Friday, October 16, 2009

In-App Sales and iTablet: The Killer Combo to Save Publishing?

Will Apple save the publishing industry?

Apple on Thursday made a subtle yet major revision to its App Store policy, enabling extra content to be sold through free iPhone apps. It’s a move that immediately impacts the publishing industry, and it could pay even bigger dividends if the Cupertino company indeed delivers its highly anticipated touchscreen tablet.

While the most obvious beneficiaries would be app developers, a market segment that can also benefit from the new in-app commerce model are people and companies that create content and need to set up shop in a way that doesn’t, in effect, charge someone for just walking in — like media publishers. Newspapers and magazines are reportedly in talks with Apple about repurposing their content onto a “new device,” presumably the rumored touchscreen tablet Apple will deliver in early 2010. Numerous reports suggest an Apple tablet would have a strong focus on redefining print media. Enabling in-app commerce through free apps was a crucial move to help make this goal a reality...

What’s in it for Apple? Primarily, squashing Amazon’s Kindle. Who would wish to read a digital newspaper or magazine on the Kindle’s drab e-ink screen if Apple delivers a multimedia-centric tablet? Wired’s Steven Levy shares my view in his assessment of the Kindle’s newspaper experience: “[The Kindle DX's] plodding menu-based interface still made navigating newspapers difficult, and the rich graphic quality that makes magazines such an indulgence is totally missing. Even the flashiest print publication looks like The New England Journal of Medicine.”

Can Apple redefine print media to save the publishing industry? It probably has a higher chance than any other tech company out there. Apple is a market shaper, and that’s the kind of a company the publishing industry needs to resuscitate it as the traditional advertising model continues to collapse. Daily Beast editor Tina Brown believes that, thanks to the powers of the internet and technology, we’re entering the “golden age” of journalism in the next three years. Perhaps Apple’s tablet will be a crucial part of it.

Read the whole thing.

What Apple has done with the App Store is create a new market for a whole host of software and services. What's impressive is that, despite serious shortcomings and relatively poor navigation and organization, the App Store already represents a $2.4 billion dollar economy. (That's bigger than the GDP of some small nations!) What's perhaps the most difficult task for Apple, software developers, and content providers is getting the pricing for everything right. This is a critical point for getting profits to incentivize continued innovation.

Stay tuned to see what's coming next.

P.S. -- For the record, the advantage eBook readers have over something like a tablet is battery life measured in terms of days rather than hours and less eye strain reading it for extended periods of time. When it comes to reading, I believe there will continue to be a strong market for both types of products. What would be ideal is if someone would develop a tablet that can display either color (like the iPhone) or e-Ink. (Barnes and Noble's eBook reader is expected to have both types of displays.)

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