor. The tablets that have abysmally failed to compete with Apple so far (and its a long list: Blackberry, HP a fistful of Android efforts) have failed because they have been competing head-to-head the level of hardware with a device that in every case, however serviceable the hardware, abysmally fails to match the content and software eco-system (its all about the apps) which sustains and grows Apple's market. Amazon will position its tablet not as a device that matches the iPad in specification and function, but as a better conduit to media resources and media consumption. Amazon does have a very significant content mix that it can channel through its device. In the books area it has a stronger and deeper selection than Apple, and although it may be lagging in its selection of music and film, it has nonetheless a respectable harvest. Books is a key strength and with its successful eInk Kindle track record Amazon has the potential to migrate millions of book lovers (and their purchased libraries) to the new platform. Apart from Apple no other media/tech player has anything like Amazon's content reach (not Google, not Facebook, not Microsoft or Sony).

But the competition will be intriguingly asymmetric "because Apple sells movies, music and books in order to sell devices. Amazon sells devices in order to sell books, movies and music. Apple has never faced an opponent with such a vastly different strategy." (New York Times 25.9.2011)

In fact the competition is deeply asymmetric in a number of ways. Amazon already provides access on Apple devices through its Kindle app, the chances are that Amazon will try to maintain the compatibility between its eInk-based Kindle app on the iOS platform and its native Kindle Fire app software. That could get to be complicated, it could inhibit development of better native-Android reading software, but this is an asymmetry that gives Amazon market reach. There is no chance that Apple will provide access to iTunes or to iBooks on an Amazon tablet app. Amazon would probably not allow that, and Apple certainly would not want that. If iBooks were to get a lot better, perhaps through taking advantage of hardware or system features, that would put some competitive pressure on Amazon's lead with eBooks. Asymmetric also in that Apple will stick to its 'agent' or facilitator role, whereas Amazon will act more as principal (Amazon is in fact becoming an eBook publisher). Apple will continue on its policy of levying a distribution tax from content that uses its iTunes marketplace (30%). Amazon will seek to maintain and re-introduce its 'merchant' role, wherein it can exploit and require deep discounts from publishers developers. Amazon will not lightly give pricing power to its publisher partners (its rules for the app market give Amazon the right to discount to zero!). Apple does give developers and publishers more pricing autonomy, because Apple knows that it will attract more developers that way and will sell more hardware and grow the ecosystem. Ironically, Apple will be able to move much more quickly to cloud-based services (Apple has struck deals which permit this streaming management of content with the permission of the music majors and publishers). Amazon will be more 'stuck with' a distribution and download model in which bits and megabytes are moved from server to device and copied to personal lockers. Ironic this, given Amazon's second to none services in cloud computing. Netflix (Amazon WSC's biggest customer) has been streaming film from Amazon cloud computers long before Amazon has the music majors signed up to a streaming approach for consumer music.

In fact the competition between Apple and Amazon at this point looks so asymmetric that one doubts that either side really needs to win a knock out. Mutually assured co-existence will be enough. Amazon will have an apparent success on its hands if it can migrate the majority of its existing and growing Kindle market to a better tablet Kindle Fire. It doesn't need to compete with Apple at this stage in the provision of the widest and richest form of app market. It has a lot of negotiating and catching up to do before it can hope to challenge Apple in music and film, and it is not interested in the new post PC computer market that Apple has in its sights. Apple may not mind Amazon getting further success in the books market (as Jobs said people don't read books anymore). The incidental benefit for Apple of a perceived to be successful Amazon tablet is that this 'success' will severely compromise and complicate Google's struggles to move Android from success in the smart phone form factor to successful tablets. If the first acceptable Android tablet is one in which Amazon have forked the operating system and taken control away from Google we can expect further fragmentation and frustration in the Android eco-system. Apple should be rather pleased about that.

From my standpoint, the most interesting area of conflict that now opens between Amazon and Apple is the one which touches on magazines and newspapers (and of course that interests us most at Exact Editions). It seems very likely that Amazon will have a strongish hand in the periodicals space for its new Kindle, and it will be very interesting to see how the Amazon commercial model for those periodicals works out. I doubt it will be easy to get an entirely satisfactory magazine/newspaper digital experience on a 7" tablet, and there will be some challenges in then moving a suboptimal experience to a 10" device in 2012, just about the time that Apple brings out its likely iPad 3. We live in interesting times!

