Monday, August 31, 2009

Netbooks, We Hardly Knew Ye: Here Come Smartbooks

With a webinar for MIT coming up at the end of September, I finally accepted that my aging laptop was overdue for an upgrade to keep up with the increasing need to be video-literate online. In the process of ordering up my new unit, I had an opportunity to order a nearly-free netbook along with my new Dell Latitude. Looked interesting for a moment, but I decided to pass and to wait it out a while longer for something with a little more power and battery life. That something is not just an idle dream: smartbooks are coming to town in a few months, and they promise to do for mobile computing what PCs did for desktop computing in the 1990s.

A smartbook is in essence a small laptop optimized to use a new generation of CPU chips such as Qualcomm's Snapdragon and Nvidia's Tegra that offer days of battery life and high-quality performance for video, Web browsing and online office applications. Combined with operating systems such as Windows CE and Google's forthcoming Chrome OS, smartbooks - and smart phones based on the same chips - are poised to eclipse inexpensive (and not very powerful) netbooks as do-everything mobile devices for people who are content to do most everything computer-oriented via the Web. Given the billions of people who have yet to use PCs on a regular basis and the increased demand for on-the-go lifestyles that rarely settle down to a desktop unit anymore, inexpensive smartbooks are likely to take off in a big way over the next few years.

That's not all bad news for some of the incumbent interests. Microsoft is well positioned with both its CE operating system and a wealth of improving online Web-based office productivity tools to take full advantage of the capabilities of smartbooks. While this means that some of its legacy desktop software may go by the wayside in the process, it's likely that the online versions of these favorites will be powerful enough to satisfy the lion's share of people who use them. This spells sorely needed growth for Microsoft, even as it comes to terms with the positioning of Google as a more direct competitor in this space via its Chrome OS operating system being launched next year. Smartbooks are also good news for most books publishers and video producers, as they are big enough and powerful enough to support their needs for better on-the-go display systems.

Will smartbooks be the spark that catches fire in many unwired parts of the world to open up the Web to billions of people who have yet to experience it? Many mobile phones equipped with these improved chips are more likely to be key in the Web's further expansion, but smartbooks are definitely a very important step forward in making Web access an instant-on service that will make browsing a more universal tool in more venues than ever before. Yes, mobile apps will still be important, but will face far stiffer competition from cloud-based content services that work perfectly fine in smartbooks and a new generation of smart phones that will service people more effectively overall. So I'll wait a few months before picking up a smartbook, but by then, with 4G networks starting to roll out, I am sure that it will be well worth the wait.

Doubling Down on Print: Magazine Launches Uptick in A Crunched Economy

At first it might appear as if some people in the magazine industry are in dire need of searching for their sanity when you first read FOLIO:'s article on a spate of new magazine launches in recent weeks. Certainly print media has its fair share of die-hards, and, well, when it's what you do well and you want to keep doing it, it's not likely that you're going to stop any time soon. But as much as there's that never-say-die strain to print media these days, there's also a lot of sense to many of the efforts that are being undertaken these days to launch new print titles.

For one thing, you'll notice that the list of magazines being launched includes a strong mix of private-labeled publications for stores, enthusiast organizations and other types of very focused market niches with loyal followings and a strong desire for relevant content. These are the kinds of niches in which print media has done very well historically and also the types of publications where captive audiences are going to appeal to many advertisers and marketers. It may be less expensive to advertise online, but when you own the audience for a particular niche anyway, why not capture the value for advertisers as effectively as possible? When you're involved deeply with a very focused topic or geography, print offers a way to get very personal with an audience that still appeals to many audiences and advertisers.

But as much as new titles such as these are valiant efforts to help marketers still looking for value in their advertising budgets, there is a larger and more nagging problem that is hanging over both consumer and B2B magazines that's just not going away; namely, why are magazine publishers still so intent on maintaining gross revenues to support ultimately unsustainable cost structures? Yes, there are good reasons to demand higher revenues for quality online content, be it through higher ad rates or various subscription and pay-as-you-go plans for readers, and these are likely to start taking off as advertisers chase their audiences into online venues more aggressively. Premium outlets will continue to thrive online indefinitely if they manage the mix of content and community features effectively. But the broader truth is that the era of big media founded on high revenues from a handful of titles is largely drawing to a close. This doesn't mean that media is dying; to the contrary, media is thriving more than ever before, even as it thrived before the past several decades of media consolidation. But what it does mean is that success will be measured by different standards moving forward.

