Joe Wikert's DisruptorFest

How Magazines & Newspaper Publishers are Training Me

The iPad is now more than 3 weeks old and there are apparently 1,000+ apps available for it (plus the 180K or so iPhone apps you can run on it).  If there are a thousand iPad-specific apps out there I haven't discovered one tenth of them; I just keep seeing the same ones over and over again in iTunes.  Even with that many apps available there are two areas I feel are severely underrepresented: magazines and newspapers.

I've purposely avoided renewing all of my print magazines subscriptions for the past several months because I figured I'd switch them to iPad apps/subscriptions.  My plan hasn't worked so well.  I no longer get BusinessWeek, Fast Company or The New York Times, but none of them are available as apps either.  So what has this led to?

I now just bookmark all those magazine/newspaper web sites on my iPad and read pretty much everything I want for free.  The longer these publishers delay introducing an iPad app for their content, the greater the likelihood I will have moved on and won't ever buy it.  What a mistake.

The whole experience has also caused me to wonder if there's an opportunity for a whole new type of app.  Think of it as a combination of Fluent News and Offline Pages.  What I want is an app that automatically checks each of those magazine/newspaper sites and pushes me the full contents of the latest edition.  Without this sort of app I'm forced to do this manually, looking through nytimes.com, clicking on each article that's interesting and then hitting the "Save to Offline Pages" webmarklet that's installed on my browser.  Why make me go through all that effort?  Why not let me tell this new app what newspapers and magazines I want the latest from and deliver them to me?

Before you say that's what the RSS feeds are for think again.  Many of those feeds are partial.  They don't include the entire article or they make you click and go to their website to see their ads.  Fine, I'll look at the ads...but in the version that's cached in this new app I'm describing.

Isn't this ridiculous though?  These publishers are trying to control the flow and use of their content so they're forcing customers like me to come up with better ways of using it.  (Hey, that sounds a lot like the denial stage the music labels went through back in the Napster days.)  And btw, I'm a customer who is more than willing to pay for online access to this content, but by not providing apps these publishers won't let me!  These are the same publishers, at least on the newspaper side, who constantly complain that Google has stolen their IP.  Google hasn't stolen anything.  And if the publishers don't get wise to the rapidly growing iPad platform they'll probably see someone else swoop in and steal the app revenue opportunity they're currently ignoring.

Payment Models

I thought the micropayment model was dead.  Back in the '90's and early 2000's it was simply too much of a hassle to pull out my credit card for any one- or two-dollar transactions.  Then came iTunes.

Now I'm amazed how quickly I'll make a 99-cent purchase.  Part of the reason is the seamless way iTunes is integrated into the overall iPhone/iPad ecosystem.  Apple has created a model where payment is too temptingly simple.  Amazon may have patented one-click payment but Apple is perfecting it.  A quick check of my recent AMEX statement shows I paid Apple more last month (for mostly sub-$5, including a large number of 99-cent, transactions!) than I paid Amazon.  That wasn't the case 6 months ago.

There's still a huge difference between grabbing a free app and paying for one, even if it's only 99 cents.  I'm still pretty stingy here and I want to feel confident I wasn't snookered into paying for something that's not even worth a dollar.

The problem in the book publishing world is that we haven't found a good content model for the sub-$5 purchase.  Customers don't want to buy chapters, so don't kid yourself about that model.  And sure, you can do the quick-and-dirty print-to-e conversion and sell it for a fraction of the print price, but that's not much of a future.

We need to create more product entry points that appeal to the masses with low initial prices that offer a great value proposition as well as upsell opportunities for additional irresistible content and/or services.

