Play To Win

Wired Magazine debuted on the ipad today with a very enjoyable native ipad experience.  If you read my last post on the Vanity Fair ipad app, you know that I have been very underwhelmed with the efforts to date.  Unlike the other magazines, Wired really makes an effort to leverage the capabilities you would expect to see in a digital version.  While preserving the flip through experience of a magazine, Wired adds useful additional information, formats and media types.  It still isn’t perfect as I am sure the folks from Wired would tell you, but it is the first big step into the future of magazine consumption.

There were the expected video opportunities in advertisements and some attempts to create more interactive ads, but what caught my attention was the variety of ways Wired used for navigation/presentation of information.  For example,  the editors picks for LCD TV’s, featured four TV’s one on the first page and then all three on the second vertical page. (you slide horizontally to move through the magazine, vertically within stories)  On the second page, rather than send me to two more pages, the review content on the page changed when I clicked on each of the TV’s.  Not revolutionary, but it did create an enjoyable experience.  Similarly, on editors picks on Bluetooth headsets was one page, with a touch on each headset changing out all the review information.    There were a number of articles that used visual cues for you to click through steps in the process such as the story on Building an Ice Hotel.

Additional content was included in a number of stories including one on Industrial Light and Magic which included a video of ILM’s greatest hits.  A number of stories that reference music provided options to play the music being discussed while you read the article.

My favorite ads were Nissan Leaf, with video and  Continental Airlines which had the tagline “Like New Things” followed by an instruction to rotate the ipad and when it turns horizontal the  ad changes to a reveal.

There were a few things that could have been a better experience such as the addition of a visual cue to inform me there is a vertical scroll opportunity.  There were a couple examples of a swipe to reveal animation (Mars history and 3d book) that didn’t work particularly well, but the thought was right.  All in all an enjoyable experience that bodes well for the future of magazines on tablet devices.

I have been been reading the June issue of Vanity Fair on my ipad today, after downloading the app and must say it is a step in the right direction. To date, the magazine efforts in the ipad space have been a disappointing user experience for me. While I understand the rush to get the content onto the ipad, the simple reproductions of the print product are a poor fit for the ipad. For me the worst offender was the Zinio app which managed to take two experiences that I enjoy, reading a magazine and using my ipad and make a miserable experience. The Zinio app was in a word, “unusuable”.

Attempting to recreate the exact look and feel of a magazine in an ipad environment is to forget what has and continues to delight millions of magazine readers everyday, the delightful content experience that magazines provide. With Zinio, and to be fair, all of the other magazine apps I have downloaded, the direct reproduction of the format of the magazine creates a difficult navigation experience that is unnatural in this environment. USA Today, has done perhaps the best job so far of the print media companies with its ipad app. I find myself, “curling up on the couch” reading the latest news on from USA Today in an experience that is familiar to a newspaper, but takes the best of what they bring and the best of the ipad environment together in a healthy marriage. My only complaint with the USA Today app is I would like them add more value to the product with more “clickable” items that provide additional nuggets of information, which is quite native to the USA Today equity.

I am looking forward to what I believe/hope will be the near future when I have such a deep engagement in the content that a magazine is delivering me on the ipad that I want to “curl up and explore the issue”. The Vanity Fair app is a step in that direction, but still suffers from some navigation issues and overall is not a real intuitive application. It does bring some value added content beyond what is in the print edition that I appreciated. It really is two products in one with its horizontal magazine reproduction (which I am guessing is a nod to the somewhat silly in my opinion ABC requirements) and the vertical presentation which is where I spent all my time. It is progress into the future and one I hope they and others will build significantly on as we go forward in this digital world.

I read with interest today’s article in the Wall Street Journal, “Publisher Delays E-Book Amid Debate on Pricing” and as one who has had an active hand in book publishing I found the position being taken by some in the industry incredibly short sighted.   It reminds me so much of the positions taken by the music industry as they struggled to adapt to a world of abundance rather than scarcity and clung to a model filled with higher product costs, often unpredictable returns all while thumbing their nose at what consumers really wanted.  Now as a dyed in the wool capitalist who struggles everyday to find additional ways to monetize what we do, I can appreciate their positions, but as many have learned, change is inevitable – you can either lead change or be run over by it.  It is more fun to lead than be run over by change and so I choose to lead.

