Some Deeper Questions About Apple and Publishers

| Hidden Dimensions

 “Poverty wants much; but avarice, everything”

— Publilius Syrus (Roman author, 1st century, BCE)

Apple’s message to publishers has been clear. If you want to play in our sandbox, you’ll have to pay. That’s requiring painful change on the part of publishers, but as part of that change, broader technical issues are at stake.

The approach that Apple is taking with publishers has been discussed just about everywhere, at length. In a recent Hidden Dimensions column, I argued that the criticism of Apple, in many cases, is not well grounded. There is a component of the publishing industry that doesn’t want to change, blames Apple, and some news sites are all to happy to run with that story and gang up on Apple. Some publishing businesses lack the technical capability or resources to make a go of epublishing without Apple, and so every dollar they have to pay Apple in their bid to survive is paid grudgingly.

This will all sort itself out. Some publishers, whether it’s books, newspapers or magazines will get a clue and radically reorganize. Some will fall by the wayside. Some new age entrepreneurs will analyze the technology and the market and learn how to make money within the constraints that tablet makers wish to place on them.

Meanwhile, given all that, there are some nagging questions.

For starters, while software technology has democratized publishing to a large extent, the extremely sophisticated technology required for hardware and software to deliver certain kinds of traditional, valuable content is moving into the hands of only a handful of companies. We never really read books and magazines on PCs — the format wasn’t designed for it. But tablets are, and as tablets start to take significant market share away from PCs, then these few high tech companies could move into a position to influence our access to traditional published sources.

Where before, there were myriads of book publishers and thousands of magazines and thousands of newspapers made available on thousands of newsstands and bookstores, in the the foreseeable future, you’ll need a tablet to access that content. That has implications that should be explored.

Questions for Tablet Makers

The publishing industry is in an energetic transitional phase. When that happens, like a quantum mechanical transition, for a time, the industry is in both states. We can see that Apple has a vision and it’s a good bet that in 20 years, the print industry will be gone. But for now, there are millions of people who depend on print and who still love the feel of paper. There is tension all around as we work through the transition.

While we’re doing that, an important question to ask is whether the vision of the future, exemplified by Apple, copied by everyone else, creates secondary problems that the tablet companies can wash their hands of. As Apple gets richer and richer, do we prosper along with the company or is it all offset by new problems for society?

For example, few of us now have Macs that can run Classic. If we didn’t migrate our documents from the days of Classic and we can no longer run apps that can read those documents, then the data is gone forever. Modern digital archivists face this monumental problem. To put it simply, what kind of device will we be using to read books in 20 years, and will those ebooks we bought today on our iPad be readable in then? Will DRM get in the way? You may not care, and Apple may not care, but archivists, researchers and historians do.

Another question to ask is whether Apple, as a money making corporation, is stressing the publishing industry at a pace that they cannot tolerate — for Apple’s sole financial gain. It’s an open question that no one has really considered. For example, if the U.S. Government wanted to enact a US$1.00/gallon gasoline tax, it would likely go to economists, the GAO, U.S. National Laboratories and so on to run simulations and assess the result of all that money being taken out of the hands of consumers. In Apple’s case, they’ve slapped a flat 30 percent on books, magazines, and newspapers, and one might legitimately inquire whether that specific fee is designed to accelerate the pace of change in a stressful, alarming way or whether it gives publishers the ability to accommodate. No one knows the answer. Is 30 percent the right number?

For example, a publisher told me that advertisers don’t perceive digital ads to have the same value as print ads. They want to pay pay less. So as publications transition to digital, their ad revenue shrinks. In the case of magazines, they are willing to make just about no money on newsstand sales — so they can claim a large readership and keep ad rates high. That game hasn’t changed in 50 years. Finally, readers don’t believe they should pay as much for digital content, believing that they should benefit from the new absence of newsstand, printing and postage costs. It’s a financial Catch-22 for a publisher trying to go digital. Many will have to wave good-bye to their cushy 20th floor editorial offices in Manhattan.

As a result, and it’s fair to ask, if the levy Apple has imposed, the price of doing business in the digital publishing era, accelerates the pace of change too quickly, publishers could have a hard time creating content that is valuable and worth paying for. (That’s the grand experiment of The Daily on the iPad.) The basic model of excellence, for a price, developed by many publishers, could collapse too quickly. Apple will have nothing to sell. Epublishing on the iPad will have been a project gone wrong that destroyed the industry it was trying to cash in on.

What’s at Stake

We are in a transition time when critical decisions are made. Will the e-documents published today still be readable in the future? Who takes ownership of that issue? Can a newspaper industry, considered sacred by the founding fathers to be our best check and balance on government remain viable? Or will we become a nation of noisy bloggers yelling at each other? Should technology companies alone, in their panic to compete, become the gatekeepers of human knowledge? For all of human history, we left that task to skilled librarians.

If the subject here were merely games or puzzle books, no one would care very much. But in the long run, our liberties born of inquisitive newspaper journalists and the greatest ideas of humankind in books is something worth careful consideration. The sale of books and news is derived from their heritage as products of enduring value. The creators of tablets and similar future technologies should be careful that in the rush to make money from these industries and become our dominant access point they don’t destroy them before the new entrepreneurs can get a financial handle on the future.

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11 Comments Leave Your Own

delmiller

“The publishing industry is in an energetic transitional phase. When that happens, like a quantum mechanical transition, for a time, the industry is in both states.”

