Silicon Valley Insider
http://www.businessinsider.com/henry-blodget-kindle-milestone-amazon-sold-more-
ebooks-than-physica...
Kindle momentum continues, the day publishers have to capitulate will come sooner
rather than later.

And, despite publish...
Specifically, the wholesale price paid by Amazon to Rosetta Stone books (the publisher)
is likely close to those paid for ...
directly with Amazon. This will provide more motivation for authors to cut out the
middleman and go direct to Amazon.

BOT...
lower than it is for new books. So the near-term picture for Amazon is slightly less dreary
than we originally thought.

B...
Most publishers we spoke with believe that Amazon will eventually have to increase
its retail price if the publishers hold...
VERY FAINT SIGNS E-BOOKS MAY DRIVE INCREMENTAL SALES

The one thing companies like Amazon and book publishers appear to ag...
that the company is waiting until the last minute to cut content deals in order to avoid any
leaks about the tablet.




S...
Story
Future Is Here: More E-Reading Apps Debut at CES
Erik Sass, Jan 06, 2010 05:40 PM

New e-reader apps and devices are...
year, compared to 2009, then again by 2012. Earlier this week, Skiff, LLC previewed its new
Skiff reader at CES. The reade...
Why put an expensive reader in the market without content? Samsung execs believe that
if they make the reader, the content...
Apple's forthcoming tablet is emerging as a much-anticipated competitor to Amazon’s Kindle. The tablet will
likely have tw...
general features, which we believe are more suited to reading graphical and image-rich newspapers and
magazines than the K...
Tablets demand a fresh approach to content and advertising that leverages the
capabilities of this new medium in the same ...
With tablets about to up the ante for the interactive publishing, here are the key
things media companies must do to adapt...
Given the more than 15 years we have been waiting for most legacy media
companies to develop Internet-literate products, t...
paid subscribers, thus eliminating a lot of the idiots who post annoyingly partisan
comments or intentionally confrontatio...
•

    •    JANUARY 21, 2010, 10:49 P.M. ET

Apple Sees New Money in Old Media
Steve Jobs's Tablet Device Looks to Repacka...
Mr. Jobs has a longstanding strategy of devising new ways to access and pay for quality content, instead of
reinventing th...
Getty Images
Apple CEO Steve Jobs spoke during an event in September 2009.
Apple's tablet foray faces several obstacles. A...
January 20, 2010

Amazon Unveils New Kindle Royalty Option; Incentive
To Keep E-Book Prices Down
As word spreads of book p...
Apple Courts Publishers, While Kindle Adds Apps
By BRAD STONE and MOTOKO RICH

SAN FRANCISCO — It’s a formidable high-tech...
books, like searchable travel books and restaurant guides that can be tailored to the
Kindle owner’s location; textbooks w...
The probable entry of Apple and its tablet into the e-book market gives publishers hope
that they might gain some leverage...
AAPL Jan 25 2010, 05:20 PM EST
                             Change                               % Change
203.07
         ...
SAN FRANCISCO — After months of feverish speculation, Steven P. Jobs introduced
Wednesday what Apple hopes will be the coo...
One question Apple faces is whether there is enough room for another device in the
cluttered lives of consumers.

“I think...
later in the spring, costing an additional $130 and requiring a data plan from AT&T.
Owners of the iPhone who already pay ...
Ian Schafer

We've known for quite some time about the iPhone's inability to render Flash content
within the mobile Safari...
Poynter Online
E-Media Tidbits
Home > Online & Technology > E-Media Tidbits
Tools: Text Size or , Print , RSS , Subscribe ...
read the way her or she likes rather than one that's imposed or b)
appreciate the e-book's artwork, coloring and typeface....
enables users to read Kindle books, and if it can also display other
                  formats, it may instantly make all ...
Then the video cuts, then Steve says, "Publishers are actually withholding their books
from Amazon because they're not hap...
To help push this point further, as PC World reported on Saturday, all of the demos on
Apple’s site for the iPad now show ...
In a recent blog post, Lee Brimelow, an Adobe “platform evangelist,” said his company
was not “against” HTML5. “On the con...
That restraint is evident in Mr. Jobs’s personal taste. His black turtleneck, beltless blue
jeans and running shoes are a ...
February 1, 2010

Publisher Wins Fight With Amazon Over E-Books
By MOTOKO RICH and BRAD STONE

After a weekend of brinksma...
Under Macmillan’s new terms, which take effect at the beginning of March, the publisher
will set the consumer price of eac...
Amazon may still hope to play one asset to its advantage. Loyal Kindle users routinely
give low ratings to books they perc...
YouTube announced this year that it was testing the new format for select videos. In the
past, YouTube videos were encoded...
Short of landing in a flying saucer and having a tablet teleported into his hands, there was
no way that Steve Jobs could ...
Apple and many others have problems with Adobe’s Flash because they don’t control it,
but it also means that people who wa...
Despite that doubt, Terry McDonell, editor of Sports Illustrated, liked what he saw, in
part because the product that was ...
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
"E-Readers #2"
Upcoming SlideShare
Loading in...5
×

"E-Readers #2"

3,110

Published on

1 Comment
1 Like
Statistics
Notes
  • Find coupons for your hosting. Get a promo deal before you purchase hosting http://vpsnet.wordpress.com/2010/05/03/vps-net-review/
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total Views
3,110
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
23
Comments
1
Likes
1
Embeds 0
No embeds

No notes for slide

"E-Readers #2"

