Too Many App Stores?

As is generally known the Apple App store handles payments for developers and some distribution functions in exchange for a 30% cut on the revenues obtained from the sale of those apps. 70% is passed along to the publishers and developers who make the apps. The Android App store is run along similar lines (30% to Google for handling the transaction, collecting the monies and maintaining the store front: 70% to the developer). Amazon last week announced its own App store, along with an invitation to developers to produce Apps for the Kindle platform. Co-incidentally it announced a new and improved deal for authors and publishers, whereby under certain not too onerous conditions the author/publisher will get 70% from the Amazon sale. It is fishy the way that these deals seem to cluster around a 30% cut. Is there something about the investment and infrastructure needed to set up and run an App store that dictates a 30:70 deal? Who is going to be first to blink, and move to 20:80?

Along with its brilliant iPad, Apple just announced an iBook application within the iTunes store. Edward Nawotka, an industry pundit wonders whether this presages Apple offering a direct route to publication for authors. Amazon has been cutting direct deals with authors (sidelining the publishers). Google is in the class-action settlement of the century in its effort to become the digital publisher or republisher of millions of out of print but in copyright books. It would seem that in there effort to establish dominant positions in the distribution of digital books these three great companies are moving back up the publishing chain in an effort to secure greater security of supply.

As well as trying to buy into a dominant supply position (it would be fascinating to see the details of the exclusive deal that Amazon struck with Rosetta for McEwan's backlist. What guarantees or minimums are in that package?), these great companies are also trying to muscle into the other guy's distribution channel. Both Google and Amazon have built apps for the iPhone which allow users of the Apple device to access resources hosted/published for Kindle or by Google Books. Somehow it is barely conceivable that Apple will produce apps for the Kindle or the Android app stores.

What does this tell us? It tells us that building an app for the other guy's store is a sign that you have either lost the market, know that you are going to lose the battle in the long run, or are not really concerned to establish a dominant software or hardware platform for books in the first place. Apple can afford to ignore (in fact can afford to welcome) the Kindle and Google Apps, because these book reading systems will only take off on the iPhone/iPad platform if the users are able to purchase media content directly to the device through iTunes and the app store. Any such transactions are a direct win for Apple at the expense of rival platforms. If Google or Amazon were to support Apple's in-app purchasing they have lost the market and 'lost' the customer relation. My hunch is that Amazon really doesn't care too much about the market for 'soft reading systems' and does not care at all in the long run about the hardware market. They care about selling digital books and built Kindle as the first stage of the rocket that would take them to being everyone's digital library. They would be very happy if the Kindle became a mere brand, a virtual personal library system; if need be on Apple's hardware and O/S. They really do not want to lose the digital books market, especially not to Google. There is therefore scope for an alliance of sorts between Amazon and Apple, if Apple wanted it. Apple has the whip hand in these matters with its clearly superior hardware and software package, but it could offer Amazon a pretty exciting prospect as the digital books back-end to the iTunes content management system.

Why the iPad is Great News for Digital Editions

We have been taking a preliminary look at the Apple announcement of the iPad. It looks like a fabulous machine and we can not wait to get our hands on one. It seems to be just right. Just right for digital editions. Here are five really good points:

1. It should be affordable by the mass market. $500 is an excellent entry price
2. It is large enough (nearly A4) to give a rich visual and touch experience, but still small enough and light enough to be handheld and used walk-about.
3. Compatibility with the iPhone for users and for Apps is a great start. There will be cool new things that are specific for the iPad implementation of Apps, but the fact that every iPhone App will run on this new thing is a boon.
4. The iPad is apparently blindingly fast, and efficient (battery life is good, much better than the iPhone)
5. Simplicity. The iPad interface and software is very appealing, and will encourage media use. The 'touch', 'geo-awareness' and 'orientation' will be wonderful for web activity.

Clearly some things are 'still to come'. Multi-tasking is surely going to be in the next O/S upgrade. We may see some more e-commerce developments: for example, it is surprising that there is not (yet) a magazine solution to match the iBooks app. The iBooks app is clearly just an eBooks store (an important distinction as it wont be able to deliver the full design-rich experience that users get from digital editions), and perhaps not yet a great eBook reading experience (see John Gruber's cavils (see at) Typography and iBooks "I was hoping for better from Apple"). We also wonder about its embrace of publisher regional restrictions: having the app restricted to the US rather than managing the territories for each book on a title-by-title basis, as is done with other content in the iTunes system, sounds inflexible. Maybe the implementation will change when they have negotiated with more educational publishers and publishers in more regions. We think that Flash is not going to be missed. We are slightly surprised that there is no camera, not even two! We are intrigued as to how iPad use is going to impact on social networks: Twitter, Facebook etc (the effect of the iPhone has been huge so far). There will be more, there is a lot to find out, but right now we want to get our hands on a few of these iPads as soon as possible.

