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Here are a few of the stories that caught my attention this week in the publishing space.
Back in June, a survey conducted by the Pew Internet & American Life Project showed ereader ownership in the U.S. had doubled in six months. As impressive as those statistics were, the latest survey released by the company this week showed that both tablet and ereader ownership in the U.S. nearly doubled again, but in a much shorter time frame between mid-December and early January (the holiday season, of course).
The survey also indicated that "[t]he number of Americans owning at least one of these digital reading devices jumped from 18% in December to 29% in January." And ownership wasn't gender biased in terms of tablets: The survey showed that the same percentage — 19% — of both males and females own a tablet. Ownership of ereaders, however, skewed female: 21% of women in the U.S. own ereaders but just 16% of the men do.
Pew attributed the dramatic growth not only to holiday shopping, but to the timely release of devices priced in the double digits by Amazon and Barnes & Noble.
Another survey released this week by RBC Capital indicated that Amazon may be making more bank per Kindle Fire device than initially thought — meaning it may not be losing money on each sale in the long term. Eric Savitz at Forbes quoted analyst Ross Sandler:
"Our assumption is that AMZN could sell 3-4 million Kindle Fire units in Q4, and that those units are accretive to company-average operating margin within the first six months of ownership. Our analysis assigns a cumulative lifetime operating income per unit of $136, with a cumulative operating margin of over 20%."
Houghton Mifflin Harcourt and Amazon Publishing East Coast announced a deal this week in which HMH will publish the print editions of Amazon's East Coast titles and, as Laura Hazard Owen pointed out, "will distribute them everywhere in North America outside of Amazon.com."
Owen astutely observed that this agreement may pave the way for Amazon to get its books in the hands of Barnes & Noble brick-and-mortar shoppers, a feat Amazon has yet to accomplish.
Also this week, Bloomberg Businessweek ran a feature piece on Larry Kirshbaum, the man behind Amazon Publishing East Coast's success thus far — or "Amazon's hit man," as Businessweek dubbed him. The feature also dipped into the history of Amazon Publishing and its relationship to traditional publishing and the Big Six. It's well worth the read.
Much of the current discourse around libraries centers around ebook availability. But the importance of the future existence of libraries goes way beyond whether or not the digital version of James Patterson's latest bestseller can be had with a library card. A Slideshare post by Ned Potter this week elevated the discussion to a higher plane. Some highlights from the presentation include:
Here's the presentation in full:
To stay current with the library discussion, other library experts to follow include Peter Brantley, Andrew Albanese, Justin Hoenke, and Sarah Houghton (to name just a few).
Related:
The Books in Browsers conference continues today — and it's being livestreamed. Speakers today include Wired's Kevin Kelly, BookOven's Hugh McGuire (@hughmcguire), Kassia Krozser (@booksquare) of Booksquare and Brian O'Leary (@brianoleary) from Magellan Media Partners.
Now, onto a few highlights from this week's publishing news.
On the heels of EPUB3 being signed off on, any hopes that Amazon might participate in an EPUB3-united publishing format were dashed when it announced its new Kindle Format 8 — or to keep with the acronym standard, KF8 — ebook format. Martin Taylor has a nice analysis of the format battle over at eReport. Much like EPUB3, the new Kindle format is fancy and shiny, accommodating all the latest web standards (including HML5 and CSS3), but as Taylor points out, the continued incompatible formats keeps things complicated:
But for publishers, it [KF8] could add challenges as the new features these formats offer mean ebook production requirements and costs will scale up. And for the newly-minted EPUB3, it poses a challenge to stay relevant as Amazon';s importance as the number one sales channel might tempt some publishers to bypass it.
This is to say nothing of device and app support issues for continued incompatible formats — and how the confusion might ultimately affect (nay, I say annoy) consumers.
As newspapers continue to struggle to find their way and experiment with out-of-the box ideas, one newspaper continually rises above the fray: The Guardian. With its Open Platform and strong commitment to data journalism, I guess it should be no surprise the newspaper would stride ahead of the pack in crowdsourcing and reader engagement as well.