I was struck particularly by an entry posted recently in Howard Owens' blog that underscored the importance of accepting different cost structures for media moving forward. Howard notes:
It wasn't until late 2007 that a switch tripped in my head and I realized I needed to flip the expense/revenue picture upside down. Instead of thinking about how to generate more cash, I needed to figure out how to create a news operation that could exist profitably based on a reasonable expectation for local online revenue.

In a market where the newspaper newsroom might cost $10 million, I knew how to make $1 million online, or even $2 million, but I didn't know -- and still don't -- how to make $10 million.

So if I can make a million online, why do I need operate a $10 million newsroom, especially given the greater efficiencies of online publishing?
In other words, while it's great to get that ten million if you know how to do it, why are publishers still so intent on launching a handful of publications that might make big revenues the old way then they can launch far easily many smaller publications online that can succeed in smaller increments very effectively? While it's not a perfect analogy for every publishing operation, I am thinking particularly of portals such as TechTarget, which is able to define and publish very discreet slices of content for very specific computer technology topics that it pays for by selling qualified leads to tech marketers. The very targeted special topic sections that The Huffington Post and other publishers are able to create rapidly and efficiently are also good examples of how online technologies can allow publishers to adapt rapidly to hot interests far more effectively than the usual "book"-oriented mentality would allow.

At the same time, many of the people who advertisers are seeking are spending more and more time with the people with whom they share common interests in social media outlets such as Facebook and brand-specific online communities managed via white-label services such as Lithium Technologies. Good editorial content will always be a draw for advertisers, but increasingly it's an extension of a core online market conversation that's managed via platforms other than news and magazine portals. The recent addition of a Facebook Connect-enabled discussion community on The Huffington Post underscores the importance of editorial content having tight connections to the personal networks that people trust to underscore their willingness to trust sources of editorial content. The fundamentals of marketing are changing before our eyes, yet media companies still whistle in the dark in search of dated metrics while opportunities to invest in the success of future metrics remain underfunded.

In this sense it's fortunate that Reed Elsevier has dared to float a GBP 824 million stock placement to gain more capital in spite of its short term effect on its share prices. If publishers should double-down on anything, it should be on raising capital to reinvest in the innovations and new business models that will sustain them well into the future. The Web has, by fiat, declared publishing to be a innovation-driven growth industry for more than a decade, even while major publishers have tried to maintain the illusion that it's still an IP-driven cash cow industry. Lower share prices from dilution may seem like a painful decision in the short run, but if publishers don't have the working capital to keep up with mean, lean operations that have invested in innovative approaches to publishing already, then they won't have much in general very shortly. For those who tried to leverage their way into a mythical king-of-the-hill media mogul position in the marketplace, well, sorry, timing is everything, they say. In the meantime, congratulations for those folks who have managed to float new print titles for very focused markets. It works for today, at least.

Monday, August 24, 2009

Automating Event-Driven Publishing: Google Scripts Offers Real-Time Triggers

In my Wall Street days, one of the first uses for real-time information feeds into PCs devised by investment banks was to pump them into spreadsheets, which would in turn calculate information that could be republished out to the investment community. It was a very cost-effective way to accomplish a key publishing function without having to rely on armies of programmers to set up these relatively simple functions that a spreadsheet could handle fairly easily.

Fast-forward to today, an era in which cloud computing is beginning to absorb both spreadsheet software and much of the content that can be consumed by software. It should come as no surprise then, that Google's recently launched Google Apps Script capabilities are providing publishing abilities that connect Google Apps spreadsheets to the Web in much the same way that investment banks were using them for business processes many years ago. You can now use script programming in Google's spreadsheets to trigger well-formatted emails to contacts, or to feed Web services - say, Salesforce.com, to pick one possible example. More to the point, though, some of the pre-defined scripts include formulas for converting local currencies into foreign currencies and business logic. Hmm, this is not just for casual marketing campaigns, is it.

It would be a far, far jump to say that Google Apps Script is in any sort of position to take on the sophisticated trading environments of investment banks, and, to be truthful, that's probably just as well. But it does point out how easy it has become to use the Web to be a self-programming publishing environment that can support many core business functions with event-driven automated information feeds. As more and more business logic works its way into cloud-driven programming environments, we can expect that both enterprises and enterprise publishers will be adopting these environments as cost-effective ways to deliver more valuable workflow services. Foreign currency trading via Google? Well, those early spreadsheets looked pretty crude at first, also. Watch this space carefully, enterprise publishers, there's more to come.

Yeah, There's a Web for That: Where are Mobile Apps Really Taking Us?