  1. 1. Silicon Valley Insider http://www.businessinsider.com/henry-blodget-kindle-milestone-amazon-sold-more- ebooks-than-physical-books-on-xmas-2009-12 Kindle Milestone: Amazon Sold More Kindle Books Than Physical Books On Xmas Henry Blodget | Dec. 26, 2009, 2:26 PM | 7,738 | 16 AMZN Dec 29 2009, 05:20 PM EST Change % Change 139.41 +0.10 +0.07% Amazon's Kindle hit an important and startling milestone yesterday: On Christmas, the company sold more Kindle books than physical books. Yes, this is obviously the result of everyone who got a Kindle for Christmas (lots of folks) firing it up and ordering a bunch of eBooks on a day in which most physical-book readers weren't shopping. But it's still important and impressive. The Kindle's economics are still lousy for Amazon: The company loses money on new releases and makes only a modest amount on older titles, thus losing an estimated $1 per Kindle book. That said, Amazon's strategy is clearly to drive "ubiquity," and based on stats like those above, it is succeeding. The more Kindle books Amazon sells, the more leverage it will have over publishers when it tries to force them to cut wholesale prices. If Amazon's
  2. 2. Kindle momentum continues, the day publishers have to capitulate will come sooner rather than later. And, despite publishers' cries, this is not necessarily bad for publishers: If publishers cut wholesale prices, Amazon will be able to cut retail prices. If the retail prices are cut to nominal levels--$2.99 or $3.99 per copy--sales velocity should soar. Publishers and writers will make less per unit, but the increased volume should make up a lot of the difference. TBI Research Amazon's Latest eBook Deal Is A Watershed, Will Increase Pressure On Publishers http://www.tbiresearch.com/amazon-likely-to-make-modest-profit-from- covey-deal-2009-12 By Rory Maher, CFA | Dec. 15, 2009, 6:10 PM | This is a report from our premium subscription research service The Internet Analyst. To subscribe or sign up, please visit www.tbiresearch.com. Amazon signed an exclusive deal for the eBook rights to two bestsellers by Stephen R. Covey. This is a watershed deal. The economics are not unusual for Amazon, but--for once--they are good for the author. By giving writers a way to make more money by dealing directly with Amazon, the deal could begin to put pressure on other publishers to change the way they view eBooks. Specifically, the deal could shift difficult discussions currently being held between Amazon and book publishers in Amazon's favor since it: • Sets a precedent for authors owning the digital rights for back titles, which could lead to writers cutting out the middleman and distributing direct to Amazon. • Pays 50% royalties to the author, setting the stage for a very public case in which an author could make more money selling e-books currently than print books. WHOLESALE PRICE TO AMAZON IS SIMILAR TO OTHER E-BOOK DEALS We spoke with someone close to the deal who said that it closely resembles a typical e- book deal, except for the larger royalty to the author.
  3. 3. Specifically, the wholesale price paid by Amazon to Rosetta Stone books (the publisher) is likely close to those paid for other comparable older e-book titles. On older books, we estimate that Amazon nets between $0 to $1 in profit per Kindle copy sold. (Amazon loses money on new books). Rosetta, meanwhile, is giving half of the overall revenue to the author, but it should make a profit since there are minimal production and marketing costs involved. LEGAL PRECEDENT GIVES SOME AUTHORS ABILITY TO DEAL DIRECTLY WITH AMAZON There is an important legal precedent here, one that could give Amazon a huge advantage in dealing with authors and publishers who published books more than a decade ago. (In those days, print publishers did not explicitly buy rights to electronic books, whereas they now do.) Rosetta Stone went through a lengthy legal battle with Random House back in 2001 in which it won the rights to sell e-books on its titles. This precedent will make it difficult for publishers to successfully sue authors and digital publishing shops for the digital rights to back titles. The precedent should give authors the ability to "go direct" and cut better deals with Amazon. This, in turn, may allow Amazon to acquire the rights to books for less than they would if a traditional publisher were involved. Publishers who do sue for electronic rights risk losing leverage in discussions because they will likely be seen as "the bad guy" suing authors in order to squeeze more money out of them. A better alternative may be to simply try to negotiate the best deal possible with authors, assuming many of them don't cut direct deals with e-book distributors. In addition, there is a competitive issue at play as well. If a large battle for e-book rights ensues in which publishers team up in court to agressively go after digital rights, the case will likely be led by a single publishing house with the others playing lesser roles in the legal process. This makes the lead plaintiff look potentially worse to authors than its competitors which could make it easier for its competitors to sign new authors. So, publishers could have a difficult time coming together to team up on an issue like this in court. AMAZON HAS NOW DEMONSTRATED IT CAN GO IT ALONE Amazon is the largest e-commerce site in the world and already has a large installed base of readers buying the print and audio editions of the e-books it sells. If Amazon is able to succesfully use its massive reach to drive a material amount of book sales off of these exclusive Covey releases it will have demonstrated to authors that it can sell e-books
  4. 4. directly with Amazon. This will provide more motivation for authors to cut out the middleman and go direct to Amazon. BOTTOM LINE: None of this will make any difference to the near-term Kindle reality: Amazon loses money on most books it sells. In order for the Kindle to become the big money-maker that most analysts expect, traditional publishers will have to cut the wholesale prices at which they are selling eBooks to Amazon. We have seen no evidence yet that this is happening. TBI Research http://www.tbiresearch.com/talks-between-amazon-and-publishers-going- nowhere-2009-11 Amazon Making No Headway In Talks With Publishers About Cutting Kindle Book Prices By Rory Maher, CFA and Henry Blodget | Nov. 30, 2009, 8:52 AM | 2 Print This is a report from our premium subscription research service The Internet Analyst. The Internet Analyst is currently in beta, with a formal launch coming towards the end of 2009. To sign up for a free beta trial, please submit your name and email address here. Kindle sales and profit forecasts are running wild. Key to the bullish assumptions is the idea that publishers will soon cut wholesale prices on e-books, allowing Amazon to start making money on them. In the meantime, Amazon is losing its shirt, selling e-books for about $1-$1.50 less than the wholesale price it pays. The negotiations between book publishers and e-reader distributors like Amazon will determine how large and profitable the e-reader market will become. So we called a number of book publishers to see how these discussions are progressing. Here are the key points: Publishers are showing no willingness to cut wholesale prices for e-books. Thus, neither wholesale nor retail prices on e-books are changing anytime soon, which means Amazon will continue to lose money on e-books for the foreseeable future. Amazon is probably making a small gross profit from older titles like paperbacks - likely about $0.50 to $1 per book. This is because the wholesale price for these titles is
  5. 5. lower than it is for new books. So the near-term picture for Amazon is slightly less dreary than we originally thought. But older books (paperbacks, etc.) only account for about 50% of sales, so Amazon's average loss per book is likely $1-$1.50. FOR NOW, NEITHER SIDE IS BUDGING Industry sources indicate that neither book publishers nor e-book retailers like Amazon are currently willing to compromise their positions. Amazon is refusing to raise retail ebook prices, and publishers are refusing to cut wholesale prices. Unless/until this changes, e-books will be a money-losing business for Amazon. The book publishers can suggest a retail price, but there is very little point-by-point negotiations occurring to work out deals that are profitable for both parties. A group of literary agents recently visited Amazon to convince the company to raise their retail prices. The argument they made was that prolonged discounts in pricing will hurt sales for both parties over time because high quality authors will stop writing as much since their incomes will have been considerably damaged (we go into more detail below). The meetings went nowhere and both sides left having not agreed on anything.
  6. 6. Most publishers we spoke with believe that Amazon will eventually have to increase its retail price if the publishers hold their ground. For now, Amazon hasn’t gained enough leverage through sales of the Kindle to make publishers change their mind in that regard. PUBLISHERS ARGUE THAT BOOK QUALITY WILL DECREASE, HURTING OVERALL BOOK SALES FOR PUBLISHERS AND DISTRIBUTORS To some degree publishers have their hands tied since they need to compensate authors enough to keep them writing. Enabling a further decrease in book prices only hurts their ability to do this since author royalties are paid off of retail sales. If e-book prices remain low, publishers argue that: • Royalties to authors will decrease and won’t be able to support books that take several years to research and write. • Authors will stop writing quality books since they won’t be able to support themselves given the amount of time and resources invested in researching and preparing the books. • This would lead to fewer people buying books, which would hurt revenue growth for both publishers and e-readers. Companies like Amazon are content to wait and see if publishers finally cave and cut prices. THERE ARE ONLY A FEW WAYS THIS CAN END Publishers offered a variety of different ways the pricing battle could play out, including: • Books are sold for less and are commoditized, leading to fewer quality books being released. • E-books are sold at a discount, but are sold after hardcopies are released, similar to the way paperbacks are currently released. • Some kind of model is developed where e-books are sold as part of a hard copy purchase (not a lot of specifics here). A more likely result is that Amazon wins and books are sold at lower prices. This would likely lead to consumers buying more books. In theory, this could lead to essentially the same amount of overall revenue for publishers, e-readers, and authors. In theory. But secular trends of declining book readership are continuing, and we don’t see this trend easing anytime soon. The book, unfortunately, is an outdated format and technology.
  7. 7. VERY FAINT SIGNS E-BOOKS MAY DRIVE INCREMENTAL SALES The one thing companies like Amazon and book publishers appear to agree on is that they both hope e-book sales will prove to be incremental, not substitiutional. Unfortunately, most publishers we spoke with thought e-books would largely be substitutional, which does not bode well for those hoping publishers will lower their wholesale e-book prices anytime soon. We caution that data is limited, but we did hear of a few examples of authors claiming e- books sales boosted their overall book sales through incremental purchases. These ranged from modest bumps to a 50% increase. These were isolated examples and did not include blockbuster authors, but if this trend continues it would support the case that e-books could drive incremental book sales or that lowering prices on books across the board could lead to a greater volume of sales. APPLE HAS HELD PRELIMINARY DISCUSSIONS, BUT NOTHING SUBSTANTIAL Right now competition does not impact wholesale pricing much – each e-book distributor must pay the same price and most e-book prices are currently similar across the board. Apple has held preliminary discussions with the trade book publishers, but little contact has been made the past six months. We believe this is likely because Apple’s tablet release is not imminent, the company is negotiating with other content providers first, or
  8. 8. that the company is waiting until the last minute to cut content deals in order to avoid any leaks about the tablet. Spring Design Strikes Deal With Google To Bring More Books To Its Alex eReader by Robin Wauters on January 5, 2010 Spring Design , developer of the dual-screen Alex eReader , has struck a deal with Google that gives users of the device access to more than one million Google Books online or downloaded using Alex’s touch-screen browser and search apps. Spring Design is set to debut its Alex eReader at the Consumer Electronics Show in Vegas later this week. The device will feature a Google Android-based platform with full Web browsing capabilities, Wi-Fi connectivity, audio and video playback and image viewing in a variety of formats. The Alex eReader will also be able to run a number of Android apps. The Alex eReader boasts a 6” EPD (Electronic Paper Display) screen which allows users to browse the Web in full color while simultaneously searching for and reading digital books. Users can thus click on hyperlinks within online books that lead to relevant information or multimedia content found online in order to enrich their reading experience. EPUB digital books can be searched and downloaded using Google API applications provided by Alex’s eReader. Spring Design made headlines late last year when it sued Barnes & Nobles for alleged infringement by stealing trade secrets and copying features from the Alex eReader for its Nook product. Google, meanwhile, is still caught up in litigation with authors and publishers over its Book Search product, although preliminary approval of a settlement was reached on November 19, 2009.