Along those lines, this week The Guardian launched n0tice, a new social news gathering platform, and @GuardianTagBot, a Twitter-based bot that will search The Guardian's tags to find the information a user needs.
Megan Garber over at Nieman Lab was all over both stories and provides great analysis — her piece on n0tice is here and her examination of @GuardianTagBot is here.
The new social platform, n0tice, goes way beyond engaging readers with comments or links to send in news tips. It offers readers an entirely separate section of their own. From Garber's post:
'It's a place where you can share news, post details about forthcoming events or let people know you have something to sell or share,' the project's FAQ puts it. Just like IRL message boards, 'everyone else in your locality will be able to see what you've posted and also take part."
This gives readers yet another entry point into the newspaper and another reason to interact with its brand in a much more personal, communal setting than simple comment areas or reader blog setups — not to mention giving The Guardian an additional line into hyperlocal news coverage.
The Twitter bot achieves a similar goal, and then some. Many newspapers signed up for Twitter and/or Facebook accounts and called it a day, but creating the search bot was a stroke of ingenuity: It allows readers to interact with the brand in real time, and the newspaper is using the search results to make improvements to its tagging system.
With both products The Guardian is not only extending its brand to engage readers, but using that engagement to also enhance its brand. Struggling newspapers, take note.
The Pew Research Center's Project for Excellence in Journalism released results from a new study this week that took a look at tablet usage in terms of news and book consumption across several categories. Some highlights from the study include:
The full report is available here.
Related:
Here's a look at the top stories published across O'Reilly sites this week.
Visualization deconstructed: Why animated geospatial data works
When you plot geographic data onto the scenery of a map and then create a shifting window into that scene through the sequence of time, you create a deep, data-driven story.
Jason Huggins' Angry Birds-playing Selenium robot
Jason Huggins explains how his Angry Birds-playing robot relates to the larger problems of mobile application testing and cloud-based infrastructure.
Data journalism and "Don Draper moments"
The Guardian's Alastair Dant discusses the organization's interactive stories, including its World Cup Twitter replay, along with the steps his team takes when starting a new data project.
Building books for platforms, from the ground up
Open Air Publishing's Jon Feldman says publishers aren't truly embracing digital. They're simply pushing out flat electronic versions of print books.
Open Question: What needs to happen for tablets to replace laptops?
What will it take for tablets to equal — or surpass — their laptop cousins? See specific wish lists and weigh in with your own thoughts.
Velocity Europe, being held November 8-9 in Berlin, brings together performance and site reliability experts who share the unique experiences that can only be gained by operating at scale. Save 20% on registration with the code RADAR20.
Here are a few stories that caught my eye in the publishing space this week.
Two news organizations recently took out-of-the-box steps in the relentless pursuit of that illusive digital-era revenue. First, USA Today decided to dip its toe into the business of big data: the newspaper will now offer commercial licensing for its information. As noted in a Nieman Lab post this week, access to USA Today's APIs isn't new — but selling the access for commercial purposes is. In an interview, USA Today's Stephen Kurtz said the newspaper is feeling it out at this point to assess the demand and to hone a working model. Perhaps Kurtz should look to an example highlighted in the Nieman post: The Guardian's Open Platform.
Another news organization stepped into a more uncharted sales area this week: Politico is now in the bookstore business. Politico recently teamed with Random House to publish instant ebooks, and now the duo will sell the ebooks from a new online store dubbed Politico Bookshelf. Initially, this venture looked like a first step for one of the Big Six to delve into direct book sales, but the release on Politico's site indicates that it's really more of a browsing platform than a store: "Shoppers can browse or search for titles, and then purchase them through a selection of online retailers like Amazon, Barnes & Noble, Politics and Prose and Apple's iBookstore."
