“When Steve Jobs, Apple chief executive, unveiled the iPad late last month, the big question among media executives was how it would transform their businesses,” Kenneth Li reports for The Financial Times. “Now they have at least two answers and a tangle of fresh questions.”
“Apple scored an early hit with the debut of an online bookstore to accompany the arrival of its digital tablet, in the process rewriting the economics of the e-book industry. But the device’s ability to transform other media segments will be more challenging,” Li reports.
“Apple answered one question by acknowledging that it wanted to go beyond the iBookstore that Mr Jobs unveiled last month and construct a well-stocked online shelf of newspapers and magazines, according to executives,” Li reports. “Discussions about selling publications through the store have stumbled on key issues.”
“Mr Jobs, who looked ‘much healthier in person’ than he did on stage a week ago, according to one publishing executive, and whose health has been the subject of speculation in recent years, spent the first week of February courting publishers and the news media in New York,” Li reports. “Over three days, he met executives and reporters at the New York Times and News Corp. He had private meetings with Rupert Murdoch, chairman of News Corp, and about a dozen editorial leaders at Time Inc, including Ann Moore, chief executive.”
“Mr Jobs articulated his belief that a ‘functioning media’ is vital to a ‘functioning democracy’ and how his ‘gorgeous’ device would help safeguard that role. ‘It sounds good to hear that from someone who’s making that kind of money that what you do is invaluable,’ says one person with knowledge of the meetings, ” Li reports. “Still, Mr Jobs has been unable to shake off the suspicion among publishers that what he terms the ‘the most important thing I’ve done’ could also come to represent the most important issue publishers will have to deal with in their careers.”
Li reports, “The question haunting publishers is whether they will suffer the same fate as the music industry, which was hit by Apple’s 2003 deal to unbundle the album format by offering downloads of individual songs via iTunes.”
Full article here.
MacDailyNews Take: Pop, Rock, Country, Hip Hop, etc. music naturally breaks down into the smallest salable unit: The song; otherwise known as a “Single,” which predates the “album.” Magazines’ and newspapers’ smallest unit is the edition, so — since we highly doubt and haven’t heard that Apple is proposing micro payments for individual articles — there is very little similarity to the music business. Apple simply took the music industry back to where it started: Single songs, before the bundle the industry dubbed “the album” was developed to get more from you for less. It’s up to the music industry to adapt to a business model in which the customer has regained their rightful power to pick and choose, not be forced to buy a $16 plastic disc in order to get the one or two songs they actually wanted. Simply put, music industry, make better songs and you’ll sell more music. Also, you do not need to collect songs for a year or two until you have 12-15 of them. That’s outdated thinking. Now, you can release songs as they’re finished (as some, but not enough, artists have already learned).
Also, unless Josh Quittner is capable of selling out Madison Square Garden for people to listen to him read his own TIME Magazine articles (and buy the t-shirt), we’re quite certain that, since they help immensely in driving it, Apple understands that the massive additional revenue stream that the music industry enjoys (concerts, videos, DVDs, and merch) does not exist for publishing.
Right now, publishers are giving away their content for free. Pretty much the same end result as the music industry was stuck with; the only difference being that customers were taking it for free. Apple is providing a way for content creators to actually get paid on what sounds like are pretty good (70/30) terms. Periodical publishers and their employees should welcome that with open arms.
The music industry was not “Hit” by the iTMS. It was saved, practically against its will. Publishers should be so lucky.
The management of these publications should have been working on this project a long time ago. What have they been doing for the last five years, hoping that the Internet was some kind of fad?
Pay for newspapers and magazines? Maybe at $5 a year max for those that interest me, but there is far too much free news on the internet to actually pay.
Throw in ads if you want – just don’t ask for my credit card number.
I wonder how one would unbundle peodicals sold as a subscription model through iTunes. I don’t think they are worried about the blunbundlimg, but the flat rate pricing that the iTS ultimately put on songs (which apple ultimately folded on, once the store had matured). I’m betting they are worried that their content will be treated by apple as just another thing that is used to sell iPads, much like songs are to iPods.
However, I would pay a small fee to have a collection of all of Charlie Brooker’s articles and videos/shows collected for me – regardless if it was his articles in the guardian or his work on newswipe – maybe unbundling is tracking the work of authors, rather than the work of a magazine or publication?
Newspapers are on their way out…… at least the ones not in a major metropolitan area…….
This sounds JUST like the music business idiots years ago…. they refused to admit they were dying….. and played the game of iTunes possibly being a bad thing…….
