The leaky corporation
Feb 24th 2011 | from the print edition

IN EARLY February Hewlett-Packard showed off its new tablet computer, which it hopes will be a rival to Apple’s iPad. The event was less exciting than it might have been, thanks to the leaking of the design in mid-January. Other technology companies have suffered similar embarrassments lately. Dell’s timetable for bringing tablets to market appeared on a tech-news website. A schedule for new products from NVIDIA, which makes graphics chips, also seeped out.
Geeks aren’t the only ones who can’t keep a secret. In January it emerged that Renault had suspended three senior executives, allegedly for passing on blueprints for electric cars (which the executives deny). An American radio show has claimed to have found the recipe for Coca-Cola’s secret ingredient in an old newspaper photograph. Facebook’s corporate privacy settings went awry when some of the social network’s finances were published. A strategy document from AOL came to light, revealing that the internet and media firm’s journalists were expected to write five to ten articles a day.
Meanwhile, Julian Assange has been doing his best to make bankers sweat. In November the founder of WikiLeaks promised a “megaleak” early in 2011. He was said to be in possession of a hard drive from the laptop of a former executive of an unnamed American bank, containing documents even more toxic than the copiously leaked diplomatic cables from the State Department. They would reveal an “ecosystem of corruption” and “take down a bank or two”.
“I think it’s great,” Mr Assange said in a television interview in January. “We have all these banks squirming, thinking maybe it’s them.” At Bank of America (BofA), widely thought to be the bank in question, an internal investigation began. Had any laptop gone missing? What could be on its hard drive? And how should BofA react if, say, compromising e-mails were leaked?
The bank’s bosses and investigators can relax a bit. Recent reports say that Mr Assange has acknowledged in private that the material may be less revealing than he had suggested. Financial experts would be needed to determine whether any of it was at all newsworthy.
Even so, the WikiLeaks threat and the persistent leaking of other supposedly confidential corporate information have brought an important issue to the fore. Companies are creating an ever-growing pile of digital information, from product designs to employees’ e-mails. Keeping tabs on it all is increasingly hard, not only because there is so much of it but also because of the ease of storing and sending it. Much of this information would do little damage if it seeped into the outside world; some of it, indeed, might well do some good. But some could also be valuable to competitors—or simply embarrassing—and needs to be protected. Companies therefore have to decide what they should try to keep to themselves and how best to secure it.
Trying to prevent leaks by employees or to fight off hackers only helps so much. Powerful forces are pushing companies to become more transparent. Technology is turning the firm, long a safe box for information, into something more like a sieve, unable to contain all its data. Furthermore, transparency can bring huge benefits. “The end result will be more openness,” predicts Bruce Schneier, a data-security guru.
When corporate information lived only on paper, which was complemented by microfilm about 50 years ago, it was much easier to manage and protect than it is today. Accountants and archivists classified it; the most secret documents were put in a safe. Copying was difficult: it would have taken Bradley Manning, the soldier who is alleged to have sent the diplomatic cables to WikiLeaks, years to photograph or smuggle out all the 250,000 documents he is said to have downloaded—assuming that he was not detected.
Things did not change much when computers first made an appearance in firms. They were used mostly for accounting or other transactions, known as “structured information”. And they were self-contained systems to which few people had access. Even the introduction in the 1980s of more decentralised information-technology (IT) systems and personal computers (PCs) did not make much of a difference. PCs served at first as glorified typewriters.
It was only with the advent of the internet and its corporate counterpart, the intranet, that information began to flow more quickly. Employees had access to lots more data and could exchange electronic messages with the outer world. PCs became a receptacle for huge amounts of “unstructured information”, such as text files and presentations. The banker’s hard drive in Mr Assange’s possession is rumoured to contain several years’ worth of e-mails and attachments.
Now an even more important change is taking place. So far firms have spent their IT budgets mostly on what Geoffrey Moore of TCG Advisors, a firm of consultants, calls “systems of record”, which track the flow of money, products and people within a company and, more recently, its network of suppliers. Now, he says, firms are increasingly investing in “systems of engagement”. By this he means all kinds of technologies that digitise, speed up and automate a firm’s interaction with the outer world.
Mobile devices, video conferencing and online chat are the most obvious examples of these technologies: they allow instant communication. But they are only part of the picture, says Mr Moore. Equally important are a growing number of tools that enable new forms of collaboration: employees collectively edit online documents, called wikis; web-conferencing services help firms and their customers to design products together; and smartphone applications let companies collect information about people’s likes and dislikes and hence about market trends.

