Pricing iPad e-magazines provides new opportunities for publishers to get it right this time.

Subject to ongoing battles over who has rights to what, one thing remains certain to both publishers and Apple–content will cost something, unlike most e-newspaper counterparts.

Certain newspapers, like the Wall Street Journal and the New York Times, have successfully employed partial pay or pay wall (i.e., pay after a reader has visited more than a certain number of times within a given period) models. WSJ.com boasts over a million pay subscribers for its online content. But, a million pay subscribers certainly isn’t the norm for most news content providers, and even WSJ articles can be accessed for free through backdoor sites like Google News (much to the chagrin of Rupert Murdoch).

Pulitzer Prize winner and former Chairman of Dow Jones & Co. (which publishes the WSJ) Peter R. Kann eloquently describes the decline of print newspapers, the emergence of the ‘free model‘ of online content, and the pricing challenge most newspaper publishers face:

“… by the time Internet editions arrived, the prevailing philosophy in most publishing companies already was that customers could not be expected to pay much for content, that it was easier simply to rely on advertising. The new Internet editions were merely the ultimate extension of that trend: free news to the consumer, total reliance on the advertiser.

But that didn’t quite work out as expected. Online advertising, given virtually unlimited supply and also given clever new competitors like search sites, has been nothing like publishers posited. Online edition ad rates and online edition ad revenues are only small fractions of those in traditional print. And as print advertising continues its steady decline, online advertising cannot come close to compensating.

The print editions still have customers willing to pay for at least a discounted subscription, but there are fewer of the customers as free online editions peel them away from print. And so the publishers are left to juggle their twin products—the old one in inexorable decline and the new one in commercial denial—and pray the future may be somehow different.”

Sadly, many print newspapers seem to be going the way of the dodo, drawing cries of death of the medium, at least as we knew it, from many.

Unlike their faster-moving counterparts, books — in all forms — are doing quite well, financially-speaking. According to the Association of American Publishers, book sales increased year-over-year by roughly 4 percent at $11.2bn for the year. Of those, about $170m were e-book sales, marking roughly 177 percent growth over last year. While not insignificant, e-books grabbed only a little over 3 percent of the total book sales.

Beyond the cost of e-readers, some, like PC World’s Tony Bradley, criticize what they perceive to be e-books’ bloated pricing model. Bradley writes,

“Media businesses–whether music, movies, books, magazines, or newspapers–seem to cling to a pricing model that fails to account for the significantly lower overhead of digital distribution. These entities seem hung up on pricing narcissism, rather than realizing that production costs are different and distribution is almost universal–changing the economics entirely from traditional models.”

Bradley suggests a revenue-focused model, which (to me) makes sense:

“Basically, publishers should be pricing digital distribution based on what it would expect in net revenue from the traditional distribution method, not based on some calculated percentage of the traditional retail price. I don’t know the exact numbers, but If Wiley is only going to net eight dollars when it sells a printed version of my book, then it should create a digital pricing scheme that nets the same.”

Some, like BNET's Eric Sherman, predict that the iPad will 'kill publishing.'

Unsurprisingly, many publishers like Murdoch seem more prone to employ beefier pricing models that hinge on how much people are willing to pay. Can you blame them for wanting a bigger margin?

That said, e-magazines provide a whole new opportunity to find a happy pricing medium that pleases both publishers and readers. Needless to say, the removal of frequent, full-glossy print production costs will reduce publishers’ overhead significantly, allowing them to price e-magazines lower than their costly print counterparts. Better content and more innovative design — enabled by the iPad’s functionality — will allow for the creation of quality multimedia experiences that readers/viewers are willing to pay for.

Central to paid e-magazines working is leaving old models behind–from both a production and consumer standpoint.

Content and design worthy of pay

In many ways, the term ‘e-magazine’ is too antiquated to encapsulate the multimedia, dynamic possibilities of content production and distribution through the iPad. It’s a given that video and audio should be integrated among text, but navigation through content should move beyond a page-by-page linear progression.

The navigational structure of each issue could take on unique properties, linking different portions of content to one another and external sources. Typefaces, sizing and layout could vary dependent on the content and what would be most aesthetically gripping to readers/viewers/listeners — much like magazines are now. To do this, however, developers would play an increasingly important role, taking on tasks akin to layout and design editors of magazines–but with more design elements at their disposal. It’s not just a matter of positioning text, pictures and headlines anymore. It’s creating a dynamic, multimedia experience with which readers and viewers can interact and experience with multiple senses.

In other words, publishers need to envision a medium that consumers are willing to pay for. If publishers utilize the technology to its fullest and give readers/viewers great content in a way they have never experienced it, I predict they will not only make good money, but they will also reverse magazines’ downward trend in recent years. Granted, that’s easier said than done. It may be the case that old magazine houses are too entrenched in their old ways to look into the future, and it may take a disruptive innovator in their industry to catalyze forward motion.

Shifting consumer focus: from price to value and cost

Most good sales people will agree that it is key to shift clients’ focus onto value, as opposed to price. A closer examination of  this notion and  re-reading Kann’s article in WSJ casts some light on how this is relevant to publishers’ making money with their content.

Entrepreneur.com‘s Barry Farber writes,

“…there are customers worth working with, whom you can help understand the difference between price and cost. Price is what they pay for the product or service; cost is what the investment is over the lifetime of doing business. Can you help your customers grow their business in a way they never thought possible?”

In the case of publications, readers and viewers are in the ‘business’ of personal edification. And if publishers can convince their audiences that they convey quality content in a quality way, the cost of an e-magazine becomes an investment in personal edification.

