How e-readers can save the magazine (and newspaper) publishing industry

Publishers: You want to unburden yourself from paying the printer, the post office, the paper company? You want to sell an ad for half its price and be just as profitable? How many more advertisers do you think you could get if you could slice your prices in half? If this interests you, read on.

I've resisted the digital e-book readers for years after I caved and bought the Rocket eBook around the turn of the century (sounds so quaint phrasing it that way!). That damn thing was heavy, clunky, twice as thick as my MacBook, and had a dim, gray LCD screen that lit up to an electric blue. Plus the number of available books was tiny at best. There was no "software". So it sat in a drawer unused, until it went up on ebay to die in someone else's drawer.

Fast forward to 2009, and now we have the Amazon Kindle 2, with 240,000 books to choose from. Being an avid non-fiction reader, I finally broke down and bought one, since the reviews to the first Kindle were so rave.

I can see how the device is well suited to books. But what I wanted to try was newspapers and magazines. I downloaded an issue of the New York Times and paged through it. The interface was clunky and poor. The e-ink technology has an annoying delay every time it refreshes, which greatly diminishes the user interface. Frankly, it's faster to turn physical pages of paper.

Also, the screen feels ridiculoulsy tiny compared to the printed page. And on my Kindle 2, the contrast was so poor that I felt like I was reading on an Etch-a-Sketch. So I returned it. Reading books on the device? Once you get past the contrast issues, fine for some people. But reading magazines? Forget it.

But this concept of an electronic reader DOES hold promise for the magazine industry, which is struggling to survive in its print-based format. E-readers can actually SAVE our industry. We're just not going about it the right way.

Here's what needs to happen:

1. We need much bigger screens. From a display perspective, we need a device built from the ground up for magazines. Books have a MUCH LOWER display requirement than magazines. Think about it. From a display perspective, books are for the most part monochromatic words on a page. Amazon's device is well-suited for this requirement, which makes sense, because books are what Amazon's trying to sell. Not magazines. To make reading magazines a pleasurable experience on an electronic reader, what we need is an e-reader that's got a BIG, high-contrast display that's as big as a sheet of paper. I'm talking 8.5 x 11 inches here. Nothing less. And for true magazine experience, it should be DOUBLE that. Enough to fit a two-page spread. It should not have a keyboard. At least 90% of the surface area of the device must be given over to the display. The entire screen has to have a touch (or ideally, multi-touch) interface. And I'm sorry, it HAS to be color. I'm not sure why everyone is hung up on the e-ink technology. My iPod touch (and your iPhone) would be a great reader if you just blew it up in size. And also, today's LCD technology, which I think is up to around 96 dpi (someone can correct me if I'm wrong), is totally sufficient. In other words: the display technology already exists. Apple has long been rumored to come out with a "tablet" device with a 7 or 8 inch screen. While that may be pleasing to many people, it is not enough for magazines. And why include a physical keyboard on the device? This is a ridiculous waste of real estate that should be devoted to the screen instead. Apple's iPhone has proven we can pop-up a keyboard on a touchscreen, and get by. Remember, we're not tapping out novels here. We're reading. I can go into Best Buy and see an entire wall of LCD televisions large enough to spread out a tablecloth on; why can't the industry understand that for MAGAZINES, we need something that is the SIZE OF A MAGAZINE! Hello? Is anyone listening? I've got my eyes on Plastic Logic, which seems to be the most promising contender so far.

2. We need better software. The Kindle's interface is adequate for books. But it sucks for newspapers and is a non-starter for magazines. We need a way to flip through pages, either one or two at a time, or big swaths at a time. We need a way to get to the table of contents and back. Fortunately, this software exists. The digital magazine industry has quietly been toiling for years, improving their software. Have you looked lately? It's gotten quite good. Now anyone who knows me knows I am NOT a fan of digital magazines. I know they have their fans, but they will never become mainstream on personal computers. I'm sorry, but NO ONE wants to read a 110-page magazine with zooming and scrolling in their email inbox. Who has time? And when you receive a digital magazine on your computer, you're in work mode. Not in reading mode. It works at cross purposes with what you're trying to get done. However, take those advances that the digital magazine industry has achieved, and put their software on the proper e-reader hardware, and suddenly you've laid the groundwork for true mass adoption.