One of the nicest features of the iPad from the Exact Editions standpoint is that it will facilitate and encourage use of books and magazines in another portable device (the iPad will create this new category) and readers will become used to reading their stuff on the iPad, on the iPhone and on any other web device that enables them to access the content feed. Underlying all of this richness is the internet and the web services that it supports. Publishers need to understand the opportunity that this presents. The same stuff can be accessed, searched and read any-way the user wants. A lot of them will want to do it on Apple's new device, and a lot of them will be buying.

Apps and Some Lessons we Have Learned

The big news today is the launch of the Apple Tablet yesterday. Gizmodo has a helpful summary of features.

We have also just released a new version of our generic iPhone App Exactly, which has an important improvement. It allows the user to sync the latest issue of her subscription to the phone. This makes the reading experience much more consistent and speedier, and of course it is then feasible to read the latest issue of the magazine on the plane or the subway, or anywhere else where you dont get an internet connection.



















Publishers sometimes find it hard to believe that iPhone users enjoy reading books and magazines on their iPhones. The fact of the matter is that a lot of iPhone usage is primarily reading: email, web pages, blogs, books and magazines. It is also clear to us that the Apps from Exact Editions are being read, and subscriptions to them are being renewed. Reading in an App which is designed to take full advantage of the iPhone software and interface is a lot more fun than reading web pages or text through the Safari browser. We recently looked at the usage of one of our magazines from this point of view. About 2% of the December usage for this magazine was through iPhones. Of that iPhone usage, customers were 20 times more likely to be reading a given page through the generic App Exactly as through the Safari browser on the phone. Now that our Apps are sync-ing its going to be a lot harder to do this kind of analysis.

The second big lesson that we have learned this year, is that making the App free is clearly a winning strategy. Publishers need to figure out ways of offering a good smattering of their book or their magazine issue as a free offering through the App. Thereafter in-App purchasing looks after the business end of the proposition. Very few magazine publishers are yet offering their magazines through the iPhone interface. The iPad announcement is a wake-up call that they better!

The Book as Information Appliance

The best blog posting on the Apple Tablet that I have read this week is at Gizmodo, by Jesus Diaz, The Apple Tablet Interface Must be Like This.

Anybody blogging now about the Tablet has an excellent chance of being proven wrong in 5 days time. But the most interesting aspects of Diaz's piece are historical, where he speculates about the interface by thinking about what has already gone before, in which he notes that the iPhone has already changed our expectations about how an interface should work. The touch screen is crucial but the flexibility of the 'app-based' interface is also crucial. He is betting, and I am sure that he is right, that the Tablet is going to be an extension and development of the iPhone interface and of its operating system (this is not going to be Mac/OS). Diaz sees the iPhone as having already established a crucial break with the 15 year reign of the desktop metaphor for usability. The genius of the iPhone is that it has shown how a small device can be a succession of information appliances in which the special features of each application are captured in the specialised interfaces which belong to each application (or 'appliance').

When it came out, people instantly got this concept. Clicking icons transformed their new gadget into a dozen different gadgets. Then, when the app store appeared, their device was able to morph into an unlimited number of devices, each serving one task.

In this new computing world there were no files or folders, either. Everything was database-driven. The information was there, in the device, or out there, floating in the cloud. You could access it all through all these virtual gadgets, at all times, because the iPhone is always connected. Gizmodo

Well, I am frankly delighted that this world of windows, files and folders is on the way out. Documents too are under notice of termination! I am very excited about the way in which information appliances will give us many more models and metaphors for the way that our software should work. Gestures will replace commands and trial by touch will replace error.....