The New York Times reported this week on Amazon's rapidly increasing reach into publishing: first it edged out bookstores, then it started launching imprints, and now it's wooing writers and "gnawing away at the services that publishers, critics and agents used to provide." Examples of Amazon's gnawing were summed up in the post:
Amazon has started giving all authors, whether it publishes them or not, direct access to highly coveted Nielsen BookScan sales data, which records how many physical books they are selling in individual markets like Milwaukee or New Orleans. It is introducing the sort of one-on-one communication between authors and their fans that used to happen only on book tours. It made an obscure German historical novel a runaway best seller without a single professional reviewer weighing in.
And this doesn't even take the Kindle Fire and the ecosystem it's creating into account. The Atlantic took a look at the dangers of where this kind of one-stop-shop might lead, and over at GigaOm, Mathew Ingram looked at Amazon's disruption and why its working. He also offered some sage advice for publishers: "Take a lesson from the music industry and don't spend all your time suing people for misusing what you believe is your content — think instead about why they are doing this, and what it says about how your business is changing, and then try to adapt to that."
Kobo stepped out ahead of Amazon this week and announced its new tablet, Vox, will start shipping Oct. 28 — a couple of weeks ahead of the Nov. 15 shipment date for Kindle Fire. Some argue that the Fire (and presumably similar low-priced tablets like Vox and Nook — there's a nice comparison of the three over at Dear Author) will lead to the demise of the iPad. What seems more likely is the impending obscurity of the dedicated ereading device. In a recent TOC Podcast interview, Max Franke of epubli talked about the German ebook market and pointed out that tablets were preferred over ereaders in that part of the world. Perhaps that trend will spread to this side of the pond as well.
Related:
This post is part of the TOC podcast series, which we'll be featuring here on Radar in the coming months. You can also subscribe to the free TOC podcast through iTunes.
In this interview, Jon Feldman founder, president and CEO of Open Air Publishing, talks about the development of "Speakeasy Cocktails," an ebook designed and built for the iPad. He says the book content was developed from the ground up specifically with the tablet in mind — each component was designed to take advantage of the rich ebook experience. Highlights from the full video interview (below) include:
You can view the entire interview in the following video.
Related:
This post is part of the TOC podcast series, which we'll be featuring here on Radar in the coming months. You can also subscribe to the free TOC podcast through iTunes.
In this podcast, Max Franke (@max_franke), head of business development and communications at epubli, talks about the current state of the German ebook market and what the future might hold. In terms of ereading devices, he says Apple and Google thus far have had an edge over Amazon because tablets are more popular in Germany than dedicated ereading devices.
Highlights from the full video interview (below) include:
You can view the entire interview in the following video.
Here's what caught my eye in publishing news this week.
Editor's note: Shortly after we posted "Publishing News," TechCrunch published an exclusive about the Amazon tablet. The big news: it's called "Amazon Kindle," it's 7-inches wide, it's scheduled for release in late November, and — most notable — it will sell for $250.
A couple interesting things happened on the ereader/tablet front this week. Sony announced its Sony Reader Wi-Fi, weighing in at a consumer-friendly $149. Forrester also released a report that explains "exactly how, and why, Amazon will disrupt the tablet market."
In a blog post, Forrester declares that "[if] Amazon launches a tablet at a sub-$300 price point — assuming it has enough supply to meet demand — we see Amazon selling 3-5 million tablets in Q4 alone." Perhaps spurred by HP's repeated "last runs" and $99 fire sale, "unnamed sources" at Amazon told the NY Post "[the] device will sell for hundreds less than the entry-point $499 iPad."
PC World notes: "[it] seems as if Amazon wants to sell more hardware first, and then hope to make up the difference in the sales of content later." It wouldn't be the first time Amazon bit the bullet to gain market share.
