Posts Tagged ‘iPad’

Digital disruption in action

October 19, 2011

This cute video making the rounds on the Internet that I’ve posted below is a perfect illustration of disruption in action.  Not only must print industries like newspapers and magazines grapple with digital disruption of their business models that has eroded competitive advantages in creation and distribution of news and information and advertising, but  they must also take into consideration the new customer segments digital technology has created.

As this video shows, digital natives are born with a “digital first” mindset.  They simply do not have the same affinity for print that previous generations may have had.  One of the early mistakes newspaper executives made with the Internet was to try to recreate the print product online, failing to ignore and capitalize on the advantages afforded by an interactive medium.  Almost a decade ago, when he was a Harvard Business professor, Clark Gilbert (he now runs Deseret Media), conducted a multi-case study of 8 different newspapers.  The vast majority of the newspaper’s online content (75-95%) was a recreation of the print product at all but one of the newspapers.

Newspapers have certainly come a long way since Gilbert’s 2002 study.  Now, wireless mobile distribution affords newspapers another opportunity to tackle digital disruption head on. Tablet devices like the iPad and smartphones like the iPhone and Droid devices afford newspapers the opportunity to create new digital products for digital consumers like this baby below.

The Daily dose of hands-on news

February 4, 2011

Now that The Daily, the first iPad-only newspaper, has arrived I wanted to provide a quick analysis based on my first impressions.  For starters, the iPad is clearly a game-changer for news designers.  The content is designed specifically for the iPad and the interactivity is impressive.  The Daily  is visually appealing with fun hands-on elements and in-app video streaming.  The Daily gets high marks for its interactivity, design and ease of use.

No offense to those involved in the publication, but the journalistic quality of the content is average at best.  Of course, you get what you pay for.  At 14 cents per issue, I don’t expect the type of quality, explanatory, long-form interpretative journalism that I could find in, say, The Wall Street Journal or The New York Times.  In pricing The Daily so cheap and devaluing the content it offers, Murdoch may actually be improving the value of his other newspapers.  I’m certainly willing to pay a premium price for content from The Journal.  The Daily dishes up journalism-lite.  But the lack of breadth and depth make for a quick daily read.

In pricing The Daily at 99 cents per week, Rupert Murdoch has effectively invented a new digital business model.  In essence, Murdoch has created a subscription micropayment.  For news content, micropayments are the idea of consumers paying pennies or less per article.  For non-news content, micropayments are usually priced from about $1 to $5.  The iTunes model of charging $1.29 per song download or the mobile modile of selling ringtones for a few bucks are examples of successful media micropayment models.  The Daily, however, offers 100 iPad pages of content per day in a weekly subscription rate of 99 cents.  Subscription strategy meets micropayment price.

The pricing point and iPad-only distribution strategy could very well work. The Daily could prove to be immensely popular and ultimately a success. But what works for one of the world’s biggest media barons does not a successful business model make for the rest of the industry.  While there’s a lot to like about The Daily, the product still remains a destination-seeking site.  You must find the news by downloading the app, pay the subscription and log on and in, rather than news stories finding you through social networks.

I have serious doubts that this app-fueled micropayment-subscription hybrid iPad-exclusive content model could ever work for the majority of the newspaper industry.  Certainly, most of the local daily newspapers with circulations less than 50,000 would lack the resources and capital to create and staff such a publication.  Few, if any, would be able to draw enough readers to justify the ridiculously low pricing point.  This does not even factor in all the non-daily community newspapers with strong print products.

The purpose of offering digital content and digital pricing structures is to obtain new paying customers.  For Murdoch, The Daily will almost certainly achieve that aim.  Other newspapers, with strong print subscribers but few paying online customers, need a platform that will allow them to earn revenue off new readers whose stories find them through the Social Web.  Micropayments are needed.

Imagine this scenario: You are the owner of a community newspaper.  An odd tragedy strikes your town that captures national attention. The national media converge on your town to cover the story, but no media outlet can provide the same level of coverage as you.  Your reporters write compelling, original pieces that no other media outlet carries but the public is clamoring to read.  In essence, your paper has a viral news story.  With a micropayment platform, you could charge a small amount per article.  Suddenly, you have a new revenue stream from thousands of new readers. Granted this is a one-off source and you wouldn’t want to bank on a once-in-a-lifetime occurrence to add money to your coffers, but the principle ideas behind this scenario remain relevant.

The bottom line about The Daily is it is right for Murdoch, (mostly) good for journalism, but the wrong approach for the newspaper industry.

Nevertheless, I look forward to seeing what The Daily continues to offer. I will gladly plunk down 99 cents each week to read it.  No, scratch that.  I will gladly pay the weekly price to experience The Daily.