3. We need a page description language specific to high-fidelity publishing. In short, the display format can and should be much closer to PDF than HTML. We need something that allows print designers to design in their native tools, not force them to become web designers and learn a whole new series of design constraints. And we must have tools that allow designers to elegantly weave rich media such as video clips into the design, rather than slapped on top of it gratuitously.

4. Devices must have wireless access. Amazon's Whispernet is a clever idea, but it's overkill. Wi fi (802.11g) is fine. Or you should be able to buy a chip from your cell phone carrier and insert it into the device and get wireless data access for an $15 per month on your wireless phone bill.

5. Devices must be vertically integrated into a click-to-purchase content store. Without this, we're dead in the water. Think iTunes but for magazines (and newspapers). Browsing and purchasing content should be easy enough for your grandmother to do it. Apple and Amazon have achieved that. They also have the clout to aggregate publishers, by the way.

6. We need a new ad model to track performance. We need some standardized way that advertisers can tell both impressions, clicks, lead-gen, even click-to-purchase. The good news is that it will breathe new life into ad buying because we'll be able to finally provide true numbers that can finally justify ROI in many ad buyers' minds. The bad news is it will change the psychology and economics of ad buying. Today, you buy a 90,000 or 2.5-million circ magazine, you assume 90,000 or 2.5-million impressions. But we all know that's not true. A digital reader will cause the industry to have to drop its drawers and reveal this. Ad buyers will be reluctant to pony up big ad bucks when its tracking system shows only 2,000 people saw their ad in that 90,000 or 2.5-million-strong magazine. On the other hand, there's no printing, paper, and postage. So our costs as publishers go down. We need to obviously pass that savings on to the advertiser. So the entire ad model will need to change. That's disruptive and painful, but it needs to happen. Let's at least try to control it.

Now, given all of the above, let's debunk some myths:

1. Information wants to be free; users won't pay for content. Apple's iTunes and Amazon's Kindle have disproved this. People WILL pay for electronic content if a) the transaction experience easy enough (think one-click), b) the price is low enough, and c) it can be "consumed" on a device that makes the experience highly usable (think iPod). If we provide a device that makes magazine reading highly usable, there's every reason to think readers would pay for content, assuming it met all three of these conditions. Micropayments have come a long way, but I still don't think we want to be asking people to make a purchasing decision every time they click a link, even if it's only five cents an article. But I DO think we can employ the latest micropayment ideas to ask them to engage in impulse purchases of entire magazines for, say, 99 cents or $1.49. Or a subscription for $9.99.

2. Reading screens is much harder than reading paper. Have you looked at a high-res laptop or iPhone screen lately? And I hate to be down on the e-ink folks, because the low-power, high-res e-ink concept is a neat idea, but Amazon's Kindle 2 did not have much higher resolution than my laptop, and to me, the high contrast and color display of my laptop screen hands down is better than the poor contrast and slow page refresh of e-ink screens.

3. People won't read more than a few Web pages on a screen. The key word in that sentence is "web". It's true, people won't read more than a few Web pages on a screen. There are two reasons for this. First, we are linear creatures. We like to flip through a linear reading experience. But the Web is hypertextual. The very nature of the Web precludes it from being linear. Am I going to click on every link in the nav bar to read every page of the NYTimes.com Web site each day? No way. But would I page through a 32-page premium edition formatted for a high-resolution, color e-reader of the sort described above? You betcha. And I'd pay for it too, by the way. The second thing that's going on in Web pages that prevents extended reading is the chock-a-block reading experience. As publishers, we're all cramming 100 pounds of crap into a five-pound sack. Ads, navigation, related articles, related sponsored links, related videos, comments, etc. It's too much noise. We can only take so much of it. It works at cross purposes with an extended reading experience. MAGAZINES, on the other hand (but not newspapers, sorry) are designed from the ground up for an extended reading experience. They are designed. And they are designed to provide an engaging reading experience over the course of 50 or 100 pages. By designers. Web pages, by contrast, on most web sites, are designed once, when the site is built (or rebuilt) and all articles flow into that one page template. We need to bring that multi-page design into the electronic realm. That's why I'm so keen on the digital magazine vendors. The Web has been a proving grounds for them. They've dealt with this challenge for 10 years now. They've learned a thing or two. Let's leverage their knowledge.