One quote that really stood out to me as missing the point was by the CEO of Sourcebooks,

It doesn’t make sense for a new book to be valued at $9.99,” said Dominique Raccah, CEO of Sourcebooks, which issues 250 to 300 new titles annually. “The argument is that the cheaper the book is, the more people will buy it. But hardcover books have an audience, and we shouldn’t cannibalize it.”

Why doesn’t it make sense for a new book to be valued at $9.99?  Other than the obvious point that it is his business and he can do what he wants, is that how pricing is set in an free efficiently functioning market?  That I want the value to be more doesn’t make it so in the eyes of your consumers.  You can always hold back some of your offerings and try to skim the most value from those hard core fans, but is it the best way?  Is it the best for a new series to hold back its rate of growth?  I would suggest that not only not being the best for the author it is shortsighted by publishers to not rush to embrace the digital book world.   While I am not going to suggest that all books should be equal in price at $9.99, the idea that they aren’t immediately available and at a discount misses the real opportunity.  The aforementioned WSJ article continued,

In recent months, however, publishers have been increasingly setting the list prices for their digital books at the same level as the e-books’ traditional counterparts, he said. Retailers, though, generally pay publishers half of a hardcover book’s list price. So if a hardcover lists for $25, the e-book retailer is probably paying $12.50 for a product it might sell for less than $12.

Let’s look at some math just for fun. (admittedly oversimplified)

Industry is averaging around 35% return rate.  (Digital rate is zero)

Hard Cover example:

$25 retail

$12 wholesale

100,000 print run

35% return rate

$2.25 variable product cost

$1.2 million gross revenue

$.250 million variable product cost

$.78 million revenue net of returns

$.53 gross profit (excludes royalties, retail promotion fees, slotting, marketing etc)

Profit per net copy sold = $8.15

E-book (we will say $9.99 for kicks)

Any price north of $8.15 to ebook retailers is a net positive (and that even assumes you still spend all the same promotion fees & slotting fees with ebook retailers you do with bricks and mortar stores – reality is costs are less)

But the e-book story gets more compelling.  In the industry for books that have print runs of 100,000 last figures I knew had a success rate of less than 45%.  That is more than half won’t earn any profit because the high returns will eat all profits.  E-books have no variable costs for the publisher and most importantly have zero returns.  Returns are the bane of book publishers and jokes about truckloads of books coming back are unfortunately true and common, yet rather than embrace an opportunity lead, too many publishers seem to be stuck in the ways that will make their enterprises of suspect value going forward.

As for the consumer, I now read all my books through Kindle on the i-phone and am reading more than twice as many books as I did before e-books, but even without consumers reading more books the real opportunity is to embrace and lead change.

EDIT: I was asked to extend my thoughts here with what would I do then if I was publishing books and so here are my thoughts.    First, understand that the above economics are made even more compelling when you consider the impact of books that don’t generate sufficient sales and generate very high returns.  If my back of the envelope math is right, on average a publisher could get under $6.50/book for e-books and still come out ahead.

What would I do:

1. Do everything in my power to drive e-book adoption amongst my consumer base.  Partner with e-book providers such as Amazon to drive more rapid adoption of e-books.  Consider launching first on e-books and then in print, not the other way around.  The fast you move people to e-books the better your long term economics will be.  Barriers to entry will come down even further with e-books and if publishers insist on holding back they can and will be supplanted.  Embrace and accelerate with a much lower cost and risk structure and learn to thrive.
2. Leverage e-books like crazy to create adoption of new high potential series.  The real money on a popular series isn’t made in the first few months of the first book anyway, it is made through the multiple purchases on a mass scale that a hit series drive.  If I am launching a series I want scale, yet I need to manage risk and e-books give the best of both worlds.
3. Work with e-book retailers to partner on ways to enhance e-books with built in sharing leveraging twitter and facebook so I can share my reading passions with those most likely to be influenced.
4. Agains embrace e-book retailers and partner on ways that we can create more value in the equation through natural extensions and ancillary ways to monetize the content.
5. Fish where the fish are.  If consumers are shifting to e-books get their quickly and stake out your fishing hole early.

WSJ Link

I been reading a lot lately about research in online communities and the very real promise of deep real time insights that they can deliver.  With any research method perhaps the biggest failing is the misuse of community based research for purposes for which it isn’t appropriate.  For example, I cringe whenever I hear people talk about “polling or surveying” online communities for quantitative insights.  Online research communities can be both short term project based,  as well as long term continuity groups.  The danger with long term groups is they can lose their ability to provide everyday consumer insights by the very nature of your involvement.  Reality is you can’t participate in a community with impacting it, particularly over time.    Nevertheless, online research communities can be a great asset in the hands of marketers.