It is easy to see how such services will produce ever more data. They are one reason why IDC, a market-research firm, predicts that the “digital universe”, the amount of digital information created and replicated in a year, will increase to 35 zettabytes by 2020, from less than 1 zettabyte in 2009 (see chart); 1 zettabyte is 1 trillion gigabytes, or the equivalent of 250 billion DVDs. But these tools will also make a firm’s borders ever more porous. “WikiLeaks is just a reflection of the problem that more and more data are produced and can leak out,” says John Mancini, president of AIIM, an organisation dedicated to improving information management.
Two other developments are also poking holes in companies’ digital firewalls. One is outsourcing: contractors often need to be connected to their clients’ computer systems. The other is employees’ own gadgets. Younger staff, especially, who are attuned to easy-to-use consumer technology, want to bring their own gear to work. “They don’t like to use a boring corporate BlackBerry,” explains Mr Mancini.
As a result, more and more data are seeping out of companies, even of the sort that should be well protected. When Eric Johnson of the Tuck School of Business at Dartmouth College and his fellow researchers went through popular file-sharing services last year, they found files that contained health-related information as well as names, addresses and dates of birth. In many cases, explains Mr Johnson, the reason for such leaks is not malice or even recklessness, but that corporate applications are often difficult to use, in particular in health care. To be able to work better with data, employees often transfer them into spreadsheets and other types of files that are easier to manipulate—but also easier to lose control of.
Although most leaks are not deliberate, many are. Renault, for example, claims to be a victim of industrial espionage. In a prominent insider-trading case in the United States, some hedge-fund managers are accused of having benefited from data leaked from Taiwanese semiconductor foundries, including spreadsheets showing the orders and thus the sales expectations of their customers.
Not surprisingly, therefore, companies feel a growing urge to prevent leaks. The pressure is regulatory as well as commercial. Stricter data-protection and other rules are also pushing firms to keep a closer watch on information. In America, for instance, the Health Insurance Portability and Accountability Act (HIPAA) introduced security standards for personal health data. In lawsuits companies must be able to produce all relevant digital information in court. No wonder that some executives have taken to using e-mail sparingly or not at all. Whole companies, however, cannot dodge the digital flow.
To help them plug the holes, companies are being offered special types of software. One is called “content management”. Programs sold by Alfresco, EMC Documentum and others let firms keep tabs on their digital content, classify it and define who has access to it. A junior salesman, for instance, will not be able to see the latest financial results before publication—and thus cannot send them to a friend.
Another type, in which Symantec and Websense are the market leaders, is “data loss prevention” (DLP). This is software that sits at the edge of a firm’s network and inspects the outgoing data traffic. If it detects sensitive information, it sounds the alarm and can block the incriminating bits. The software is often used to prevent social-security and credit-card numbers from leaving a company—and thus make it comply with HIPAA and similar regulations.
A third field, newer than the first two, is “network forensics”. The idea is to keep an eye on everything that is happening in a corporate network, and thus to detect a leaker. NetWitness, a start-up company, says that its software records all the digital goings-on and then looks for suspicious patterns, creating “real-time situation awareness”, in the words of Edward Schwartz, its chief security officer.
There are also any number of more exotic approaches. Autonomy, a British software firm, offers “bells in the dark”. False records—made-up pieces of e-mail, say—are spread around the network. Because they are false, no one should gain access to them. If somebody does, an alarm is triggered, as a burglar might set off an alarm breaking into a house at night.
These programs deter some leakers and keep employees from doing stupid things. But reality rarely matches the marketing. Content-management programs are hard to use and rarely fully implemented. Role-based access control sounds fine in theory but is difficult in practice. Firms often do not know exactly what access should be assigned to whom. Even if they do, jobs tend to change quickly. A field study of an investment bank by Mr Johnson and his colleagues found that one department of 3,000 employees saw 1,000 organisational changes within only a few months.
This leads to what Mr Johnson calls “over-entitlement”. So that workers can get their jobs done, they are given access to more information than they really need. At the investment bank, more than 50% were over-entitled. Because access is rarely revoked, over time employees gain the right to see more and more. In some companies, Mr Johnson was able to predict a worker’s length of employment from how much access he had. But he adds that if role-based access control is enforced too strictly, employees have too little data to do their jobs.