  9. 9. Story Future Is Here: More E-Reading Apps Debut at CES Erik Sass, Jan 06, 2010 05:40 PM New e-reader apps and devices are hitting the market at a furious pace, and this year's Consumer Electronics Show in Las Vegas is a favorite venue for unveiling new entries. The profusion of free downloadable software apps, in particular, promises some kind of social and technical shakeout in the years to come. The most recent software app announced at CES, Blio, comes from knfb Reading Technology, a company founded by futurist Ray Kurzweil, the inventor of voice-recognition, and the Federation of the Blind. Originating as an app to help people with impaired vision read digital content more easily, knfb is marketing Blio to mainstream consumers. Blio aims to preserve the visual format of books and magazines, including layout, type, images and colors, while also enabling an array of digital media, like online video and interactive Web. Compatible with desktop and tablet PCs, netbooks, iPhones, iPods and other mobile devices, the free app allows users to make "notes" by saving additional images, video and voice content alongside digital content. It also compiles lists of relevant Web references. Blio offers users access to 1.2 million titles through a partnership with book distributor Baker & Taylor, Kurzweil said. Like other e-reader services, Blio stores digital editions purchased by the user in a virtual library, but unlike some other services, the user can access this virtual library by various means, including mobile devices, desktop and tablets, allowing them to "transfer" the reading experience between devices. Kurzweil also touted its color capabilities as a significant improvement over competing services, which are for the most part limited to monochromatic reproductions of print content, noting the importance of color to reader experience for content like cookbooks, travel guides, how-to books, textbooks and children's stories. On the device front, the Consumer Electronics Association predicts e-reader sales will double this
  10. 10. year, compared to 2009, then again by 2012. Earlier this week, Skiff, LLC previewed its new Skiff reader at CES. The reader, created at the behest of magazine and newspaper publisher Hearst, has its own Skiff e-reader app, which should be compatible with content from other publishers. Advertsing Age Latest E-Readers Come From Samsung, Lacking a Little Content Comes to Market With Google Books, but Promises More Soon By Michael Learmonth Published: January 07, 2010 Samsung execs believe that if they make the reader, the content will come. LAS VEGAS (AdAge.com) -- Does the world need another e-reader? Samsung thinks so. In addition to the flashy 3-D TVs and Blu-ray players that Samsung rolled out at the Consumer Electronics Show in Las Vegas, the company has also jumped into the e-reader fray with two models sporting features such as a stylus pen for writing and the ability to share content wirelessly. Both the E6 and bigger E101 ($400 and $700, respectively) will go on sale early this year, but one key component is missing: content. Initially, Samsung's e-readers will only have access to Google Books, mostly comprising out-of-print titles and books in the public domain.
  11. 11. Why put an expensive reader in the market without content? Samsung execs believe that if they make the reader, the content will come. Samsung spokesman Jason Redmond said that with Amazon's Kindle, Barnes & Noble's Nook and Sony's e-readers in the market, Samsung would be able to reach deals with publishers. And consumer demand for devices and e-books alike seems to be growing. A new Parks Associates report says 7% of those with broadband connections at home are considering buying an e-reader in the next 12 months. Amazon, which has been touting the success of the Kindle but providing no solid numbers, said that on Christmas Day its digital book sales exceeded physical book sales -- a first. Samsung has also launched its own app store, "Samsung Apps," which now sells applications for TVs and Blu-ray players but will be adapted to Samsung's e-readers as well, allowing the company to sell books and deliver them wirelessly. Mr. Redmond kept mum, however, on the economics; Amazon keeps as much as 70% of newspaper sales revenue, and publishers are eager to license competitors on better terms. Last month Plastic Logic and Sony were already spotted cozying up to publishers by offering better cuts of revenue and more information on consumers. The Business Insider Apple Tablet Better Positioned Than Kindle To Go After Newspaper/Magazine Market Rory Maher, CFA: rmaher@tbiresearch.com January 4, 2010.
  12. 12. Apple's forthcoming tablet is emerging as a much-anticipated competitor to Amazon’s Kindle. The tablet will likely have two competitive advantages over the Kindle when it comes to selling digital versions of newspapers and magazines: • Lower content delivery costs, which should enable Apple to cut deals with newspapers and magazines that are more favorable for the publishers than Kindle deals. • Better graphical features LOWER WIRELESS DELIVERY COSTS WILL ENABLE APPLE TO CUT BETTER CONTENT DEALS Newspapers and magazine e-reader files are typically a lot larger than book files since they host more graphics and illustrations (most books are simple text). Therefore, it costs Amazon a significant amount of money to deliver newspapers and magazines to its Kindle device since Amazon picks up the wireless bill for content delivery, not the consumer. An executive from an e-reader company estimates the delivery cost of a single newspaper or magazine subscription on a wireless device like the Kindle could be as high as $3 per month. That’s a lot when you’re only selling subscriptions for upwards of $10 a month. Here is how the executive arrives at this estimate: • Low-single-digit cost per MB data delivery fee • 4 GB average file size (could be bigger depending on the publication). • 25 deliveries per month, or 100 GB total data usage per month. Apple, on the other hand, partners with carriers for its portable devices (like the iPhone/ATT relationship) and passes the delivery costs to the consumer through unlimited data plans. The lower overhead enables Apple to cut better content deals with magazines and newspaper publishers, which we’ve heard Apple has been doing. We should note that sophisticated computing functionality could consume a greater amount of bandwidth, which could make it difficult for Apple to pass these costs to consumers. Industry contacts indicate Apple is offering splits of anywhere from 50/50 to 30/70 in favor of the publisher and not asking for exclusivity. These terms are much better than Amazon’s, which typically gives less than half the revenue to publishers. APPLE TABLET BETTER REPLICATES EXPERIENCE OF READING PRINT MAGAZINES AND NEWSPAPERS Apple has released no details about its tablet. But, there has been plenty of speculation surrounding its
  13. 13. general features, which we believe are more suited to reading graphical and image-rich newspapers and magazines than the Kindle is. • A display size 7” to 10.” • Full color display with illustrations and graphics. • Touch-screen technology. Reflections of a Newsosaur Musings (and occasional urgent warnings) of a veteran media executive, who fears our news-gathering companies are stumbling to extinction Friday, January 08, 2010 Holy Moses! Media need to gear up for tablets Most media companies are better equipped to deal with the tablets Moses hauled down Mount Sinai than the dazzling new gizmos coming from Apple, Microsoft and a host of other technovators. This has to change fast. As my friend Mark Potts ably noted here, tablets have the capability of revolutionizing newspapers, magazines, book publishing, television, movies, communications, applications and gaming. They also will further stress the tattered advertising and subscription models on which the change-averse legacy media continue to rely. Tablets will the rock media as much, if not more, than the Internet, because they will powerfully combine ubiquitous connectivity, elegant displays, powerful computing and extreme portability. As the future Swiss Army knife of media platforms, they have the potential to obsolete not just print, broadcast television and Filofaxs but also desktops, laptops and smart phones.
  14. 14. Tablets demand a fresh approach to content and advertising that leverages the capabilities of this new medium in the same way TV required pictures and action, instead of stiff announcers recycling radio fare. The first, feeble shot of the tablet revolution was fired on Wednesday when Steve Ballmer, the chief executive of Microsoft, showed off (video) a trio of pending products at the Consumer Electronics Show. Ballmer did little to take the edge off the fevered expectation that Apple will debut a tablet of its own on Jan. 27. By most accounts, the upcoming iSlate, if that indeed is the name of the new Apple offspring, will look a lot like an iPhone fitted with a 9.5-inch diagonal screen vs. the 3.5-inch display on the original, ground-breaking smart phone. With the first tablet computers headed to the marketplace, it’s already late for the slow-poke media companies to begin thinking about how to leverage this new medium. But starting late is better than not starting at all. They have a limited amount of time to get it together, because widespread tablet adoption probably will have to wait until iPhone fanciers can work off the two-year indentures imposed by AT&T. To their credit, a few media companies (be sure to see this must-watch video from Sports Illustrated) have put serious cycles into thinking about tablets. But even the best of the early efforts appear to have fallen short, because the legacy media guys are focused – as they were when the web debuted – on repurposing their existing offerings.
  15. 15. With tablets about to up the ante for the interactive publishing, here are the key things media companies must do to adapt: :: Enrich. Equipped with bigger and better screens, faster processors and, one can only hope, improved network connectivity, tablets will provide dramatic, multimedia presentation for both news and advertising. While video to date has been an afterthought, if not to say an unwelcome intrusion, for print media, it will be de rigueur in the tablet environment. Deeper and easily searchable video offerings will be necessary for media outlets of every kind. Because tablet readers will be assimilating information at unprecedented rates, graphics and other forms of visualization will be essential to inform and engage audiences. :: Alert. Because tablets will be highly portable, always on and the focal point for all manner of professional and personal communication, nearly all media offerings will have to include real-time content delivery like never before. As you can see by sampling such early experiments in insta-journalism as the beta versions of Nozzl News or Thoora.Com, this is easier said than done. However, publishers who cannot efficiently produce continuously captivating news products will suffer diminished relevance. :: Personalize. Apart from a few users who attempt to protect their private activities, almost everything people do on tablets will be tracked: web searches, sites visited, articles read, videos viewed, phone calls, purchases, restaurants reviewed, calendar entries and financial information. Owing to global-positioning systems embedded in every unit, the devices not only will know your precise whereabouts but also which direction you are headed. Based on where you are standing, smart-phone applications like Urban Spoon can suggest a place to dine. Thanks to Loopt, the GPS-enabled social network, you can figure out where to meet friends or avoid your ex. :: Assist. The download of more than 2 billion of the 100,000 available iPhone applications is a powerful demonstration of the potential utility consumers will find in their tablets. Apps do everything from dictating emails and providing driving directions to counting calories and organizing expense accounts. There’s even a Genius app to help you find more apps. While many media companies have created more-or-less elegant apps to port their legacy content to the iPhone, precious few have had the good sense to charge for them. Meantime, Mom and Pop developers around the globe have built six- and seven-figure businesses by selling games, virtual drum sets, alarm clocks and cocktail recipes for as little as 99 cents a download. :: Target. By harnessing the above capabilities, publishers can create highly individualized news and entertainment products that represent highly targetable advertising opportunities. Putting the right pitch in front of the right person at the right time is the Holy Grail of advertising. Marketers will reward publishers handsomely for doing it and will forsake the ones who can’t.