The copyright associated with "EMAIL" turned 29 this week (the copyright holder, V.A. Shiva, was 14 when he submitted the paperwork, which might explain the use of all caps.). As you might expect, Shiva takes issue with declarations and predictions about email's demise:
Ironically, even as Zuckerburg declares as some trade journals said, "EMAIL IS DEAD," he is launching @Facebook as a direct challenge to GMail. He says it will have EMAIL in it, along with other types of "messaging." Facebook produces billions of EMAIL messages everyday.
A screenshot of the History of EMAIL infographic created by V.A. Shiva.
Even with IM and texting on the rise, email won't be delegated to a retirement home anytime soon. We are, after all, in the Information Age and the Age of Social Media — and so far, email has been the tie that binds it all together.
In the wake of an author going apoplectic about a few books slipping out ahead of the scheduled release date, it's refreshing to see another big-name author purposefully using a similar technique as a marketing ploy. Stephen King's book "Mile 81" was published this week, but readers didn't necessarily have to wait for the official pub date to get their digital hands on the thing. King released early copies of the digital-only book to a few lucky people deemed influential (social-media-wise) by Klout.
King is no stranger to experimentation, but this latest promotion may have left something on the table. The early release copies, for instance, were made available just a few days before the actual release date. That's not all that impressive when compared to something like Pottermore, which is granting two months' worth of advanced access to early members. That said, "Mile 81" is a step in the right direction, and it'll be something to watch if King embraces a similar marketing strategy for his next full-price bestseller.
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Dear Waters Near Africa,
I know that you're very proud of the tropical depressions that you raise, and I'm sure that watching your "little babies" develop must bring you a lot of joy. It pains me to tell you, however, that one of your offspring, I think her name is Irene, went on a bender last week and totally trashed our coast. And if that isn't bad enough, I hear you have another little hellion called Katia eyeing our back yard with malice. If you can't control your children, I'm afraid we're going to have no choice but to call the police, or possibly NOAA, and ask them to do something about the situation. Thanks.
You can help my personal disaster recovery program (hey, propane for the generator doesn't grow on trees, you know ... well, actually, it did a few million years ago ...), by buying my new book, now available in early release. Read the book that helped Oprah lose weight, landed Gwyneth Paltrow her first acting gig, and got Barack Obama elected. While we can't promise the same amazing results for you, it does have a lot of good stuff in it about enterprise iOS development.
In non-flood-related news ...
When HP called it quits on its attempted iPad-killer, the TouchPad, most folks chalked it up to another attempt by an industry dinosaur to become one of the hip new kids. And it was no surprise that HP tried to clear its inventory by fire-saling the remaining inventory at a bargain-basement price.
What has everyone scratching their heads is that, as TouchPads disappeared off shelves at the low, low price of $99, someone over at HP decided it made sense to restart the production line and make more units to sell at the same discounted price. Given that the best estimates show HP losing around 200 clams per unit at that price, the company seems to be pursuing a somewhat questionable business model.
It may make sense if HP is trying to build interest in WebOS in front of a potential sale to buyers such as Samsung, though at least some buyers of the discounted units seem more interested in hacking them to run Android rather than stay with the native OS. In any event, if you're interested, run out and get one before the last run sells out ... Unless HP decides to do another last run ...
Google has a history of acquiring big names in the industry to enhance its prestige as a leading software research organization. When Google hired James Gosling, who is considered one of the fathers of Java, it was seen as another feather in its cap, adding to a cadre that includes such notables as Mac pioneer Andy Hertzfeld (most recently responsible for designing the Circles feature in Google+) and Vim developer Bram Moolenaar.
It appears that for Gosling, Google wasn't so much a destination as a rest stop, however. After only a few months on the job, he's flown the coop, off to join a new startup designing autonomous ocean-going robots. If I had to guess, I'd say that Gosling decided he'd rather be a big fish at a small company solving a challenging and cool problem, as opposed to being part of a brain trust at a large one. Hey Google, I'm still available!
While you're pondering the wisdom of HP, here's another puzzler to chew on. If you had just gotten over the embarrassment of having one of your top-secret product prototypes left in a bar, and ending up in the hands of Gizmodo, wouldn't you make doubly sure that you kept track of where the next ones went?