There is a well done post on the Community 2.0 blog where the folks at FreshNetworks share some thoughts on what makes a community vs. a research panel,

“Research panels and online research communities are very different. They work in different ways, deliver different types of research and insight and are useful for different business objectives. The biggest failing that we see with online research communities is that what you really have is a panel of people and not a community. The discussions tend to be between the brand or agency and community member, rather than peer-to-peer in the community. And you find that the majority of your traffic comes when you send an email about an activity, survey or discussion that you want people to respond to.”

One of the better presentations I have seen that deciphers brand communities was done by PluggedIN.

Overview Of Market Research Online Communities

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What are your experiences with online research communities?

Research, Social Media Marketing, Research, Social Media, Social network, Virtual community

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Placement Matters

June 17, 2009 Jeff View Comments

With all the push to increase ad unit sizes, as well as make them more invasive, I think one very important component is being missed.  The real opportunity for increasing ad effectiveness online making ads relevant to the users contextually.  It is really no difference that with other content links on a page.  A highly relevant text link can and usually does generate more clicks than a non or less relevant more prominent link.   Engaging consumers with advertising and marketing messages when they are engaged the same category of content or in a relevant  frame of mind of mind has always been the most impactful.   General engagement with content is not the right measure, engagement with content relevant to the advertising is the right measure.   Want to fix online ad engagement look for better targeting not maximal disruption.

Article in Mediapost today adds some data,

“Indeed, ads running on Web sites with related content were 61% more likely to be recalled than ads running on sites with unrelated content, according to a recent study conducted in collaboration with CBS Vision using McPheters & Co.’s AdWorks methodology. “

See the whole article here

Advertising Advertising, Marketing, Online advertising

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Five Keys for Current or Future Partners in the Tech Space

June 15, 2009 Jeff View Comments

When I have interviewed people for positions in the past at Procter & Gamble or  now at Meredith, I usually tell them what I am looking for both in the prospective employee and from them in the interview before I ask a single question.   I am always amazed at how many people seem to just miss entirely that I have given them the answer and road map for a successful interview before it starts.  The majority proceed with their canned discussions  and fail to use the enormous help that I have given them to their advantage as we discuss the position.  In a similar vein, as I work with partners on tech projects I see the same dynamic being repeated.  Like the interviewee, many a tech company (and yeah this applies to most any type of company) seem so focused on their own original idea of what it is, what it can be (or should in their mind) be that they are unable to stop and listen to their partners.

When I am working with a partner either as a vendor, supplier, or business partner I have five keys that are important to me for us to have a successful relationship.

1. Deliver on Time – Yes I want you to tell me that we can get their faster, but only because you have found a way to save time or you gave me an option to phase the implementation that I chose.  You are not likely an island for us and when you miss your dates, a lot of other people miss their dates.  Just like you update your investors we update our management, our sales teams makes promises to our advertisers, marketing plans are made and when you miss its a big deal.  Don’t give me vaporware or vapordates.  I need real dates.
2. Share Your Roadmap – Almost everything today is connected in my world and if I am to do my job of shaping our efforts I need to understand your product roadmap.  If I don’t know where you are going how can I see the opportunities to make what you are bringing to the table more centric to the experience we provide consumers?  Understand the risk you face when you aren’t actively sharing your product roadmap, if I am not aware of it, there is a good chance I am already seeking out someone who can deliver it.  Finally, I want the opportunity to impact your roadmap.  In many cases we are the ones closest to the ultimate consumer that we are both serving.
3. Lead Me – The fact that we are working together means that I have bought into one or two things already, your technology or your expertise in a specific area – hopefully both.  If you are a provider of a comment system I should not be the one identifiying how the make the platform more engaging or more sharable.  I expect you to provide the thought leadership in your area of expertise.  Yes I want the opportunity to impact your roadmap, but even more I want your expertise to impact my roadmap.
4. Don’t Surprise Me – Don’t tell me the day before a launch that you aren’t going to make it.  Don’t tell me a component isn’t going to be ready on time the week it supposed to go live.  Don’t hide bad news.  No I am not going to like it whenever I receive it, but if I know with lead time I can make other adjustments to mitigate the impact.  I know you are working like crazy to get back on schedule, but don’t leave me or our organization hanging.
5. Usability, Usability, Usability – it only works if it works for someone coming in blind.  Gone are the days of manuals and classes to show consumers how it works.  Lose your own code words and use the terms consumers use.  Test with real consumers in usability environment.  Again you should be the one pushing back on our requests that would hamper the usability.

