Device Elitism

Is publishing's obession with the Kindle and the iPad elitist? That is the question posed by Publishing Perspectives (http://publishingperspectives.com/2011/04/publishings-obsession-kindle.ipad-elitist/ 

Edward Nawotka writes that " Recently I have heard several digital publishers across Latin America and South East Asia argue that the ongoing obsession with Kindle and the iPad is shortsighted at best, elitist at worse. These publishers feel that the readers in their nations, be it Columbia, India or Indonesia are just as avid consumers of digital reading material as those in other nations, but the high cost of the Kindle and the iPad make them inaccessible to most consumers. This, as well as an outright lack of content, means coming up with an alternative distribution strategy. Typically, this means focusing on devices that the vast majority of people already own or are likely to continue owning in the future: the simple feature phone. The phone is cheap and nearly ubiquitous all over the globe. Could focusing on developing for feature phones--or at least channeling content through an appropriate API--offer a greater number of people, not all of them in rich nations, greater access to the world's intellectual wealth?"

In a tablet-giddy age this is a brave thing for Mr. Nawotka to say. Speaking from a magazine perspective, I don't think the focus on the tablet, for example, has anything to do with elitism. In my opinion it has much more to do with the prevailing magazine business model.  Although the larger US magazine publishers in particular have vowed to generate more of their total revenue from content, most still get 70-80% of their revenues from advertising. Thus the need for a screen size, rich color display and functionality that would offer a high CPM universe for prospective advertisers and a sticky space for consumers. And to date consumers seem to be spending more time in a magazine app than in the print version. Advertising on the tablet shows enormous promise but one wonders what happens when device manufacturers provide the opportunity to measure user analytics in the softwear. Adobe/Omniture has hinted at this or more than one occasion.

I think it a little one-sided to downplay interest in the iPad outside the US and Europe. The tablet is becoming very popular in China, for example. Nonetheless, we cannot underestimate the importance of the feature phone, the smartphone and the "superphone"--these devices exist along a continuum as consumers increasingly demand more features and functionality. We need to address the content needs of the more than 1.5 billion mobile phone users worldwide.

It might be easier to develop premium content units or templates for a range of mobile devices in countries outside the US, at least in the beginning. In most regions, including Europe, publishers generate much more revenue from content than from advertising (There are some exceptions, including Italy). While the publishers in question are no less interested in brand integrity than their brethren in the states, they have a long history of repackaging and mashing up content, as does the long tail of mid-size and independent publisher in the US.

The German magazine Focus has reported some success in selling high-value, article-level content through Google's One Pass. Given the abundance of mobile devices there is no reason a similar article-level approach that includes personalization, location-based features and relevant context could not be developed for the increasingly sophisticated mobile device. Viyya Technologies, a New Jersey-based company, is developing such a business.

Such an approach to mobile content distribution would not only be good business; it would be consistent with current dynamics in the device and carrier eco-system. At the end of the day even the finest premium content is still, well, data and therefore a predictable, scaleable revenue stream. 

Geo-Fencing

A few years ago a publishing friend in Sao Paulo, Brazil said his company enjoyed zero newsstand returns. I assumed this was no more than acceptable bravado. After all, I had been arguing that the U.S. soccer team actually stood a chance against Brazil.

My friend didn't really sell every copy put out at retail. He just collected all "unsolds" and stashed them in a warehouse on the outskirts of town. "Fire hazard," is what I thought when eyeing the million-plus magazines reaching to the roof of a well-managed and spacious warehouse.

His plan was simple. He would distribute old magazines, usually with no cover date or price, to parts of the country that had not been exposed to articles about the "Ten Ways to Enjoy Brazilian Wines." That, by the way is a joke at the expense of my Brazilian friend who forced me to actually count all those stored magazines. Or he might re-issue the magazines with new covers putting, as it were, old wine in new bottles.

And why not? Brazil has huge swaths of land that have not been blessed with a traditional distribution system presently clustered around Rio and Sao Paulo. 

Anyone who has been involved in international publishing knows the above story varies by degree in other developing countries or nations in transition. I've seen instances in China, India and Russia where publishers sell dated magazines outside the major metro areas. The old-fasioned doctrine of "scarcity" still works in some places. Yes, the local black market might have some skin in this game.

What happens when distribution systems in other nations become more mature, and these options are less viable?

At the recent OMMA Mobile conference in Los Angeles there was considerable talk of mobile applications at retail. In a way this was refreshing as there was less emphasis on the Jesus iPhone and more attention to the bottom of the puchase funnel. A number of speakers addressed mobile's ability to "geo-fence" around retail, including loyalty programs and CRM data. Ikea and JC Penny seem very advanced in reading scans with mobile phones.

TechCrunch reported on December 6, 2009 that "Google had mailed out window stickers with two-dimensional bar codes (aka QR codes) to the most searched for or clicked-on businesses in its local business directory. Anyone with a QR code reader in their phone can scan it to call up a Google Mobile local directory for one of these favorite places."  Just wave your iPhone in front of the bar code and get all the necessary information about a local business.

As location-based mobile marketing becomes more sophisticated and coupon scanning more ubiquitous, retail businesses, including magazines, are likely to be transformed.

As for my friend in Brazil he plans to put all back issues of his million magazines on mobile devices.

And the U.S. is going to win the upcoming World Cup.

China Test

off to Beijing