Well, evidently, there's a lot of after-hours drinking going on at Apple because, once again, a next-gen iPhone became separated from its owner at a watering hole.
The more cynical among the press have suggested that it's actually all just a publicity stunt, though given that the police were brought in, I tend to doubt it since filing a false report is not a trivial charge. I blame the new iPhone Drinking Game App in iOS5. You know, the one where you have to take a drink whenever you pull out your phone to settle a trivia dispute at a bar.
Please send tips and leads here.
Related:
Here are a few of this week's publishing highlights. (Note: Some of these stories were previously published here on Radar.)
A report released this week from the Pew Internet Project said ereader ownership growth in the U.S. doubled in six months, from 6% to 12% of adults owning an ebook reader. The report, which was compiled from a month-long telephone survey between April and May this year, also showed that ereader growth is far outpacing tablet growth:
Tablet computers have not seen the same level of growth among U.S. adults in recent months. In May 2011, 8% of adults report owning a tablet computer such as an iPad, Samsung Galaxy or Motorola Xoom. This is roughly the same percentage of adults who reported owning this kind of device in January 2011 (7%), and represents just a 3 percentage-point increase in ownership since November 2010.
In a post for PC World, Ed Oswald noted that the timing of the survey might have missed a growth spurt:
What will be interesting to watch over the next few months is whether this trend continues, and whether the release of the iPad 2 results in a jump in tablet ownership. It probably isn't foolish to assume many who did buy the iPad 2 were new to tablets overall, which would result in a jump in ownership.
And as PC Mag pointed out, although the growth rate for ereaders is impressive, the statistics for market penetration leave ereaders and tablets in the dust compared to other electronic devices:
By way of comparison, some 83 percent of respondents to Pew's most recent survey said they owned a cellphone (Pew doesn't appear to have broken out smartphones in its findings). Desktop PC ownership (57 percent) still trumps laptop ownership (56 percent), but just by a whisker, and well within the margin of error.
Politico and Random House have forged a partnership to produce instant ebooks for the 2012 election. According to a post on Politico's website, the book series, which will be produced exclusively in digital format, won't be lacking in expertise:
The series of four books will be written by Mike Allen, Politico's chief White House correspondent, and former Newsweek editor-at-large Evan Thomas, and edited by former Newsweek editor-in-chief Jon Meacham, who became executive editor and executive vice president at Random House last autumn after Newsweek was sold to Sidney Harman.
The idea of covering events by writing books in realtime isn't new. As the Politico post points out, the 2012 election books will "represent another step forward for the model of instant book publishing exemplified by the 'Beyond Bin Laden' book of essays that Meacham edited and published a week after the Al Qaeda leader was killed."
Commenting for a New York Times post, Meacham said the project might also be an opportunity for publishers to change consumer perception: "An impetus here is to encourage people to think of book publishers in a more periodical way."
At the very least, it's another step forward for traditional book publishers into the instant-oriented digital age.
This post originally appeared on Joe Wikert's Publishing 2020 Blog ("Harry Potter and the Direct, DRM-Free Sale"). It's republished with permission.
It took her a while, but J.K. Rowling now apparently believes in the future of ebooks. Last week's Pottermore announcement featured two important publishing elements: a direct sales model and a lack of DRM.
Harry Potter is one of those unique brands that dwarfs everything associated with it. Most Potter fans can name the author but few could tell you the publisher without looking at the book's spine. Although that's often true with other novels, Harry Potter is much more than a series of books or movies. It's an experience, or so I'm told. (I'm not a fan, have never read any of the books or seen any of the movies, but my house is filled with plenty of diehards who have told me everything I need to know.)
