So What is the Business Model?

In looking to the promising digital future for magazines it is essential that publishers separate out two questions:

1. What is the best consumer format for digital magazines?
2. What is the appropriate economic model for the digital magazine business?

These are very different questions. But the answers that we come up with are going to have a bearing, the one on the other. And vice versa. The magazine publisher has to get both right!

Over-simplifying wildly, there are currently three views on the appropriate format for digital magazines battling for the attention of the consuming public.

1. In some ways the simplest solution involves converting the magazines existing web site into an RSS feed which packages the contents of the web site for delivery in through a browser or an RSS aggregator. Many of the early magazine and newspaper apps were in effect re-packaged RSS feeds. In this view, digital magazines should aim at maximum topicality and a streaming delivery through which each story (or article) is delivered to the audience in a self-contained capsule, when it is ready and whenever it is updated, in a continuous flow. The RSS format has been leveraged and improved upon by Flipboard (Zite and Pulse are aggregators in the same category). This is a radical format change as a consequence of which the print magazine loses the 'rigidity' both of the 'issue' and of the 'page'.
   
2. More of a 'half-way house' is the trend to develop digital magazines which although they drop the 'integrity/rigidity' of the printed page, maintain the edition-driven, periodical, grouping of the dated issue. Magazines which are delivered as digital editions to the Kindle have this re-flowable format and step away from the pagination of the print magazine, they probably also 'lose' the advertisements which form a part of the print version, but they continue to adhere to the serial clumping of the magazine associated with a publication date, and temporal sequence in the magazine archive. We can think of these re-flowable digital magazines as similar to ebooks. It is no accident that magazines delivered through Amazon's Kindle (a dedicated ebook reader) have this structure. But there are plenty of similar ebook-like apps in iTunes. The Economist's iOS app is a good example.
3. The alternative model for digital magazine deployment, works from the supposition that consumers really want a virtual magazine. The digital magazine retains its print 'look and feel' with pages and settled issues, but the magazine becomes a virtualised object, at once familiar and flexible, browseable, searchable and linkable; a magazine which can be read on a mobile phone, a web-connected computer, or a tablet in analogous ways as the print magazine would be read as a physical product. Declaring an interest: this is the route to digitization employed by Exact Editions, but also by Zinio, and with some variations by Adobe. Commentators sometimes refer to these solutions as 'PDF magazines' or 'Page Turning' solutions/platforms, but such characterizations miss the point that virtualised digital magazines can be much more than mere replicas. Because they are virtualised replicas, they can have layers of additional purely digital functionality superimposed on the replicated structure. Obviously 'search', enhanced 'linkage' and integration with web services, multimedia elements and episodes can be stirred into the format and tablet-specific interactions work well on a digital object.
   

There really is no uniformity of opinion about which of these models for digital magazine delivery is the most suitable and attractive. Speaking for myself, as you might predict from my statement of interest, I have a strong preference for the virtual magazine model (type (3)), but I also enjoy Flipboard and can see why some readers may prefer an Economist-style app. We may also feel that the RSS magazine solution works better in the format constraints of a mobile phone, and in contrast the virtual magazine, which needs to handle fully designed pages, plays to its strengths within the scale of an iPad.

Consider this: if the best format for a digital magazine were a completely settled question, we should not be seeing so many experiments with differing formats and delivery services. It should also be noted that all three types of format are the subject of steady evolution and improvement: RSS-style, ebook-style, and virtualised page-based, digital magazine readers are all getting better. It is not as though the magazine industry has decided with a herd-like mentality that one digital format is clearly the winner -- whereas the book publishing industry, by contrast, appears to be reaching a consensus that ebook formats (such as for the Kindle or for ePub) are a settled choice.

Since there is a certain amount of confusion or disagreement about what digital format makes for the most pleasing and sustainable digital magazine experience, then it is hardly surprising that there is a lack of consensus about the appropriate business model around which magazine publishers should build their digital solutions. The problem here is that print magazine publishers (also printed newspaper publishers) have developed a twin track approach to revenue and profitability, through which advertising and sales (newsstand or subscription) both contribute. Magazine publishers are nervous about a digital future in which subscription sales would be the primary pillar of their magazine revenues. When a publisher looks at the digital distribution options for magazines in relation to actual or potential business models for a magazine business, the choices become rather constrained. The RSS model really has to be an advertising-led or even an exclusively advertising path for monetisation. The ebook approach clearly forces the pace on subscriptions, and since most ebook-style magazines actually drop the advertising component its actually inimical to the advertising revenue stream. Any play for digital magazines where ads and subs are driving the revenue line has to come up with a solution through which advertisements and subscriptions are working jointly through a digital medium. The virtual magazine looks as though it might carry this two track approach.