Looking at the difference between e-books and e-newspapers (and WSJ‘s content contrasted with many e-newspapers), the difference is quality. Books take a significantly longer time to write, and readers are thus willing to pay extra for the value of the writer’s labor. The WSJ has unique, quality reporting and a distinct brand, and hence people are willing to pay for the content over free content available on Joe Schmoe’s blog. Admittedly, this is an oversimplification of the issue at stake, and free content isn’t necessarily bad (achem…this blog).

To end, here’s a video demonstration of Wired’s iPad e-magazine, in current form. It’s looking pay-worthy, in my opinion.

Share the Future

An image pulled from DeviantArt by CrapsY (username).

The first was with an old friend, Michael P. (whose facebook profile I took the below quotation from), who forsook the life of  a Harvard-graduated consultant to work in a coffee shop and live as a Central Square hipster. Our conversation, which ranged from ‘catching up’ to ‘big issues,’ gravitated toward Michael’s thoughts on an emergent counterculture that he termed ‘the unplugged’ — that is, those who refuse to subscribe to a lifestyle that increasingly depends on modern technology. A proponent of this lifestyle, Michael made significant efforts in the last couple years to reduce his online footprint, pare down his digital interactions, and do things like increase the size of his record collection and work on a screenplay about an 80′s record producer.

As I understood them, Michael’s views (and those of ‘the unplugged’) are premised on the notion that technology detracts from our lives’ experiences by drawing our attention away from our real-world experiences and interactions. Michael posits that those who are ‘plugged in’ misguidedly reify technological advances as ‘progress.’ While technological artifacts seemingly make our lives better, they actually distance us from one another and definitively human activities — e.g., expressing ourselves through art and engaging the world through our tactile senses (sound familiar?).

The ‘unplugged’ view, I think, tends to overly romanticize the past and a (purportedly) simpler way of socializing, expressing oneself, and interacting with the world. Though I understand the love for and actually tend to prefer activities that more intimately (in a physical sense) connect me to the product of my work, I (and, I think, many others) view technological artifacts as just another set of tools we can use to interact with the world — e.g., a paintbrush, a pencil, a pair of glasses. In other words, technological advances most directly affect media, not expression. Or, more simply, technological advances most directly affect the tools we use, not how we use them.

That said, the forms of expression undeniably change as a result of the given media through which they are expressed. The notion of ‘friendship,’ for instance, has changed dramatically. In a world where roughly 30 percent of the facebook friendships of those between 18 and 24 are people whom they have never actually met, ‘friendship,’ it seems, certainly means something less substantial than what it perhaps once did. For photographers, the development of Adobe’s Creative Suite has changed how they view their craft.

In this light, I think the dichotomy between ‘unplugged’ and ‘plugged in’ is misguided. The analogy implies a reliance upon a sort of technological energy for functionality. But technology is more than that–at least for me. It enriches, enhances and augments my reality; it creates opportunities to share information, connect with others and learn about things I never would have been able to otherwise. In many ways, my subscription to a life filled with technological artifacts is more akin to the Matrix’s ‘jacking in’ — that is, it’s a choice to participate in a whole other experience of reality (I recognize the negative implications that this term may hold. My use of this term is also an admission that there is certainly something lost in exchanging the simplicity of more immediate physical interactions with the world for a view shaped by a world in which technological advances are a given). In contrast, a life without technology, I think, is a rejection of participation in this world and its benefits — and so, I will term it ‘checking out.’

This distinction leads me to think of the second conversation I had on this subject. During my final interview presentation with Jack Morton Worldwide, where I now work in business development, Liz Bigham, the Director of Brand Marketing, asked me if I perceived a pull-back reaction to a world saturated with social media — a desire for real, physical connections with other people. During the interview, my first response was that the nature of interactions is being transformed by media and the capabilities of technology. That is, the line between ‘real’ and ‘virtual’ experiences would continue to erode as time progressed, and any desire for ‘physical’ experiences could eventually be entirely satisfied by virtual ones.

But thinking back on this question, I’m not certain this is the case. I anticipate that the ideological divide between ‘jacked in’ and ‘checked out’ peoples will only increase as technologies transform our experiences of reality more dramatically. Michael’s disdain for technology isn’t fading quickly, and there’s something intuitively appealing about his rejection of the ‘jacked in’ life that evokes sympathy. Don’t I also enjoy it when I get out to nature, leave behind my cell phone and computer, and cut myself off from the technological world? But my memory of the practicality of using technology always seems to win out. I like having a world of information at my fingertips, the people I know available at the touch of a button, and the host of possibilities technology provides me. I suppose, though, that’s the divide–some people don’t.

But perhaps there is something to my initial intuition in my conversation with Liz, and the ‘checked out’ counterculture will ultimately have less ammunition to fuel its ideology. At the core of disdain for technology, I think, is disdain for ‘the complex,‘ a purportedly enhanced reality in which our actions must conform to the constraints placed upon them by the limitations of technology. What this disdain fails to recognize is that accompanying the trend of technological complexity is an ever-increasing tendency toward simplicity in design. User interfaces are becoming more elegant and intuitive, despite increasingly complex back-ends. Physically, technological artifacts — e.g., televisions — are also becoming less cumbersome and streamlined. This tendency toward design simplicity will only become more apparent as  futures waves of technological artifacts reach us.

My guess: ‘checked out’ people will resist until Apple comes out with a strong enough ad campaign for its iTablet.

“As I look around the contemporary American scene I am puzzled by what seems generally to pass for a historical object or monument…With us the association seems to be not with our politically historical past…what we cherish are mementos of a bygone daily existence without a definite date. Archie Bunker’s armchair will recall–at least to the present generation–not only the many hours agreeably spent watching television, but also the environment, the setting, of a popular program, though not necessarily the program itself.”
- J. B. Jackson

Share the Future