Just like their music counterparts… newspapers and other print producers need to come into the technology age
How much does it cost to print and distribute a magazine and will this equate to much less than 30% of the cost of the end product. If all they are worried about is there bottom end pass the cost onto the advertiser for allow them to use interactive adverts ( links and video ect ). Why are they worried that the magazines are going to be broken up into articles and sold seperatly that is just idiotic.
The wave of change is coming my friends and if your not on it you will be swept under it.
Certain magazines I’d happily subscribe to. Newspapers? Not a chance. Books? Yes. Comics? Maybe. But not newspapers.
You won’t subscribe to newspapers, etc. ultimately. It’ll be authors that you subscribe to. That’s what they are worried about. A “producer” is even less necessary in the print world than in the music world.
Just think….. rather than paying $6.00 for a magazine littered with adverts and a lot of stories someone may not be interested in……
We might be able to pay $0.50 to read an article we ARE interested in…. and they could even throw in an advert or 2….
furthermore, unlike an audio album, books cannot be unbundled and remain complete. The work stands together as a whole. There are very few record albums (Tommy, Dark Side of the Moon, etc) which require remaining intact for a complete listener experience. Hence the al la carte model which works just fine for music purchases.
dd
I think I would subscribe to newspapers and magazines myself with the iPad. It’d be nice to see everything in color, and easily readable, and more importantly, searchable. Think of how nice it would be to get your home-town paper when you’re out of town, or if you’ve moved away but still like to keep up with what’s happening back home.
It’d be great having gardening magazines and the like on an iPad, and especially nice if they added video “how-to” articles that are impossible with a paper product, all easily searched in one easy place.
In the fashion magazines and Vanity Fair, the ads are definitely part of the desired content.
As far as the record labels, it’s as if you saved a man from drowning but he hates you because he can’t swim. Go figure.
Music was not originally “songs” and “singles”. In it’s earliest form, music was a drum circle around a fire. These sessions lasted much longer than 4-6 minutes at a time.
The smallest most basic unit of music is a single drum beat.
“…the same *fate* as the music industry?”
What nonsense! The music industry should kiss Apple’s corporate ass for saving theirs.
Well said MDN. Why are publishers still agonising over an inevitability? I don’t recollect Kodak crying so much as looking where else in imaging they could find revenues when film began caving to digicams. Print is dead except for a smaller specialist press. News doesn’t belong to anyone. Only the reporting does and when you decide to print that its shelf life may be over even before it’s sold because breaking news does not honour print deadlines.Much better to accept Jobs’ offer since it is the only coherent strategy from anyone. Even with iBooks or iPublish, I don’t see traditional news or mag formats lasting out the decade. I used to buy maybe 15 to 2 mags a month a few years ago. I haven’t bought one for 4 years. There’s no point. I get the latest product news untainted by the need to please advertisers and multimedia content too.
So much more that could be said here but let’s just watch this long foreseen train wreck as it happens. What comes out the other end has got to be better and it may even be ad-free, like the songs and books on iTunes and iBooks! heh heh. but it’s true. Let’s have no ads anywhere. EVERY thing will cost about 10 to 20% less. And we can enjoy what we pay for without the distracting noise pollution of ads. Amen to that!!
Simple answer, if you don’t like the deal, go your own way. Write and app for your publication, stick with paper, what ever. Just don’t bitch that the lifeline you’re being offered is the wrong color.
Print media magnates need to take note of the floatation device located within arm’s reach. It is entirely up to them whether or not they make use of it. The value of print is plummeting as people are perfectly willing to pay nothing for something with only slightly less production value or, in some cases, an online version of exactly what other customers pay for in print. You have a device and an online ecosystem to exploit. I suggest you get off your asses and think about “how” instead of “if”.
The main problem with newspapers and magazines (not all, of course) is that the content is very dated in this internet savvy world. I haven’t bought a MacWorld, or other tech sort of magazine in years because I can see it all weeks before on line. Thee same is true with newspapers. The difference there being in depth reporting that one doesn’t get on TV or Radio and not even on line. All these publications need to create product that reflect the world we live in, not the world of 20 years ago.
I buy magazines, and save them, and use them for references all the time. I have binders, and boxes, and stacks full of them.
I saw the iPad and looked at my office and visualized all that paper gone and I was sold.
I also imagine having all those hundreds of pounds of magazines and books with me in a 1.5 pound device (searchable no less) and I get very excited….. any publisher that can’t see that is a moron…
Yeah, the music industry was *saved* by Apple. It was “hit” by Napster.
I’ve been a subscriber of Macworld magazine for years, since well before Jan ’94, and I can’t wait to stop receiving hardcopies and have it download to me via iTunes every month.