I had an interesting exchange on Twitter today with Rafat Ali, founder of paidContent.org and a person who I respect and admire greatly for his insights into the content industry (not to mention for having blown the socks off of many a trade pub over the past several years). Rafat had pointed out in a post on paidContent that The New York Times had started to use barrier ads on their iPhone applications, something that he found to be very intrusive. I couldn't agree more on this point; most media companies view mobile applications as little more than Compuserve-like kiosks from which they can serve slightly jazzed-up versions of their Web page content. With that in mind, it shouldn't surprise us that the NYT or any other media company will be intent on carrying over its ad strategies to these walled gardens.

As a follow-up, though, Rafat pointed me towards a good post on pC's mocoNews site that outlined the case for Apple's approach to mobile apps versus Google's more Web-centric approach. Tricia Duryee points out in this article that Apple had considered emphasizing the browser as the focus of delivering content on the iPhone, but then shifted to its App Store as a preferred method for getting people excited about the potential of mobile devices for delivering useful content and services. As she notes:
[T]he biggest problem facing Google will not be convincing developers, but consumers. Apple’s steroid-enhanced marketing machine has drilled into the public thinking that “there’s an app for that,” not that there’s a URL. Clearly after logging 1.5 billion downloads within a year, Apple is on to something and vigorously training the mobile users of tomorrow.
Sorry, Tricia, but I have to smile at that one. While Apple rolled out a very savvy strategy for the iPhone given its market position as a high-end product oriented towards proprietary intellectual property, I think that it's worth noting that a lot more than 1.5 billion Web pages, many of them with embedded applications, are downloaded every day on the Web. The iPhone's app strategy has certainly made mobile technology platforms far more usable and understandable for its early adopters, much as early premium online information services such as Compuserve and the original AOL made the still-crude world of networked information delivery more palatable. Similarly, early PCs benefited from a galaxy of packaged software that used to line the shelves at local stores, providing "user-friendly interfaces" that made still-crude PC technology more palatable.

But today the walled-garden services of Compuserve and AOL are distant memories, and packaged software for PCs is almost non-existent in most local stores, except for a few have-to-buy items like Microsoft Office software (about the most expensive items to be found on any of the shelves at our local Staples office supply store), accounting systems and tax preparation tools. Why? Because for the most part these products and services were attached to more mature technologies that no longer required packaged IP to help people get to the good stuff. In the instance of software, many of the functions that used to require packaged software are now available via cloud computing services, including tax preparation, bookkeeping, spreadsheets and word processing. In the instance of services like Compuserve, it also became a matter of scale: 65,000 or so iPhone apps sounds like a lot of services, but good luck finding any of them once you begin to scale up to more broad markets. Walled gardens are great when you have a cozy crowd, but most people's interests won't be content to stay in them very long when a good search engine can help them to find the next movable feast easily.

This isn't to say that there is not a valuable place for mobile applications in the mix of marketing strategies for publishers and technology companies. Good functionality with good content being fed into it is a winning combination on any platform. But if we were to speed up the clock and have this discussion a year from now, I don't think that people will be waxing as sanguine about the App Store as they are today - and not just because of Google's Android mobile platform hitting the scene. Real applications, as opposed to the lightly gussied-up browser substitutes that most publishers toss up as mobile applications, take time and thoughtfulness to develop and to roll out carefully.

Yes, a Safari browser is a somewhat different platform than a Chrome browser, and so on, but it's not very realistic to compare the relatively minor differences in how these packages handle largely open Web standards such as HTML compared to the larger, glaring differences between iPhones, Palms, Blackberries and Android phones. Mobile applications will be useful, but there is no practical way to expect publishers to deal cost-effectively with this broad array of approaches simply to get their content to and fro. No amount of seductive ads by Apple or any other platform manufacturer is going to be able to conceal this basic fact, it would seem.

The truth is, of course, that many Web pages are in fact driven by very sophisticated applications already, a fact that will be only accelerated by the emergence of HTML 5, which does more to merge programming functionality into the Web environment than previous versions of the basic code for Web pages. The architecture of today's Google Chrome browser hints at where this is really taking us. When you have more than one page open in a Chrome browser, each tabbed page is its own separate program process on your computer. If one tabbed page has a problem, it can stop functioning without affecting the other opened pages. In other words, Chrome as a browser is actually a multi-process program execution environment.

To put it another way, it really doesn't matter whether you're running a Web page or an application, as long as you can get to it easily in a standardized access environment. Why bother with a page of apps and a separate set of Web page bookmarks when you can have one unified environment where you can access whatever is important to you? Once you have that kind of environment, people will want to have billions of choices filtered by a good search engine or recommendation service rather than a few thousand apps that have to be "mother-may-I"ed through Apple before they can be accessed.