Ken Doctor, over at the Nieman Journalism Lab, has posted an intriguing analysis of the parallels between film distribution (as managed by Netflix) and the digital transition confronting newspaper and magazine publishers. In Doctor's view:

These economics of transition have a second, big piece for publishers that Netflix doesn’t have to worry about: advertising. With advertising accounting for 70 percent of newspaper revenues worldwide, the huge question for publishers is how much ad revenue they can make from purely digital customers. In the U.S, newspaper publishers know they make more than $500 a year on a Sunday print subscriber. With reduced digital product cost (like Netflix’s reduced cost of streaming), newspaper and magazine publishers won’t need the same level of revenue, but they will need a substantial part of what they are getting today. Those economics are just being modeled now in 2011, as the promise of higher-priced and higher-value tablet (and smartphone) advertising looks like it may be real and buildable.

Magazine and newspapers aren’t yet ready to more forcibly shift the audience in the direction of digital-only. The Newsonomics of Netflix and the Digital Shift.

Doctor reckons that the periodical business has perhaps one to three years to prepare for an accelerated shift to digital. I am not sure about the higher-priced and higher-value tablet advertising metrics that Doctor discerns, but from the rate at which iPad subscriptions are motoring there is a growing perception that the digital shift with magazines has certainly begun and it is subscription led, and iPad shaped.

Jazzwise a new app with Bonus Media

We have a new app in the iTunes app store with some cool bonus media. I have also been experimenting with Google+ and Webdoc (first impressions: very useful and cloud-based) to see how we can give a few glimpses of the magazine apps that are coming through from us in increasing profusion.....

Some screenshots from the Jazzwise app. There is some music in the magazine app, but I have used the Webdoc tool to grab a fragment of Archie Shepp and Joachim Kuhn.

Disruptive Paradigms

There is a fascinating confusion now reigning in the higher reaches of the Microsoft empire.

Steve Balmer and his team are convinced that tablets should be viewed as PCs, and that there is no need to put a mobile operating system on Windows tablets ("iPads and tablets are just a different form factor of PC"). They appear to have completely misread the reasons for the success of Apple's iOS and its iPhone and iPad devices. As Horace Dediu notes:

Summed up, the real challenge for Microsoft is whether they can keep their business model (selling OS licenses to hardware vendors) as PCs become more device-like. Not only is iOS setting the benchmark for performance but Android is potentially ready to take share if the market turns slightly more modular. Microsoft’s differentiation looks to be primarily its legacy of PC software. Asymco: is the tablet computer a new PC or Post PC?

Horace Dediu clearly thinks that Microsoft are completely missing the point of the shift to a Post PC model of computing: deep integrated development from hardware through system software to applications; a new model for developer engagement; and novel challenges for manufacturing and distribution in which incredibly high levels of device standardisation and reliability have to be met. All of this Apple gets, and Microsoft apparently does not get it. They are stuck with an outmoded paradigm and it is preventing them from engineering a competitive challenge. Microsoft will not build a competitor to the iPhone or the iPad because Microsoft thinks that its future lies, as its past successes have lain, in licensing its desktop operating system (and a separate mobile operating system) to manufacturers. Microsoft will not be competitive because Balmer does not want to be in that competition to build an integrated device that works across all device formats and layers media on applications, on transaction engine, on operating system and finely engineered and integrated device. And it may already be too late.

These shifting paradigms, are everywhere in the technological landscape. The shift from a PC oriented workstation to tablet and sundry mobile computing devices is just a particularly extreme and decisive example. I think we can see another disruptive paradigm shift working its way through the British newspaper industry this last week. The abrupt closure of the News Of the World was an extraordinary and rather shocking event. But as the ongoing fallout shows the real damage that is being done to the newspaper business is self-inflicted. The News of the World was paying bent investigators and cosying up to policemen because the business managers believed that it was only by delivering a stream of edgy/dodgy stories that they could persuade people to buy the paper. As the (mostly digital) competition got fiercer the methods became dodgier. Newspapers are hoping that their old business model can be replicated digitally, and they are not confronting the deeper problem which is that the package of business strategies and features that supported newspapers 10/15 years ago is no longer going to work (exclusives, classifieds, daily editions, ABC audits, bulk deals, tombstone ads, stock price listings).