Nice metaphor, John. I think that what we’re dealing with here is, essentially, a dead cat.

Nemo

John:  This is one of your best.  The question that you poses are the right and most important ones.  I don’t know the answers, but let me offer this:  It is early days, nothing has been set in stone, and change is still possible by all parties that important to the future of published materials. 

There is a problem though in that Apple apparently is running its App Store a near breakeven so it does not have much to offer publishers, unless it were to, say, eliminate free apps.  Is that something that users of the App Store would find acceptable so that publishers could have more of the pie?

Or would users of Apple’s devices and the App Store be willing to give up their privacy, as they do on Google’s Android and Facebook, so that publishers can have more of the pie?

If Apple have answers to these questions, supra, it could perhaps decide to reduce its 30% commission.

Lancashire-Witch

How quickly things change. From making computers to making money.  It’s a slippery slope, as some in the auto industry discovered.

FlipFriddle

The publishers have always been able to produce content that was valuable, at least the ones that were a successful business. What they need to do is stop giving away the content for free online. They’ve all cut their own throats; the siren song of the web and it’s millions of eyeballs made them give away their content supported by advertising they admit is worth less to them and the consumer. Giving it away diminishes the value of the content as well. The public has come to expect things online to be free because everyone has given it away for free for so long. Maybe they should start charging the online advertisers more? If print is dead, where else can they advertise?

Print industry gone in 20 years? Impossible. Shrunken like a dried pygmy victims head? Probably. Books have no battery limitations, obsolescence (save language), or DRM, so they will be a cheap, easy, and long-lived way to store information. But it is definitely all changing, and your last two paragraphs definitely describe the most important issues to think about.

Nice post.

Mike Weasner

Printing on something hard (rock, various forms of paper) has been in use for a LONG time.  Digital “printing” has been in use for a relatively SHORT time and has seen many formats.  As John noted, archivists and others are concerned about this move to digital publishing.  Until a long-term standard is agreed upon by publishers, archivists, researchers, software companies, consumers, and yes, even governments, a “digital dark age” looms.  I have Sky and Telescope magazines from 1962 on my bookshelf and can still read them. Will some amateur astronomer 50 years from now be able to read the digital editions now being published by Sky and Telescope?  I had planned to check on this but the file on how to build a time machine that I received from someone in the future couldn’t be read by today’s eReaders.  Oh well.

daemon

Baron’s sells single copies of their magazine for $5 each and full page color print ads for $49,213.

Baron’s Circulation is around 300,000. For each possible impression Baron’s charges just over 16.4 cents each. Keep in mind, these aren’t even real impressions, cause it’s just as likely that no one bothers to look at the ad as it is for someone to see it.

Website advertising on the other hand goes for 50 cents per 1000 people that see it. Add on to the fact you know more about the people that you are advertising to online than you could ever know about a Baron’s reader, and the absolute goldmine that’s being squandered by the publishers is baffling.

Bosco (Brad Hutchings)

While we?re doing that, an important question to ask is whether the vision of the future, exemplified by Apple, copied by everyone else, creates secondary problems that the tablet companies can wash their hands of.

You can’t even ask this kind of a question absent a company that makes the whole widget. The thing is though, that before long, 80% of this tablet market will belong to a collection of companies that make pieces of the widget. The question will be answered by evolutionary forces rather than by any kind of deliberate planning.

You’ll have a far better chance of being able to access your Sky & Telescope in 2031 if the format it’s in is guided by a group of companies rather than controlled by one company. That gives more players an interest in the format, rather than having one player focussed on “moving the platform forward”.

Lee Dronick

See this story about an author who having been rejected by publishers decided to self publish via ebook

jfbiii

Apple forces, and content providers evolve. Then a bunch of folks jump into whatever new market Apple has taken over or created and, by rushing to produce cheap imitations, end up with 80% of the music player and digital music distribu—...wait a second…that doesn’t sound right…

mhikl

Yes we are just entering this new age of electronic publishing. Pricing, as Nemo says, is not set in stone. Amazon/Kindle charges 10 to 70%. Apple 30%. Obviously, there is some wiggle room here.

It’s the Goldilocks Principle. Publishers can set their own rates and the public will choose whether it is too much or just right. Quality will be a factor and we may see a return to responsible and glorious writing or a continuation of common scribble and again, the public will decide which is just right. Advertisers, too, will figure out how to nab their audiences on the new electric iForm and will be stepping up to the publisher’s plate with their Apple free dollars in hand.

Apples stores may look so good, so cool and soooo easy one’s first thought might be that they must have made themselves. But if it is true the App Stores are barely covering costs then Apple deserves credit for their crafty plan. All that planning and expense and not for immediate profit but as assistance to their products which in the end helps build sales, brilliant and copiable. Apple is looking evermore like a model example for corporation structures of the 21st Century.

Apple will not and cannot break the new epublishing industry for there really isn’t one to break, yet. There are some upstarts and that’s about it, and it may take a decade or longer for the nuts and bolts to be work out just as it has taken for countless new industry upstarts from the automobile to computers. In the meantime, paper publishing will continue as is while tinkering to find its confident step into the future of epublishing.

As Alfred E Neuman would say, “What, me worried?”

Lancashire-Witch

As Alfred E Neuman would say, ?What, me worried??

Or it could have been - “What! Me worried.”

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