The iPhone App Store has been a very clever and useful marketing mechanism that has allowed Apple to make its platform more palatable and useful in a highly controlled way that's appropriate for any emerging technology. Let's face it, the mobile Web is still a work in progress, making the more sophisticated displays of some mobile apps far more appealing than dealing with the almost-good mobile Web functionality that's available on most platforms today. But given the already mature nature of the Web that's awaiting better browsing via Chrome and other platforms that will not intentionally cripple Web functionality to make more proprietary approaches more palatable to consumers, it's not likely that this artificial Compuserve-like era of iPhone applications can be expected to dominate the mobile content landscape very long.

iPhone apps will endure and even prosper for quite some time, to be sure, just as those early online services such as Compuserve managed to endure for several years after the emergence of the Web. But it won't take long for most content consumers to realize the difference between a transitional technology designed to bolster the margins of publishers and a more satisfying technology that connects them more effectively with the world at large. As long as companies like Apple can create new frontiers of technology that entertain and delight high-end mobile content users, we'll be hearing, "Yeah, there's an app for that" for quite some time. But if history is any guide to the future, it's not likely that any one company will be able to keep that phrase rolling off of their clients' lips when more powerful substitutes are available that intrigue more people more easily. Yeah, there's a Web for that, all right.

Monday, August 10, 2009

Deer in the Headlights: Enterprise Publishers Confront Fallout from Earnings

I've been making the rounds lately amongst many of the major enterprise publishers, and while there are some bright spots here and there in their outlook and aggressiveness in challenging markets, I am afraid that the challenges to their earnings in a tough economy are taking their toll on many of them. The good news is that aggressive cost-cutting has been able to hold up earnings at many enterprise publishers, including the recent earnings report by Thomson Reuters indicating that profits have doubled in the wake of their cost-cutting after the acquisition of Reuters. But at Thomson Reuters and many other enterprise publishers, including Reed Elsevier, the top line of revenue growth continues to look challenging for the next year or so at minimum. Traditional forms of enterprise investment in subscription information services are down, while investments in new and innovative approaches to information services are being metered out judiciously by major vendors in the midst of continuing cost control pressures.

While a certain amount of down-time from investments in growth after cutbacks is understandable, I am increasingly concerned that many enterprise publishers may be ill-prepared to manage a comeback to healthy sales as the economic outlook begins to brighten. The challenges to their revenues are the result of their enterprise customers having to manage the same sort of economic shocks, a situation that has left many open questions as to how these enterprises will respond to the need for improved information services once they recognize their own need to re-invest in growth. Typically it's the individual business units in an enterprise that are the first to recognize the need for investing in more and better information services in a recovering marketplace, followed by a second wave of new cost controls that shift increased spending to more centralized information budgets. But with more enterprise workers using a wider variety of technologies to serve their own information needs, it's not clear that the second-wave bounce for information subscriptions will have much upside this time around.

This argues for a much more sophisticated understanding of how people in a variety of enterprise work roles see themselves as information purchasers today. Many of the questions that need to be answered about this more dispersed and complex map of potential buyers and purchase influencers are beyond the typical hypothesis-testing that traditional market research tends to focus on in preparation for a new product lifecycle. Simple, quantifiable answers to questions about markets are important when you are focused on a specific marketing goal. But as these deer-in-the-headlights clients start to wake up, being more certain about who to speak to in a sales situation for both product needs and budgets can mean the difference between making incremental changes to products that may be ill-positioned for this new market map of purchasers and knowing when to invest deeply and rapidly in new products and services to meet their needs.

The narrative research techniques that we're pioneering with our clients seem to be very well-devised for cutting through the chaos of changing markets and making sense of complex behaviors and motivations that influence people's quest for order and action. Being able to filter unbiased stories that people tell about key complex behaviors and activities such as content purchasing, use and budgeting enables you to understand both how different extremes of possible behaviors and attitudes relate to specific types of people in a sales situation, but also allows you to drill down to the specific stories that people are telling about those situations very specifically. The techniques also allow you to identify and explore "weak signals," outlying groupings of people who have similar overall attitudes but perhaps very different stories from one another that lead to those groupings. You can to explore the "forest" of complex human behaviors associated with enterprise content buying and use prior to testing out specific responses to those behaviors.

