28/10/2010 § Komentiraj
After the release of the iPad, high hopes within several troubled industries have exploded; but it is not Apple alone to blame for the dramatic expectations such as »iPod to save publishing after it saved the music industry«.
Can we draw some parallels of what change was introduced to the music industry and how applicable is it to the existing situation?
Can a digital device really be an industry saviour? If we guess the answer up-front based on the fact that even Chuck “The Columnist” Norris could not save it, the answer should be pretty obvious :-).
How has Apple changed the music industry?
Apple ingeniously identified all the weak points of the major labels, leveraged their desperation and cluelessness and successfully orchestrated the effort that resulted in wealth for, well, mainly Apple shareholders. Hands down, one of the best plays seen; Apple’s efforts paid off extremely by the extraordinary iPod sales, Apple also become the biggest music retailer in selected markets.
What were the key elements of the music industry change?
- A masterfully designed device for consumption of music in the new digital format- the iPod
- Decoupling of albums into more basic elements- the transition from album to a »a-la cart« sales model
- An aggregator to provide the music- 3rd party iTunes provides music from major and independent labels
- A changed mindset of the music industry- licensed the right to sell music in the new format to a 3rd party
- The consumer willingness to pay for the music in the digital format- proper pricing and great user experience (fast search, no “pollution” of P2P networks)
Technology alone can’t save publishing
Technology in the means of iPod and iTunes was only a part of the solution and energy required to change the landscape of the industry. From the list above, iPad today only provides new means to consume the content. It’s not much more than the iPod was back then.
Technology is no panacea for everything that is wrong within the industry. Even more, the silver (or magic) bullet syndrome (when organizations look for a single technology solution without understanding the full scope of the problem) can be disastrous in case an organization puts all the faith into it and abandons the evaluation of other than silver bullet scenarios. This usually results in no improvements or even in regression.
What are other differences between then and now?
Yes, we have the “iTunes” store also for magazines and newspapers, but it relies on the Application (Apps) model; we are “forced” to consume the whole mag, we are not able to “buy songs from different musicians and burn them into albums”.
The Apps however properly address both client segments; on one side they provide an enhanced consumption (reading) experience for consumers and on the other side they allow more measurable marketing initiatives for the advertisers.
On everything else at the moment (the architecture of the industry, the business models, the way content is produced, edited) iPad has no or little influence.
While there was no need in changing how music content is produced, there are major changes today how new content is produced (blogs as an example) and news distributed in real-time (twitter as an example). The iPad App model does not address this.
The real challenges
As it seems, the new format is here to mainly rival the old format. This is not all bad news for newspapers looking to supplement the decreasing print circulations, however it does not introduce changes necessary to generate future sustainable wealth. And this necessary changes lie outside of the iPad and Apple.
The existing model does not address the biggest challenge we have with consuming information today; it rather sticks to the existing model and principles.
It does not change and adapt to the new ways the information is consumed today; it does nothing with regards to how social networks have changed the way content is produced, curated and editorial done (social networks as the new editors), it does not change the economics of content, neither what now possibilities the new platforms for distribution and aggregation are providing. It does little new on how marketing is embedded in the social web today (advertising is only one part). it does nothing to help implementing a more open architecture in print and publishing, it does not help the consumer to get out of the ancient closed environment of the publishers, it does not suggest the publishers how to charge for the content in an open world.
The fact that iPad tries to copy the iPod model, could lie his greatest danger; not that much for Apple, but quite more for others.
So, is iPad here to save the print and publishing industry? Nope, not by itself and not now, not in next couple of years while the industry will have to reinvent itself around some new paradigms.
Could iPad actually be bad news for the existing players?
There is a lot of experimentation today how the newspaper or magazine app of the future look like and how they should look like.
The prime focus of experimentation however should not be on the front-end, but rather on the back end side. New business & operational models and new architectures on the content creation, consumer & marketing engagement models, aggregation and distribution side.
No doubt, the iPad user base is increasing at a high pace. Apple seems to believe (based on the very self-confident subscription model proposal) that the medium is compelling enough to drive the consumers also towards news and magazines. And that this large user base combined with industries desperation would move the publishers into this kind of a closed system.
According to Wayne Rosso (marketing & consulting executive music industry veteran), the record labels are more like Apple’s death grip hostages. If there is something to learn from the music industry it is the fact that there is little to nothing philanthropical about Apple that would support the “Apple is here to rescue the old media giants” mantra.
Interesting times and challenges, and another opportunity for the second (the first one) Slovene crowdsourcing project “The Slovene Manifesto: how to save democracy via new journalism and media models”.