But before we chuck all the paper-based metaphors out of the window (along with the files, the folders, the waste baskets and the .docs), I think that an age of software interfaces emulating information appliances is going to be very helpful and very preservative for some parts of our print and our paper heritage. Pages will stay with us. Tablets like pages and canvases. Libraries too -- we need a collective noun for a large collection of apps, and 'library' may be the group noun of choice. Above all, books, magazines and newspapers are great 'metaphors' for information appliances. They are information appliances par excellence, and they have in their 'soft' or emulation versions great potential for use on a tablet or an iTouch interface. Books, magazines and newspapers should behave and will teach us how to use the tablet interface in much the same way that they behave and teach us how to learn in real like. But they will not be the same. They will be software applications, appliances, apps, and so they will have much more potential for compute application. The main advantages of tablet-books or tablet-magazines or tablet-manuals, behaving somewhat like their physical counterparts is that we all know how the physical objects work and the virtual information appliance will work in a similar way to help our expectations and to help our discovery of how they are different.

I have no idea what the Apple digital publishing environment is going to look like when it is unveiled next Wednesday, but I bet that it is going to look much more familiar to book lovers, more retro, than most of us realise. If Apple have got their information appliances right digital books and magazines are going to feel more like real books than most digital publishing experts would have predicted.

What Happened to Twitter

There has been some reports of Twitter's growth slowing in recent months. ReadWrite web reports some HubSpot research which shows Twitter's growth slowing to merely 3.5% month on month growth in October; down from 12% in March 09. But it all depends what you are measuring. It seems unlikely that the Twitter investors are getting anxious. HubSpot is measuring new users and followers and the really interesting change is that Twitter usage is growing very fast still, but most of this growth is not on Twitter.com but in the Twitter ecosystem, which includes the mobile space, and other social services such as Facebook. Fred Wilson has a good posting about the difference between Twitter.com and the Twitter ecosystem. Think of it as the proverbial iceberg, with only Twitter.com emerging above sea level. The hidden, 'submerged', Twitter seems to be growing like crazy: and as web services continue to broadcast to billions of mobile phones it is going to carry on growing. As Wilson says:

My point is this. You can talk about Twitter.com and then you can talk about the Twitter ecosystem. One is a web site. The other is a fundamental part of the Internet infrastructure. And the latter is 3-5x bigger than the former and that delta is likely to grow even larger. Twitter.com vs the Twitter Ecosystem.

Exact Editions is fundamentally a database driven web service, providing access to books and magazines, most of the action happens on our web servers. But in our own much smaller way, we have also noticed that our growth now is spurting in ways that are hard to measure as more of the Exact Editions ecosystem is working in a devolved fashion away from our servers. We have had a rush of users of the new Music Week App in the last 10 days: the downloads of this free app will have an impact on our bandwidth costs this month. But it is hard to know what happens with those downloads once they have been sync-ed to the iPhone (there are various indirect measures from which one can infer activity and we will increasingly rely on them). It seems probable already that a large part of the activity on our publications is happening in 'client' nodes, holding sync-ed issues, where our server logs and analytics gives no reliable data on usage. If free apps take off this could explode. As Fred Wilson says, the delta is going to grow.

This burgeoning penumbra of eco-systems associated with multiple and various web services will surely lead to a more of an 'organic' view of the web, with each web service and each individual distributable app collecting its own 'clients' within a cellular membrane. I resolve to stop thinking of the web as a net. It is getting to be more like frogspawn than a spider's web. We live in interesting times.

What do Literary Agents Do?

The other day I was talking (mostly listening) to someone who works in trade publishing. That is the kind of publishing in which books are 'sold' for advances of £25K, or maybe £250K, or very occasionally more than a million smackeroos. This friend/acquaintance was explaining that the house she works for controls very few of the electronic/digital rights in the books they publish and she was frustrated that agents seem highly reluctant to grant any rights, or even to experiment with digital propositions.

This got me to thinking. What is the point of an agent who does not do deals? We do not hear much about agents doing digital deals. Are they just sitting on their authors' rights and not exploiting them at all? Or are there soon going to be a rash of direct deals by agents with the likes of Amazon, Sony, Apple, Plastic Logic, Google etc? Perhaps there will be some deals: a couple of months ago Amazon flew a dozen top literary agents to Seattle for frank discussions. A few days ago Amazon announced that they had done an exclusive deal with Paul Coelho, exclusive for all his e-books in Portuguese. I wonder how much Amazon had to guarantee or pay as an advance for the exclusive rights? But all the e-books rights for Portuguese Paul Coelho, (why only Portuguese?), does not sound like such a big deal (oh yes, I know he is Brazilian, so it is a fairly big deal).

