Most news stories are covered by many media outlets. News is not a scarce commodity. Magazine articles, on the other hand, typically provide more in-depth commentary or analysis on interesting topics. A consumer can’t easily find other sources for a magazine story.
Hamish McKenzie argues that magazine publishers, like music publishers before them (album versus iTunes single), should break up the sacred magazine bundle online and allow consumers to either pay a Netflix type subscription to an all-you-can eat buffet of articles from a variety of publishers, or provide an a-la-carte menu for consumers to discover and pay for the articles they want to read
Of course, this implies that publishers would need to coordinate the development of an industry led technology and distribution platform (similar to Hulu), or watch an external technology company such as Flipboard, Google, Apple, or Amazon build a business model off the publisher’s content and own the relationship with the end consumer.
As McKenzie states:
The first problem is that there is an app for each magazine. To subscribe to the New Yorker, Wired, Vanity Fair, GQ, The Atlantic, Details, New York, and Time, you’ve got to have seven different apps, many of which are bloated. Some issues of Wired, for example, have weighed in at 500MB each. And what do you get inside? Aside from the occasional animation, or supplementary audio and video, they’re basically just digital facsimiles of the paper product. Worse – you can only get the stories if you get the whole magazine.
So here’s an idea for how to do it better and make money from it.
Break up the bundle. Present stories on an individual basis. Do to the magazine what iTunes did to the album, but do it with a Spotify model. And put it all into one app.
In short: build a platform not for magazines, but for magazine stories.
Here’s how it works. You have an app called something like Mag Reader. When you open Mag Reader, it shows you a list of the latest works from your favorite publications, as well as ones that align with your interests, or the stories currently most talked about on social media.
Each story is listed with a small picture, headline, by-line, date, relevancy rating (just like Netflix’s customized recommendations), introductory teaser, and publisher name. Before clicking through, you can expand each one to see more art work, the first few paragraphs, who has recommended the story, links to similar stories, and what else the publisher has put out recently. If you feel the urge, you can even buy the magazine issue into which the piece has been bundled for paper consumption.
You have a profile page, just like you do on Spotify or Facebook, on which your most recently read stories are listed alongside the stories you recommend most highly. On your page, you can also list your favourite magazines and writers, along with your interests. Perhaps you even list all the readers you follow, Twitter-style. You can discover new stories through the social connections you have built around your profile, just like you do now through Twitter, Facebook, and Google Reader (people still use that, right?).
Each writer has a profile, too. Some writers will be affiliated with magazines; some will be independent. You can follow your favorite writers, so you’ll always know when they have a new story out. On his profile, a writer has a bio, links to his stories, and perhaps even a “works in progress” section that comes with a “donate” button, so readers can make financial contributions to stories they’d like to see materialize, Kickstarter-style.
Publishers have brand pages, as well, just like on Facebook. At each page, you can read about the magazine, check out the masthead, perhaps watch some behind-the-scenes footage, and maybe even subscribe to their bundled products.
The story-reading experience is seamless and alive. You can highlight passages you want to make a note of, just like you can on the Kindle. You can look up specific words in a dictionary. Publishers can easily integrate multimedia into their stories. Writers can update their stories as new information comes to hand. On each story you can leave comments that will then, if you so choose, publish to your Facebook profile. You will be able to sort comments on the stories to prioritize the ones written by “Friends” or “Friends of Friends” (thanks, Roman Meytin, for that idea).
One commenter from Germany, who actually tried to launch a service similar to the one described in the article, summarized the experience of trying to herd
cats publishers and get them to work together:
We presented our app to dozens of newspaper publishers and press agencies in Germany and we had around 20 of them joining our model as launching partners. But we realized very soon that this model was a failure.
Most newspapers, mainly the big and interesting ones, were not interested at all, they all wanted their OWN app in the AppStore. They did not want to promote an app that contains content from other newspapers. They did not want users to choose which article is interesting and which one is not. So, more or less all German newspapers launched their OWN apps, most of them never reached top 100 of the category news in appStore and – even more surprising – a lot of them are completely free or you have to pay an initial single payment of .79 €.
paidContent has a good primer on the European Commission and Justice Department investigations into the e-Book industry.
Before Congress today, the head of the Justice Department’s antitrust division reportedly confirmed months of rumors by stating that the federal government and state attorneys general are investigating the electronic book industry. Earlier this week, the European Commission said it has begun formal investigations to follow up on raids of publishers’ offices that took place in March.What is the Conspiracy?
The case turns on “agency pricing,” a scheme under which the publishers set the price for e-books on the iPad. In return, Apple (NSDQ: AAPL) collects a commission.
What is the Point Of Agency Pricing?
Publishers watched in horror as Amazon (NSDQ: AMZN) decided to build up its market share in e-books by selling prized titles for less than $10. Amazon sometimes sold at a loss. This set a low floor for e-book prices and also threatened the sale of more expensive hard cover books. The agency model lets publishers set higher prices and ensure customers don’t become used to cheap e-books.