4. People won't pay $350 for the device. Well, that's not strictly true. Geeks like me would, but with that pricing model, these devices will never amount to more than a curiosity. However, there is a way to address the cost.

Publishing consortium to the rescue

Think about cell phones for a minute. The cost of the handset itself is wrapped into the monthly payment. Millions and millions--billions!--of $200 to $400 devices are being given out for "free" all the time-- with a two-year contract, of course. And look at worldwide cell phone penetration, as a result.

Now is the time for the publishing industry to step up and find a way to wrap the cost of the hardware into the cost of the content. Our pitch to our audiences: you want Time, People, Oprah, and Popular Electronics? Sign up for a two year subscription and your e-reader is $50. Or better, it's free. (The Silicon Alley Insider had a recent post that calculated it would actually be cheaper for the New York Times to simply give a Kindle 2 to all of its readers than to pay year's printing, paper and distribution costs.)

For B2B it's trickier since our magazines are already free, but there's no reason that both controlled and paid circ vendors can't form a consortium to get readers into as many hands as possible. Smarter people than me can and should speculate on how the pieces should come together, but it should involve publishers, digital magazine vendors, hardware makers, and aggregators. It should be a big solution involving many players. This is too big a problem for one company to solve on its own.

Plastic Logic is trying to be its own aggregator, but this will never gain critical mass, unless the hardware maker is Apple. Apple has a good chance to get this right, but not if they come out with a device with a 7" screen.

I don't think individual magazine publishers have the clout and financial muscle to develop their own hardware, despite what Hearst is trying. Plus, by definition, a single publisher would be loathe to create an aggregation portal with competing or non-related magazines.

Amazon COULD be an aggregator but I don't think it's likely for two reasons: 1) its business model is biased toward books and 2) it already has its own Kindle device. It's not likely to go back to the drawing board and start from scratch.

The dark horse candidate is us. The magazine industry. We could be the Hulu of magazines. Hulu is a Web site made by a consortium of television broadcasters that allows viewers to access branded broadcast content in one place online. We need to provide something similar: One place to sign up to get your free e-reader from any number of hardware companies, with any number of magazines from your favorite publishers, powered by software from any number of digital magazine vendors.

We could, by banding together in the manner described above, literally remake our own future by harnessing both the hardware and the software technology (that already exists, by the way) and funding our own non-print, non-post office, non-paper future. I'm not naive. As admirable as this sounds, in some ways, this is the least likely. There are so many financial, organizational, and technical hurdles to overcome. But if we could pull it off, this would be my personal favorite, and I would volunteer my time to participate in such an endeavor if it had the true backing of the industry.

Don't get me wrong, I think there is a future in Web-only publishing. The information technology publishers have already shown this is possible. But if we could find a way to transfer the linear reading experience to a non-Web, non-hypertextual, electronic reader environment, we would ALL have a new lease on life. Publishers could build thriving business that consist of equal parts Web sites and digital magazines on true e-reader devices.

Can we do it? Do we have the vision? Or the will? You tell me.

Who is in charge of your publication's product development strategy

This question is directed to smaller publishers: Do each of your publications have a person in charge of new product development? Are there titles on the payroll, "Product manager" or "Product development manager"? Ten years ago, there was no such thing in B2B publishing. The "product" was a print magazine, and it's stayed pretty much the same for well over a hundred years.

By now, most if not all publishers have an executive in charge of digital media. But I'm going out on a limb and arguing that that's not really the same thing as a product development person at the brand level.

There needs to be someone who really understands the brand, and who is given a budget and a mandate to develop new online products.

This may seem obvious, but after attending the recent ABM Digital Velocity conference in New York City and hearing other publishers present, I'm not so sure we're all on the same page.