  16. 16. Given the more than 15 years we have been waiting for most legacy media companies to develop Internet-literate products, there is reason to fear they will not segue smoothly into tablet computing. Because tablets represent the last, best do-over for media companies, however, here’s hoping the continuing erosion of their traditional businesses will impel them to act before it’s too late. PaidContent.org http://paidcontent.org/article/419-how-the-new-york-times-should-charge-for- content/print/ How The New York Times Should Charge For Content A storm has been brewing at The New York Times for a while now. Ever since TimesSelect—the paid digital version of the Times—was canceled back in 2007, the “content wants to be free” crowd has danced around its proverbial grave, singing the equivalent of “ding, dong, paid media is dead.” Now, NYTimes.com is reportedly considering erecting a new pay wall—one presumes a shiner, prettier one than the last wall, but a pay wall nonetheless. Not to put too fine a point on it, but this is a bad idea whose time has unfortunately come. First, let’s look at what NYTimes.com risks by shutting off the free flow of its particular mix of cultural elitism. For argument’s sake, let’s accept Compete.com’s view of NYTimes.com at about 15 million visitors per month, compared to the WSJ.com‘s smaller 11-plus million. It’s safe to assume that traffic will go down, even providing that some brand-critical content will remain free (please don’t cut off my David Brooks drip, please). The question is whether the traffic will get cut by 80 percent, as our survey would indicate, or whether it will end up somewhere less damaged, cut, say, by 30 percent—though with far fewer page views per viewer because the only way to keep site visits high is to give select content away for free, but that free content has to have a meter on it that expires after some number of pages, typically five. As much as I like to pick on media companies when they’re short-sighted, I don’t think such a complaint applies in this case. In the spirit of helping to rebuild this particular media company in the digital era, I want to offer a few pieces of advice to the folks finalizing the details of this shift: 1. Give the highest-profile content away for free. A critical decision will be to determine just how much content you can give away for free without undercutting subscription revenue. Look at your sources of traffic—anything that draws dramatic traffic from abroad is something that builds your international reputation. Give that away. Any traffic that preserves the egos (and the skilled contribution) of specific personalities we will avoid naming, should also be free. And, of course, the front page should be sample-able for free. 2. Make free content sell the value of paid content. But even in these free pages, find a way to let free readers know there’s more to be had, not just elsewhere, but even on those free pages. For example, at WSJ.com, comments can be organized to show only those by
  17. 17. paid subscribers, thus eliminating a lot of the idiots who post annoyingly partisan comments or intentionally confrontational stuff. Some people would pay to become a commenter whose comments aren’t automatically marginalized. Others would pay to read only those who are willing to pay that price. Too elitist for you? Um. You’re The New York Times. 3. Brace for impact. Even if you get the balance between free and paid right, traffic will fall. WSJ.com has about two-thirds of your traffic, even though it has 600,000 more paid daily subscribers to its print edition than the Times does. That’s a good metric to shoot for: a quarter as many paid subscribers as print subs, or about 250,000 in your case, with traffic somewhere around 9 million uniques a month (using Compete.com’s metrics here, adjust accordingly). That’s after you rebound from the initial confusion. Of course, advertisers will still panic. Ironically, the drop in traffic will constrict supply, driving ad rates up, but over a smaller reader base. The result will be a reduction in ad revenue of at least 50 percent. Plan for it, send the message internally that there’s no way around this iceberg but to try to plow right through it. 4. Don’t bet on Apple’s tablet to save you. We all know you’re timing this to coincide with Apple’s forthcoming announcement about a media-heavy tablet. While it won’t ride in and save the industry, it can help. Make sure Apple (NSDQ: AAPL) has a way to enable offline access to your online content so that tablet readers on the subway don’t suffer from low bars. And whatever you do, make sure your NYTimes.com subscription is multi-platform—don’t ask readers to pay extra to get the pretty tablet version. Make that a carrot rather than a stick; even the movie industry is learning that it’s not nice to double-dip your customer. Content you buy once should be available everywhere, end of story. Notice that this advice is directed to NYTimes.com and nobody else. Because there is no other newspaper that we believe can pull this off at this time, even though a majority of newspaper editors are considering it. In fact, other papers like the Washington Post and the LA Times should go on the offensive and try to satisfy as many ad-funded readers as possible, since they’ll have a shot at boasting as many monthly uniques as NYTimes.com. Rebuilding the media isn’t pretty. You can’t satisfy everyone. But you can satisfy customers with convenient access to good content across multiple platforms. That’s what people are paying for more and more—in video, in music, in books, and, increasingly, in news. James McQuivey is an analyst at Forrester Research, where he serves, and contributes to the Forrester blog for Consumer Product Strategy professionals. Related Stories • New York Times Leaning Toward ‘FT’ Metered Model; Announcement Finally On Way? • How Berlin In 1989 Is Like The Media Business In 2009
  18. 18. • • JANUARY 21, 2010, 10:49 P.M. ET Apple Sees New Money in Old Media Steve Jobs's Tablet Device Looks to Repackage TV, Magazines, Just as iPod Changed Music Sales By YUKARI IWATANI KANE And ETHAN SMITH With the new tablet device that is debuting next week, Apple Inc. Chief Executive Steve Jobs is betting he can reshape businesses like textbooks, newspapers and television much the way his iPod revamped the music industry—and expand Apple's influence and revenue as a content middleman. In developing the device, Apple focused on the role the gadget could play in homes and in classrooms, say people familiar with the situation. The company envisions that the tablet can be shared by multiple family members to read news and check email in homes, these people say. Despite its digital legacy, Apple is betting that its Tablet can revitalize television, magazines and newspapers in the way iTunes changed music. Ethan Smith joins the News Hub panel to discuss. Related Video • News Hub: Apple Looks to Reshape Media • Apple Tablet on Tap • Apple's Tablet, as Imagined by Publishers For classrooms, Apple has been exploring electronic-textbook technology. Apple also has been looking at how content from newspapers and magazines can be presented differently on the tablet, according to the people familiar with the situation. Other people briefed on the device say the tablet will come with a virtual keyboard. Apple has recently been in discussions with book, magazine and newspaper publishers about how they can work together. The company has talked with New York Times Co., Condé Nast Publications Inc. and HarperCollins Publishers and its owner News Corp., which also owns The Wall Street Journal, over content for the tablet, say people familiar with the talks. New York Times Chairman Arthur Sulzberger declined to comment in an interview Wednesday on its involvement in the new device except to say, "stay tuned." Apple is also negotiating with television networks such as CBS Corp. and Walt Disney Co., which owns ABC, for a monthly TV subscription service, the Journal has reported. Apple is also working with videogame publisher Electronic Arts Inc. to show off the tablet's game capabilities, according to one person familiar with the matter. Journal Community • Vote: What price would you pay for Apple's new tablet device? • Discuss: What features would you want to see it have? • Vote: Touch, voice - How would you prefer to interact with technology? • Vote: What do you most want to buy as your next computer? Apple's strategy contrasts with how other technology companies are approaching media. Notably, Google Inc. offers content to consumers largely free on properties like its video-sharing site YouTube, making relatively little distinction between clips from users and those of professional media companies, although YouTube this week said it plans to experiment with movie rentals. Web sites like Twitter and Facebook also provide outlets for user-generated content.
  19. 19. Mr. Jobs has a longstanding strategy of devising new ways to access and pay for quality content, instead of reinventing the content. Apple's iTunes Store, for instance, became the world's largest music retailer partly by making it easy for people to buy music, most of it from major record labels, by the song instead of by the album. Its digital-media receiver Apple TV was also designed so people can buy and rent movies and television shows. Mr. Jobs is "supportive of the old guard, and [he] looks to help them by giving them new forms of distribution," says a person who has worked with the CEO. "What drives all of these changes is technology, and Apple has an ability to influence that." Apple's divide with Google over how it views media content also drives the wedge deeper between the two companies. Apple's iPhone, for example, currently closely integrates Google's mapping and search technology, but a person familiar with the matter said Apple was in serious discussions with Microsoft Corp. to incorporate its Bing search engine into the iPhone as the default search and map technologies. Microsoft declined to comment. The talks were reported earlier by BusinessWeek. Details of how Apple charges for the content on its tablet couldn't be learned, but people familiar with the company's thinking say Apple could change conventional payment structures. One person familiar with the matter said the company was discussing with the New York Times how it could charge for news through iTunes. It is unclear how people will access content wirelessly off the tablet. An Apple spokesman said the company "doesn't comment on rumors and speculation." Mr. Jobs didn't respond to a request for comment. Mr. Jobs' effort to repackage and resell more media content isn't without obstacles. He already has faced resistance from television companies and cable-network providers over Apple's desire to license just their best content rather than all of it. Many music executives complain that it has become a powerful gatekeeper between the labels and customers. What's more, the iTunes Store's music downloads haven't grown fast enough to offset the decline in CD sales for music companies. On Monday, Apple sent out an invitation to a media event on Jan. 27 "to see our latest creation." The tablet, which Apple currently plans to ship in March, will have about a 10- to 11-inch touch screen, say people familiar with the situation.
  20. 20. Getty Images Apple CEO Steve Jobs spoke during an event in September 2009. Apple's tablet foray faces several obstacles. Analysts say demand will depend on its price, which some believe will be about $1,000. Apple must also convince consumers the product is worth buying in addition to an iPhone and a laptop computer. And Apple faces competition from cheaper netbooks and other devices such as Amazon.com Inc.'s Kindle e-book reader. The tablet's success will depend "on how this product can fit into the user's daily life... and whether you have enough content to make it important enough to use it," said Henry Lu, senior vice president of Taiwanese computer company Micro-Star International Co., which failed at selling a tablet computer a few years ago. In the academic arena, Apple could face hurdles wooing universities if the tablet doesn't meet their needs or isn't compatible with other computing devices that students are using. Amazon had been hoping to target the market with its 9.7-inch screen Kindle DX e-book reader, for example, but schools said the device wasn't sufficiently interactive and lacked basics such as page numbers and color graphics. One person familiar with the matter said Apple has put significant resources into designing and programming the device so that it is intuitive to share. This person said Apple has experimented with the ability to leave virtual sticky notes on the device and for the gadget to automatically recognize individuals via a built-in camera. It is unclear whether these features will be included at launch. Apple's content-related efforts heated up in the fall. In October, Apple sent representatives to the Frankfurt Book Fair, the industry's largest trade fair, according to one person familiar with the matter. At the same time, Apple pitched media companies on a "best of TV" subscription service to television networks under which customers would pay a monthly fee for on-demand access to programs from a bundle of participating TV networks, giving consumers another way to readily access television content. At a meeting in New York with one network in October, an Apple executive said the company was specifically looking to access four to six shows per channel, said one person familiar with the meeting. Apple also has been planning a revamp of its iTunes music service by creating a Web-based version of it that could launch as soon as June, say people familiar with the matter. Tentatively called iTunes.com, the service would allow customers to buy music without going through the specialized iTunes program on computers and iPhones. People familiar with Apple's plans say a central part of the new strategy is to populate as many Web sites as possible with "buy" buttons, integrating iTunes transactions into activities like listening to Internet radio and surfing review Web sites. In November, Apple hired Tracy Augustine, a former executive at textbook publishers Cengage Learning Inc. and Pearson Education Inc., as the director of world-wide education. Ms. Augustine is responsible for "driving global strategy and revenue for the education online store for students," according to her LinkedIn description. Ms. Augustine didn't respond to a request for comment. — Geoffrey A. Fowler and Russell Adams contributed to this article.