Some magazine publishers are also desperate to hang on to the old business model in the hope that it will continue to work. Jan Wenner the founder, owner and publisher of Rolling Stone is such and had an alarming interview with AdAge a few weeks ago.

Ad Age: What's your take on selling magazines on the iPad and other tablets?

Mr. Wenner: It's the same pretty much as I've said about the web. The tablet itself is a really fun device. Some people are going to enjoy it a lot and use it. Some people aren't. On this plane one person's traveling with a tablet, one's not. There's a certain trendiness to the thing. And it's a great thing. But is it a good magazine thing?

It's a good magazine reading device, absolutely. And where it becomes more convenient to read the magazine on that, that's got the advantage. But that's more convenient only if you're traveling, if you're away from home. Otherwise it's still easier to read the physical magazine, which is widely available on newsstands, at airports, and everywhere. You can still subscribe to get it and get it on time. You still get all the value of the magazine.

I don't think that gives you much advantage as a magazine reader to read it on the tablet -- in fact less so. It's a little more difficult.

From the publisher's point of view I would think they're crazy to encourage it. They're going to get less money for it from advertisers. Right now it costs a fortune to convert your magazine, to program it, to get all the things you have to do on there. And they're not selling. You know, 5,000 copies there, 3,000 copies here, it's not worth it. You haven't put a dent in your R&D costs.

So I think that they're prematurely rushing and showing little confidence and faith in what they've really got, their real asset, which is the magazine itself, which is still a great commodity. It's a small additive; it's not the new business. (Jan Wenner interview with Nat Ives in AdAge, May 30)

Wenner is a smart publisher but he is too much like Steve Ballmer and he is failing to grasp the opportunity that a new paradigm will give him. He wants to carry on selling double page spreads for $60,000+ dollars to big brands ("They're going to get less money for it from advertisers."), as Ballmer wants to keep on selling $40 Windows licenses to laptop makers. But that may not be a feasible opportunity for a digital magazine. The iPad at least is shaping up to be a good proposition for selling subscriptions to magazines, but there is no guarantee that it will be as attractive to high-spending consumer brands and their advertising budgets.

I hope that Jann Wenner takes a closer look at the way iPad subs are working. Some magazines are making real progress on the iPad, and the simple truth is that you need to sell 3,000 copies, and then 5,000 copies before you can sell 50,000 and then 100,000 subscriptions. But selling copies is not the point, gathering iPad eye-balls is not really the point either, selling subscriptions is. Subscriptions can be and will be repeat business on the iPad. They will be a phenomenal business, outstandingly profitable for Apple and also a very good business for magazine publishers who have lots of advantages when it comes to selling subscriptions. Their product is a periodical (so repeat business is 'built in'), their product appeals to highly identifiable consumer niches, they already know how to sell direct to consumers (contrast with book publishers, music publishers and TV producers), their product can be delivered through multiple channels (including print). Consumer magazines are finding one part of their business (advertising) sorely disrupted by the internet and digital devices, but another strand to their business (subscriptions) appears to be ideally placed to work through the iPad and other tablets. Go for it!

Apple's Mega Newsstand

At its World Wide Developer Conference at the beginning of the month, Apple introduced iOS5, a close integration with Twitter and its plans for a Newsstand within iTunes. There was a brief overview of the Newsstand service in the presentation and this mention in the Press Release:

Newsstand is a beautiful, easy-to-organize bookshelf displaying the covers of all your newspaper and magazine subscriptions in one place. A new section of the App Store™ features just subscription titles, and allows users to quickly find the most popular newspapers and magazines in the world. If subscribed to, new issues appear in the Newsstand and are updated automatically in the background so you always have the latest issue and the most recent cover art. Apple Press Release, June 6, 2011

There is quite a lot yet to be decided about the precise shape and operation of the Newsstand but what we know looks promising. We know that its coming in the fall, which means that it must be near completion; we know that it will enable background downloading; and that it will present the front pages, front covers, of newspapers and magazines in a more topical and attractive way. We know that Twitter will be available as an omni-present system-call in the new iOS. We also know that Apple's newly introduced in-app subscription process, with automatic iTunes renewals is working well, many mainstream publishers have announced that they will support it. This is a separate but important development. We also know that Apple has relaxed its previously announced, but over-restrictive policies on pricing of subscriptions "outside" the App store. Apple will not be 'leaning over' and requiring publishers to charge no more for digital subscriptions on the web or on Android than they charge within iTunes. Apple is loosening up a bit.