What can we learn from other experiments in the app world?:

• First, don't assume the quick-and-dirty p-to-e conversion model is more viable just because the iPad offers a large, full-color screen.  I still refuse to pay $4.99 for a single iPad issue of Time, for example.  (You'd think the magazine folks would realize that's no way to attract new customers.  What about the free trial subscription to let me see what's special and get me hooked?)
• Second, and perhaps most importantly, think about rich content, not just quick-and-dirty conversions (see my earlier highly relevant posts here and here).  A chemistry textbook publisher creates this while a visionary creates this.  The former is a yawner while the latter, even as a fairly high-priced iPad app lures me in because it's so tempting to explore and discover with it.  Question: How many customers would describe your e-products with words like "tempting", "explore" or "discover"?
• Third, think about subscriptions, not just one-time payments.
• Fourth, think about selling the network, not just an individual product.
• And finally, don't ignore the advertising and sponsorship worlds.  Yes, I know many people say they won't stand for in-book advertising.  That's fine.  Offer two different versions, including the higher-priced one for those folks who won't tolerate the ads.

The Uber-Index

The Rich Content post I wrote back on March 29th keeps popping into my head.  I think our industry has spent way too much time trying to force-fit video and other types of content in with the written word.  Meanwhile, the real solution to rich content has probably been right here under our noses the whole time: the index.  Actually, what I'm talking about should be called an "index on steroids" or an uber-index.

For years publishers have generated those backmatter elements we've grown to know, love and rely on...the index.  Index specialists are charged with finding all the critical terms, synonyms and other entries then compiling them into one of the most important elements of the book.  Up to now those indexes have been static and almost exclusively focus on providing pointers within the book the where index appears.  In tomorrow's ebook, the uber-index should grow as more related content is available on websites, blogs, other books, apps, etc.

Liza Daly expressed a similar vision in this excerpt from an iPad-related interview she did with The New York Times about a week after my "Rich Content" blog post:

I see the consummate iPad reading experience to be one that is, on the surface, traditional: heavily textual, quiet, hand-held. But lurking beneath the words is the whole Internet, ready to be questioned — “Find other works that quoted this,” “Where was the Marshalsea prison?”, “Which of my friends is also reading this?”, “What is that attractive person across from me reading?”

None of that requires a publisher to “enhance” the e-book prior to publication. A truly modern e-reader is one that is intimately connected to the Web and allows a user to make queries as a series of asides, while reading or after immersive reading has ended.

So what this all means is that authors and publishers could continue to build books they way they've done for hundreds of years, but a new effort needs to be dedicated to the index itself.  Not the print index, of course, but the uber one that works within the e-reader.

Imagine an e-reader/app that lets you read a book in the traditional way but below the surface it offers smart links to all the related content and resources you could hope for.  As I mentioned in the 3/29 post, some of this could be automated but then it's little more than a set of algorithm-based search results.  I want something more and I'll bet you do too.

How about applying the wisdom of the masses to the problem?  Just as the Wikipedia provides encyclopedia-length entries on subjects far and wide, what if there were a community-based service that created nothing but the most relevant pointers to all the best content?

You're an expert in 70's music and you spend all your waking hours looking for the best sites, videos, interviews, etc., on the subject  Why not share your discoveries about Thin Lizzy and Mott The Hoople by adding to and helping curate the uber-index on these topics?  The uber-index would then be made available to e-reader apps so that when someone clicks on Glen Frey's name in Don Felder's (terrific!) book about The Eagles, Heaven & Hell, they'll immediately have access to a growing list of outside resources that confirm Felder's point that Frey was a complete jerk!

All of this functionality would be included, btw, with little to no work required by the publisher.  A utility would run the book's contents against the uber-index and generate all the relevant links.  You could do this when you buy the book or periodically as you're reading it, to make sure it's always up-to-date.

How about that?  An infinitely deep index, the uber-index, that dramatically enhances and extends the reading experience while preserving it at the same time.  Isn't that what we're all after?

P.S. -- Now take it a step further.  Are you familiar with the "Sponsored Links" area of the Google search results?  These are the links someone has paid to have included in your search results  Why not introduce a sponsored link section to this as well, where monetization can occur?  So when you pull up the menu for Glen Frey mentioned earlier it also includes a paid link from Amazon where you can buy his latest CD, if you're so inclined.  Click that link and the publisher/author get a cut of the sponsored link payment.  If a substantial enough AdSense-like ecosystem builds up around this it creates an additional revenue stream that could be shared by all parties.