Likewise, I recently bought six Missing Manuals, and these books are thick and heavy. I would gladly repurchase electronic copies that I could carry w/ me anywhere and instantly search.
I agree, anybody could have created an iPad, but no one did ’til Apple, because it’s the combination of hardware _and_ software. I just love the way pages turn on it, and can’t wait to get one!
@ ET
Now imagine that extrapolated to all those millions of magazines, textbooks, technical manuals, etc… that lay in piles everywhere, all vanishing. All those trees can go right on living, and instead of thumbing through tables of contents, indexes and appendices, you simple enter a search term.
Yes, I love books. I love paper in my hand. But I love the ones that are called The Lord of the Rings, not How To Operate Your Kenmore Dish Washer. Books that mean something personal are wonderful, but disposable magazines are just wasted pulp. We can do better. And we will.
I can’t see myself purchasing the New York Times in any format.
I have already decided on my first eBook purchase – iPad – The Missing Manual by David Pogue.
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Fitting, I think.
-c
You may be onto something there, the back catalog for reference. Old, long gone titles, or authors who have since left a publication.
I would fork over bucks for a CD or DVD with PDFs of Galen Rowell’s or DeWitt Jones’ articles in OutDoor Photographer for example.
It’s not like publishers receive the cover price anyway. Magazines only get between 40 and 50 percent of the cover price on single-copy sales; the rest goes to the distributor and retailer. It’s similar with subscriptions sales.
Factor in the savings of not having to print and distribute physical copies, and the idea of charging 99 cents for a magazine with a cover price of, say, $3.99 isn’t such a bad deal for publishers.
@Botvinnik: I meant to elaborate that those media giants who espouse what their editorial board deems is the conscience of America, are dead in the water. People won’t purchase those things that they don’t believe in, when given the choice.
I can think of several magazines which we have cancelled, but to which we would resubscribe if they were available electronically–ads and all. These publishers are drinking Fail Juice by the gallon.
Speaking as someone who works in the newspaper industry, I agree with MDN’s take. This won’t eat away at newspaper (paper) subscriptions (too much) but it will finally be a way to get the i-generation to subscribe to and read newspapers.
The Kindle was nothing more than a Nikon NC2000. (Newspaper photographers will get that joke)
What is missing from the discussion is what the periodical publishers are really afraid of losing out on – reader data. They claim they would lose the ability to communicate with their readers. I’m sure that there is a grain of truth to that, but that data is worth more for advertising than anything else.
I’m sure the pricing is a hang up, etc, but the consumer data, which could be even more valuable if they can see what readers are clicking on what embedded ads (What, you thought somehow there wouldn’t be ads in the digital versions?!?! That’s funny).
They think that is a gold mine and they don’t want Apple to siphon that money.
Also, to the commenter that argued “if you don’t like it, don’t do it”,
well that is true and on an ad hoc basis is reasonable, but I think it really misses the big picture.
Apple and the publishing industry need this to gain traction and right now that requires a broad selection of content to interest a wide spectrum of readers. Good for iPad sales, good for sales through iTunes, and good for the publishing industry.
Eventually, the publishers will capitulate and see the light. It’s simply a matter of time. Seventy percent of a subscription price is much better than 100 percent of nothing.
The real asset of any book, magazine or newspaper is not its printing presses, as was once the case. It’s the content created, owned and syndicated by the publication. As others have noted, the industry has had years to work out electronic distribution, micropayments and subscription plans with the public, and to an individual, they have failed.
While record labels, TV and movie studios can complain about the revenue accrued by Apple in distributing music, TV and movies through the iTunes Store, the fact is that they would be in dire straits without partnering with Apple. The record industry in particular might be bankrupt today if not for Apple. So while these industries cede some revenue to Apple, this cost also covers the expense of distribution. What likely frustrates these industries is that the credit card and purchase demographic information resides with Apple, not the content source. I have a hunch that if this is a sticking point, it’s something that could be shared or negotiated eventually.
At this point, the Rupert Murdochs of this world are acting exactly as many of the record companies, and even recording artists did at first in resisting the iTunes Store. (Think Metallica and Red Hot Chili Peppers as two examples.) After failed attempts with horrible examples like PressPlay, the studios got religion.
Sooner or later, publishers will too. So many of them are staring at bankruptcy that it is inevitable that Apple and an entirely new method for electronic publishing, will be their only way out.
Also, with the iPad, it’ll be feasible to have subscriptions to foreign magazines, and not have to pay the astronomical shipping price that smaller magazines would have to charge. Plus, you’d get content the same day they do locally.