This really could be the very best news for the digital magazine and newspaper industry. Here is why:

1. Apple sold nearly 20 million iPads in the year to April 2011. We do not know how many they will sell in the second year, but it seems reasonable to expect a very large number. Another 50+ million units seems probable. Three years after its launch the iPad could certainly have a 200/300 million installed base. That is scale.
   
2. Apple has decided to bring some marketing and retailing focus to periodicals within iTunes. This is what the Newsstand announcement really amounts to. Apple will arrange focus and in-store presentation and highlighting. It is as though Tescos or WalMart announced that they were going to have a big newsstand kiosk in a prominent place within all of their retail outlets. The Newsstand will be a sales focus and it will attract masses of titles. Since periodicals have never been aggregated and retailed at remotely comparable scale, it is quite hard to envisage the potential for a newsstand which has tens of thousands of titles in all the main languages. Apple would only be doing this if it considered that newspapers and magazines could be a big category. Apple is building a platform from which it can sell billions of news and magazine subscriptions.
3. It would appear that Apple will be going for a very 'format' neutral Newsstand. Apple has not said that all magazines and newspapers should have a specific file format, as happens with iBooks. It has not said that newspapers and magazines should or should not be 'interactive', though it seems certain that interactivity will be there (see most newspaper apps). This is ingenious because it allows/encourages publishers and developers to experiment with different sorts of delivery format. Apple is offering a sales platform, a payment platform, a cloud-based delivery and access platform. But it is not dictating the format or precise implementation of magazine services. This is ingenious in two directions. It encourages publishers with the advantages of a genuine platform (scale in distribution, and simplicity in payment and licensing for customers) but does not constrain publishers or developers in the services that they may offer. The platform does not appear to constrain the potential for innovation and diversity, except perhaps that these periodicals will of necessity have issues and front pages (even that limitation may be negotiable). Since magazines and newspapers have extraordinary diversity in their appeal and in their production processes, this is a masterstroke for Apple. And it is also clever in a second way since it enables Apple to be quite agnostic about how magazines and newspapers should be delivered. Apple does not have the heavy responsibility of managing content and dragging timely editions from publishers' workflow. Apple allows innovation within the iOS guidelines and will benefit (to the tune of 30%) from not having to do the experimentation or day to day content management on their publisher's behalf. Apple does not even expect to host the titles (as it does for iBooks).
4. Publishers will complain about Apple's 30%, and although I have some sympathy for the complaint, one notes that Apple's recent loosening of its pricing rules, has given publishers an enormous opportunity. Magazine publishers especially. Magazines know how to sell subscriptions to consumers. They have been doing that for years. Magazines have a business model which encourages them to sell direct and they should certainly use that to build direct relationships with their subscriber base. But they should also welcome Apple as the cornerstone of their digital promotion. Apple is not telling its book publisher partners or its music industry partners that they should sell direct. Furthermore, there is little chance that Jeff Bezos will echo Steve Jobs when he said: “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.” (Apple Press Release, February 15, 2011) Replace 'Apple' by 'Amazon' in that sentence -- and I am not sure that Jeff Bezos would even recognise it as grammatical, he would certainly stumble if it were included in the Kindroid press release.

There is only one thing clearly wrong with the Apple, iTunes, Newsstand as far as I am concerned. Do you think there is any chance that they could move away from that rather corny idea of presenting magazines on a pine bookcase? Would it not be better if the Newsstand felt more like an Apple retail store? Not pine, but steel, marble and clean, abstract lines. Putting tens of thousands on pine book cases makes no sense at all.

Now that Apple Owns the Tablet Space .....