Similarly, DLP is no guarantee against leaks: because it cannot tell what is in encrypted files, data can be wrapped up and smuggled out. Network forensics can certainly show what is happening in a small group of people working on a top-secret product. But it is hard to see how it can keep track of the ever-growing traffic that passes through or leaves big corporate IT systems, for instance through a simple memory stick (which plugs into a PC and can hold the equivalent of dozens of feature-length films). “Technology can’t solve the problem, just lower the probability of accidents,” explains John Stewart, the chief security officer of Cisco, a maker of networking equipment.
Other experts point out that companies face a fundamental difficulty. There is a tension in handling large amounts of data that can be seen by many people, argues Ross Anderson, of Cambridge University. If a system lets a few people do only very simple things—such as checking whether a product is available—the risks can be managed; but if it lets a lot of people do general inquiries it becomes insecure. SIPRNet, where the American diplomatic cables given to WikiLeaks had been stored, is a case in point: it provided generous access to several hundred thousand people.
In the corporate world, to limit the channels through which data can escape, some companies do not allow employees to bring their own gear to work or to use memory sticks or certain online services. Although firms have probably become more permissive since, a survey by Robert Half Technology, a recruitment agency, found in 2009 that more than half of chief information officers in America blocked the use of sites such as Facebook at work.
Yet this approach comes at a price, and not only because it makes a firm less attractive to Facebook-using, iPhone-toting youngsters. “More openness also creates trust,” argues Jeff Jarvis, a new-media sage who is writing a book about the virtues of transparency, entitled “Public Parts”. Dell, he says, gained a lot of goodwill when it started talking openly about its products’ technical problems, such as exploding laptop batteries. “If you open the kimono, a lot of good things happen,” says Don Tapscott, a management consultant and author: it keeps the company honest, creates more loyalty among employees and lowers transaction costs with suppliers.
More important still, if the McKinsey Global Institute, the research arm of a consulting firm, has its numbers right, limiting the adoption of systems of engagement can hurt profits. In a recent survey it found that firms that made extensive use of social networks, wikis and so forth reaped important benefits, including faster decision-making and increased innovation.
How then to strike the right balance between secrecy and transparency? It may be useful to think of a computer network as being like a system of roads. Just like accidents, leaks are bound to happen and attempts to stop the traffic will fail, says Mr Schneier, the security expert. The best way to start reducing accidents may not be employing more technology but making sure that staff understand the rules of the road—and its dangers. Transferring files onto a home PC, for instance, can be a recipe for disaster. It may explain how health data have found their way onto file-sharing networks. If a member of the employee’s family has joined such a network, the data can be replicated on many other computers.
Companies also have to set the right incentives. To avoid the problems of role-based access control, Mr Johnson proposes a system akin to a speed trap: it allows users to gain access to more data easily, but records what they do and hands out penalties if they abuse the privilege. He reports that Intel, the world’s largest chipmaker, issues “speeding tickets” to employees who break its rules.

Mr Johnson is the first to admit that this approach is too risky for data that are very valuable or the release of which could cause a lot of damage. But most companies do not even realise what kind of information they have and how valuable or sensitive it is. “They are often trying to protect everything instead of concentrating on the important stuff,” reports John Newton, the chief technology officer of Alfresco.
The “WikiLeaks incident is an opportunity to improve information governance,” wrote Debra Logan, an analyst at Gartner, a research firm, and her colleagues in a recent note. A first step is to decide which data should be kept and for how long; many firms store too much, making leaks more likely. In a second round, says Ms Logan, companies must classify information according to how sensitive it is. “Only then can you have an intelligent discussion about what to protect and what to do when something gets leaked.”
Such an exercise could also be an occasion to develop what Mr Tapscott calls a “transparency strategy”: how closed or open an organisation wants to be. The answer depends on the business it is in. For companies such as Accenture, an IT consultancy and outsourcing firm, security is a priority from the top down because it is dealing with a lot of customer data, says Alastair MacWillson, who runs its security business. Employees must undergo security training regularly. As far as possible, software should control what leaves the company’s network. “If you try to do something with your BlackBerry or your laptop that you should not do,” explains Mr MacWillson, “the system will ask you: ‘Should you really be doing this?’”
At the other end of the scale is the Mozilla Foundation, which leads the development of Firefox, an open-source browser. Transparency is not just a natural inclination but a necessity, says Mitchell Baker, who chairs the foundation. If Mozilla kept its cards close to the chest, its global community of developers would not and could not help write the program. So it keeps secrets to a minimum: employees’ personal information, data that business partners do not want made public and security issues in its software. Everything else can be found somewhere on Mozilla’s many websites. And anyone can take part in its weekly conference calls.