  21. 21. January 20, 2010 Amazon Unveils New Kindle Royalty Option; Incentive To Keep E-Book Prices Down As word spreads of book publishers talking to Apple (NSDQ: AAPL) about a possible deal for its anticipated tablet device, Amazon (NSDQ: AMZN) is taking a preemptive strike by offering a plan that gives content owners a greater share of the royalties for e- books sold through the Kindle. The new option completely reverses Amazon’s standard 70 percent take of the revenue split from Kindle e-books. This new pricing plan will become available at the end of June. Amazon is clear that this new pricing plan will be in addition to the standard revenue deal the company offers to authors and publishers and is not a replacement for it. The e-tailer also points out that e-book publishers who choose the new option will receive 70 percent of list price, net of delivery costs. In order to take advantage of the special revenue plan, authors and publishers will have to adhere to a strict set of requirements on pricing and features. First of all, the new option covers only those books that are priced between $2.99 and $9.99. Also, the e-book’s list price must be at least 20 percent below the lowest physical list price for the physical book. Titles in this plan have to be available for sale in all geographies where the author or publisher has rights. Most importantly, Amazon will not allow books that are sold for less in other stores—both physical and electronic—to participate in the new plan. Despite these restrictions, the additional royalty option is meant to soften some of the complaints from publishers who have felt that Amazon’s existing revenue share model is tilted to far in favor of the e-tailer. In its announcement, Amazon points out that authors often receive royalties in the range of 7- to 15 percent of the list price that publishers set for their physical books, or 25 percent of the net that publishers receive from retailers for their digital books. It’s hard to say what impact Amazon’s plan will have on existing challenges from Sony (NYSE: SNE) and Barnes & Noble (NYSE: BKS). But it does show that whatever potential threat is coming from Apple, Amazon is already putting its defense in place. Release The New York Times January 21, 2010
  22. 22. Apple Courts Publishers, While Kindle Adds Apps By BRAD STONE and MOTOKO RICH SAN FRANCISCO — It’s a formidable high-tech face-off: Amazon.com versus Apple for the hearts and minds of book publishers, authors and readers. Amazon’s Kindle devices and electronic bookstore now dominate a nascent but booming market, accounting for more than 70 percent of electronic reader sales and 80 percent of e-book purchases, according to some analysts. And on Thursday it will take a page from Apple and announce that it is opening up the Kindle to outside software developers. Apple’s much-anticipated tablet computer, which is widely expected to be announced next Wednesday and go on sale this spring, will be a far more versatile (and expensive) device that will offer access to books, newspapers and other reading material through Apple’s popular App Store on iTunes. Book publishers, who rail against the dominance of Amazon and its insistence on discounting new releases to $9.99, are now playing the tech titans against each other. In the process, they may be rushing from the clutches of one tenacious chief executive, Jeffrey P. Bezos, into the arms of another, Steven P. Jobs, whose obstinacy over pricing has given the music industry similar paroxysms of anxiety. “Will Kindle pricing trump Apple sex appeal? Isn’t that the question, really?” said Richard Charkin, executive director of Bloomsbury Publishing in London, who has been watching developments in e-book sales with keen interest. “I haven’t the faintest idea. All I would say is, great. The more people that are out there marketing books in digital or any other format, the better.” There are now almost daily tactical moves by various parties in the business, with no end in sight. In its announcement Thursday, Amazon will say that it is letting programmers create what it calls active content — similar to applications — for the Kindle and keep 70 percent of the revenue from each sale after paying for wireless delivery costs. Amazon will release a set of programming guidelines that other companies — including publishers of books and periodicals — can use to create and sell applications for the Kindle. Until Amazon introduces more advanced models of the Kindle, developers will be limited by its slow-to-refresh black-and-white screen. Ian Freed, vice president for the Kindle at Amazon, said he expected developers would devise a wide range of programs, including utilities like calculators, stock tickers and casual video games. He also predicts publishers will begin selling a new breed of e-
  23. 23. books, like searchable travel books and restaurant guides that can be tailored to the Kindle owner’s location; textbooks with interactive quizzes; and novels that combine text and audio. “We knew from the earliest days of the Kindle that invention was not all going to take place within the walls of Amazon,” Mr. Freed said. “We wanted to open this up to a wide range of creative people, from developers to publishers to authors, to build whatever they like.” The move may also represent a shift in Amazon’s relationship with newspapers and magazines that make digital editions for the Kindle. Many executives at those organizations have expressed dissatisfaction with their 30 percent cut of subscription fees on the Kindle and lack of a direct relationship with those subscribers. With a Kindle app store, those media companies will be able to sell more profitable Kindle applications, and present news that is updated throughout the day. Amazon may be rushing to change the rules of its Kindle platform with an eye toward the fanfare that will no doubt greet Apple’s long-awaited tablet. The devices, to be sure, are fundamentally different: Amazon has positioned the Kindle as the ultimate reading device, easy on the eyes and slow to deplete its battery. Analysts say that to buyers of an Apple tablet, playing video or video games may be more important than reading. But for book publishers, Apple’s introduction provides a potentially golden opportunity: the chance to counter Amazon’s control over the e-book market and regain some leverage over sensitive matters like pricing. Apple representatives have been in New York this week talking to the largest trade publishers, according to industry executives. They said Apple had proposed an arrangement under which publishers would get to set the price of their books, with Apple taking a 30 percent commission and the publishers keeping the rest. Steve Dowling, an Apple spokesman, declined to comment on what he called “rumors and speculation.” Depending on whether Apple sets an upper limit on pricing, its model could be much more appealing to publishers, who resent how Amazon has aggressively discounted their books. Typically, Amazon charges $9.99 for new releases and best sellers, a price that other e-book vendors, including Sony and Barnes & Noble, have effectively been forced to follow. While Amazon pays publishers a wholesale price typically equivalent to half the list price of a print book — meaning that Amazon generally sells new e-books at a loss — publishers fear that Amazon has accustomed buyers to unreasonably low prices. They say that if Kindle were to maintain its dominant position, it could force publishers to lower their wholesale prices.
  24. 24. The probable entry of Apple and its tablet into the e-book market gives publishers hope that they might gain some leverage in negotiations with Amazon. They could, for example, delay the release of e-books in the Kindle store while selling more expensive versions for the Apple tablet. “There’s a battle going on for what is the value of a digital book,” said a publishing executive who did not want to be quoted by name because of the delicacy of discussions with Apple. “In that battle, Apple has put an offer together that helps publishers and, by extension, authors.” Some publishers warn that Apple’s terms can be restrictive in other ways, and that a model that looks good in theory may not be as attractive in practice. And Amazon has moved to counter Apple’s appeals as well. On Wednesday it announced it would improve the royalty terms for authors or publishers who publish e-books directly onto the Kindle — essentially beckoning authors and their agents to split off e-book rights and sell them directly to Amazon. Under the new terms, Amazon says it will offer authors and publishers who set e-book prices below $9.99 a royalty rate of 70 percent of the digital list price (after delivery costs, typically about 6 cents a book) — an obvious echo of Apple’s offering. But publishers can anticipate another high-tech heavyweight entering the business: Google, which has pushed its own plans to begin selling e-books. “The more companies that control consumer transactions, the more important the publishers’ role will be,” said Mike Shatzkin, chief executive of Idealog, which helps publishers develop digital strategies. “If Apple enters this market, and in three months Google follows, we may be looking at a completely different e-book world in the next year.” Business Insider Silicon Alley Insider 'Canvas' A 'Perfect Name' For Apple Tablet, Says Apple God John Gruber Dan Frommer | Jan. 22, 2010, 3:40 PM | 3,294 | 18 Print Tags: Gadgets, Apple, Big Tech, John Gruber, Apple Tablet
  25. 25. AAPL Jan 25 2010, 05:20 PM EST Change % Change 203.07 +5.33 +2.69% What is Apple going to name its tablet computer? iSlate? iPad? Slate? iBook? MacBook touch? iPod touch HD? How about Canvas? (Or iCanvas?) That's one of the potential names emerging from the Apple nerd camp, via Daring Fireball blogger John Gruber. Why? Because the invitation Apple sent to reporters -- splashed with paint blotches -- looks like it could be the canvas for a kid's preschool art project. Gruber writes today, "Even without considering the invitation design, I love this name. It looks good, it sounds good, and it evokes the right feelings and ideas: thin, light, clean, crisp, blank, the thing great artwork is made upon. It’s a perfect name." We agree. Click here to see 20 Apple tablet design concepts → January 28, 2010 With Its Tablet, Apple Blurs Line Between Devices By BRAD STONE
  26. 26. SAN FRANCISCO — After months of feverish speculation, Steven P. Jobs introduced Wednesday what Apple hopes will be the coolest device on the planet: a slender tablet computer called the iPad. For all the hoopla surrounding it, however, the question is whether the iPad can achieve anything close to the success of the iPhone, which transformed the cellphone and forced the industry to race to catch up. Apple is positioning the device, some versions of which will be available in March, as a pioneer in a new genre of computing, somewhere between a laptop and a smartphone. “The bar is pretty high,” Mr. Jobs acknowledged. “It has to be far better at doing some key things.” Half an inch thick and weighing 1 1/2 pounds, the device will vividly display books, newspapers, Web sites and videos on a 9.7-inch glass touch screen. Giving media companies another way to sell content, it may herald a new era for publishing. But the iPad, costing $499 to $829, also lacks some features common in laptops and phones, as technology enthusiasts were quick to point out. To its instant critics, it was little more than an oversize iPod Touch. A camera is notably absent, and Flash, the ubiquitous software that handles video and animation on the Web, does not work on the device. Another thing missing is an alternative to the AT&T data network, which is already buckling under the strain of traffic to and from iPhones. Some versions of the iPad can, for a monthly fee, use a 3G data connection like cellphones, but the only carrier mentioned was AT&T. The event, in typical Apple style, was tightly scripted and heavy on theatrics and hyperbole. But the success of the iPhone, and the hive of rumors and leaks surrounding the iPad, raised expectations and made this perhaps Mr. Jobs’s most highly anticipated product unveiling yet. It was one that he clearly cared deeply about. Mr. Jobs, a consummate showman, presented the iPad to an enthusiastic crowd of around 800 employees, business partners and journalists, some of whom shoved their way in when the doors opened to grab the best seats. It was only his second public appearance since a leave of absence for health reasons last year. Mr. Jobs posited that the iPad was the best device for certain kinds of computing, like browsing the Web, reading e-books and playing video. The iPad “is so much more intimate than a laptop, and it’s so much more capable than a smartphone with its gorgeous screen,” he said in presenting the device to a crowd of journalists and Apple employees here. “It’s phenomenal to hold the Internet in your hands.”