When the iPad was launched, there was a widespread view (and I shared it) that soon, and not more than a year or two later, there would be some highly competitive and lower-priced tablet alternatives for customers to choose from. The iPad had opened a new hardware category, but competitors would quickly crowd into this new opening... there would be lots of choice and most of it would not be for Apple hardware.

Whilst dissecting a review of one of the best Android competitor's to the iPad, Marco Ament notes:

Translation: Android tablets have managed to copy the iPad’s hardware well enough — the easy part — but have failed to provide good software and significant third-party app choice — the hard part. The Android Tablet Problem

For any 'head-to-head' competitor tablet to get into the market for a face off with the iPad there is the possibly insuperable problem that the new tablet lacks a coherent body of developers and of tablet-primed media. Apple has been building its iOS developer community and media resources for four years (arguably more). Apple has huge momentum and capability behind its iOS platform and this cannot be matched by any competitor. I don't think that a 'head to head' competitor to the iPad can emerge in the next five years. The competitive threat if it comes, will be from a completely new approach, an external threat not a mid-size device like the iPad. We should look to a paradigm shift as radical and disruptive as the iPhone/iPad surge that Apple has produced to disrupt the mobile phone and the laptop computer.

Harry McCracken reviews the state of iPad competition and concludes that it is very hard to see why anybody in the market for a tablet would buy something other than an iPad 2.

And yet no Apple competitor has started selling anything that clearly answers a fundamental question: “Why should somebody buy this instead of an iPad?” Sure, it’s easy to point at specific things that other devices do better (or at least differently) than the iPad, and some of the people reading this article can explain why they chose another tablet and don’t regret the move. (If you’re one of them, please do!) Still, sales figures for tablets show that when consumers compare the iPad to other choices, an overwhelming percentage conclude that the iPad is the best option. ....Instead of an iPad (Technologizer)

If the 'competitors' to the iPad cannot emerge now, a year after the first iPad was launched, why should it be feasible that the direct competition will be stronger in a year or two's time? The iPad eco-system is getting richer and stronger at an amazing rate and that is the problem any direct tablet competitor faces. The fundamental point about the iPad and the iOS range of devices is that Apple is not really selling a hardware solution; Apple is offering a software and services solution, and it is the whole package that customers are buying into. This is something which no competitor to Apple is plausibly positioned to challenge. Not Microsoft (they don't really do manufacturing), not Google (they don't truly understand selling), not Amazon (who are best placed to have a shot at it, but do not have deep consumer-device engineering DNA).

We will come back to Amazon in a minute. But first let us consider what are the consequences of Apple owning the tablet category for the next three, four years -- by which I mean that Apple has a good chance of being the supplier of most of the tablets bought for the plan-able future.

1. Apple will sell a lot of iPads and will certainly offer a modicum more choice (high-end, low-end, high-res, medium res). Moore's law says that Apple should be able to produce a sub $200 iPad for Christmas 2012. Apple will do that.
   
2. The degree of device choice will be constrained by the requirement that as many apps as possible should run across all iOS devices. So no new aspect ratio, but quad pixel density. The coherence and interoperability of the range of iOS devices is already another source of lock-in. That gets stronger as the differentiation within the range is gently increased.
   
3. The lead that Apple has in the deployment of apps for tablets will grow. Enormously, and become even more of an obstacle to 'internal' disruption from iPad-like competitors.
   
4. Android, or maybe Windows, phones may well provide very strong competition at the 'low end', at the small format end of the market. There will be plenty of apps for non-Apple phones. These non-Apple phones will also be well-placed to produce competitive applications which are not tablet-sized and which do not necessarily require the full range of touch interface.
   
