January 22, 2010 at 15:02How to be content producers in the iSlate world?
- Transfer
Arnon Mishkin is a partner at Mitchell Madison Group , where he advises on how to improve your business through the Internet and achieve profitability online. Previously, he was a partner in the Boston Consulting Group, where he was involved in the company's first projects on the World Wide Web.
Most content creators ( once considered themselves kings) are waiting for Apple's iSlate to appear next week. Indeed, such a painful expectation has not existed since the time of the flood, and maybe even earlier, because this time the former slaves ignore the golden calf, i.e. Steve Ballmer with his Window's tablet. For some reason, it seems to me that this optimism is justified. The iPhone and probably iSlate, called the “iPhone on steroids,” are likely to allow companies to create full-fledged applications, and not just read (and therefore disposable in essence) web pages.
Moreover, as Apple seeks to use new approaches to existing technologies that change not only the business that they directly concern, but also the spheres adjacent to it, it is highly likely that Apple will find an innovative way to leap over existing products. iPod turned the rules of the music business, iPhone defined mobile web. iSlate will be made and marketed at such a price that it will create an application market for iSlate applications, just like Apple created the iTunes market for iPod and iPhone. Rest assured, iSlate, unlike other e-readers, will expand the emerging market for mobile content devices.
But in the coming years, content producers and audience aggregators should be careful in their dealings with e-readers, otherwise everything will turn into just making money for Apple, just like Kindle sales have become a bonanza for Amazon. With the launch of iSlate, Apple and its iTunes store can truly turn into a collection point for online content, delivering music, applications, the press, and cinema to media players dominating the market.
For the music industry, the emergence of such a collection point began to mean the death of its business model. iTunes selected a significant amount of recordings for consumers who already did not consume pirated products, thereby lowering the value and profitability of record companies. Amazon (with its Kindle) and Barnes & Noble (with its Nook) have the potential to reduce the value of publishing companies and can hack them in the bud by starting to conclude contracts directly with the authors.
However, collection points do not always destroy the industry. Sometimes they put things in order. In the mid-1980s, cable operators turned into such a very efficient collection point between content producers / cable networks and their subscribers, who began to pay a monthly fee for the best signal quality and a number of products available only on cable TV.
Initially, most cable networks offered their programs for free. Content was king. The audience began to connect to the cable. And investors believed that advertisers poured into cable TV because it was easier to identify the target audience. But quickly enough it became clear that cable TV did not become profitable through advertising alone. Like these days, no one felt obligated to pay for CNN or ESPN. Then the studios gathered their spirits and went to the operators represented by John Malone, saying that if they did not begin to share part of the monthly fee, then they would go out of business.
Malon, better known for his miraculous ability to receive controlling stakes in cable networks that he programmed than for his spontaneous generosity, did not want to agree. As for the CNN case, he personally persuaded NBC to start planning his own cable network to get a bargaining chip in negotiations with Ted Turner. But ultimately, the operators agreed to pay the creators and aggregators for the content.
Of course, it is too early to say whether Apple will become such a gathering point, and it is too early to speculate on what kind of blow will be inflicted on content producers. But they should already think seriously today, and not just experiment, on how they will build relationships with iSlate and many other existing and so far only announced electronic readers.
Among the most important issues to consider are the following:
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See also: What to expect from iTunes for Magazines ?
Most content creators ( once considered themselves kings) are waiting for Apple's iSlate to appear next week. Indeed, such a painful expectation has not existed since the time of the flood, and maybe even earlier, because this time the former slaves ignore the golden calf, i.e. Steve Ballmer with his Window's tablet. For some reason, it seems to me that this optimism is justified. The iPhone and probably iSlate, called the “iPhone on steroids,” are likely to allow companies to create full-fledged applications, and not just read (and therefore disposable in essence) web pages.
Moreover, as Apple seeks to use new approaches to existing technologies that change not only the business that they directly concern, but also the spheres adjacent to it, it is highly likely that Apple will find an innovative way to leap over existing products. iPod turned the rules of the music business, iPhone defined mobile web. iSlate will be made and marketed at such a price that it will create an application market for iSlate applications, just like Apple created the iTunes market for iPod and iPhone. Rest assured, iSlate, unlike other e-readers, will expand the emerging market for mobile content devices.
But in the coming years, content producers and audience aggregators should be careful in their dealings with e-readers, otherwise everything will turn into just making money for Apple, just like Kindle sales have become a bonanza for Amazon. With the launch of iSlate, Apple and its iTunes store can truly turn into a collection point for online content, delivering music, applications, the press, and cinema to media players dominating the market.
For the music industry, the emergence of such a collection point began to mean the death of its business model. iTunes selected a significant amount of recordings for consumers who already did not consume pirated products, thereby lowering the value and profitability of record companies. Amazon (with its Kindle) and Barnes & Noble (with its Nook) have the potential to reduce the value of publishing companies and can hack them in the bud by starting to conclude contracts directly with the authors.
However, collection points do not always destroy the industry. Sometimes they put things in order. In the mid-1980s, cable operators turned into such a very efficient collection point between content producers / cable networks and their subscribers, who began to pay a monthly fee for the best signal quality and a number of products available only on cable TV.
Initially, most cable networks offered their programs for free. Content was king. The audience began to connect to the cable. And investors believed that advertisers poured into cable TV because it was easier to identify the target audience. But quickly enough it became clear that cable TV did not become profitable through advertising alone. Like these days, no one felt obligated to pay for CNN or ESPN. Then the studios gathered their spirits and went to the operators represented by John Malone, saying that if they did not begin to share part of the monthly fee, then they would go out of business.
Malon, better known for his miraculous ability to receive controlling stakes in cable networks that he programmed than for his spontaneous generosity, did not want to agree. As for the CNN case, he personally persuaded NBC to start planning his own cable network to get a bargaining chip in negotiations with Ted Turner. But ultimately, the operators agreed to pay the creators and aggregators for the content.
Of course, it is too early to say whether Apple will become such a gathering point, and it is too early to speculate on what kind of blow will be inflicted on content producers. But they should already think seriously today, and not just experiment, on how they will build relationships with iSlate and many other existing and so far only announced electronic readers.
Among the most important issues to consider are the following:
- What is the difference between the needs and desires of your paper consumers from digital?
- How do your tablet plans fit in with your overall digital platform strategy?
- What does your brand (s) mean in the world of tablets, and how can you increase the value of your brand through content packages rather than individual pieces of it? For example, for the magazine business, in order to avoid the fate of music studios, you need to decide how to preserve the value of the magazine as a whole, and not break into separate articles. In other industries, companies need to decide what will be the maximum benefit for their brand: organizing their existing web products? in creating a new, more segmented product? In general, is there any point in selling through a consortium of larger publishers?
- What value do you represent for a company selling a tablet, and how do you approach licensing issues for your products for it?
- Is it worth it and how to participate in a consortium of publishers? Do you participate in order to make your consortium the strongest, or to gain superiority in negotiations with tablet companies?
- How to use your sites where your content is available for free in such a way that sales on tablets do not suffer from this?
- How to promote tablet products so as not to be tied to one platform?
- How to determine that the market is not the only company is a collection point? And if this suddenly happens, how best to build a relationship with her?
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See also: What to expect from iTunes for Magazines ?