Thursday, April 28, 2011

Device Elitism

Is publishing's obession with the Kindle and the iPad elitist? That is the question posed by Publishing Perspectives :

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

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

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

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

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

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