  27. 27. One question Apple faces is whether there is enough room for another device in the cluttered lives of consumers. “I think this will appeal to the Apple acolytes, but this is essentially just a really big iPod Touch,” said Charles Golvin, an analyst at Forrester Research, adding that he expected the iPad to mostly cannibalize the sales of other Apple products. Mr. Golvin said book lovers would continue to opt for lighter, cheaper e-readers like the Amazon Kindle, while people looking for a small Web-ready computer would gravitate toward the budget laptops known as netbooks. But other analysts say they have heard similar criticism before — once aimed at the iPhone, which has now been bought by more than 42 million people around the world. These believers say Apple’s judgment on the market is nearly infallible. “The target audience is everyone,” said Michael Gartenberg, vice president for strategy and analysis at Interpret, a market research firm. “Apple does not build products for just the enthusiasts. It doesn’t build for the tens of thousands; it builds for the tens of millions.” Apple says the iPad will run the 140,000 applications developed for the iPhone and the iPod Touch, but the company expects a new wave of programs tailored to the iPad. One of the most significant applications for the iPad may be Apple’s own creation, called iBooks, an e-reading program that will connect to Apple’s new online e-bookstore. Mr. Jobs said Apple so far had relationships with five major publishers — Hachette, Penguin, HarperCollins, Simon & Schuster and Macmillan — and was eager to make deals with others. Publishers will be able to charge $12.99 to $14.99 for most general fiction and nonfiction books. Apple’s announcement that it was diving into the growing e-book business put the company on a collision course with Amazon. Mr. Jobs credited Amazon with pioneering e-readers with the Kindle but said “we are going to stand on their shoulders and go a little bit farther.” John Doerr, a Silicon Valley venture capitalist who serves on Amazon’s board and is also an adviser to Apple, said there could be room for both companies, noting that Amazon sells many books to iPhone owners who use its Kindle application, which will also work on the iPad. “I don’t think Jeff Bezos is going to leave the e-book business,” he said, referring to Amazon’s chief executive, “and I don’t think it will be confined to the Kindle.” Three models of the iPad, $499 to $699, will connect to the Internet only via a local Wi- Fi connection. Three other versions will include 3G wireless access and will be available
  28. 28. later in the spring, costing an additional $130 and requiring a data plan from AT&T. Owners of the iPhone who already pay at least $70 a month to AT&T will not be getting any breaks. Other companies have sold tablet computers for years, but they never caught on with consumers. In 2001, Bill Gates predicted at an industry trade show that tablets would be the most popular form of PC sold in America within five years. “The fact that he and Microsoft didn’t deliver is surprising,” said Tim Bajarin, a longtime industry analyst. “It has taken Apple to bring this to consumers and make it work.” Apple has been working on a tablet computer for more than a decade, according to several former employees. Improved technology has helped the company to finally bring a model to market, as has the ubiquity of wireless networks. The success of the iPhone and its cousin, the iPod Touch, have shown a path for tablets. People have been willing to pay to customize those devices with applications, turning them into video game machines, compasses, city guides and e-book readers. The iPad will be a big opportunity for software developers, said Raven Zachary, president of Small Society, an iPhone development company based in Portland, Ore. “Although I think some of us were a bit surprised we only have 60 days until it launches to develop for it.” Jenna Wortham contributed reporting from New York. Advertising Age Does Apple's IPad Take a Bite Out of Web Advertising? Media Will Work Great on the the Device, but Your Ads May Not By Ian Schafer January 27, 2010
  29. 29. Ian Schafer We've known for quite some time about the iPhone's inability to render Flash content within the mobile Safari browser, and based upon Apple's announcement of the iPad today, it looks like that device isn't going to do it, either. Touted as a savior for the publishing business, this device will potentially revolutionize the delivery and commercialization of content. But most publishers are publishing their content to the web. Via websites. And for those that don't yet have paywalls, they support their websites with advertising. Those ads are almost 100% rendered in Adobe's Flash. So when people use the iPad's web browser to visit their favorite newspaper (as Steve Jobs did in his keynote; see photo at right, courtesy of Engadget), they won't see the ads at all. That either means advertisers will need to stop building ads in Flash (no chance) or publishers will need to build app versions of their publications upon the iPad SDK (software development kit), resulting in a lot more work, a lot more time, a lot more resources. Now, creating a parallel platform to the web may be the right thing to do if a $499 tablet becomes as ubiquitous as the iPod, but this is another classic example of Apple making development and distribution on their platforms more proprietary. It also makes publishers more reliant upon, in all likelihood, Apple's own ad-serving platform which was created through the acquisition of Quattro Wireless. Whereas the iPhone created a marketplace for new content (apps), the iPad seeks to revolutionize existing ones (content publishing). If the company that owns the platform also owns the ad network, the ad format, and the ad tracking, is that too much control? Now, this is all speculation at this point. I'm sure this will all play itself out as we get deeper in the SDK, and into the device itself, but this is definitely something to be discussed at your next ad sales meeting if you're a publisher. Media planners are going to have to get up to speed with a whole new platform. And creatives are going to have to learn to build in formats that take advantage of multitouch gesturing, video and a whole slew of other new possibilities without using Flash. And maybe HTML 5 just got a whole lot more important.
  30. 30. Poynter Online E-Media Tidbits Home > Online & Technology > E-Media Tidbits Tools: Text Size or , Print , RSS , Subscribe via e-mail Watching Kindle, iPad and e-Readers? Openness is Key Posted by Dorian Benkoil at 11:27 AM on Jan. 28, 2010 Dorian Benkoil Even before the launch of the Apple iPad, pundits were declaring it the Kindle killer, and hours after its unveiling others were adding their A group voices. But I smelled trouble for Amazon's e-reader weeks earlier. weblog about the intersection Though I own a Kindle and have also read its books on my iPod Touch, of news & the last three or four e-books I've bought were from Barnes & Noble and technology O'Reilly publishing. The reason? It's not that I own B&N's Nook or some other e-reader (yet); rather, those e-books come in formats that enable me to consume them on many devices, share them with friends and even grab portions to send to the world. The lessons, I think, are instructive for publishers and others who make their content available on digital devices. I predict we'll start to see market share of non-Kindle e-readers increasing, and not only because those manufacturers are working to cut deals with publishers that are more favorable than the what one analyst calls Amazon's "wolfish" shares of revenues and restrictive terms. As consumers discover the flexibility they have to consume e-books on a PC, a Mac, a BlackBerry, and an iPhone, iPod Touch or iPad, as well as other devices that can read PDF, .mobi, Android or ePub files, I predict they'll gravitate toward the more open formats. Because the open formats also allow cutting and pasting with ease, e- books published that way also have a better chance of catching on via in social media and blogs. And links in books, magazines, newspapers or other media can easily take users to relevant Web pages. Even when the function does work on the Kindle, the Web surfing experience is less than optimal. Some open publishing formats allow the purchaser to share a book with one or more people at a time. Some allow customization of colors, background, fonts and other visual elements that a) allow a consumer to
  31. 31. read the way her or she likes rather than one that's imposed or b) appreciate the e-book's artwork, coloring and typeface. This morning, publishers are saying they look forward to getting their art books on the iPad. Reading on a Kindle can be absorbing, but it can also be a flat, gray, text- laden experience that makes it hard to consume graphics and charts. For a final pièce de résistance, open formats let users mark up the text and use speech synthesis applications to have a book read aloud by a computer -- something I've done many a time while cooking, doing laundry or washing the dishes. Again, I'm not saying that publishers should eschew the Kindle. I negotiated a deal to get a blog network on the device because there was no exclusive arrangement, and any additional revenue from subscribers was essentially free, with no additional work required once we created an appropriate feed. Plus, the Kindle now has a large embedded base, and publishers who want as large a readership as possible should publish their works in the Kindle format for years to come. Kindles have also proven a decent way to promote unheralded authors. Looking at it from Amazon's side, I can understand the business model to milk its first-mover advantage after building the first device that seamlessly integrated a readable screen, portability, long battery life, easy navigation and, perhaps most important, a big library of books (and other material) purchased easily and accessed wirelessly. Amazon was able to create a closed device, and a constrictive business model, because it provided so much that others hadn't matched. But, as I've written before, there are a lot of other features the Kindle doesn't have: the RELATED ability to look at the books on multiple screens (it was manna from heaven when "iPad includes iBooks its e-books were made available on the app, may be Kindle iPhone/iPod), share and blog, and more. killer," by Damon (OK, the uber-geeks in the room might Kiesow, Mobile Media raise their hands and say you can do most or all of these things with a Kindle. Indeed, I have unscrewed the back of the device, installed an SD card, transferred material to the card, plugged it into a reader, manually converted the text into a manipulable format, and then sent it along. But how many people will go through that workaround?) We'll see if the iPad takes hold and how much it is able to cut into the Kindle's base. The device can reportedly use the iPhone/iPod app that
  32. 32. enables users to read Kindle books, and if it can also display other formats, it may instantly make all the other e-readers obsolete. The iPad also can play video and music, which gives it and publishers a powerful competitive weapon. Apple has a store that can compete with Amazon's, too. If users can also cut and paste, blog and otherwise manipulate their media, the iPad will have yet more ways of knocking pure e-readers to second-tier status. Whatever happens with the iPad, though, publishers need to pay attention and provide material on any popular digital platform, and customize that content when possible to make the experience on each platform as positive as it can be. Amazon is apparently courting developers to help it stave off the iPad threat, and I wouldn't be surprised to see others follow suit. All of that will benefit consumers, and perhaps publishers. Note how much better smartphones have gotten as makers rush to seize momentum created by the iPhone. As I wrote in another recent column, digital media is not and never will be a one-platform or one-device game for long. Openness to multiple platforms will ultimately win the game. Silicon Valley Insider Steve Jobs Says Book Publishers Hate Amazon's Kindle Jay Yarow | Jan. 29, 2010, 8:49 AM | 9,026 | 38 Steve Jobs told Walt Mossberg that Amazon's e-book prices are likely going higher than $9.99. After Steve presented the iPad, Walt Mossberg managed to talk with him briefly while people were testing the iPad. Kara Swisher filmed them. Walt asks Steve, "Why should she buy a book for $14.99 on your device when she can buy one for $9.99 from Amazon or Barnes & Noble?" Steve responds somewhat knowingly, "That won't be the case." Walt says, "You won't be $14.99 or they won't be $9.99?" Steve says knowingly, "The prices will be the same."