I suspect that exclusivity is the key issue here. Agents are used to handling and dealing in exclusive rights, and they are working with the hypothesis that digital rights are going to be like the exclusive rights that they have learned to carve out of the traditional book-publishing contract. Identify and separate the rights and sell each of them for as much as possible to one counter-party. But are digital rights like this? Does exclusivity really cut it in the innovative market for digital books? It has always seemed to me that copyright owners would be better off, and publishers would also be in a stronger position, if digital deals were almost always non-exclusive. Why do an exclusive eBooks deal with one supplier if there are 15 different players in the market, each with their own 'installed base'? Why do a five year exclusive with Amazon if the market for digital is going to end up with Apple, or Google or someone else?

If you look at the couple of dozen eBook reading platforms that were announced, re-announced, released or previewed at last week's CES (Consumer Electronics Show), it would appear to be quite possible that the market for digital rights is going to become extremely diverse and based on many different types of non-exclusive exploitation. Are agents capable of handling this kind of fast moving market? Is your typical literary agent capable of identifying and negotiating deals with dozens or scores of technology partners? How many literary agents were at CES in Las Vegas last week? Not too many, and few literary agents are comfortable in evaluating technology propositions.

Perhaps agents should get used to the idea of granting all digital rights to the book publishers they deal with on a non-exclusive basis, retaining the right to do non-exclusive deals themselves in certain circumstances. That way publishers and agents will all be working for the trade authors they represent. Just at the moment, it appears that a degree of paralysis and ignorance is ensuring that as few deals as possible are taking place. We are seeing the emergence of a new class of 'neglected exploitation' rights, somewhat analogous to the 'orphan copyrights' which lie at the core of the Google Books Search Settlement.

Broadening and Deepening the Exact Editions App Platform

The midwinter break seems to be getting longer. But we have been busy improving the Exact Editions App functionality in the last few weeks.

There have been some important changes in the way we view Apps. The first big change is that the Exact Editions App platform now supports full issue sync-ing to the iPhone. The sync-ing is only possible in a WiFi zone and it happens in the background, automatically whilst you are using WiFi. The sync will only work for the 'most recent issue' for a periodical (if it happened for everything iPhones would soon be full of back issues). This development was strongly requested by early users of the Exact Editions Apps and it has been warmly welcomed. The change has three important consequences:

1. Subscribers can read the current issue of a magazine anywhere on their iPhone (no need to be connected to the web, so great for tubes and airplanes).
2. Reading of a sync-ed issue is significantly faster and smoother. You have to be in a very good web environment (eg 4G) to get such a fast response from an un-synced App.
3. An incidental benefit is that a subscriber whose sub has ended, will still have access to the last issue of the subscription, even after the term of the subscription. This has obvious benefits for the subscriber, but it also makes 'trial' or 'free' Apps more attractive, when the trial has ended the sync-ed issue is still there.

The Music Week App which we released yesterday, was the first to be launched with single issue syncing from the 'off'. Apple have also been making some subtle shifts in the way they manage/control the App Store. And a couple of these changes have also had some bearing on the way we think of Apps for magazines. A very important improvement has been that Apple are now more comfortable with developers offering in-App purchasing from a free App. This has huge potential for magazine publishers (who have always used the free issue as an incentive for print subscribers). Another subtle shift is that developers are now advised against offering subscription services for a period of only a week (30 days is OK). Since all of the magazines that we have launched have used the 'low priced' one week sub as a way of seeding the market and encouraging early adoption, this presented a slight problem for Music Week (which is a high value professional publication). So, with a last minute change of guidance via the approval process, and a fast moving decision from the publisher (who liked the idea of offering a free taster for their premium service) we were able to quickly introduce the concept of a free preview. Within a day of launching the Music Week App we were also able to offer a free App which provides users with almost all the functionality of the full publication -- but on a delayed basis. The issues available for free are four or more weeks out of date.

PaidContent today had a premature piece on the Music Week App where the journalist got this story almost backwards. The last minute change alluded to was not a matter of 'rethinking' on prices, but of fast moving development to offer a 'free trial' something which had not previously been possible with the Exact Editions technology and the Apple e-commerce rules. This was a case of 'instant development' not of 'indecision'. A lightning advance not a hasty retreat. We expect all our magazine Apps to adopt the same taste-before-you-buy approach in future. The response to the Music Week App has so far been very strong. More than encouraging: confirmation. Free Apps to paid for subscriptions is the way that magazines will work. That is the story that PaidContent needs to take a look at.