Few companies will go that far. But many will move in this direction. The transparency strategy of Best Buy, an electronics retailer, is that its customers should know as much as its employees. Twitter tells its employees that they can tweet about anything, but that they should not do “stupid things”. In the digital era of exploding quantities of data that are increasingly hard to contain within companies’ systems, more companies are likely to become more transparent. Mr Tapscott and Richard Hunter, another technology savant, may not have been exaggerating much a decade ago, when they wrote books foreseeing “The Naked Corporation” and a “World Without Secrets”.
from the print edition | Briefing













Because we have such a limited understanding of this phenomenon, it’s not surprising that ugly social media scandals happen all the time. The recent Youtube
Traditional market research works in 1:n mode too. A company surveys customers, conducts focus group studies or sells its new products in test markets. The company thereby receives information about what customers think, but the other customers typically don’t get any insight about each other’s opinions, and they don’t influence each other.























35 Comments
An interesting column with many strong points. I would make one observation if I could…You seem to be ignoring the fact that very few people truly have access to magazines over the IPAD, which is approaching 10 million users. The comparison I would make would be to the early days of cable TV in the US. When cable only reached 10 million homes, the platforn could not support new networks like CNN or ESPN. It was only when the started to reach 30,40 or 50% of homes in the US when the economics started to work for content providers. Give this new medium time before tearing it up!
That iPad magazine subscriptions are plummeting as iPad sales are soaring shows a large disconnect between what people want to do with an iPad. Of course, it could also reflect a lack of marketing or a lack of the right business model to encourage people to consume their “print” in digital form. Paper is an excellent medium: high resoultion, portable, tactile, robust, instant-on and shareable.
One other observation regarding the failure of magazines and/or newspapers, at least as far as the German market is concerned:
Most of them are simple PDF transfers of the print version. You can double-tap to zoom in and read the articles just fine, but all pictures become blurry. You often have to navigate page by page and can’t jump to sections of interest to you. As an example, I refer to you Axel Springer’s iKiosk, which has most of their (German) newspapers and magazines available. To expect people to pay money for this kind of experience is ridiculous.
IMO, I want two things from e-mags which they currently don’t deliver: 1. The ability to save and search articles so I can refer to them later. Paper is horrible at this. 2. Prices that reflect the true cost of editing and publishing content, not chopping down trees, printing on paper, and then delivering that paper on trucks to the newstand or via snail mail.
I do disagree with the author’s first point. I find the idea of having all of my magazines on a single device that I can carry everywhere and read anywhere *enormously* appealing (and “green” to boot).
In the end, I think publishers just haven’t figured out how to truly leverage the medium yet.
There’s a great deal of valuable insight here, for which, many thanks.
I have a question for Robert (comment 4). What do you consider that fair price to be once paper, printing and physical distribution are removed from the equation? i’ve been researching the viability of a tablet-only magazine and even with all those costs taken out, the economics are pretty unforgiving.
For a magazine-like proposition to have sufficient value to entice people to pay for it, you’d need to offer a magazine-like level of material – say, equivalent to 80 or so pages of original editorial, with a variety of voices and viewpoints. That means you’re looking at a team of at least a dozen writers and more photogrphers/illustrators/videographers/etc.. Let’s say they’re all freelance professionals, so the quality should be decent and you don’t have to pay salaries, and maybe they’d be prepared to work for lower rates than they’d get from established commercial titles because they want to do something more independent and maybe get to cover stories they can’t cover for mainstream outlets. Maybe they’d even forego a fee entirely and work for a share of profits. Let’s also assume you can eliminate a load of ongoing design and subbing costs by publishing your app via a CMS to predesigned templates, and you find someone who can build you that system affordably. And let’s also say you opt to take a huge gamble and each self-edit your work, and don’t get any insurance against libel and other publishing liabilities (because you won’t be able to afford it so you hope that trying hard to avoid mistakes, and keeping your fingers crossed, will be sufficient). You have to also concede that you won’t earn any income from ads from the first edition, because nobody knows how many (if any) you’ll sell.
