The next step: monetizing mobile inside and outside of Apple's walls
The magazine industry has been talking nonstop about the iPad for months, but it's time for publishers to hash out a real business model for the broader tablet market. At this week's American Magazine Conference in Chicago, vendors offering a variety of mobile publishing technologies and services discussed what to expect.
While it's not clear yet which tablet competitor will give the iPad a run for the money, any expansion of the market will benefit consumers and publishers, said Dan Baum, vice president of Digital Publishing at Adobe Systems (which plans to release its digital publishing solution any day now). “We would love to see more devices out there mostly because we think more consumer choice is better,” he said.
It could also benefit publishers, who will have more opportunity to sell their content. Baum encouraged publishers not to “succumb to the walled garden world,” alluding to Apple's tight rein over app development and subscriptions in its marketplace. Nobody knows about that better than Adobe, which was rumored to have reworked its Wired app when Apple banned Flash.
“It's really going to become incumbent on the publishers to start telling all the marketplaces, 'we need to sell our content, you guys need to figure out how to work together,'” Baum said.
On the other hand, more competitors means more juggling for publishers. Most publishers can't afford to invest everywhere; they will have to pick and choose the best platforms for their target audience. Zinio's Chief Marketing Officer Jeanniey Mullen said publishers will optimize content where consumers spend the most time.
“Early adopters of the iPad are really the techno early adopters … They're people who feel that this device really fits into their lifestyle,” she said. “And so the future is about fitting your future strategy into your consumer's lifestyle.”
Cheryl Goodman, director of marketing at Qualcomm MEMS Technologies, sees devices switching more to the “superphone” model, which will be more of an in-between of the smartphone and tablet. “It is a tablet world today; it will not be tomorrow,” she said.
Qualcomm's Mirasol Display Technology does not require a backlight and therefore consumes less battery power. Goodman said in an interview the device will be a good third option for publishers, aside from e-readers and the iPad. She said the company is in conversations with several companies, and we can expect to see Mirasol-enabled devices by the winter (further out than what she anticipated earlier this year).
Qualcomm has been doing lots of outreach to the publishing industry, though it's not a direct sell for them. Goodman said she hopes to be a liaison between content providers and device makers. She also mentioned the opportunity for for publishers to have branded devices. “There are so many untapped models out there that aren't controlled by Apple,” she said.
Though Apple was invited to AMC, the company wasn't around to defend its stake in the mobile publishing market ― not a huge surprise, since Apple doesn't work the conference circuit too often.
Emerging business models
The best option for publishers might be a single platform that enables them to publish a single digital edition across many devices at once.
That's the model that media consortium Next Issue Media wants to execute. However, 10 months after the joint venture was announced, the details are still vague on how NIM plans to pull off its vision.
A cross-platform digital storefront could offer all kinds of options for publishers, such as bundled print and digital subscriptions and partnerships around bundled content (similar to the television model).
Magazines can learn from Hulu, an ad-supported video site with major stakes owned by NBC Universal and News Corp. The site was profitable the last three quarters, bringing in $100 million last year. Revenue is expected to double this year, said CEO Jason Kilar, speaking at AMC.
Kilar attributed some of the site's success to a willingness to not accept transaction-based pricing, focusing on aggregated content instead. The site's targeted advertising strategy allows users to choose the ads they want to view, demanding higher premiums than ads in the living room. Most recently the site added subscription to its model, launching a premium content service, Hulu Plus, based on an aggregation-through-subscription model.
Kilar encouraged print publishers to stop holding on to legacy models, including making everything free. Media, he said, is a discretionary business that needs to be based around the consumer. “If you make it more convenient to consume your content, people will consume more of it,” he said.