Monday, January 3, 2011

The genius of magazines and books on the ipad and why publishers are ruining it

I know, this is NOT a medical article. But I feel compelled to write this because I fear that the publishers without a clue will destroy a burgeoning sales model before it even gets started.

First, let me state that the statistics of an initial peak of electronic magazine sales on the ipad, then recent decrease, is not surprising. This is because early adopters wanted to see really cool content on their really cool device. And they were willing to pay for it. At least initially.

However, it is insane to pay more for an electronic document than the written version. For paper content you pay for the content, editing, distribution, and capital cost (cost of the paper and printing of the document). For the ipad, you pay for the first two, but the last two are minimal. The distribution is through apple. Advertising the existence of the app is probably a necessary expense. But what capital cost is there in electrons? None.

Therefore, the magazine subscription model could be applied by taking the current list price for the paper mag, and decreasing it by the capital costs, and giving large discounts for prepaid subscription buyers. A $2.00 mag could cost $1.50 on the pad.

But this is not what's occuring. For instance two full years of "Wired" magazine paper version is $20, but one electronic version is $3.99 an issue. That's too much money for the coolness factor. So sure a bunch of early adopters coughed up the money for one issue, but that is not sustainable.

What do I want out of an electronic newspaper/magazine?
These Ten things:
1) Good quality content consistent with the paper version
2) Added value with multiple spots to click for extra content (photos, video, website links...)
3) A vibrant design
4) Sound I can control, and video I can control: NO AUTOPLAY VIDEO and EASY DISABLING OF SOUND
5) Price consistent with paper version, perhaps even discounted off paper version
6) Ability to buy a reasonable subscription in advance for a discount like with paper versions
7) Easy links for sharing to social media portals like FB and Twitter
8) No popup advertising
9) More functional advertising - for instance, have ads like in paper version, but where you can click for a coupon, sweepstakes, catchy video ad, etc...
10) Allow paper version subscribers to get the app at a significantly discounted rate so subscribers aren't double charged.

My concern is that newspaper/magazine publishers will see the lower sales and say that the model of electronic media has failed. It hasn't. THEIR model is what is failing: which is to say, the model whereby you gouge the early adopters and then drop the price when it becomes clear nobody will buy your product, and then drop the format when it "fails."

The problem is not in having a shortage of consumers, or reaching those consumers. Ipad users want great content. And are willing to pay a fair price for them. But what is occurring now is going to ruin the industry before it even starts.

Hopefully, the "moguls" will realize this cash cow for what it is. Look at the apple app store. Look at how much money is made on these apps. Millions of apps. Give a good product at a fair price and you will make money on the volume. And as an added bonus, you'll kill less trees in the process.

For book publishers, it is a similar idea. If you are going to charge me $20 for an electronic book, I want added value. I want video interviews of the author. I want interpretations by critics. I want photos of the setting (a la Dan Brown "extra content" books). I want to be able to click on any word in the book and get a link to it's definition, thesaurus, and relevant google search. I want to be able to personalize the book with notes, and print those out.

If you won't give me added value, then I want a lower cost. And I mean REALLY lower. I think no electronic book that is merely a pdf of the print copy is worth more than $4.00 a copy.

Publishers need to think quality, cost and volume. Good quality + Low Cost = High Volume of Sales and $$$$$ to publishers.

Maybe book publishers could even go with a subscription service for popular authors like Dan Brown, Michael Palmer, Nora Roberts where readers pay a lower price per copy than anyone else, but commit to three books at a time. And get discounted access to the "backlist" of older books. If they had that for Dean R. Koontz I'd do it in a heartbeat.

I just hope that while publishers run in fear from new media, then gouge the ones who lead the way, they don't kill the cash cow before it is old enough to produce milk.

2 comments :

  1. Agreed. I expect to save money by skipping all the paper/ink/shipping costs. There's no reason to charge full-price for ebooks. I was going to buy my kids' literature texts in electronic format this year, but discovered quite a few ebooks that cost more than I'd have to pay for the paper edition. That won't be happening.

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  2. @warmsocks - the good news for "classic literature" is most of that is off copyright and free. Anything by Mark Twain, Oliver Twist, Even some Winnie the Poo, is available at no cost via ebook. I predict in 7 years, a "school version" of the ipad will exist that many schools will supply/require and all textbooks will be delivered electronically.

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