There are widely divergent opinions on how to manage new product development, even within the same company. For example, take a Web site redesign. Once you're done, are you done? Some publishers think so. "We spent the budget and got the Web site. We're done." Really? For how long?

Also, I still see evidence of some publishers whose Web site strategies consist of "All the crap we ran in print, archived online." Yes, a great strategy 10 years ago, when many publications couldn't even get their archives online. Enough to build a sustainable Web site today? Few would take that bet.

My argument is that each site needs an ongoing budget and a person whose job it is to constantly come up with the next thing -- at the brand level. Note I didn't say the next big thing. That's certainly needed from time to time, but don't forget, lots of ongoing smaller improvements and course corrections add up. Especially when the competition may not be doing the same.

Does that product development manager position need to be a full-time job? No. It can be an existing editor, salesperson, even digital media executive who is officially tasked with this. I've even seen audience development folks at some of the IT media companies tasked with this.

But it needs to be made very clear that new product development -- and the budget to go with it -- is part of this person's job. One idea I picked up at Digital Velocity was to financially incentivize the person tasked with product development if revenues (or traffic) from the idea takes off.

Should publishers be new product development people? No. They have a magazine, Web site and conference to run. This is a task that needs to be given focus and budget. (Did I mention budget?)

But why can't editors earn extra pay this way? I'm biased of course (former editor) but I think editors are uniquely qualified as new product development folks, because they're presumably the most expert in the market and brand. Why not pay the editor $5K if a traffic threshhold is reached as a result of traffic from the new idea? Or if revenues or profits from a new idea exceed a certain target?

I think in-house digital media folks who are responsible for multiple brands can and should provide the support to the new product people, but the new product people need to exist--along with a budget and a mandate--at the brand level to be remotely effective.

Social media hot or hype?

I remember attending American Business Media's annual Digital Velocity event in March 2007 and seeing some really interesting social media presentations. At that time, I thought social media was white hot. They had a speaker from Gather.com -- a consumer social media site, not B2B -- tout exponential growth curves, with his presentation ending with a dire: "Think this is just consumer? It's coming to business."

Caught up in the hype, I returned convinced that launching social networks in our space (packaging and manufacturing) was an absolute must. We had vendors lined up, strategies in place, editors girded and ready to go. We were going to trounce the competition and be first to market in our space with a comprehensive social networking app.

Then I did my quick reality check that I do with any new project. I ask two questions: 1) Is this something readers are asking for? 2) Is this something advertisers are asking for?

While we did conduct some web surveys to readers that indicated some interest, it's always difficult to tell with such surveys how widespread the interest is and whether people would make a social networking app part of their work life. And certainly, no advertiser has ever come to us and said, "Hey, we want you to offer social networking." The only thing advertisers want is leads. Does social networking provide leads? Not really.

So we pulled the plug.

If social networking seemed white hot in March 2007, it now seems super white hot in February 2008. What's interesting is the proliferation of vendors whose social networking platform can be white labeled for B2B media applications. A year ago, there was Leverage Software, whose platform is used by Infoworld's IT ExecConnect. It was really cool, and really expensive. Initially they wanted $25K per year. We just couldn't justify it for what amounted to an experiment. Then they came out with a do-it-yourself model for $300/mo for up to 100 users. But today there are dozens of companies that offer a social media platform for media companies like us, that we are now enjoying extreme downward price pressure.

I remain dubious of social networking's value in certain markets--such as ours, namely, where people are very private and exist in corporate cultures that restrict outward communication food, drug, beverge manufacturers). If people meet at a conference or event, I can see them maybe using a social networking site to stay in touch--maybe. That said, I am watching this space closely, and I'll jot some notes of vendors to watch (in addition to Leverage Software).

IntroNetworks -- this was brought up to me by some Web gurus at Rockwell Automation, one of our advertisers. Has a very similar cool feature to Leverage software, a visual people finder, that maps your interests onto a circular target with graphical depictions of other people in the circle who are either closer or further from you--depicted in the center--based on their matching interests.

Neighborhood America -- This is one to watch namely because Steve Ennen, one of the sharper folks in this business, was impressed enough to leave what had to have been a great, cushy job at American Business Media to become their business development guy. Steve has called me to schedule a demo, but I haven't seen it yet.