In-Book Advertising

Apple's upcoming iPhone OS update will include an option for in-app advertising.  The iAd service is just the next step Apple is taking to beat Google in what will surely be a very lucrative mobile advertising market.

Does this represent an opportunity for book publishers and authors?  Absolutely.  Hear me out, even if you're one of those purists who insists on books existing as they always have, without ads...

Let's start with the fact that you could always sell two versions of your products: one with ads and one without.  The version without ads is priced higher than the one with the ads.  Test, measure, rinse, repeat.  Why wouldn't you want the opportunity to study real world data from your customers to see whether ads have an impact on product acceptance and sales?  The results might just surprise you.

Or, how about all those free samples you have floating around?  I'm talking about the excerpts you distribute in the hopes that you'll convert some number of browsers into buyers.  Your conversion rate is something less than 100%, so why not find other ways to monetize that experience?

This is yet another one of the Kindle platform's shortcomings.  Amazon never built a model content owners could leverage to drive some additional revenue.  They didn't offer it with books but I'm even more amazed that they never figured it out for newspapers and magazines, especially since we're all quite used to seeing ads throughout those products.

In case you haven't noticed, most customers feel ebook prices should be lower than print prices.  That pricing pressure alone should cause every author and publisher to experiment with services like iAd.  What have you got to lose?

P.S. -- If Apple is smart they'll build iAd into the iBooks app.  You'll tell them whether or not you want iAd service included every time you provide them with ePub files for your next book.  Hopefully they'll also let publishers try out that two-pronged approach where the book is available both with and without ads, at two different prices.

Amazon's Next Move

Let's say you're Jeff Bezos and you're heading into the office this morning.  It's the first day back to work since the iPad launch.  We're talking about the most significant gadget launch since, well, since the iPhone.  Suddenly the feature set of your ereader, the Kindle, looks pretty lame.  No color display.  No wifi connectivity.  Approximately 149,999 fewer apps than what the iPad supports.

What do you do?  My advice: Turn the Kindle for iPad app into the most exciting reader app in the industry.

You might have noticed that Amazon has released several "Kindle for..." apps up to now.  There's a Windows one, a Mac one, an iPhone one, etc.  They're all intended to complement the Kindle, not replace it...and that's the problem with the iPad version.

It only took a couple of hours of iPad use to realize I'll never touch my Kindle again.  Ever.  All my Kindle books are now on my iPad.  Do I mind that the iPad's backlit display isn't as easy on my eyes as the Kindle's?  No.  I read off that iPad display for about 10 hours on Saturday and my eyes felt the same as they did the day before.

And while I love the Whispersync technology Amazon uses to keep my place across devices, I really don't see myself reading books across devices now.  I can't put the iPad down.  I used to read a bit in bed on my iPhone but now I'll just do the same with my iPad.  The Kindle for iPad app is brain-dead compared to the iBooks one though.  Even the dictionary feature on the Kindle is missing from the app.  Then there's the glaring issue with no sample support.  That's right.  I can't preview Kindle books through the iPad app, so how do they expect me to buy anything from them?!  (UPDATE: I stand corrected.  You can download Kindle samples to the iPad app.)  Amazon has apparently also conceded the newspaper/magazine segments to Apple as there's no way to read your Kindle subscriptions through the iPad app.

As long as this app is nothing more than a bare-bones reader Amazon is giving me zero incentive to buy ebooks from them.  Why would I make my content investment in a dead-end technology when I could probably get the same title through the iBookstore?

So Jeff, resist the temptation to limit the functionality of the Kindle for iPad app.  Make it as rich as possible.  Make it extensible so that new types of content can be added to it.  Reach out to the community and see what features excite them.  Experiment and innovate!  Don't let it rot on the vine like the "Experimental" features have on the Kindle.

Kindle sales are already going to take a hit because of the iPad.  You'll continue selling to people who are convinced the Kindle offers a better reading experience than the iPad.  It doesn't though.

You can afford to lose the hardware battle but you really don't want to lose the content battle.  Focus on your reader apps and make them world class, OK?

P.S. -- The iPad is great but it's not without its flaws.  Click here to read the details of my first day with this very promising device.