  33. 33. Then the video cuts, then Steve says, "Publishers are actually withholding their books from Amazon because they're not happy."* Steve also tells Walt the iPad does 140 hours of continuous music playback, and battery life will not be an issue on the iPad. Says Steve, "Ten hours is a long time, you're not going to read for 10 hours." It's cool to watch the video to see Steve Jobs interact with Walt, he's much taller, as he rocks back and forth nervously. The action starts around 1:45 in the clip below. *We originally heard Steve say "pull their books" from Amazon when we listened to it the first four times with headphones, but the fifth time we listened on speakers and heard it as "withholding." January 31, 2010, 11:37 pm Why the iPad Web Demo Was Full of Holes By NICK BILTON apple.com A still from a video demo of the iPad on Apple’s site. Note the missing Flash element in the middle of the Web page. Adobe’s Flash will probably not come to the iPhone, iPod Touch or iPad, but for many people with these iProducts, this may prove to be a nonissue, as I report in Monday’s Times. While Apple may not make an official statement on the topic of its lack of interest in supporting Flash, its actions speak louder than words. Think back to the Apple keynote last week. Here’s Steven P. Jobs, master of ceremonies, the wizard in front of the curtain, sitting on a stage before hundreds of technology reporters, and he quite happily pops around the Web on the iPad, showing Swiss-cheese holes in pages where the Flash player can’t be displayed. Apple’s iPad demo was coordinated down to the second. Teams of Apple perfectionists practiced every aspect of this, meticulously organizing everything down to the color and angle of the armchair on stage. Mr. Jobs knew what we would all see as he navigated to nytimes.com: a blank square instead of a Flash video player. Apple could have picked any Web site without Flash, but instead it practically sent out a press release stating its stance on the topic: Flash will not work on the iPad.
  34. 34. To help push this point further, as PC World reported on Saturday, all of the demos on Apple’s site for the iPad now show missing holes where Flash player videos would appear in a normal browsing experience. The Web-page mockups in earlier versions of the demos showed images of Flash content. It’s been over three years since Mr. Jobs stepped on stage and demonstrated the first iPhone, and since then there have been upgrades to the iPhone’s memory, processing speeds, software developer kits and everything in between, but no mention of Flash support. With over 60 million iPhones and iPod Touches in the marketplace, content providers have been given two choices: either stand with Adobe and stick with Flash or make the switch to non-Flash technologies and reach this huge audience, most of whom don’t really care about a format war — they just want to get the content. Numerous developers and executives that I interviewed for my article said there was a trend toward offering users an alternative to Flash video, the predominant video standard online, in the form of HTML5, an open standard. Senior-level managers from many of the top video sites online, including YouTube, Vimeo, Blip.tv and Flickr, all agreed that video online is starting to splinter, and as some test out HTML5 for video distribution, many will begin offering both formats as the iPad makes its way onto the market. Andrew Pile, vice president of product and development for Vimeo, said, “Some people rightly or wrongly blame Flash for poor video performance on the Web, and although HTML5 has its limitations, too, we will most likely create a version of the site using HTML5 for the iPad.” Douglas Alexander, general manager of Flickr, said he planned to start experimenting with HTML5 video in the coming months. And Justin Day of Blip.tv said he had an HTML5 player in the works that the company plans to introduce soon. As John Gruber of the Mac blog Daring Fireball aptly explained on Saturday, developers and the Web will go where the users are. Mr. Gruber writes: What’s Hulu going to do? Sit there and wait? Whine about the blue boxes? Or do the practical thing and write software that delivers video to iPhone OS? The answer is obvious…. Hulu isn’t a Flash site, it’s a video site. So what can Adobe do? One option would be to completely open-source Flash, but based on my talks with Adobe employees, this is highly unlikely. Or, if it wants to continue selling software for building Flash Web sites, it can continue to innovate along its current path, allowing developers to output their work in both Flash and non-Flash formats.
  35. 35. In a recent blog post, Lee Brimelow, an Adobe “platform evangelist,” said his company was not “against” HTML5. “On the contrary, we see it as an exciting development for the Web,” he said, adding that Adobe planned to introduce tools to help people use it. Sounds like a wise move on Adobe’s part, given that things don’t seem to be moving in Flash’s direction. January 29, 2010 Steve Jobs and the Economics of Elitism By STEVE LOHR The more, the better. That’s the fashionable recipe for nurturing new ideas these days. It emphasizes a kind of Internet-era egalitarianism that celebrates the “wisdom of the crowd” and “open innovation.” Assemble all the contributions in the digital suggestion box, we’re told in books and academic research, and the result will be collective intelligence. Yet Apple, a creativity factory meticulously built by Steven P. Jobs since he returned to the company in 1997, suggests another innovation formula — one more elitist and individual. This approach is reflected in the company’s latest potentially game-changing gadget, the iPad tablet, unveiled last week. It may succeed or stumble but it clearly carries the taste and perspective of Mr. Jobs and seems stamped by the company’s earlier marketing motto: Think Different. Apple represents the “auteur model of innovation,” observes John Kao, a consultant to corporations and governments on innovation. In the auteur model, he said, there is a tight connection between the personality of the project leader and what is created. Movies created by powerful directors, he says, are clear examples, from Alfred Hitchcock’s “Vertigo” to James Cameron’s “Avatar.” At Apple, there is a similar link between the ultimate design-team leader, Mr. Jobs, and the products. From computers to smartphones, Apple products are known for being stylish, powerful and pleasing to use. They are edited products that cut through complexity, by consciously leaving things out — not cramming every feature that came into an engineer’s head, an affliction known as “featuritis” that burdens so many technology products. “A defining quality of Apple has been design restraint,” says Paul Saffo, a technology forecaster and consultant in Silicon Valley.
  36. 36. That restraint is evident in Mr. Jobs’s personal taste. His black turtleneck, beltless blue jeans and running shoes are a signature look. In his Palo Alto home years ago, he said that he preferred uncluttered, spare interiors and then explained the elegant craftsmanship of the simple wooden chairs in his living room, made by George Nakashima, the 20th- century furniture designer and father of the American craft movement. Great products, according to Mr. Jobs, are triumphs of “taste.” And taste, he explains, is a byproduct of study, observation and being steeped in the culture of the past and present, of “trying to expose yourself to the best things humans have done and then bring those things into what you are doing.” His is not a product-design philosophy steered by committee or determined by market research. The Jobs formula, say colleagues, relies heavily on tenacity, patience, belief and instinct. He gets deeply involved in hardware and software design choices, which await his personal nod or veto. Mr. Jobs, of course, is one member of a large team at Apple, even if he is the leader. Indeed, he has often described his role as a team leader. In choosing key members of his team, he looks for the multiplier factor of excellence. Truly outstanding designers, engineers and managers, he says, are not just 10 percent, 20 percent or 30 percent better than merely very good ones, but 10 times better. Their contributions, he adds, are the raw material of “aha” products, which make users rethink their notions of, say, a music player or cellphone. “Real innovation in technology involves a leap ahead, anticipating needs that no one really knew they had and then delivering capabilities that redefine product categories,” said David B. Yoffie, a professor at the Harvard Business School. “That’s what Steve Jobs has done.” Timing is essential to make such big steps ahead. Carver Mead, a leading computer scientist at the California Institute of Technology, once said, “Listen to the technology; find out what it’s telling you.” Mr. Jobs is undeniably a gifted marketer and showman, but he is also a skilled listener to the technology. He calls this “tracking vectors in technology over time,” to judge when an intriguing innovation is ready for the marketplace. Technical progress, affordable pricing and consumer demand all must jell to produce a blockbuster product. Indeed, Apple designers and engineers have been working on the iPad for years, presenting Mr. Jobs with prototypes periodically. None passed muster, until recently. The iPad bet could prove a loser for Apple. Some skeptics see it occupying an uncertain ground between an iPod and a notebook computer, and a pricey gadget as well, at $499 to $829. Do recall, though, that when the iPod was introduced in 2001, critics joked that the name was an acronym for “idiots price our devices.” And we know who had the last laugh that time.
  37. 37. February 1, 2010 Publisher Wins Fight With Amazon Over E-Books By MOTOKO RICH and BRAD STONE After a weekend of brinksmanship, Amazon.com on Sunday surrendered to a publisher and agreed to raise prices on some electronic books. Amazon shocked the publishing world late last week by removing direct access to the Kindle editions as well as printed books from Macmillan, one of the country’s six largest publishers, which had said it planned to begin setting higher consumer prices for e-books. Until now, Amazon has set e-book prices itself, with $9.99 as the default for new releases and best sellers. But in a statement Sunday afternoon, Amazon said it would accept Macmillan’s decision. On Friday, Amazon removed “buy” buttons from thousands of titles published by Macmillan, including recent best sellers like “Wolf Hall” by Hilary Mantel and “The Gathering Storm,” by Robert Jordan and Brandon Sanderson. Customers who wanted to buy print editions could do so only from third-party sellers. Digital editions made for Amazon’s Kindle device disappeared. In a strongly worded message on its Web site on Sunday, Amazon said that while it disagreed with Macmillan’s stance, it would bow to the publisher’s plan. “We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles,” Amazon said. “We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.” The face-off had set the already anxious publishing industry on edge. “I think everyone thought they were witnessing a knife fight,” said Sloan Harris, co-director of the literary department at International Creative Management. “And it looks like we’ve gone to the nukes.” As of Sunday evening, the “buy” buttons had not yet been restored to Macmillan titles on Amazon. In a statement to Publishers Marketplace, an online industry newsletter, John Sargent, chief executive of Macmillan, said: “We are in discussions with Amazon on how best to resolve our differences. They are now, have been, and I suspect always will be one of our most valued customers.”
  38. 38. Under Macmillan’s new terms, which take effect at the beginning of March, the publisher will set the consumer price of each book and the online retailer will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99. Those terms mirror conditions that five of the six largest publishers — Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster — agreed to with Apple last week for e-books sold via the iBookstore for the iPad. For more than a year, publishers have been fretting about the price of digital books, which Amazon, as the dominant player in the fast-growing market, had effectively been able to set. Last Thursday, Mr. Sargent flew to Seattle to explain the pricing and new sales model to Amazon. He said Amazon could continue to buy e-books on the same terms it does now — allowing the retailer to set consumer prices — but that the publisher would delay the release of all digital editions by several months after the hardcover publication. Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales. Amazon’s goal has been strategic: it aims to establish a low price for e-books that will have the ancillary benefit of helping it sell more Kindle devices. Amazon’s decision is also a victory for Apple’s chief executive, Steven P. Jobs, who first pitched the idea of selling e-books under the agency model to book publishers earlier this year. Now Apple, whose iPad tablet is due in March, can compete on fairly equal footing with Amazon. Book publishers, meanwhile, are volunteering to limit their digital profits. In the model that Amazon prefers, publishers typically collect $12.50 to $17.50 for new e-books. Under the new agency model, publishers will typically make $9 to $10.50 on new digital editions. Apple’s stance in allowing publishers to set their own e-book prices (albeit within a limited range) is also a bit of a reversal. That is precisely the kind of arrangement it declined to offer TV networks and music labels, which have long railed against the 99- cent price of songs in iTunes. Analysts say Amazon, which accounts for 15 to 20 percent of domestic book sales, probably realized it could not compete with Apple if it wasn’t offering the same range of content. “Amazon figured out pretty quickly that this was a battle they could not win,” said Mike Shatzkin, the chief of the Idea Logical Company, a consultant to publishers.
