Tomorrow we’ll finally see Apple’s tablet computer, whatever it is finally called. I’ll write another column then attempting to explain where I think this thing is likely to succeed or fail for Apple. But right now I don’t see much point in speculating about something we’ll know for sure within 24 hours. It’s much more useful, I think, to look instead at the Big Media companies Apple is targeting with this device, why they might be attracted and whether the iPad/iSlate/iWhatever is likely to deliver what they think they need.
I was talking not long ago with editorial folks at an unnamed media company that rhymes with “The New York Times.” There was some possibility of my blogging over there. They were intrigued, but couldn’t fit it into their grand plan, at least not right away. The problem was resources were already allocated and such an endeavor takes months to mount and costs tens of thousands of dollars.
No it doesn’t, and that’s the problem with Big Media.
When I was at PBS we did occasional redesigns and I never knew what they cost because for most of my 11 years there I was just a paid contributor. But toward the end of my tenure I became a producer which means I was finally exposed to budgets and was, to some extent, even responsible for paying some of them. And I was shocked to learn that my final design for a Moveable Type blog over there did, indeed, cost tens of thousands of dollars — many tens of thousands of dollars.
PBS isn’t a company that rhymes with “The New York Times” but it still qualifies as Big Media, so the pricing was more or less confirmed.
Now look at the screen you are reading right now, my WordPress blog at cringely.com. It cost me NOTHING to design. I did it myself in a single night with the help of an experienced and generous friend, Benjamin Higginbotham of Spacevidcast.com. This blog is hosted by Media Temple in Los Angeles and costs me $50 per month, which is a lot compared to most blogs, but then I’m getting more than a million page-views per month. One more Christmas card or IBM column and I might bump up to $100 per month just to get some more resources, but I think I’ve made my point: a good Internet media product doesn’t have to cost a lot of money. This is my living, remember, that’s putting three kids through school. What are my gross margins — 10,000 percent?
While those are my gross margins they aren’t the gross margins at PBS or at a company that rhymes with “The New York Times.” Those outfits have overhead I don’t. They have legacy relationships and obligations I can’t even imagine. They can’t just go from there to here in an instant even if they wanted to.
Which brings us back to the iSomething to be introduced tomorrow. No matter how great it is, it can’t support the legacy infrastructure of Big Media, which includes mid-town office buildings and business lunches (hence my picture of New York’s 21 Club, if you hadn’t already figured that out).
Big Media wants revenue approaching what they could charge if a web site was a printed magazine. Remember the original lure of the Internet for publishers was the idea that there would be more profit without the expenses of printing and distribution. But it didn’t work out that way because Internet users won’t generally pay for content.
But Apple has the mojo. Steve Jobs has been firm from the start that content should be paid for and his generally is, except of course for my podcast on iTunes. Big Media likes the way Steve thinks. And so they can with one breath condemn him for killing the music album, yet in a second breath they can see him as the savior of magazines, newspapers, and good-but-thinly-watched TV series.
And Apple CAN be that savior, but only after a rationalization and severe downsizing of Big Media overhead, which I am not at all sure Big Media is really ready to do.
Based on the rumors I’ve heard so far I’m guessing the new Apple product will be — like the Apple TV — a hobby, a critical success but a business failure, though one with enough potential that Apple will give it a few years to succeed. It’s in giving those few years where Apple really can save Big Media, which will undoubtedly by then be not so big.