Forking the Business

Reed Hastings the inspirational founder of Netflix just owned up to a big mistake in running his business (see his video apology here) and announced that in consequence of this misstep and failure of communication he would split his baby in two: Netflix (the old name for the new business) which would now solely be concerned with selling digital streaming video to consumers on a subscription basis, and Quickster (the old business with a new name) which would be solely concerned with shipping DVD's to customers who wish to have films on DVD.

In software parlance he is 'forking' the code base (the assets of Netflix and the employees will be divided between the two new businesses), and he is duplicating the customer base (users will have two accounts where they had one before) and he is potentially setting them against each other.

So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. An Explanation and Some Reflections.

This does seem like a pretty drastic change to a business that has been steadily evolving towards a streaming mode of delivery for film and TV. I hope it works out for the Netflix businesses and its customers, but it certainly seems risky.

It is worth thinking about these drastic manoeuvres because a similar distribution challenge faces the magazine industry as digital delivery becomes more important. Will it be necessary for magazine publishers to split their editorial, development and design teams, their commercial and sales efforts to build separate digital and print-based work-flows and subscription operations? Some magazine publishers are working now with separate editorial and design workflows? Will this result in an inevitable split between subscribers for print product and for digital editions? Can magazines afford this duplication? Do consumers want two products?

At Exact Editions we are convinced that such a split cannot work, is ruinously expensive and results in sub-optimal solutions for print subscribers and the digital audience. Perhaps magazine publishers have been too mesmerised by the possibility that magazines as digital resources on the iPad could be something completely different from the print object (and perhaps not quite honest enough about the talents that they have to produce something completely different and digital, some ghastly interactive apps have been the result). The key thing that magazine publishers have going for them is that they already (in many cases) have a strong and renewable subscription relationship with their print audience. Actually most music producers, film companies and book publishers would die for a situation in which they had a direct billing relationship with the digital audience. Magazine publishers have no idea how lucky they are. It is therefore vital to transfer this subscriber relationship to the digital sphere as soon as possible. Print publishers can do this because it can be very simple and straightforward to offer those print-subscribers who want it a digital subscription as a complementary part of their print subscription. Enfranchise the print audience as quickly as possible.

Consumer magazine publishers are in an extraordinarily privileged position because they 'own' their audience (subscribers who come to them direct) in a way in which very few consumer media operations are able to match (music, film, book and TV producers all struggle through not being able to bridge the gap directly between digital product and digital consumer). From this standpoint the concession that Apple has given to magazine publishers is extraordinarily important.

“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 Press Release Feb 15, 2011

Although magazine publishers do realise the importance of 'owning' their digital audience, very few of them have yet made the transition that the prevalence of the iPad/iPhone and the army of Android devices affords to them. Relatively few magazines yet have 2% of their subscription numbers through digital subs. By Christmas 8% of the US consumer magazine market will have access to their own iPad, and 4% of the UK audience will be similarly placed. Surely it is time to get those subscription offers in place? No need to fork the business for that.

Financial Times Tablets

As a regular FT reader I watch their digital development with real interest. Paid Content has been following their strategy and has a note about the reasons why the FT has now withdrawn its app from iTunes.

Two months after the deadline for compliance hit, it’s now clear The Financial Times and Apple (NSDQ: AAPL) can’t come to a compromise over the new requirement that in-app subscription payments must go through iTunes Store. The paper’s iPad and iPhone apps have disappeared from iTunes Store. Apple says the FT took them down to comply with its new terms. Financial Times Apps Finally Pulled from iOS Paid Content

The FT has a really excellent HTML5 app designed for the iPad (and other tablets?) and subscriptions for this app can be purchased directly from the FT web site. Note that the headline is misleading, the FT has not pulled its app from iOS, the app actually works fine with an excellent touch-interface on the iPad. What has happened is that the app cannot be bought or distributed via iTunes. The reason for pulling out of iTunes? Well, it apparently isn't primarily about the 30% commission that the FT would have to pay for all subscriptions sold through iTunes:

“(Giving away) thirty percent of subscription revenue isn’t something we celebrate, but that was secondary actually - we already pay other distributors and agents; newsagents take a cut. Central to our whole strategy and all our aspirations is to have that direct relationship with the reader.” John Ridding CEO FT, interviewed by Paid Content, August 8, 2011.

