By Greg Mills
Bleeding, as a medical therapy, is one of those historic absolutely backwards things that were done in Medieval ignorance. Someone who is already weak from an illness would be bled every day to get rid of the “bad blood.”
There is no way of knowing how many people died from the bleeding treatment instead of what they were trying to be cured of. We know now there is no such thing as bad blood or good blood.
In business there is normally a period of time where new ventures require an investment to get to a break even point. Sometimes the venture or new product proves to be so ill-founded the plug is pulled to stop the loss. Recent examples of failed product releases that bad include Microsoft’s Kin phone and perhaps RIMs PlayBook. Sometimes the venture or new product turns around and begins to make money and the initial investment is finally paid back, handily.
“The Daily” digital newspaper was launched with great fanfare as the format for the salvation of the publishing industry. Various digital magazines also were launched hoping to create a viable “go to market plan” that would work. Dead tree newspaper publishers are slowly bleeding to death in the US, as circulation and costs are both going the wrong way. As newspaper circulation is generally going down, the rising cost to publish papers is eating away profits and bankrupting publishers all over the country. Few newspapers are making money these days.
The notion of almost free “scaling” in digital publishing is very attractive. Once you have the content “published” on your servers, the cost for individual downloads is negligible. For example, this article, once published to our MacNews server costs virtually nothing to present to one more reader. A dead tree paper publisher must buy paper and print a newspaper for each reader, and then get it physically into the hands of that individual reader.
Shifting the cost of delivery to the reader, who uses their internet infrastructure to download the content is much cheaper than paying a paperboy and gassing up a fleet of delivery trucks. Digital papers only require content that is processed by a computer to create files that amount to a digital paper.
Digital papers are a great concept; the problem is in the details and the free competition they face. Free content trumps paid content if you are a reader. The single biggest problem “The Daily” faces is the free news content found at CNN.com and the like. “The Daily” has to do it better and provide compellingly more valuable content to the reader to justify them paying. Virtually the same information is freely available in numerous forms, so why pay?
“The Daily” has spent magnitude of US$10 mIllion dollars in the last 90 days, more than it took in, according to reports. Converting free sample subscriptions to paid subscribers has proven difficult. This was expected. News Corp plans to continue “The Daily” experiment and try to get to break even at some point in the future.
Getting Internet junkies to pay for content has proven a problem in the past, but Apple was able to break the piracy of music problem by selling songs at 99 cents on iTunes. The hope is that they can do the same thing with digital publishing. There are fundamental differences, however, as free news sites aren’t copyrighted like music was.
In addition to the problem of retraining Internet readers to pay for content they are used to getting free, “The Daily” has also blundered in user interface tweaks that require iPad users to do things on t “The Daily” site that isn’t the standard of the iPad platform. I noticed the same thing with ABCNews.com.
They got creative and screwed around with the vertical scrolling interface of iPad to require readers to scroll the page right to left. Attempting to scroll up and down is fruitless and frustrating. I noticed that there is also much less content on ABCNews.com than the other news web sites. Dumbed down sites don’t impress me.
I spend about one minute on ABCNews compared to five minutes on CNN or CBS news web sites. With all that extra reformatting effort at ABC, they creativity shot themselves in the foot. ABC even put out a novel ball user interface app for iPad. Again, fooling around with the user interface was counter productive. I threw the ABC ball app away and rarely go to ABCNews.com since it rarely has unique content, and I don’t like the needlessly modified user interface. If I wanted odd interfaces that have no enforced convention, I’d buy a Windows PC (if I ever buy a PC, shock treatment or a frontal lobotomy might be indicated).
“The Daily” may eventually figure this out and come up with compelling content in a familiar user interface. I “subscribed” while “The Daily” was free but lost interest during the trial period and haven’t gone back. It seems to me “The Daily” was long on content I didn’t care about and had almost nothing on tech or science that I enjoy and seek. “The Daily” also could have launched a local reader ad feature that might have drawn interest and advertising revenue.
As I have said in previous posts about digital magazines, once the novelty wears off, the price per issue for digital content must reflect some sort of discount for the savings to publishers. Not having an actual book or magazine that is a printed hardcopy, delivered by mail is a remarkable savings that the consumer must share. A digital copy of a document shouldn’t be more than a hard copy. Digital consumers aren’t stupid, in fact the opposite is true.
A number of the big guns in the publishing industry are now reluctantly cutting prices per issue for digital magazines to at least match newsstand prices and also offering annual subscriptions. There is clearly more market adjustment downwards in prices for the digital download revolution to take hold, but some progress in the market is going on.
There is still resentment that Apple won’t give digital publishers contact information on subscribers through the iTunes store. What store would give publishers the contact information on people who buy publications at their brick and mortar store? The only possible reason publishers want contact information would be to sell products directly and cut Apple out of the loop and revenue stream.
Apple getting 30% also rankles them. Steve Jobs, in effect says to them, get rankled or just die a slow economic decline. Publishers want to continue to maintain current prices and put the savings of going to digital publishing in their pockets, without cutting Apple in and without passing some of the savings on to readers.
As many cool things as Apple does, you have to expect some tangental efforts will fail. As conventional paper publishing continues to decline, the Internet digital download will certainly take its place. The issue is; when will paid digital news papers, magazines and books ever really take off? It’s all a market price point issue.
Thats’ Greg’s Bite for today.
(Greg Mills is currently a graphic and Faux Wall Artist in Kansas City. Formerly a new product R&D man for the paint sundry market, he holds 11 US patents. Greg is an Extra Class Ham Radio Operator, AB6SF, iOS developer and web site designer. He’s also working on a solar energy startup using a patent pending process for turning waste dual pane glass window units into thermal solar panels used to heat water see: www.CottageIndustrySolar.com Married, with one daughter, Greg writes for intellectual property web sites and on Mac/Tech related issues. See Greg’s art web site at http://www.gregmills.info He can be emailed at gregmills@mac.com )