Even after all that you’re still looking near – *very* conservatively – $50,000-worth of time and effort from those involved just to get one edition published. And that’s only if your content is in a subject area which isn’t expensive to cover, where the stories come to you and don’t cost you anything to research and report. Let’s say you do a really solid PR job and promote your new title relentlessly via social media and you manage to sell 5000 copies (which, from the figures above, looks to be more or less impossible given that you won’t have the visibility or marketing resources of major publishing houses, and they can only manage to shift twice that of their world-famous flagship brands). The cost of editorial on that basis would leave you witha “cover price” of $10 – though you’d need to make it nearer $15 if you’re planning to sell via the Apple App Store because they take a 30 per cent commission. And that’s clearly unsustainable, especially for a product which won’t boast a fraction of the sophisticated presentation of titles produced by established publishers. Yet if you charge a considerably lower price you can only break even by selling Wired June numbers, which would require phenomenal good luck even if you had a million or two to drop on a marketing campaign.
I’ve come to the conclusion that the barriers to entry remain almost as high for tablet publishing as for print – at least, for independent start-ups. You can’t really hope to produce something people will want to buy at a price they’d be willing to pay for a brand new title from an unproven new company. I can see why established publishers have stuck to porting established brands rather than setting up new tablet-specific titles, and suspect that one of the lessons being drawn is that sales are so bad there’s no point even considering tablet-only titles for the foreseeable future. In the process, though opportunities are being wasted and the possibilities of the medium remain unexplored, because those with enough money don’t see the point in experimenting and those who had hoped that tablets might offer a cheap and efficient route to market are, at the moment, finding that this is sadly but most definitely not the case.
mags on the ipad? like listening to a symphony on a walkie-talkie. useless compared to the real thing.
One important why is missing, probably the most important. Access from tablets and phones must be rising dramatically, not for the apps but for the web sites. This is because they integrate into the social stream and the web at large. You can’t link to an app.
Just like paying for Netflix vs pirating movies, I’ll buy ipad mags when convenience, value ads and user experience outweigh cost.
Adds
“It would be unfair to blame publishers”.. I think that publishers didn’t understood the Web ten years ago, and now the ipad and mobile devices.
Related post in french : http://www.pascalrossini.com/wordpress/2010/12/les-magazines-papier-sur-lipad-un-succs-mitig/
Bry Wolf, Cry Pad. Even more reasons in a blog post published almost at the same time:
http://www.garfors.com/2011/01/cry-wolf-cry-pad.html
Good points in the article. I was wondering myself, why I’m underwhelmed by the couple of magazines, Adobe is going to put down into our throats with its inferior frameworks.
And I don’t like those magazines, and here’s why: when WIRED showed up on the iPad, I was very enthusiastic. In fact, I couldn’t wait to get hands on the first issue and was deeply disappointed, when I got my iPad. All the important things, all the specific things an iPad can do better than a PC weren’t here in the E-Magazines. No Copy/Paste, no enhancing of the fonts, and the layouts are very print-old-fashioned.
Then Branson went in with “Project”. I gave it a (second) chance, ’cos Branson often gets it better. Bottom line: same inferior Adobe-framework, some good ideas, an awful layout, that is not iPad-like in any way.
So the iPad Magazines failed? Maybe. Maybe not, because iPad-language is so new, that we all will have to CO-DEVELOP the new language. Remember the first MTV-Programmes? It was some sort of rollercoaster-tv back then, and the MTV-ductus had to develop through years (that MTV is dead by now is another story …).
I’m confident, that “Magazines” will survive on the iPad (and similar devices). But they won‘t look like now – lots of jpgs arranged as articles, filled up with video, sound and other gimmicks.
They will more likely look like Flipboard. Flipboard is the beginning. Imagine a “Magazine” edited professionally with the possibilities of the Web, touchbased and made by people who know good journalism – and you will have the choice to arrange your individual “Magazine”, that is to be paid of course.
THAT will indeed be the future. Give it some time …
This segment is not yet ripe. People get excited and they download the digital format out of hype. Later, they realize that the old thing is still better. Comparison is inevitable. Until a revolutionary new e-zine format can convince people to download their magazine on their tablet and completely ditch the paper, then people will continue to patronize the printed version. I am interested how mobile technologies like QR code is also changing how we use printed media. I don’t know yet. So far I am not contended how majority of digital magazines are delivered.
Oh, I would blame the publishers. They seized the iPad as a way to try to recapture their control over the experience of their editorial products (a serial experience dictated by an editor), brands, and business model. They used the iPad to try to step back. Finally having realized the power of the link, the cut it off. The iPad apps we have seen from publishers are their last gasp.
The fundamental problem: Content is not an app. Apps need to *do* something. Content works quite well on the web. With HTML5, any of the bells and whistles that are shown on an app to “enhance” (that is, tart up) content can be done on the browser … with links!