Any magazine that doesn’t see this as a huge boon isn’t thinking clearly.
@ Ron Robertson
Now that is something I had not thought of – and it’s huge! Yeah – there have been many many time I have been to B&N;and wanted to buy certain magazines from abroad – but no way – not at those prices. BUT – make them accessible on my iPad – you bet I’m there!
Funny, but most mags are 12.00 or less per year. I even get Popular Photography for .33 cents an issue with a special last year and Time for a year for 15.00 prepayment. So .99 an issue is a deal for them. I find many of the ads great and if the price is right will not mind them. I do remember the early Nikon and was all the talk in first days of digital photography. But if the same with the iPad in ten years it will cost less than a hundred dollars.
Magazines in a digital format should be close to free – the publishers should be able to make huge money on focused advertising.
Advertisers should be willing to pay big for an add with a clickable link, and the ability to link to a video add, or a list of user reviews with star ratings, or industry reviews, or and industry web site, or a NGO site for donations, or an advertisers digital store, or………..
Heck, maybe publishers should pay readers to subscribe to their magazines just to attract more readers to earn more add dollars….. now THERE is a new business model…. read magazines and visit sites in exchange for iTunes store credit….
This replay is going to be a little of topic but anyway —
While Steve Jobs continues to spend a great deal of his time and that of his companies time restricting market after market — it would be really nice and politically correct to restructure one more major institution — one that is or should be dear to one and all.
THE WAY AMERICANS VOTE!
Ever sense the mechanical voting booth was first invented, the industry has bent over backward to make it easy to control the vote or better yet block the voter (those not white) from voting.
Apple could offer their computers and their iron clad software to solve the issue of fair elections — thus its time for Steve Jobs to offer up iVote, an honest, fool proof solution that would allow American one and all to vote from the comfort if their home using their home computer or any Apple products.
How about Mr Jobs — are ready to offer the nation the safety of a free vote in a simple and honest solution?
Just a through…
So … How will this affect MDN, as it is a news aggregator, will we have to pay for the majority of articles?
Another thing about all this is that there is the possibility of completely changing how we get and consume magazine content.
Rather than selling a separate (monthly, weekly, or whatever) edition via the Apple iBookstore, the publication sells a subscription reader app good for a certain time period (year, 6 months, or whatever) or a certain number of viewings.
This reader app allows subscribers access to subscriber-accessible-only, web based content (that appears on an iPad in magazine layout format) that is updated much, much more frequently than monthly (weekly, or whatever) print edition is published.
Instead of waiting a whole month to get new content, you get new content almost constantly. This would fundamentally change how readers consume magazine content.
Aggregating content for such consumption would fundamentally change how such magazines are published as magazine publishing would begin to operate the way TV stations do in dealing with a constant inflow of information.
It is the beginning of web pay walls. Free web content would be limited and used as an enticement to subscribe.
“music naturally breaks down into the smallest salable unit: The song; otherwise known as a “Single,” which predates the “album.” Magazines’ and newspapers’ smallest unit is the edition, so –“
Albums are to singles like magazines are to stories. A story, article, news item, etc. is the smallest salable unit. The iPad will do to magazines what the iPod did to albums.
MDN… artists still save up their writing and energy to enter a ‘studio’. They collect their musicians and produce their latest batch of songs and produce an ‘album’. You know, like a photo album: A collection of similar things in one
place.
So, musicians will still have songs that relate to each other, and would seem obvious to tag their relation to each other through a classification called an album.
It is all much more pragmatic and I think less bottom-line driven (as it relates to record labels) than how you are describing it.
IMHO
Doesn’t anyone read the article anymore?
It’s not about the money, folks, it’s about customer data.
From the article:
Apple’s history of sharing limited consumer information with partners beyond sales volume data could prove a “deal breaker” for publishers, said one senior media executive in discussions with Apple.
“Customer data is everything,” another magazine publisher said shortly after the iPad launch. With publishers’ having spent decades gathering information from subscribers, Apple’s policy could rob them of their most valuable asset.
“We have for many years relied on subscriptions to be able to communicate with our readers,” said Sara Öhrvall, senior vice-president of research at Swedish publisher Bonnier. “It is absolutely crucial to keep the data. That’s something that our advertisers need. It is something that we need.”
Without the ability to identify customers on different digital platforms, publishers would be unable to offer print subscribers discounts or free access to digital versions.
Customers “will be really upset if we try to charge [them] again”, Ms Öhrvall said. Whether it’s an Apple device or another device, “it’s a deal killer”.
If Apple can bend on this, I think a deal is likely.
——RM