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It’s not that hard to predict what will happen in the future (I will die; Fifi, my son Fallon’s stuffed orca, will eventually need restuffing, etc.) but it is very hard to predict with any accuracy when things will happen. For technologies, I tend to see events happening long before they actually do, which makes me something of a prophet, though a pretty useless one.  This may be proved yet again in the coming months as Apple and other companies attempt to take most of the paper out of publishing, something I thought we were about to do 15 years ago, but didn’t.

Back in 1994, I proposed to my employer at the time that we start a strictly online publication to cover just Microsoft. We called the proposed e-magazine MicroSquish and took it so far as to make a pilot issue and do some very interesting market research. The World Wide Web was only a couple years old at the time, and I was unconvinced that it presented a suitable delivery platform in an era of dial-up Compuserve accounts and 2400 bps modems. So MicroSquish was conceived as a downloadable publication to be distributed by e-mail in the new PDF format then called Acrobat. It looked just like a print magazine, right down to the 75 percent ad-edit ratio. And just to be cool, we built into the technology the ability to report back data from readers. We could not only track who read each issue, but how many times it was read and which stories or ads. We figured this data of who read what and in what order would be very useful to advertisers and ad agencies. But we were wrong.

Ad agencies 15 years ago didn’t want to know whether or not their ads had actually been read, they told us. This was simply because if an advertiser discovered that few, if any, people were actually reading their ad on page 113, the company might just pull that ad and save their money, taking revenue away from the ad agency in the process. The entire ability to sell an ad-edit ratio of 75 percent (which was needed to qualify for printed distribution by second class mail – yet another buggy whip in a digital era) was based on this deliberate ignorance. Ad agencies and publications alike knew that many — even most — advertising dollars were simply wasted, but it wasn’t in their interest to admit that, so they didn’t.

Contrast this to pay-per-click, which is brutally honest, where every successful ad has efficacy and advertisers have a pretty darned good idea what they are getting for their money. This reality is precisely why ad-supported magazines, newspapers, and television are losing revenue. It is a trend that is likely to continue, and can only result in a degradation of production standards on the print side to match the reduced revenue potential of the online business, where BS gives way to measurable, though impoverished, results.

It is not a pretty picture. More pay-per-click means more online content but ultimately less money for producing that content. Print publications fade from sight or continue primarily as art forms, rather than businesses. None of this is intentional. This isn’t Google or Apple or any other company setting-out to destroy an industry. It is simple Darwinian evolution that will ultimately make many print publications as obsolete as I already am.

Back in 1994 I proposed to set an example with Microsquish but it never saw the electrons of publication.  Computer professionals who were already spending eight hours per day in front computer screens told us in focus groups that they didn’t see themselves reading a publication on those screens. Think about that statement for a moment and you’ll realize how crazy it was. But my bosses were, I think, relieved to hear it, because they weren’t ready to give up print distribution. Then there was the little problem of distributing up to 200,000 one-megabyte files per week, which looked like it might take more than a week back then simply to do. You can’t publish a weekly magazine that takes eight days to deliver.

Well what goes around comes around I guess because the rumor this week is that Apple’s long awaited tablet computer is some form of electronic reader and that Apple intends to get into the distribution of content for this new platform, just as it earlier did for the music, TV and movie businesses with the iPod and iTunes.

I have no inside knowledge about Apple’s plans, but as one of the guys who came up with the whole electronic publication idea, I think I’m in a position to put it in perspective.

Technology is the least of this.  Yes, we need an electronic medium that is price-competitive with what it replaces, but it doesn’t take an Apple per se to do that. The much harder parts are the business model and the mojo.

Mojo?

Mojo!

Let’s assume that Apple or some Apple competitor announces a really good electronic reader, which means one that costs little, is super-easy to use, stores a lot, and has very low power consumption.  That’s just the beginning.  To go with that reader they’ll need sources of content and a way to make money from the new content business.  Just making the reader isn’t enough: if you build it they won’t come. But in order to get the content you have to be able to convince content owners to share and that requires mojo – the perception on the part of the content owners that this thing is going to be a success whether or not they participate.

An important thing to remember here is how Apple evangelized the Macintosh 25+ years ago. For the Lisa, which predated the Mac, Apple didn’t bother to lure developers: Apple just wrote itself the seven core applications it thought would be enough to make the platform a success.  Only that didn’t work.  The Lisa was too expensive and seven apps weren’t enough.  So for the Mac, which was developed for far less money than the Lisa, Apple turned to third-party developers. And here’s the line they used, which I believe was the work of Alain Rossmann: “It’s obvious that graphical computing is the future, whether the Mac is a success or not. This is your chance to learn how to develop for such an environment. Choosing not to develop for the Mac, then, is choosing for your company to eventually die.”

The argument obviously worked, especially when persuasively made by guys like Steve Jobs and his surrogate, Guy Kawasaki.

Apple is doing it again, from what I understand, only this time the evangelizing is being done among print and electronic publishers. And what’s being dangled before this New York and L.A. crowd is the Hope diamond of modern electronic publishing – PAID CONTENT.

Every publisher wants to make money. The six ways to make money in publishing are: 1) selling the product outright, whether it is a book in a bookstore, a magazine on a newsstand, or a pay-per-view TV show; 2) selling subscriptions; 3) selling ads; 4) selling a combination of subscriptions and ads; 5) syndicating content – selling it for use by other publishers, or; 6) giving the thing away for free to support a live tour or event of some sort to which people in many cities and countries will buy expensive tickets.  The Internet era has supposedly taught us that almost nobody is willing to pay for a subscription so that limits publishers to ads, syndication, or touring/events – none of which appear to generate enough revenue to pay for the kind of lunches publishers like to eat, hence the fading print and broadcast industries.

Part of the difficulty here is that while we’ve effectively removed most of the production and distribution expenses from publishing, we’ve added some expensive layers, especially portals like Yahoo.  Also the old-line publishers like Time-Warner that are used to OWNING their content haven’t shown themselves to be as good as Lonelygirl15 at MARKETING it. And unlike Lonelygirl, T-W is saddled with very high overhead if very little teen angst.

Enter Steve Jobs, stage left, proffering an appealing concept (I make lots of money selling content: look at iTunes), embodied in an attractive package (the Apple tablet/reader/thingee), and suggesting an exciting outcome (the salvation of Big Publishing). And his mojo is having some effect. The New York Times, for example, is suddenly talking about paid content, having a couple years ago specifically walked away from that business model on empirical grounds. The Times and most of the other publishers (like Rupert Murdoch) suddenly taking another look at paid content have all been drinking Steve’s Flav-R-Ade.

But that’s not enough.  If Steve is going to change publishing the way he’s already changed music, he’s going to need more than what I’ve described so far.  He’s going to need a new publishing platform, a new kind of product to sell on that platform, and a new business model to pay for it. Anything less will not succeed. I’ll get into those details in my next column.  Until then talk among yourselves.

Tags: Apple, Internet, Microsquish, publishing, tablet computer

This entry was posted on Wednesday, October 7th, 2009 at 8:09 pm and is filed under 2009. You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.