5. Apple's competitors will increasingly throw their weight behind web standards and 'open' technologies.
   

Amazon already has the Kindle platform and has sufficient strength in books, music, film and periodicals to mount a competitive challenge to Apple with its likely Android tablet -- they need to launch it soon or Apple will own the holiday season device market in 2011. Amazon may be able to launch a somewhat credible Kindroid alternative to the iPad, but I think Apple has played a very clever move here in the last couple of weeks. It relaxed its e-commerce terms so that the soft Kindle can stay on the iPad/iTunes platform. This might have looked like a concession to Amazon (and to the millions of iPad owners who run the Kindle app on their iPad) but it was in fact an astute and decisive blow to the hardware side of Amazon's business. Not having your Kindle library on the iPad would have been a decisive reason for many Amazon customers to switch to the Android tablet that will soon be launched by Jeff Bezos. Now there is no compelling reason to buy the Kindroid, no reason not to buy the iPad which will hold your library. Apple will not be getting 30% from the sale of Amazon ebooks, but those books can be used on iOS and Apple's selection of music, film and apps is so much better than Amazon will be able to offer on the Kindroid. Apple will not be letting Amazon deploy film or music apps within iTunes either. So who has the upper hand in that trade? Apple never actually applied the e-commerce rules that it has just relaxed (they were meant to come in force at the end of this month). Perhaps they were told by lawyers that the proposals would attract monopolies sanctions, but rescinding/withdrawing them now was a stroke of genius and a sign of confidence. When push comes to shove, Apple owns the tablet space and there is not a lot that Amazon or anybody else can do about that.

Is Twitter Becoming the Web's Intentional Layer?

Intentionality is a philosophical term of art, and it refers to or 'points to' the directedness or aboutness of much of our mental and linguistic activity. Of much of our action. But 'intentionality' has also been used by web commentators, John Battelle, for one, when he considers the extent to which Google is striving to build a method of search which captures the user's intent and which is at the same time harvesting and modeling intentions and desires:

The Database of Intentions is simply this: The aggregate results of every search ever entered, every result list ever tendered, and every path taken as a result. It lives in many places, but three or four places in particular hold a massive amount of this data ......... This information represents, in aggregate form, a place holder for the intentions of humankind - a massive database of desires, needs, wants, and likes that can be discovered, subpoenaed, archived, tracked, and exploited to all sorts of ends. Such a beast has never before existed in the history of culture, but is almost guaranteed to grow exponentially from this day forward. John Battelle The Database of Intentions, 2003 -- [at that time Battelle gave pride of place in his blog to Google, MSN and Yahoo. I think now he would pick Google, Facebook and Twitter, possibly Amazon and Apple].

My intuitive 'internal model' for thinking about the web is of a constellation of HTML, of piles of content; comparable, and yet exceeding, the largest libraries. But the web is also and quite distinctively a constellation of links, hyperlinks, and these links are intents. Every hyperlink is itself an 'intentional act', a referential act that is also digital, an act that annihilates distance and short-circuits context and time, taking us instantaneously, magically, to the target of the link's intention. Every link that our finger points to on an iPad is the shadow of the intentional act of the author of the link, and the harbinger/blueprint for the intentional act of each user who follows the link. Viewing the web not so much as a static docuverse, but as a dynamic aggregation of usage and process, the intentional power of the web comes from the way it charts and shifts the attention, the intention, and the focus of its users. Google is as much an instrument for choice and for cognitive intent as it is also an engine for search. However there is a case for treating Twitter as a special case, as especially pure and nakedly intentional. Tweets are all about links and intentions and Twitter is building a massive intentional superstructure through the discourse and activity of Twitter users. There are at least three sources for Twitter's pervasive intentionality.

1. Twitter's atomicity. Twitter's brevity hones the sharpness of a tweet's intentional aim. The 140 word limit forces directedness in tweeting. The character limit requires that the user targets with precision and clear reference the subject that is being tweeted. For a medium with such a narrow bandwidth, Twitter has been extraordinarily effective at finding ways of lassooing content with precision. Think twitpic and bit.ly. A picture may be worth a thousand words, but you do not need a thousand words to reference a picture in a tweet. It is not possible to say everything in a tweet (Godel's theorem and The Whitsun Weddings are just too subtle and long), but there is no practical limit to the stuff that one can refer to or touch on with a tweet.
   
2. Twitter's asymmetry. Twitter in a deep way echoes the topology of the web, with the asymmetry of the follower/followed relationship matching the asymmetry of the hyperlink (that which is linked to often does not link back; just as I am more likely to follow Stephen Fry than he is to follow me). This asymmetry leads to a much more interesting network than the symmetrical relationships that were at the starting point of Facebook and Linkedin. Twitter piggybacks on the topology of the web (any url can be linked to as can any place on a Google map) but we should notice that it also escapes the web, since a good deal of Twitter activity takes place without the web, in apps, on SMS and mobile phones. Twitter's capillary vessels can run through the web, but they also allow us to wander off into digital by-ways that are beyond the web. This gives scope for broader digital intent and for a layer of crisp intentional communication which is not bound to the web, though it uses it.
   
