iPad and the New Five-Fingered Exercise

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by: Ken Doctor

Part Two of an iPad Series

Part One: "Nine Questions on the Tablet and the News Industry Future"

Paid or free, or some combo? That's one of the big questions news publishers are asking themselves as they debut iPad products. Many publishers are, understandably, hedging. They are offering free products out of the gate -- the Financial Times' being sponsored by high-end watchmaker Hublot -- and then planning/hoping to charge two to three months down the line. They are each eyeing the other guys, and seeing which way they'll go -- and what the early experience of charging looks like -- before committing.

Bloomberg, Reuters, New York Times (NYSE:NYT), USA Today, NPR and AP are going free out of the gate, with WSJ (NASDAQ:NWS) poised to erect a stately $17.99 monthly paywall, a wall that looks far less pervious and freemium-loving than its WSJ.com web counterpart.

Time Inc and CondeNast -- GQ (which will be the first up on the iPad), Vanity Fair, Glamour and the New Yorker -- magazines see the world more simply: Just pay us about what you pay for a print copy, and we'll give a luminous, more-fun-to-play with iPad product.

We'll see a broad divergence between newspaper and magazine products -- much broader than what we have seen on the web, where the meat-grinder designs of horizontal formatting long ago sapped vitality and innovation in newsy product presentation. We've been stuck in 1.0 land for a long time.

The big consumer magazine producers -- your Next Issue Media consortium members Time, Conde Nast, Hearst, Meredith, and News Corp --- can simply write off the last decade as an awkward interregnum. They invested far less in the web than their newspaper counterparts (no classifieds to protect) and found themselves competing at a disadvantage. Their stuff didn't look as good online as it did in print, and they were competing for attention with scruffy news publishers and bloggers, low-end company that always seemed a bit below them. They lost ad pages and staff, and, somewhat, their way.

So they are likely to return what they do best: produce whole objects, removing them from the messy, atomized web. Take a look at their demos, and you see the homecoming celebrated. Thank you, Mr. Jobs, who is happy to collect his 30% (take that, airport kiosks and the struggling USPS). For their part, the 30% payment to Apple (NASDAQ:AAPL) is just a new cost of doing business, a bedrock of a new sustainable business model -- as long as advertisers come along, which they will, as long as readers come along. What's old is new is old.

They'll probably recuse themselves from the free web conversations, increasingly delaying their free web offerings to differentiate from paid iPad+ offerings. Wired's Chris Anderson explains this philosophy to Gawker:

We've always sequenced magazine content so that it comes out at different times in print and on the web, with web delays that have typically ranged from days to weeks. I can't speak for the rest of CN or any other title, but at Wired we intend to do the same thing with tablets. I can't yet say what the range of delays will be for various parts of the magazine, but we'll experiment with different options, ranging from short delays to long ones.

I like Marc Frons' arraying of the products on a political spectrum. Frons, CTO of the New York Times, tells me he assesses the first rank of iPad products to be on the right-wing of publishing -- essentially re-purposed products of the existing, conservative order. In the center, the web, a hodgepodge of somewhat repurposed print, spiced with still-awkward multimedia mixings. On the left, a hazy future, as digital newsy media comes into its own, with its own look and feel. Or as Frons describes it, " improvisational jazz to the classical music of reader apps. We don't want to cede that ground to the Facebooks."

So magazine publishers clearly will retake the right. Magazine look-and-feel with all the wonder of iPad functionality they want to add in over time. With largely monthly production schedules, the tasks are doable. They see a path forward in the digital age.

The center is the center, and it may lose its grip over time. The battle to define the left -- the real new news media -- will be fought out by fewer companies. Leave the magazine companies out of that battle; they're now closer to happy. It's the news companies that are staking out the iPad turf, and in the process, redefining the medium.

Here, I look to the Digital Dozen companies I noted in Newsonomics. That Digital Dozen -- the 12-15 nationally and globally reaching news companies, based in the U.S. and UK -- categorization has been one of the most controversial as I've talked about the book in interviews and talks. Surely, these companies, bloated as they are with outsized cost structures, will cave in on themselves in the new digital world, many smart people tell me. They may be right, but I doubt it. Most of the Digital Dozen -- think News Corp, BBC, FT, Bloomberg, Reuters and ABC (NYSE:DIS), among them -- operate as big news operations within far larger, deeper-pocketed, diversified companies. Yes, some -- New York Times, NPR, AP, among them -- don't have those buffers and may have a harder time competing.

Yet, here we are, before the big iPad launch, and it's the Digital Dozen who are represented in the first-to-be launched products. It takes big companies to afford the investment in the platform and the ability to operationalize the product day-by-day.

From here on, I think we'll see these companies go head-to-head for reader and subscriber dollars. As they do, I think they'll face a new five-fingered exercise. Raise one hand; five is the probably the maximum number of iPad news sites for which readers will pay.

Pew Internet. always-intriguing , in its 2010 "Understanding the Participatory News Consumer" suggests that:

While internet users who get news online tend to explore a wide variety of news topics, they are fairly modest in the number of internet sites they use to gather that information. One in five online news users (21%) say they routinely rely on just one website for their news and information, and another 57% rely on between two and five websites.

Even on the promiscuous Facebook, we see that the average Facebook user becomes a fan of only four pages.

The technology is getting a lot smarter, but as humans we're still supremely limited. We recall three to five things about things. And that enduring truth will color iPad payment success as well, I'll bet.

So in a world constrained to a hand of paid possibilities, what will readers buy?Among the answers we'll see evolve (more discussion on this to come) are:

  • Single-company all-access products. All-you-can-eat of the New York Times, by print, smartphone, iPad and you-name-it. All-you-can-eat of News Corp news (WSJ, Barrons, Marketwatch, AllThingsDigital, +++).
  • Niched, higher-end products. Reuters, long overlooked in the U.S., may take a lead here. At launch, it will have three separate products, one of which is market dashboard for financial enthusiasts, in addition to a pictures app, highlighting its global photojournalism and its News Pro product, itself more targeted (as is the newly designed Reuters U.S. website) to business professionals. In business and sports, particularly, we'll see targeted products that serve much more specific audiences.
  • Aggregated products: These will be the wild cards. So we may only buy a handful of products -- but they don't have to be single-title or single-company offerings, though that's all we've seen in early demos. Who, for instance, might finally round up the local press, a lassoing that should include worthy start-ups as well as dailies? We won't see many local tablet products at launch. In their emaciated states -- and given how small individual markets will be this year -- these companies will stay largely on the sidelines. An aggregated product, though, could be a hit. One cool interface, navigation to your locality (and please connect me not just to the daily rag, but to Yelp, Open Table, Google (NASDAQ:GOOG) maps, Zillow+++). AP Gateway's app will try to stake out this turf. I think it's got two competitors. One would be Journalism Online's Press+, whose paid system could power an aggregated product. Then, of course, there's a minor Cupertino start-up called Apple, which put together some product called iTunes. iTunes for News, second life?

Disclosure: None