  39. 39. Amazon may still hope to play one asset to its advantage. Loyal Kindle users routinely give low ratings to books they perceive as too costly, or whose digital editions are delayed past the publication of the hardcover edition. These consumers could ostensibly reject costlier e-books. February 1, 2010 IPad Can’t Play Flash Video, but It May Not Matter By NICK BILTON Where was the Flash? Web designers — and a fair number of Web users — noticed something missing from Steven P. Jobs’s demonstration of the Apple iPad Wednesday. On some of the Web sites he displayed on the tablet computer’s screen, blank squares appeared where video or animated content would normally be displayed. The holes, observers correctly assumed, meant that the iPad would not display videos, animations or any other features created using Flash, a type of multimedia software made by Adobe. Flash is one of the world’s most ubiquitous applications, appearing on 98 percent of all computers. YouTube videos run on it. It is what animates millions of graphics and advertisements on Web sites around the world. Adobe says the technology supports nearly 75 percent of video on the Web and 70 percent of online gaming sites. But Apple’s support for Flash has been flagging. While Flash is present on nearly every Apple desktop and laptop computer, the company decided that Flash would not be used on the iPhone. Apple has argued that the Flash technology is too slow and unduly taxes laptops and netbooks. The company also has concerns over Flash’s vulnerability to viruses and other malware, as well as the way Flash-based content can voraciously consume battery life. Adobe, unsurprisingly, disagrees — and has its own theory about why Apple remains hostile to Flash. Adrian Ludwig, group manager for the Flash platform product at Adobe, said he believed Apple’s opposition was a way for the company to control its iTunes system. “I think it’s pretty clear that Apple wants to regain control of the content consumers see online and the content Apple offers for their devices,” Mr. Ludwig said. But concerns over the lack of Flash in the iPad and iPhone may be short-lived. Many online video sites have been experimenting with a new Web language that can support video, called HTML5. Unlike Flash, which is a downloaded piece of software that can interact with a computer’s operating system, HTML5 works directly in a Web browser. And although this new video format does not work in all browsers, it will allow iPhone and iPad users to enjoy more Web-based video content.
  40. 40. YouTube announced this year that it was testing the new format for select videos. In the past, YouTube videos were encoded in Flash, but were re-encoded for the iPhone. The popular video-sharing site Vimeo.com is also experimenting with new platforms, based on comments from its online community. “We received a tremendous amount of feedback from our users saying that they wanted to have HTML5 as an option for their videos,” said Andrew Pile, vice president for product and development at Vimeo, an online video service. Mr. Pile does not see this new format replacing Vimeo’s Flash- video inventory, but will instead offer it as an option for its viewers. Other video sites, including Blip.tv and Flickr.com, Yahoo’s photo and video-sharing Web site, also hope to start experimenting with alternatives to the Flash video platform in the coming year. But migrating the entire Web to the new format will not be fast, or easy. Flash has all the advantages any entrenched technology enjoys and remains the standard multimedia language for a vast majority of developers and programmers. And while HTML5 may help standardize Web video, it does not necessarily address the needs of other types of online content created in Flash, including animated advertisements and online gaming. Andrew Frank, research vice president at Gartner, believes it is impossible for Apple to maintain a walled garden around the content and advertising people consume on the iPad. Mr. Frank said, “I think we’re a long way from the iPad having enough influence on the advertising market to affect the decisions and process around online display advertising.” But even if the standoff between Apple and Adobe continues, these advances in Web- based video mean that iPhone and iPad users will start to see fewer blank squares online. This article has been revised to reflect the following correction: Correction: February 3, 2010 An article on Monday about the absence of the multimedia software Flash in Apple’s new iPad tablet computer referred incorrectly to the Web language HTML5. While HTML5 can support video, it is not itself a video format. The article also misstated the ownership of HTML5 patents. HTML5, like other versions of Hypertext Markup Language, is open source; it is not owned by a group of companies, including Apple. (Many Web sites that are starting to use HTML5 are using a particular video encoding program called H.264, which has shared patent pool, of which Apple is a part.) February 1, 2010 The Media Equation To Deliver, iPad Needs Media Deals By DAVID CARR
  41. 41. Short of landing in a flying saucer and having a tablet teleported into his hands, there was no way that Steve Jobs could have lived up to the hype before last Wednesday’s iPad announcement. But he came pretty close. By the time the bells, whooshes and clicks died down, I couldn’t say the future had arrived, but I’m pretty sure we can see it from here. “It was like someone came back from five years into the future and handed this to us,” said John Gruber of Daring Fireball, a respected tech blog. The iPad’s promise was hinted at before Mr. Jobs hit the stage. The set was dominated by a large, comfy chair. Since the birth of the personal computer, we have been hunched over, squinting at screens — great big terminals, laptop displays, tiny screens on PDAs. With the iPad, the screen has come to us as we lean back in ease. Critics who suggested that Apple unveiled little more than an iPhone that won’t fit in your pocket don’t seem to understand that by scaling the iPhone experience, the iPad becomes a different species. Media companies now have a new platform that presents content in an intimate way. “Looking at it through the lens of whether or not it has new features and applications misses the point,” said Craig Moffett, an analyst at Bernstein Research. “It is nine times larger than an iPhone, and that is fundamentally a new application.” That application isn’t work, not without a keyboard (touch-typing with all fingers on a virtual keyboard is miserable) or a camera. This is a device for consuming media, not creating it. So are the media providers ready to deliver? Yes and, sadly, no. The iPad’s glories as a media consumption device open up a whole new frontier for developers and publishers. But they also raise large questions about the business models that will drive that content to the screen. For gaming, the iPad manages to be both a remarkable display device and a large, engaging controller, and the App Store from the iPhone should accommodate a new generation of games played on a bigger field. But when it comes to other dynamic media like television and movies, the iPad is running into the familiar trouble. Apple has limited agreements with movie studios, so movies received very little play last Wednesday. The movie “Up,” a fancy piece of software produced by Pixar, looked great during the presentation, but most studios have yet to come to terms with how their work will be monetized and displayed on the iPad. The iPad won’t play Flash, the Adobe software which powers a great deal of animation and interactivity on the Web, so for the time being, iPad’s utility as a surfing device is significantly compromised. You can’t, for example, watch Hulu, the popular site that offers a free buffet of network TV shows.
  42. 42. Apple and many others have problems with Adobe’s Flash because they don’t control it, but it also means that people who want to see those shows on their iPad will have to pay for them on iTunes rather than watch them free on Hulu. (And according to The Financial Times, just before Apple introduced the iPad, the company pressed television studios to cut the iTunes prices for their programs in half.) Of all media, books had the most real estate in the presentation — with good reason. The reading interface on the iPad is almost as sexy as the gaming, with no waiting for e-ink or pages to load. Readers can literally page through books in an interface that replicates the tactile romance of reading. And the forthcoming iBooks marketplace means that Amazon no longer has absolute authority on the price of electronic books (an authority Amazon tried to impose on Friday by refusing to sell books from Macmillan after the publisher insisted on pricing similar to the iPad; Amazon backed down Sunday night, saying it would “capitulate and accept Macmillan’s terms.”) But the book industry seems ill-prepared to take advantage of many of the new worlds the iPad opens up. Although five of the top six publishers signed on, there was little indication that they would use some of the muscle the device displays. Readers on the iPad should certainly expect that when they buy a cookbook, building in cooking demos would be a no-brainer, but it may be a long while before the industry has the ability to produce books that incorporate multimedia. Newspapers and magazines will have far less trouble changing the wheels on the car as it goes flying down new roads. Martin A. Nisenholtz, senior vice president for digital operations at The New York Times, took a turn on the Apple stage with a demonstration that displayed the new flexibility and range of the iPad. But many people could not help but notice that no magazine companies were involved in Wednesday’s presentation. “I saw iBooks today, but no iMagazine,” said Sara Ohrvall of Sweden’s Bonnier Corporation, which owns a number of American magazines. And many magazine companies have been working on prototype applications for a device that would seem to be a dream come true. Writing on the Pentagram blog, the designer Luke Hayman said the iPad will “revolutionize the way we read magazines.” (Tell that to Condé Nast, which just put the finishing touches on a prototype of a gorgeous digital magazine — in Flash.) But there’s a sticking point here, too. The consumer side of both newspapers and magazines is in the database business, trying to expand their base of credit cards and information about consumers. In a world of applications, a share of the revenue will go to publishers, but the information about customers mostly belongs to Apple. The big question for publishers is, will Apple allow them to develop their own relationship with the consumer?
  43. 43. Despite that doubt, Terry McDonell, editor of Sports Illustrated, liked what he saw, in part because the product that was unveiled fit nicely with a prototype that the magazine has developed. “I saw the Mac demo’ed by Steve Jobs in 1984 in the offices of Newsweek, and I knew at the moment it was going to change everything because of its capabilities for desktop publishing,” he said. “I felt the same way watching this presentation. There are huge potential gains for us here.” Even as business models have yet to evolve, the iPad is clearly a next-generation media consumption device. The iPad is less gadget than pure frame on content. During the hands-on demo, I was so intent on what was on the screen that I all but forgot I was holding a piece of technology. A lot of things are clearer in this gorgeous new environment, except that part about turning the iPad into a cash register for media companies. PaidContent.org http://paidcontent.org/table/e-reader-comparison-chart/ Comparing E-Readers | January 2010 How Do E-Readers Stack Up With iPad In The Mix? Use Our Chart As A Guide Barnes Sony Amazon Amazon Plastic Logic Apple iPad & Noble Daily Kindle 2 Kindle DX Que proReader Nook Edition Reader Link iPad Kindle 2 Kindle DX Nook Daily Que Edition March (WiFi only) Available Now Now Now Now Mid-April April (WiFi/3G) WiFi: WiFi/4GB: $649 $499-699 Price $259 $489 $259 $399 WiFi/3G/8GB: 3G/WiFi: $799 $629-829 8 x 5.3 x 7.7 x 4.9 8.13 x 4 .5 inches 10.4 x 7.2 x 8.5 x 11x .33 Size 0.36 x 0.5 x 19/32 thick 0.38 inches inches inches inches inches Weight 1.5 lbs. 10.2 oz. 18.9 oz. 12.1 oz. 12.75 oz. 17 oz.

×