The Environment
Unfortunately for media outlets, an economic downturn has come during a media revolution. Print -- and arguably TV-- are faced with a movement to online media that leaves key revenue sources like classified ads and other broad classes of advertising virtually dried up. Finding a new business model to replace the broken one remains a major challenge
Evolving Technology Picture
We have seen the emergence of the Web, blogs and Twitter result in an immediacy of news dissemination with which conventional media cannot compete. These new forms still suffer from deficiencies in depth, rigour and from a lack of well-defined channelization, but the allure of immediacy is a key draw. Ironically that same fast-breaking immediacy was the basis on which conventional media defined success for many years. But online content consumers are left to find their own sources in a sea of content, rather than being able to choose from an array of coin-op boxes or flipping through the channel line-up on their remote control.
Enter the tablet or 'slate' device.
Well, to an extent we got the first peek at elements of such a device with the Apple iPhone/iPod Touch. A small device with a high quality display and decent network access gave us a first sense of comfortable, mobile access to the media organs we already preferred on our laptops. The rapid explosion of apps from the associated AppStore took that one step further, and we were able to disconnect from a browser-based presentation to reader applications designed for dedicated content given to us for free from specific media outlets - the AP Newsreader, the BBC newsreader and many others among them.
The stage is well set for new devices in this category.
The Kindle device emerged along the way as well - providing books from Amazon, but also other content. While I personally thing the design is quite poor, even in its second generation, there has been strong uptake on the device, and it's unique approach to network access is part of that. It has a proprietary pipe rather than an open do-what-ever-I-want-to-do-with-it one. But the form factor, look and feel are a failure that only tech-hungry early-adopters and less discerning members of the early majority could love.
In a week we will see a new device from the thought leader in this space, Apple. Presumably - if rumours are to be believed - they will introduce the first devices in their tablet family, purportedly called iSlate - perhaps two devices as big and slightly bigger than a paper-back novel, but as thin as a stack of 6 or 8 credit cards.
More important than the form factor, for print media anyway, is that newspapers and magazines are apparently being given the means to make this their new channel to market. It couldn't have come at a better time. Apple will control the first entry into a portable, ubiquitous electronic print media marketplace, by delivering an attractive platform with broad appeal. Expect well over two million units to be in users hands by this time next year.
The Challenge
As if the challenge of introducing a product in this space isn't challenge enough - and Apple knows this from their experience with the Newton a generation ago - there are some substantial challenges for the media outlets themselves.
With merely the features of the iPod Touch, a new iSlate could probably still succeed in the marketplace. But Apple is not often one to rely on an incremental path to product success, and will be looking to a compelling media offering as the iSlate's extra delight, in the same way that the AppStore is the delight behind the iPhone/iPod Touch (Why don't they just rename that thing the iTouch?).
Media Outlets face a challenge in embracing electronic delivery without a product like the iSlate. Many are making noises about paying for content, but they must surely know that this is untenable in the web browser universe.
It has been well known in the online services and portals world that if you take a web-based offering with say 10Million users/participants/members and introduce a nominal fee-for-use, you will quickly find your portal left with about 150 dedicated users in about a month.
It isn't just the prospect of paying money that will send the users to the nearest competitor, rather it is due to the whole incremental user-cost associated with making payment happen. A user cannot simply pay as they would dropping a few quarters into a newspaper box and pulling the door open. Online payment comes with a bevy of privacy disclosures and onerous acts of exposure involved. One must not only provide their true identity information - name, address, phone number - but a payment method as well, most likely a credit card. I won't get off on my pet tangent of true micropayment service business opportunities (I think there is a huge one still waiting) but suffice to say that this step is a substantial impediment.
The New York Times has announced that it will begin to charge for more than occasional content access starting next year.
If they are going to charge for more than occasional use under a conventional browser based universe, how would they do it? First, they would have to differentiate between occasional and frequent use. There are only two ways to achieve that - with browser cookies that track your visits (and are easily cleared, rendering the approach useless) or with registration. The registration approach has two options: to allow what I'd call 'casual' registration, where you use simply a 'name' and email address, or alternatively to use 'strict' registration, where you have to provide verifiable user information and credit card info. In that latter approach, you would start incurring costs upon exceeding your free usage threshold, in the former you would be pushed into 'payment-info-please' screens upon exceeding such a threshold.
Neither is very appealing, and really the strict approach is the only real option, and even that is rendered useless when we look at how media consumers actually access content. We don't pick an outlet and stick with it, we graze, sometimes over dozens of papers, blogs and other media sites. The prospect of having a strict-registration protocol with each is totally a non-starter. Thus the NYTime plan is untenable, unless we turn back to a now proven Apple model.
The iPhone/iTouch (okay I said it) has succeeded in introducing a solution to the issue of onerous payment systems through an approach known as the 'zero dollar invoice." This is a commendable achievement, and is likely the element that makes a solution to the new media delivery impasse palatable enough to succeed.
While the NYTimes has declined, in these pre-iSlate days, to explain how there path to pay-for-content will work, it seems crystal clear that only through the clout of an Apple + iSlate would they be able to make it work. We will no doubt see them as a flagship service on the new device.
Their success will absolutely hinge on an Apple controlled payment system to get around that multiple registrations problem. In the same way Apple's ecosystem for small portable apps revolutionized the mobile industry and left ALL serious competitors trying to make their own AppStores, the success of portable media is also wrapped around centralized payment. Media outlets would never get individuals to register for disparate sites all with their own desire to collect your personal information and credit card data. Without an iSlate solution, they would fail with further demonstration of the 10M to 150 transition effect.
When the iSlate is introduced, your existing iTunes based payment system will be able to send you zero dollar invoices for any of the free print-media content that will be necessary to provide 'trainer' products for iSlate users. Zero cost media will be vitally important just as free apps on the AppStore were vitally important for iPhone/iTouch users. Until we all get a few zero dollar invoices, we don't totally trust the system, and are wary of our latent credit card info sitting on Apple's servers.
The extra boon for media outlets is that not only do they get revenue through Apple for subscriptions, but surely their content will include ads that look very comfortably like old-style newspaper advertising. I predict success, and furthermore, I think this is why we are quietly seeing a few astute buyers trying to scoop up failing media outlets and local papers at bargain prices before the rush begins.
We are on the verge of a print media revolution. The NYTimes will likely provide free content for a while on whatever we call the new 'AppStore' (NewsStand? BookStore? PrintShop?) They have a bit of a challenge to manage the no-payment-now-but-pay-required-later approach. That's not possible with iTouch Apps. The model there is that you either pay or don't pay as you load the App. There is no transition from free to paying dependant on behaviour (e.g. exceeding a usage threshold). They could achieve it by simply having "NYTimes Lite" and "NYTimes Pro" App-equivalents. But these are implementation details that will work themselves out.
Suffice to say that the end of the dark days for media may well be upon us. Now, if you are a reporter, you just need to get a good grip on your desk to get you through the next 6-12months.
Researchinator is socking away a few dollars in the hopes of being able to read the paper again, without killing trees...
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