But this is still hard to understand, because the newsagents and other distributors who sell the physical product not only take a cut, in aggregate much more than 30%, they deliver readers who have no direct relationship with the publisher. Refusing to sell subscriptions through iTunes and refusing to participate in the shortly to be launched Newsstand within iTunes is de facto hiding the publication from the 200 million people who have an iTunes account. The FT has lots of costs to get on to physical news stands but good product placement within iTunes is pretty much free for the publisher, so why turn that away? Sure some loyal readers who have purchased an iPad will be willing to go to the FT's web site and sign up directly there, through the Safari web browser, but everyone who has an iPad has an iTunes account and knows how much easier it is to use it to buy a subscription within iTunes than to transact with a web site using a credit card. The FT's move away from iTunes makes no sense in the context of customer acquisition, especially since Apple now allows publishers to provide free for subscribers access through an app. Apple has also stepped back from requiring that publishers who sell subscriptions should offer the best price in their iTunes sub. If the FT wished to promote digital subscriptions which include free access to the app, and at a lower price to direct subscribers who have given their demographics to the publisher, there is nothing now in the Apple rules to prevent this. They could have in-app purchasing within iTunes, but no reader demographics, and off-iTunes direct selling with complementary iPad access to those subscribers who complete the demographic form. Anonymous readers via Apple, and 'engaged' subscribers via their own transactional system.

The FT's stance in this matter is so puzzling that I wonder if there is some hidden explanation. One that occurs to me is this: the FT will have spent some time developing its HTML5 app and the service that delivers it. It surely will have done this because the FT expects there soon to be a range of media consumption tablets of which the iPad is merely the foretaste. So the publisher would like to manage the way in which subscriptions are handled across all platforms, collecting similar information from Android, Windows and iOS platforms on similar terms. That this may be the main concern is shown by this remark:

“You have to think about the customer - life is going to get pretty confusing if you have to have a different sign-on with all the different device manufacturers. John Ridding CEO FT, interviewed by Paid Content, August 8, 2011.

Sure there is a certain logic to this approach: the FT is going to do everything the FT way. This is a 'consistent' way of looking at distribution channels from the publisher's point of view, but it is an extraordinarily un-customercentric way of looking at the market. Suppose every publisher develops apps in a similar fashion. There is no likelihood at all that different publishers will offer their subscriptions on similar terms or have matching demographic requirements. So life is going to get very confusing for periodical subscribers who have to learn about the very different sign-on steps required from different publications. An approach that may appear to be simplifying matters for the publisher is vastly complicating the lives of consumers. One of the great advantages of iTunes for the customer and the publisher is that the terms and conditions for purchasing apps and subscriptions are pretty much standard. You know what to expect and its all very simple.

It will be interesting to see how the FT app plays alongside the terms and conditions that will be attached to the heavily rumoured Amazon Android tablet. Its hard to see how Amazon could keep an HTML5 app off the hardware, but it will be surprising if the publication is sold through the Amazon app store, because there is no likelihood of Amazon letting publishers collect all that demographic data that they would like to have from subscribers. So, rather than being a rebuff to Apple, perhaps the FT's stance in this matter is a statement of principle and a shot across the bows of the soon to be revealed Amazon periodical platform.

How much will it hurt the FT if they persist in their policy of not offering the app through iTunes? My hunch would be that iTunes availability with very modest promotional efforts could easily double the level of sales that they can achieve from a stance without iTunes. We are currently seeing a big step up in iTunes subscription purchases (mostly for the iPad). iPad sales are ramping up. There is a good chance that the FT app will go back into iTunes with 12 months. Apple will not have changed its stance, but the FT will have seen that it can work with iTunes and 'upsell' to customers who may have initially been reluctant to provide personal details to the publisher.