Rowling realizes the strength of her brand and knows she can use it to establish direct relationships with her fans. And so via Pottermore, the author doesn't need any of the big names in ebook retailing. Why settle for a 20% royalty or a 70% cut of the top-line sale when you can keep 100% of it? And why only offer one format when some portion of your audience wants MOBI for the Kindle, others want EPUB for their Apple/Sony devices, and maybe a few more would prefer a simple PDF?
It's not surprising that J.K. Rowing is forging ahead with a well thought-out direct sales plan. What blows my mind is that more publishers aren't doing the same. Sure, you'll find publisher websites selling PDFs. Some even offer other formats. But rarely do you find a publisher's website with all the popular ebook formats. Regardless of what type of device you have, it sounds like you'll be able to purchase a Harry Potter ebook for it on Pottermore. I hope they take the extra step and include all the formats in one transaction like we do on oreilly.com.
The other smart move by Rowling is the exclusion of DRM from Pottermore ebooks. Here's an important question for authors and publishers everywhere: If Harry Potter doesn't need DRM, why does your book?! If you ditch DRM you'll be able to offer all the formats. You'll show your customers you trust them and you'll also make it far easier for them to actually use your content.
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Here are a few publishing highlights from the past week. (Note: Some of these stories were previously published here on Radar.)
JK Rowling's announcement of her Pottermore website — and the long-awaited arrival of "Harry Potter" ebooks — was the most talked about story this week in publishing circles.
Pottermore will offer extra Harry Potter content for fans (Wired has a nice breakdown on the content speculation), and in the fall the site will exclusively sell the ebook versions of the popular series. Thanks to a partnership with Overdrive, the ebooks will be available across multiple ereading platforms, including the Kindle.
Rowling introduces Pottermore in this short video:
In a post by Philip Jones and Charlotte Williams for Bookseller.com, Rowling commented on why she's choosing to sell directly to her readers:
It was quite straightforward for me ... It means we can guarantee people everywhere are getting the same experience and at the same time.
Some see the move as the big game changer in publishing, and it definitely has ruffled some feathers. In a post on Beattie's Book Blog, a spokesperson for UK book retail giant Waterstone commented:
We always sought to add value for the fans when a new Harry Potter book was released and their launch days have become the stuff of legend at Waterstone's and other booksellers. We're therefore disappointed that, having been a key factor in the growth of the Harry Potter phenomenon since the first book was published, the book trade is effectively banned from selling the long-awaited e-book editions of the series.
The site will go live in October, but Rowling will hold a contest that will give one million fans early access to Pottermore in July.
The rumor mill lit up this week with leaks of a possible Amazon tablet coming to market in August or September. Digitimes says Amazon is aiming to sell 4 million units, globally, this year.
Additionally, Ed Sutherland notes in a Cult of Mac post:
Earlier leaks indicate the Kindle-maker will offer two tablet versions: a 7-inch device codenamed "Coyote" for $349 and a 10-inch model for $449.
A PC World post points out that Amazon hasn't officially commented, but that same post also links to a story where Amazon CEO Jeff Bezos told Consumer Reports to "stay tuned."
As the mobile space increasingly connects the real and virtual worlds, changing the way people communicate, shop, read, and (very soon) pay for things, some argue that amidst all these shifts the space really needs a creative spark. Taking the analog experience and simply making it digital isn't cutting the mustard.
In the spirit of disruption, I've reached out to several people across the tech and publishing industries to answer one question: If you were going to build an app that fully harnessed mobile's capabilities, what would it do and how would it work?
Up first is Joe Wikert (@jwikert), general manager and publisher at O'Reilly Media. Wikert recently posted a piece bemoaning the state of digital content, specifically in relation to magazines. He summed up the issue succinctly in his post:
The bottom line is that I had higher hopes for the shorter-form content model by now. I'm hard-pressed to point to any one magazine app and say, "yeah, they've really created something special here." Instead, the Wired's of the world came in and offered the print content in e-format and thought they could charge a lot for it. I'm glad they've learned that won't work, but now I'm hoping they'll start experimenting more, either on their own or jointly with some of their competitors.