3. Twitter's syntactic devices. Twitter has a repertoire of formal devices which allows users to harness and amplify the intentions of others. The 'follow' relationship is a primary mechanism of amplification, since the tweeter with a large audience is like a speaker with a megaphone. Following is certainly not the only basis for collective action in the Twitter domain. Users have plenty of other devices for amplification and message modulation: 'retweeting', recommendations, Twitter lists, locations, and hashtags are all mechanisms that enable and allow the Twitter user to deploy collective intentionality. It might be better to say that these are mechanisms that allow users to participate in collective intentionality in a new and inherently digital way.
   

We should be careful not to give excessive focus to Twitter -- which is just the epitome of many other social internet technologies that enable us to share and focus desires, perceptions, references and approval. But Twitter's pure and naked intentional quality defines its usefulness and attractiveness. There are rumours that next week will see Apple announce that iOS 5 will support system level calls to Twitter. If that happens we will see less talk about the iPad being merely a lean back device.

The Google Books Mess

There were a couple of tell-tale signs last week that Google may be having some pain and problems with its vastly ambitious Google Books project. First, was the news that Google was pulling the plug on its corresponding, open-ended, plan to scan and database masses of historic newspaper archives. Second a report that Google was diverting all its programmers from its eBookstore and perhaps not vigorously pursuing plans selling eBooks.

The problem that Google has, is that there was huge momentum within the company towards its grandiose plan for a comprehensive universal digital library and this vision, with its accompanying class action settlement [ASA or amended settlement agreement] was decisively stopped in March by the opinion of Judge Chin (USDC SDNY)

While the digitization of books and the creation of a
universal digital library would benefit many, the ASA would
simply go too far. It would permit this class action - - which
was brought against defendant Google Inc. ("Google") to challenge
its scanning of books and display of "snippets" for on-line
searching - - to implement a forward-looking business arrangement
that would grant Google significant rights to exploit entire
books, without permission of the copyright owners. Indeed, the
ASA would give Google a significant advantage over competitors,
rewarding it for engaging in wholesale copying of copyrighted
works without permission, while releasing claims well beyond
those presented in the case. (Opinion 22 March 2011)

Chin's decision is styled an opinion, and it might yet be appealed or revised, but most observers would tell you that it has pretty well stopped the Google project in its tracks.

Google has got a lot of figuring out to do:

1. Google is not out of its legal woes, although such a rich and powerful company can probably stall or out-manoeuvre the authors and publishers who are parties to the original suite in the USA. Yet Google will need some resolution to the case or it risks enormous damages for breach of copyright ($3.6 trillion according to one scholar).
   
2. Google will not find it straightforward to avoid legal actions in other jurisdictions. It has ongoing legal woes in France, and if some French publishers win substantial damages, many others will charge through these same gates.
   
3. Google is continuing to scan without permission millions of works which are not out of copyright on behalf of its library partners. So the liabilities grow.
4. Google will be required to deliver digital library services to some of its core collaborating libraries. The libraries of Michigan and Stanford in particular. To the extent that these services depend on copyright works digitized without permission Google remains at significant risk.
   
5. There will be increasing concern about advantages that may accrue to Google from the works that it has already scanned and databased, and which it may use in ways impervious and invisible to external actors. Perhaps Google will gain enormous advantage in the fields of search, automated translation and semantic technologies through private access to vast amounts of unregistered, unlicensed, copyright material. That putative advantage creates legal risks for Google from competitors and regulators.
   
6. Without a recognized and legitimized settlement Google cannot deliver services of general public benefit, and at some point Google loses good will. Without a settlement Google cannot even be generous.
7. Google has plenty of agreements with publishers and authors for the distribution, display and potential licensing of millions of copyright works. So it could be an active participant in the eBooks market, but it has been strangely hesitant and stuttering in recent years about its commercial activities. Almost certainly because Google's lawyers are anxious about the way such commercial exploitation may play against the unresolved matters in dispute. If Google carries on havering it will lose its opportunity in the digital books market, much as it appears to be losing its opportunity in the market for digital music.

I am not sure that Google has an easy way of stepping out of this mess. But it needs to find, or create through disruptive action, some solution.

