It has been an interesting year in the publishing industry. Newsweek announced a digital only strategy, The Daily decided to shut down its operations, 87% of American Newspapers and Magazines have at least 1 mobile app and 41% of these publishers see at least 10% of their circulation coming from Digtal by the end of 2014. Last but not least, one of our publishing partners has extended its Italian language offering to other markets in a translated digital only product strategy.
If I may, I would like to step backwards in time and share an experience I personally had with a newspaper publisher a long time ago. My boss at the time, Nichi Grauso, was the owner of Sardinia's biggest daily paper and Tv station. He decided, however, in 1994 that the internet was the future and that in a couple of years' time, readers would get all their information from the internet. Long story short, we were the first paper online in Europe (immediately after the San Josè Mercury News) and we had players involved in our project such as Nicholas Negroponte and the well known Newspaper consultant, Terry Maguire.
Nichi invested in toll free lines (which were costing him thousands of dollars a day) to give internet for free to the people, since he thought the internet should be "free like bread". A true visionary, Nichi would be constantly stuck between our meetings on how we were going to change the future and the number of subscribers that were joining his service called Video On Line. Nichi would literally refresh the browser every minute or so to see how subscriptions were going.
Just 4 years later, in the same town, with more or less the same business idea, a man by the name of Renato Soru was generating 3,000 new internet subscribers a day with a strategy called freelosophy. It was simply a matter of timing...
I learned an important lesson at my first real experience in the technology world and that was, a visionary can see the light and understand the path of the future, but the consumer and their habits tend to be much-much slower than that visionary tends to see. In some ways, the sloth like pace a consumer habit changes is a blind spot many of us, especially in technology, tend to underestimate and it tends to be costly...
What happened with Rupert Murdoch and The Daily? If he had met Nichi Grauso, I think he would have saved a lot of time and money. Again, consumers are slow to change and Mr. Murdoch created a very expensive product which meant that the only way to success in a short amount of time would have been to win hundreds of thousands of paying subscribers. In Mr. Murdoch's words, he commented, "Unfortunately, our experience was that we could not find a large enough audience quickly enough to convince us the business model was sustainable in the long-term. Therefore we will take the very best of what we have learned at The Daily and apply it to all our properties."
It is easy to comment on somebody's mistakes but one observation we can make about Murdoch and The Daily is this; The tablet market was just too small but even in 2013, as 1,000,000 Android devices are being sold every day, this same strategy might just work for a company like Newsweek, for example.
This year, we have seen similar decisions made by the president of Hearst and groups like Condenast. The President of Hearst, last week announced that, "his readers are not interested in interactivity, or put in his words, "When Hearst first launched digital editions for the iPad, it loaded its titles with interactive features -- features, Hearst President David Carey said, readers don't necessarily want.
"We had to find out whether people wanted something all-new and interactive, or if they just wanted the magazine in mobile mode," Carey recounted onstage at Mashable's Media Summit in New York City Friday. "The industry overshot the interactivity early on. What we discovered is that most people just want the product itself," he explained, echoing the sentiments expressed by editors at The New Yorker and Popular Science.
It is a clichè but history does repeat itself and when I am with publishers and smart interactive digital guys in their group, I often hear the comment, "we want a product that exploits all the capabilities of the tablet. Fair enough, I say, but that which "exploits" all the potentials of the iPad may not have anything to do with ROI or what the consumer truly wants today.
In October, my colleagues and I took our usual stand on the start up boulevard at the Wan-Ifra fair in Frankfurt. We decided to go and watch Condenast UK present their 2013 strategy. This is what they did on stage;
They unfolded 2 physical magazines, one was the original format and one was the re-impaginated digital version. The digital version was 3 times longer, so literally did not fit on the stage. And this is what they said, our digital version is 3 times bigger, it takes 3 times more time to download, 3 times more resources to create and we are not generating 3 times more revenue. We are going back to a more simple version.
So, my New Year's greetings go out to all of you, and I invite you to remember, when it is not broken, there is no need to fix it and consumers, yes, they are slower than we think to change their habits and, at least for now, consumers all over the world really like going to the newsstand and buying their Sunday Paper and at the same time, being able to read the same exact product on their iPad, Android, Windows 8, Nook and whatever else, wherever they are, whenever they want.
Now that we have gotten beyond 12-21-12, we all know, we will have plenty of opportunities to innovate and do fancy stuff, when the time is right.
And we did not talk at all about what is going to happen with mobile digital advertising in the future:0)!
Season's greetings and Happy New Year from Paperlit:0).