Joe's response to my question follows:
If you were going to build an app that fully harnessed mobile's capabilities, what would it do and how would it work?
Joe Wikert: That's the million-dollar question ... or maybe the billion-dollar one! I have a few thoughts on the capabilities required to capture my attention, but I also realize that there are probably many features I haven't even thought of. It reminds me (once again) of a Henry Ford quote I like to toss out from time to time: "If I had asked my customers what they wanted, they would have told me a faster horse." In other words, if customers aren't already used to a particular platform or its potential capabilities, it's easy for them to limit their thinking to what they already know, not what they haven't yet experienced.
One of the key things I'd like to see happen with content is for us to stop looking at it through the lens of a book. We tend to get hung up with animating page-turns and we think less about how the content should be conceived in a digital-first (or digital-only) world.
Photo: Kindle vs. iPad by kodomut, on Flickr
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As more magazines take advantage of the iPad's popularity, one thing thus far has been clear: most publishers are simply reproducing their print products on the digital screen.
In a recent interview, Matthew Carlson, principal of experience strategy and design at Hot Studio Inc., said established magazines are thus far missing the boat by producing iPad editions weighed down by bloated files, slow downloads and locked content:
Magazines have traditionally thought of themselves as kind of a locked book, of a complete, discreet object. Ideally, something that is going to be really interactive or live out on the web needs to be more like an open book — like if you took the cover of the magazine and turned it outside in so that people could discover and access the stories more effectively.
A screenshot from the Flipboard iPad app.
Who's doing it right? Carlson pointed toward a trio of companies that wouldn't be counted among traditional publishers:
The magazines that are doing the best job right now wouldn't be considered traditional magazines at all. Flipboard, Reeder, Zite — these things are really more like glorified feed readers. Or feed readers that create a beautiful presentation layer. These magazines do a good job of bringing the type of interaction digital media consumers expect. I don't think many mainstream magazines have quite reached that level of interactivity.
For more on how iPad magazines can do a better job of engaging readers and how best to design and build a magazine for tablets, check out the entire interview in the following video:
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Yesterday, Hewlett-Packard announced the launch of its TouchPad tablet, which is scheduled to hit stores sometime this summer — no pricing information has been released, however.
The announcement was timely, as Apple is in a bit of a battle with publishers over subscription and in-app purchasing policies. HP is taking Apple head-on, even hiring one of Apple's senior directors to help draw developers.
Also notable is that HP has signed on Time Inc., allowing the publisher to provide magazine subscriptions under agreeable terms. The European Newspaper Association (ENPA) is likely taking note as its concerns over Apple's subscription policies intensify.
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As the publishing industry undergoes fundamental changes, new processes and ways of doing business emerge. Companies are now "mobilizing" content, building multimedia, and incorporating social media — concepts that would have seemed utterly foreign just 10 years ago.
In the following interview, Catalyst Investors co-founder Ryan McNally reveals the publishing trends that are catching investors' attention and he explains how a full embrace of new technology will help the industry evolve.
Ryan McNally: Publishing is playing catch-up to the capabilities of new technology, and that makes this an exciting time. Digital publishing and new platforms for consumer engagement — tablets — will be the biggest drivers of growth for the foreseeable future. Ebooks and e-magazines will be the immediate product opportunities.
More broadly, the evolution of what we think of as "publishing" will continue. Incorporation of video, multimedia, and social interaction will foster innovation. In the short term, I think this will mean that publishers will look to the past for their future — using archived content in new ways.
Publishers will attempt to innovate by bringing social media into the mix to utilize the capabilities of tablets and other digital devices — look at Vook, for example. There will be opportunities to meld video, text, images, and social media into ebooks and e-magazines. As this kind of content becomes widespread, consumers will expect more than just a digital presentation of their analog content. Some of the more interesting start-up opportunities will involve services or technologies that help publishers create this kind of material.