The original goal of a universal library designed, built and maintained by a single technical player was hubristic and naive, driven by the enthusiasm and commitment of the founders (Page in particular who felt that he owed a debt to his alma mater, the University of Michigan). Google's best hope now would be to distance its involvement from the prospect of private gain and to place all works not public domain, and not explicitly licensed to Google, in the sole care and control of the public academic institutions from which the original works were taken, and to renounce any commercial advantage through its involvement in converting 'orphan' works. Google will have to pay the authors and publishers something (if only to cover some of the legal bills, that will otherwise be pursued to the bitter end on a contingency basis by the other side), it can afford to finance the first blocks of a Rights Registry, but it should be more open and more public, more consultative, in part foundation funded, than the original design. Google does not need and should not look for special advantages on rights and forward-looking business models. If Google were to do that it could help to promote the cause of orphan works legislation in a disinterested manner. Google needs to get legitimate, beyond all shadow of doubt, fast.

Google often likes to play the 'open' card, but it has been far too closed and 'private' over its books project. It needs to rethink the game-plan and its style of involvement. That way it will retain the good will of the library community and the reading public. By being highly generous and public spirited it looks after the interests of its shareholders also. Page is now CEO and he may need to bite on the books bullet and own up to a change of course, only be being much more open and generous can Google hope to make something like the Google Books project a reality.

Too many Hoops for Hulu for Magazines?

Next Issue Media has launched a 'Preview Service' with seven magazines sold on subscription or as single issues. Next Issue Media has been called the Hulu for magazines and is the creation of Condé Nast, Meredith, Hearst, News Corporation and Time Inc. Only seven magazines currently feature in this Preview Service, but they are top drawer items: The New Yorker, Popular Mechanics, Fortune, Esquire and Time etc. The consortium is advancing on a narrow front both in content selection and in delivery channels, and at this point only the Android operating system, but no phones, and the only tablet device is the Samsung Galaxy Tab. Narrower still: since at this point the magazines are only available via the Verizon WiFi service and an app in the Vcast (Verizon) app store. But more magazines and more channels are promised for the autumn (more details at MediaMemo -- Peter Kafka).

There are plenty of difficulties in running consortia, and I take my hat off to the NIM team for getting something out of the door when all the backing companies will inevitably have very different views on how the terms shall be crafted, and wary of precedents being set. Perhaps for this reason they are at this stage offering 'monthly subscriptions' and 'single issue purchases'. Supporting two very different access/license models indefinitely could get very complicated. Its also complicated for consumers that, depending on the title, 'existing print subscribers are eligible for a free or discounted digital upgrade'. If a subscriber to two print titles gets free access to the New Yorker but has to pay a digital upgrade for his sub to Popular Mechanics, NIM's customer support lines will soon be red hot. Building a system that manages all this reliably, will not be a trivial undertaking. And the consortium will lose its way if the magazine access model is not standardised across all the titles served, when 100s of magazines are on offer. Allowing publishers to set the price of their services is one thing but allowing the publishers to set different access models and subscription rights is fraught with difficulties.

It is going to be a challenge for this Hulu for magazines to achieve the Hulu-style popular momentum that they will need to secure the continuing support of their backers. But they do have a chance, because their backers are strong media players, all with an interest in maintaining some leverage over other players who will be driving digital consumer acquisition. Having a 'tame' Android platform with some market penetration will be useful for all these publishers. But consider the range of devices that Next Issue Media will be playing with or against. These will include:

1. Apple for the iPad (in pole position)
2. Apple for the iPhone (not to be overlooked as its a somewhat different delivery proposition)
3. Amazon for Kindle
4. Amazon for soon to emerge Android App store (and likely Amazon media-consumption Tablet). Amazon may have several tablet form factors.
   
5. Barnes and Noble magazines on Nook and next generation Android tab
   
6. Android app store (ie the Google managed app store, with flavours for several levels of Android phone/tablet). Lets call this 6a, 6b, 6c.....
   
7. Blackberry Playbook platform (with its own set of 'Android' complications)
   
8. HP Web/OS (Next Issue Media say that they will support this before the end of the year)
9. Nokia/Microsoft tablets when they come...

We have at least nine different platforms right off the bat, and the chances are that there are several more, some with a significant spin that we don't know about yet, that could play a part in the digital magazine market next year. Who says strategic planning for digital magazines is a straightforward business?

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.