iPad won't create viable paid content business model
Since the iPad's introduction, publishers have been led to believe that Steve Jobs is their “knight in shining armor.” The sleek tablet has a lot to offer to publishers, who are seeing their profits decline, ad revenues plummet, and their lunch being eaten by social networks, blogs and other market players, some of whom didn't exist ten years ago.
iPad can't fix a flawed business model
Less than a year later, it is clear that the iPad will not save the publishing industry. The reason is simple. It is not technology that is killing publishing. The cause is far deeper: the business model.
The first magazine, Gentleman's Magazine, was published in 1731, written by Edward Cave. The model on which that publication was based, 300 years ago, remains simple: scarce content costs money. Therefore, readers should pay to gain access to this content.
Since then, the Internet was invented and swamped by user-generated content. Users have become both producers and consumers of content. News is freely accessible to all. Social networks allow people to interact with their friends on a previously unknown scale and with greater efficiency than ever before.
Yet 300 years after the first magazine, magazines are still trying to survive by using the same, old business model.
The iPad is an amazing device. I have one, my employees use it a lot, and I am definitely going to buy iPad 2 in April. But it won't make me pay for content I can get on other devices or platforms at no cost. The sleekest interface, the most well designed application won't make me pay for content, when comparable content is freely available on the Internet. When content isn't personalized, linked to my friends on social networks, or providing unique added-value, why should I adhere to a centuries-old business model?
iPad: a seductive Siren
Jobs and Co. make publishers an offer that is extremely interesting: a sleek device, from the powerhouse that made “a phone without a cut and paste function” a runaway success. It includes a closed content garden, coupled with a built-in application delivery service, and some fairy dust from the most respected technology and design company in the business today.
In March 2010, a month before the iPad landed in stores in the US, I was honored to speak at FIPP/VDZ Digital Innovators Summit in Berlin. Everybody in the room was talking about the iPad and how it would save the publishing business. But no one had yet held one in their hands. The combination of real issues for publishers and Apple’s fairy dust was already having an effect, even before the product was introduced to the market.
The threat to magazine publishers cannot be solved by technology. The technology that is destroying their business model is beyond their control and cannot be stopped.
The iPad won't save publishing. Technology is not the answer. A new content model is required, a content model that takes readers, not only the editorial team, into consideration, and a model that treats readers as community, not passive content consumers. When publishers will question their business models as thoroughly as they review their latest iPad apps, then we’ll know the industry is on the right track.