More than two years ago, when the Amazon Kindle first launched, I wrote an article about the evolution of e-readers that was necessary to make then great devices for newspaper and magazine publishers. The Kindle (and other similar "e-paper" e-readers) is a "good enough" device for reading books, but it has some severe limitations for newspaper and magazine readers. With the recent announcement about the Apple Ipad, now is a good time to revisit what is needed for publishers on an e-reader.
In the original article, we highlighted several limitations the then current generation of e-readers (e.g. Kindle, Sony Reader, etc.).
- Lack of touch screen navigation
- Lack of advertising in publications (e.g. Amazon Kindle)
- Lack of color and multi-media for advertising (e.g. Flash or video)
- Control of the subscriber
- Battery life when wireless is on
The first question that I'm sometimes asked is "Why is touch screen navigation so important for newspaper and magazine reading on an e-reader?" Reading a book is a very linear process. The reader starts on Page 1, then reads Page 2, Page 3, Page 4, etc. The process of reading a newspaper or magazine tends to be very non-linear. The reader may read an article from the front page or cover that catches their eye, then jump to another section (e.g. Comics, Gossip, Advice column, Business, etc.), then they will jump back to the front section and so on... Touch screen navigation works very well for publications in which the reader is jumping around from section to section or article to article. This is a capability that next generation e-readers like the Sony Reader and Apple Ipad provide with touch screen navigation.
Advertising is the lifeblood of traditional newspaper and magazine publishing. In some cases, advertising accounts for 80% of revenue, with subscriptions and single-copy purchases providing the remainder. For this reason, the Amazon Kindle model with no advertising simply doesn't work long-term for publishers. It appears that this will not be a limitation of the Ipad. This will be key for publisher's success with e-readers and may ultimately force Amazon to change their model for publishers. Advertising on e-readers may also be a mixed blessing for publishers in that it will deliver the enhanced tracking (e.g. click-thru and click to purchase) that advertisers increasingly expect and demand, but may mirror online advertising results that show lower than desired click-thru rates that ultimately result in lower ad revenue for publishers.
The first generation e-readers have used "e-paper" technology that is limited to fairly low resolution black and white text and images. E-paper has a relatively slow refresh rate that precludes multi-media and video. Advertisers are accustomed to color in traditional print media and multi-media (e.g. Flash, animated GIFs) in online advertising. A e-reader that has color ads, multi-media ads and the ability to click on an ad and be delivered to the advertiser's web site is considerably more valuable for advertisers and ultimately for publishers. The Ipad has a high resolution color screen that is capable of displaying multi-media and can link to web sites either through Wi-Fi or the optional 3G cellular. (Unfortunately, the 3G model and associated costs may ultimately be a problem for publishers. More on that later...)
Apple's decision to restrict Adobe Flash on the Ipad seems like a short sighted one that has more to do with corporate animosity between Apple and Adobe than it does with technology. Adobe like to tout the statistic that Flash is available on 99% of Internet enabled desktops and increasingly on mobile devices as well, including Blackberries, Google Android and Windows Mobile. It is ultimately in the best interest of publishers and advertisers for Adobe Flash to be supported on the Ipad and similar devices.
The first generation Kindle had very poor battery life when the wireless capability was turned on. My first generation Kindle battery lasted less than two hours (even after a battery replacement) when the wireless was turned on and in use. Amazon made firmware improvements in November 2009 that was designed to almost double (to 7 days) the battery life of the Kindle 2 and Kindle DX (but not the original Kindle). In order for publishers to deliver advertising with clickable links to live web sites, the e-reader devices must be able to leave wireless turned on without unreasonably draining the battery. The Apple announcement indicates that the Ipad will have a 10 hour battery life. Of course, device manufacturers have a history of inflating battery life claims, so we'll have to wait and see real world results.
One significant downside of the Amazon Kindle model for publishers is that Amazon completely controls the subscriber. While Amazon now provides subscriber information to publishers, Amazon has had a very restrictive agreement about what publishers can do with the information. Amazon has also takes approximately 70% of the revenue publishers receive from subscriptions on the Kindle. While this sounds ridiculous on the surface, it might actually be a viable model if publisher could advertise on the Kindle and retained all the profits from the advertising in their publications. In the absence of advertising revenue, the Kindle model simply isn't a long-term viable one for newspaper and magazine publishers. It's interesting to note that Apple's App Store model is exactly the opposite of Amazon, in that Apple receives 30% of the revenue from the sale of an application, while the publisher receives 70%. This has proved to be a highly successful model for both Apple and application developers.
The bottom line is that the Ipad has great potential for newspaper and magazine publishers. It's a device that delivers many of the capabilities that were missing in the first generation e-readers. If newspaper and magazine publishers are ahead of the curve, they will all be developing Ipad applications that leverage the capabilities of the device to deliver their content to consumers with a good navigation interface, and rich media advertising. Paper is ultimately a very inefficient content delivery mechanism for publishers that will be replaced with digital delivery. The only question is when...
Unfortunately, there are some problems with the Ipad for publishers that are likely prevent a widespread adoption. Most of these are related to the wireless capabilities (e.g. Wi-Fi and 3G) for content delivery. In one of our future posts, we'll talk about what these problems are and what publishers should be doing now to address them.
2 comments:
Kevin, You "touch on" (pun intended) key points in the use of e-readers in the publishing industry such as how/why the Kindle is friendlier for book reading than it is for news publishers and the types of features/apps that Apple/other e-reader manufacturers should develop for news publishers. Those features/apps that you mention are, indeed, very important to publishers looking for mobile subscribers as well as advertisers looking for value in mobile advertising. The initial purchase price of the e-reader, the lack of certain important features and the short life of the battery will have a big impact on how fast/slow the iPad and similar e-readers take off. Thanks for your very informative article.
You make an interesting point about price. As the price of the devices continue to fall, I predict that we'll see a day when publishers provide the subscriber the device for free (or greatly subsidized) with the purchase of an annual subscription to the publication. I suspect that a major newspaper (e.g. NY Times) or newspaper group (e.g. Gannett) will realize before long that e-readers allow them to enter new markets with only a few journalists and ad sales staff. They can leverage all their existing national and international news, sports and feature content and add a little local content and advertising. E-readers will allow them to penetrate the market without significant infrastructure investment (e.g. printing and distribution).
Post a Comment