Ryan McNally: We are growth investors rather than start-up investors, which means we provide capital for companies that have already proven their technology and business model but need capital to expand. Nonetheless, the things that we look for are very similar to classic venture investors.
Broadly speaking, we look at such things as potential market size and how it is growing. A growing market can forgive a lot of mistakes that earlier-stage companies are likely to make along the way and reassure investors that there will be multiple options to exit. We also look at novelty or uniqueness of the idea or technology or content. Scalability of the business model and its level of profitability at scale are other important considerations. People are important, too. For instance, we look at the ability of the team to execute against the challenges the company will face in its growth. We also look at who is the most likely buyer of the business.
Ryan McNally: All of the issues I just mentioned are important in deciding whether to start a business. They're not just applicable to investors. After all, the entrepreneur is the first investor and has the most at stake.
There are other issues that apply just to entrepreneurs, though. You have to ask yourself, can you lead an organization? Do you have the vision, motivation, discipline and creativity to deal with the ups and downs that come with starting a company? You also have to ask: Do you have the skills to run the business or will you be learning on the job? And can you devote the time and make the family sacrifices required to put in the sometimes grueling hours to build a business?
Money is a big question, too. If you're going to start a business, you should anticipate that you'll need 6 or more months of working capital without revenue.
The unasked question that runs through all of these other questions is, do you have the passion? If you can satisfy yourself on that one — and assuming your idea is good — you can sort out the others.
This interview was edited and condensed.
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Now firmly seated in the New Year, your week in review returns to its normally scheduled programming.
As reported in the Year in Review, Novell had plans to sell a chunk of Unix intellectual property to CPTN Holdings, a consortium that includes Microsoft, Apple, EMC and Oracle. This reopened the fear that Linux would come under patent attack. Last week, it was reported that the deal was evidently off, but according to Microsoft, it was just a procedural thing with German regulators, and the process is moving ahead according to plan.
Assuming this sale goes through, it will remain to be seen if the Gang of Four takes the next step and tries to prosecute any of the patents against the open source community. It's possible that they intend to use them against other companies, or as protection against IP actions. But given Microsoft's history in the SCO controversy and the company's feelings about Linux, it is also possible that pigs will fly.
If you haven't heard that Apple finally inked a deal with Verizon this week, you should consider subletting the rock you've been hiding under. The interesting question that no one seems to be asking is if this is going to start the fractionalization of the iOS developer community. The Verizon version of the iPhone will ship with a mobile hotspot feature that the AT&T version lacks, and you can't help but wonder if other differences will creep into the iPhone over time as different carriers put different restrictions and requirements on the platform. One of the major selling points of the iPhone is that there has been little platform diversity for developers to deal with, apart from some sensors and the iPad. If too much branching of the hardware and software platform occurs, Apple could find themselves in the same boat with Android.
We also know that certain apps were banned from the App Store because AT&T objected to them. Will apps now have to pass muster for two different carriers, or will we start to see AT&T and Verizon-only applications?
That yearly pilgrimage of tech-heads, CES, has ended, and the big news for software developers is that tablets appear to be the new black. Multiple vendors showed off iPad wannabes at CES, many based on Android, a few on Linux, and a few running Windows.
Smartphones have already changed how software is developed, as applications have moved away from the keyboard-and-mouse input model. But until now, desktop-level applications have still clung to the old way. As tablets start to replace notebooks and netbooks, we're likely to see development shifts in productivity and enterprise applications that traditionally were tethered to a keyboard.
What does the future hold for those who code? My crystal ball is currently installing update 2 of 543, so I guess you'll have to check back here next week to find out. Suggestions are always welcome, so please send tips or news here.
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"Tell the chef, the beer is on me."
"Basically the price of a night on the town!"
"I'd love to help kickstart continued development! And 0 EUR/month really does make fiscal sense too... maybe I'll even get a shirt?" (there will be limited edition shirts for two and other goodies for each supporter as soon as we sold the 200)