GoingOn -- This is the social networking app from AlwaysOn, the Silicon Valley tech uber-blog founded by Tony Perkins, former publisher of Red Herring. If it has all the functionality of AlwaysOn, it would be quite robust and definitely worth evaluating.

Pluck -- Although this is used by McGraw-Hill Construction, I found it too consumer-oriented. But who am I to argue with McGraw-Hill? Last time I checked, they were doing okay.

Ning -- Powers the social networking function of American Business Media's new site. Why did they select Ning? I asked Joshua Kuvin, their CTO. In his words: "We had interviewed everything from a $100K build-out to the smallest. Ning offered the most professional look and feel, [and] premium service is only about $35 a year and takes all ads out. I investigated it further to make sure that all info would remain private if a person wished to do so… and this was something that very important thing for us." I logged in and experimented with it, and it seemed to provide all the necessary functionality.

KickApps -- Love the name, but it's more consumer-oriented. Worth looking at for enthusiast media.

Near-Time -- This is more of a community Wiki and blogging platform, I found it weak in organized discussion groups when I evaluated it a year ago. Today, who knows, it probably can cure cancer.

CollectiveX -- This site doesn't explicitly bill itself as a social networking app, but that's what it does. And best of all, the free version does all the basic things you'd expect in a social networking site (member discovery, discussion groups, file library). For $9 per month you can have the ads removed, but to tell you the truth, they're at the bottom so you don't even notice. We're experimenting with using CollectiveX as the social networking app for a new packaging line performance workshop we're launching. It's a two-day workshop, and the theory is, if you've spent 2 days in a sweaty room in Tampa with someone at a workshop, chances are good that a strong-enough bond will be formed that a social networking app may have a chance to be used.

Of course, in my opinion, the biggest social networking app is one that's free to everyone with internet access: e-mail.

If you've found some others that would be suitable for B2B, post them here! Better, share your experiences with launching and running social media sites. I'm collecting those as well.

Wither subscription-based content?

With the New York Times' discontinuation of its Times Select experiment, whereby readers paid to access the Times' exclusive columnists, and the buzz of anticipation that Rupert Murdoch will end paid access to the Wall Street Journal in the hopes of opening up wider advertising opportunities, it appears that the future of paid content is in question.

Witness this video of a panel discussion on the future of online advertising at the Ad Tech show in New York, where Arianna Huffington said that in the future, "what's going to be least important is subscription-based content...Unless it's pornography, and especially weird porn, don't charge for it." It was a clever line that drew laughs from the audience, but when it comes B2B, I'm not so sure we can put the nail in the coffin of paid content just yet.

Rather, as I've mentioned before, exclusive content available in a web-only format that cannot be replicated in print can be a big part of the future of online B2B media growth, and is worthy of our time and investment. I'm not talking Web-exclusive articles. I agree with Huffington that people just won't pay for words, no matter how good they are.

But they will pay for other forms of structured content. The most obvious example is structured databases of industry information, which database publishers have proffered for years. Trouble with that is the data business is so fundamentally different than the publishing business that most publishers have trouble making the mental leap.

But with audio, video and images, the Web opens up opportunities beyond data. Witness AdForum.com, a repository of television 75,000 commercials and 20,000 agencies from around the world. It charges $295 per year for access, and the videos are structured and searchable through a slick user interface. By the way, this is owned by Maydream, which is not a publishing company. Why didn't Ad Age come up with this Web site?

Another good example is Reel Exchange from Penton Media.

We're experimenting with a similar concept with our Global Package Gallery, which aims to be the largest online repository of high-resolution package images. We're just in launch mode now, so time will tell whether this is successful. But I can tell you that we will draw very little from our experience of selling ads and writing articles, which is all we've ever known. We're definitely flexing some new muscles.

But sniffing out these new opportunities, which are often right under our noses, requires an entirely different way of thinking about the markets that we serve. By the way, an excellent resource for getting the creative juices flowing is Russell Perkins' InfoCommerce Group. He runs an excellent conference and writes a great blog highlighting these types of business models.