What’s the Problem with Agency Pricing?
The class action suits complain that agency pricing is an illegal cartel. Here is how one complaint describes it: “As a direct result of this anti-competitive conduct as intended by the conspiracy, the price of e-books has soared. The price of new best-selling e-books increased to an average of $12 - $15—an increase of 30 to 50 percent.”Is Agency Pricing Against the Law?
For decades, it was illegal for manufacturers to impose prices on retailers. That’s why you used to see “Manufacturers Suggested Retail Price” on many items—companies could suggest a price but not impose one. This changed after a 2007 case called Leegin in which the Supreme Court said it wasn’t illegal for a handbag maker to control prices. Now, the analysis is done on a case-by-case basis to see if pricing is fair. In this case, the publishers are the manufacturers and Apple is the retailer.
Mark Coker of SmashWords, which works with Indie authors to get their titles on e-Books, adds some insight from the small guy perspective in support of Apple, Amazon and the large publishers:
It would be a sad day for authors, publishers, readers and online bookstores if agency pricing was overturned, because it could allow one or two well-funded companies to sell books at below cost and effectively drive every other ebook retailer out of business. That would lead to *less* competition in the ebook retailing market, not more, would prevent the development of indie ebook retailers in smaller markets, and would ultimately lead to less competition and higher prices.
What critics of agency pricing forget is that these large traditional publishers are becoming less and less relevant each year as more authors independently publish and distribute their own books. At Smashwords, we distribute over 90,000 of such indie ebooks, and we let our authors and publishers set their own prices. We only distribute to agency retailers. These indie authors benefit from the higher royalty rates enabled by agency pricing, and they set the average price of their book under $5.00. Why do they price low when they have the power to price high? Because they know they can sell more copies at a lower price, and since they’re earning 60-70% of the retail price under agency vs. 42-50% under wholesale, the author can still earn more at a lower price to the consumer.
If an author wants to earn $2.00 for each book they sell, they’d set the price to customer at $2.86 under Agency and $4.00 under wholesale. In this new world of indie publishing, Agency facilitates lower prices.
The book market is extremely competitive, and that’s a good thing. If publishers make the mistake of pricing their books too high, readers now have 90,000+ lower cost alternatives.
Amazon announced today that Kindle and Kindle app users can now check out electronic books from 11 thousand local libraries around the United States.
You know, like we do with analog books. Except this time you receive the book via WiFi or USB.
Unlike analog books you can make margin notes and highlights and librarians won’t give you the stink eye for doing so.
Visit your local library’s Web site to see if it’s participating in the program.
The importance of the message over the medium extends beyond just news. Look at the Kindle. On the surface, it may seem Amazon is selling Kindles. Actually, Amazon is selling books — e-books, which incidentally make Amazon a lot of money. Again, the medium (the Kindle device) isn’t as important as the message (written word.)
Kevin Kelly, a well-known technology thinker, recently noted that the Kindle would be free by end of 2011. I would argue that it’s already free. Just download it on your iPad or Motorola Xoom, and within minutes, you’re busy reading. Netflix, too, has separated itself from the medium by streaming videos to a variety of devices as opposed to delivering DVDs (the medium) and profited from it.
When companies can’t really tell the difference between the medium and the message, they get in trouble.
Last fall, Amazon announced its plans for Kindle Singles, an attempt to make short stories and content of similar length to its e-reader. It was a call, in Amazon’s words, to “serious writers, thinkers, scientists, business leaders, historians, politicians and publishers to join Amazon in making such works available to readers around the world.”
And today, the first set of Kindle Singles is available in the Kindle Store.
These pieces run between 5000 and 30,000 words (around 30-50 pages) and range in price between $0.99 and $4.99.
For authors of short stories, and other short form content, it would seem that Amazon is starting to be delivering upon the promise of the digital revolution to create new monetization opportunities for creators.
When USA Today publishes its first post-holiday bestseller list tomorrow, e-book versions of the top six titles will have outsold their respective print versions for the previous week. And of the top 50 books, 19 have higher digital than print sales.
It’s the first time that the newspaper’s top 50 list has had more than two titles in which the digital version outsold the print.
Image: Creative Commons
The success of Amazon’s Kindle has, I think, lulled print publishers into a false sense of security. After all, they’re thinking, the stuff that goes on the Kindle is just text. It may not be created by squeezing dyes on to processed wood-pulp, but it’s still text. And that’s something we’re good at. So no need to panic. Amazon may be a pain to deal with, but the Kindle and its ilk will see us through.
If that’s really what publishers are thinking, then they’re in for some nasty surprises. The concept of a “book” will change under the pressure of iPad-type devices, just as concepts of what constitutes a magazine or a newspaper are already changing. This doesn’t mean that paper publications will go away. But it does mean that print publishers who wish to thrive in the new environment will not just have to learn new tricks but will also have to tool up. In particular, they will have to add serious in-house technological competencies to their publishing skills.
If they don’t do it, then someone else will. There will always be “books”. The question now is: will there always be publishers?