In other words, the best way to invest in testing out ideas for new products and services may be to have better objective observation of complex behaviors before you form specific ideas to test out in a deeper way. How do you do this cost-effectively when your own budget for research has gone "deer-in-the-headlights?" Well, we think that our New Rules of Engagement: Re-Tooling Information Sales and Marketing for the New Economy subscription study may be the key for many major enterprise publishers getting in touch with enterprise workers dealing with the shocks affecting their own organizations. Primary subscribers will bet insights into stories from hundreds of enterprise workers on key topics affecting their content purchasing and use and workshops that will help them to interpret research results and to apply them to their own organizations. With "New Rules" available for your 2010 planning sessions, you'll have a far better chance of trying out the right ideas for your markets more rapidly as the economy recovers.

I hope that you do give "New Rules" a look and to consider how your organization can benefit from understanding purchasing patterns for enterprise content in a whole new light. With revenue growth at a premium, we hope that this cost-effective investment in basic understanding of your markets -and the potential gaps that may exist in your own staff's understanding of them - will help to accelerate your revenue growth sooner rather than later.

Monday, August 3, 2009

eBooks Platforms Flourish. Winner: The Web

While there's been enormous buzz about Kindle eBook readers from Amazon and, now, the new eBook platform offering from Barnes & Noble and an updated eBook reader from Sony, the broader truth is that eBooks represent just a sliver of the book industry as a whole and an even smaller portion of online attention. With USD 118 million in U.S. eBook sales last year versus USD 24.3 billion in overall book sales, electronic books have barely scratched the economic surface of publishing, in spite of all of the Silicon Valley bluster about their potential. Yet this isn't stopping major retailers and publishers from experimenting with eBook technologies again and again - and continuing to pull their punches when it comes to realizing the possibilities for books in electronic forms.

This doesn't mean that there aren't good efforts being applied to these improved stabs at eBooks. The new Barnes & Noble eBook store includes lots of state-of-the-art best practices, including easily downloaded reading software for PCs, Macs, Blackberries and iPhones, a decent offering of current commercial titles and access to free eBooks from the Google Books online archive, as well as a smattering of classics pre-loaded into their eBook reader. A forthcoming eBook reading unit from Plastic Logic will enable Barnes & Noble to have its own little toy for eBook enthusiasts, but wisely they didn't bother to wait for this hardware to show up before launching its attractive and easy-to-use store for existing electronic platforms. As they go to pains to point out in their online orientation materials, they want it make it as easy as possible for people to buy and download eBooks using whatever device people want to use to absorb their attention.

While it's good that Barnes & Noble is offering alternatives to eBooks and a very consumer-friendly approach to their promotion, the broader truth is that the book industry has gained very little from eBooks thus far in taking on their biggest competitive challenge: the Web. If, after more than a decade of Web access to books, the entire book industry can only garner USD 323 million worldwide from a medium that reaches more than 1.4 billion people around the world, one wonders how projections predicting USD 9 billion in eBook sales by 2013 can represent real growth and new markets as opposed to a more probable contraction of overall book revenues as book sales to dwindling audiences transfer to online destinations.

There are many signs that the book industry is becoming more savvy about rethinking their role in publishing and beginning to think of themselves as being able to promote talented authors as assets in many media, but these are baby steps in the face of a Web that has already completely rethought how people can profit from expressing themselves to audiences. As nice as the Barnes and Noble eBook store may be, its level of education and assurance seems to be aimed at people who have very little confidence with using online content. One would think that book publishers would become far more aggressive in thinking about how to engage the most aggressive online content producers and users, capturing their energy and interests - and disposable income - more effectively. Certainly ensuring compatibility with iPhones and Blackberries are a step towards that audience, but the relatively inflexible eBook reader software that packages most eBook offerings on these platforms seems doomed to make books an afterthought rather than a primary focus of aggressive content users.

What publishers should do is to focus far more aggressively on packaging that will integrate book content into personal publishing lifestyles far more aggressively. APIs that facilitate applications development to extend eBook capabilities, collaborative reading, bookmarking, linking, user-generated content and other extensions into the real-time generation of content consumers and producers are essential developments to bring eBooks into the stream of attention that they really deserve. Serving audiences is the real objective of publishing - not generating units of production that may or may not deliver full value to a given audience. Creating services that keep people who are today's greatest content purchase influencers - digitally literate readers - in a position to recommend and amplify the value of a wide variety of book-oriented content and services will take far more than locked-down reading software that operates in a vacuum. These types of services are surfacing in the hands of innovative online companies, but as to where that leaves mainstream book publishers and retailers remains to be seen.