OK, I feel better now, got that off my chest.  If I am working with you now or you want to in the future, take note I have already given you the answers you need for a happy partner.  So since all is fair game what do you need from me to be a better partner?

General Technology

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Five iPhone apps of the week

June 15, 2009 Jeff View Comments

Maybe I am still too new to have the app love fade, but I find myself finding more and more utility from the apps on my iPhone.  There is so much value in the iphone world that I can’t help but believe that in only a few years it will be as hard to imagine not having an iphone (or like device) as it would be for must of us to imagine a world without the web.  My five iphone apps of the week:

Kindle App. I was skeptical until I tried it several weeks ago, but I am hooked.  It is easy to use and I don’t suffer from eye strain when reading as I thought I might, but above all it is convenient.  It is so easy to buy books, and even easier to have then handy to read.  Gone are the days of lugging a book on the plane.   My iphone moment this week was about 9:30 on Saturday night as I wanted to relax and read and since it was a beautiful evening I went out my deck and finished reading a book.  Holding my book and turning pages required only one hand leaving my other hand free to pet my German Shorthaired Pointer who was trying to crawl into my lap.  As the sun faded, the back-lit screen kept me reading till the end.  Life is good

Koi Pond Alright there has to be one app that doesn’t need any real purpose right.  Simple well done app that my 2 1/2 year old delights in.  She points to my iphone and says “fish”  Her smiles and giggles as she plays in the virtual water with the virtual fish is day maker.

Facebook app I would guess over 80% of my facebook access is now through the iphone.  My posting frequency is up, I am feel more connected to my friends.  I love being able to snap a picture and upload it to facebook instantly.

Around Me I first thought this would be a great app when I travel, and it is.  I have already used it discover a restaurant, navigate to the restaurant, and save the restaurant so I can easily find it again when I return.  What I didn’t expect was to use around where I live.  In addition to the obvious finding things near you it is also the easiest way to find your way quickly to something when you are close, but not quite sure where it is.

Fandango I started using Fandango as my usual way to find show times and buy movie tickets a couple of years ago, and bringing that functionality to my iphone just made it even easier.  My only complaint, needs to sync with my online account so I don’t have to re-enter information.

Can’t wait to see what apps impact my life when the OS 3 apps start arriving.

iPhone Facebook Connect, iPhone, Smartphones

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Profiting Through Platforms

June 12, 2009 Jeff View Comments

Remember the often quoted statement that “information wants to be free”?  When Stewart Brand uttered this in 1984, I am not sure that he really foresaw what was to come.  With fewer and fewer exceptions each day information is free or is becoming free.

“On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other”  Stewart Brand, Hackers Conference, 1984.

In a similar fashion software has shown that it wants to be free.   I recently read “What Would Google Do?” by Jeff Jarvis and have found myself contemplating his thoughts about the importance of platforms.  Facebook is a platform, Google Maps is a platform, WordPress is a platform.  The key as Jarvis puts it is, “A platform enables.  It helps others build value….Platforms help users create products, business, communities, and networks of their own.”  Most interesting to me in platforms is when they are well done how they allow users across the supply chain to build upon them and leverage them is ways the platform developers never conceived.

So what does all this mean?

First - While content may want to be free and commoditized, those who produce content can add value to that content through the platform in which it is distributed by understanding and anticipating and fulfilling the related needs of those who seek your content.    All along the way there will be opportunities to monetize for those who have the skill to identify them.

Second - When in doubt build it as  an open platform that allows others to build value.  Any one who thinks they can go it alone and not let the walls around their site, their content, even their ownership of user registrations come down is likely in for an unpleasant surprise.  It is time to be open, open to our users, open to our advertisers, and yes even open to our competitors.   Don’t try to keep all the value for yourself.  Share the value with those who created it and you will develop a more successful platform with a wider moat and ultimately more profit.

Third - Quality matters.  Information may want to be free, but quality content attracts scale.  With scale comes more opportunities to monetize.  Quality content, quality platforms.  Facebook exploded when it got the user interface right. Usability matters.  Invest in quality to build profitably.

Platforms Community, Facebook, Jeff Jarvis, Platforms, Social Media

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