I clicked through from Jeff Jarvis’s tweet out of curiosity and want to first say thank you for citing our (the Pew Internet Project’s) data.
Professionally, I would agree with MV that this segment of the market is not yet ripe. I also agree with the critique of publishers who do not yet know how to take advantage (just as they didn’t in 1995 — I have some hilarious memories from my days helping to launch usnews.com).
Personally, I just spent a very enjoyable 20-minute bus ride with the iPad version of Martha Stewart Living. I loved the before-and-after photos of her house/garden/apple tart. It’s not perfect, but it’s worth a look as a model for what a digital mag could be.
1. The content in these apps is mostly being repurposed after the print issue is put to bed, by a few people put in charge of publishing it via the app. That’s not a digital-first practice; it’s the same error newspapers and magazines made for years (and many still do) with respect to the web. The writers and photographers who create the content are not even being asked to consider app functionality.
2. On the web, the whole idea of an “issue” is dead. Content is atomized, navigation is via links, and consumers have long ago learned to surf and explore. If an app is an attempt to put the genie back into the bottle, to package up content into weekly or monthly “issues,” without links and social functionality, it will fail.
3. Success may come for publishers who abandon packaged, dated “issues”, who instead deliver a personalized content stream, who enable social functionality and links, and who involve writers, photographers, editors and designers fully in the creation of app-based content.
4. Because tablets are leisure devices more so than computers or even smartphones, the real monetization opportunity on apps will not come from selling subscriptions or advertising, but by inventing new ways to interact with customers: facilitating conversations and blending news, social media and brand messages in order to actually sell stuff and facilitate transactions — in short, to leverage those new relationships of trust into brand new streams of revenue.
(I made these points back in March here: http://newsafternewspapers.blogspot.com/2010/03/ipad-strategies-for-publishers.html)
Jeff,
I agree wholeheartedly about HTML5. Anyone contemplating a new publication targeted at tablets would be daft not to work in that format, they’d also be able to publish as a web app and thus expand their notional market beyond tablet owners to everyone with a browser, albeit without touch-screen functionality.
However, the overall point I was making still stands: the pricing will be key, and for individuals or independent outfits without a significant bankroll reliant on word-of-mouth and social media to promote and market the app, you have to both be cheap enough to entice the curious while charging enough to give yourself a chance of covering costs from sales alone in the short term. That is a significant problem, and may well be the key factor holding back all development in this emergent sector: at present what we seem to be seeing is that those with money enough to spend hold back because they’re not seeing returns significant enough to justify further investment, and independents who are keen to try something new and different are stymied by the significant costs of doing business in this (slightly) new marketplace.
I guess my disappointment is that I thought that, maybe, here was a new business model for people in my position (freelance journalists, as opposed to staffers). So far my business relies on two models – sell my work for a flat fee to a publisher, who then has to work out how to monetise that investment, usually by bundling it with other relevant content in an online or physical package; or self-publish my work and aim to attract income by selling advertising around it, soliciting voluntary donations on the page (Paypal, Tipjar, etc.) or by getting commissions from products sold via links on the page where it’s published. The paywall experiments of Murdoch notwithstanding, it’s already clear that for standalone journalists the chances of charging people to view work online are nil, so the tablet/app concept appeals because, even though the numbers so far are small, it appears that there is a section of the market that is willing to pay to access journalism through this system. And while the necessity of opening it up to outbound links is clear and the desirability of finding some way to open it to inbound ones would clearly help to promote it, the main benefit it offers is for journalists to actually be able to sell their work directly to their readers without going through a middleman.
But if the economies mean that the only way this will work is by chasing the same mass-market numbers that established publishers achieve with their print products, then development of the sector won’t happen from the independents. If the established publishers aren’t pushing it either, then we may never get to see what this format is capable of being.
You could blame publishers. Sure.
Or you could blame readers for expecting a whole industry to change within a couple months of the launch of a product.
But then why did readers expect so much… The trouble was in the overhyping of the product by Apple and tech pundits, creating expectations that could not be met so quickly.
Readership will come back as the industry adapts, it’s called maturing (see The Internet).
Thank you, FF, for the ringing down the curtain on Versioon 1.0 of tablet magazines. Shipping is a feature, and some rather big media cos. shipped. They and we all got the subjective and objective data on what didn’t work; nobody went bankrupt, and (especially this week) no one’s dismissing the tablet form-factor as a fad. We all just might be *learning* something.
Great article Frédèric. I think you’ve got it.
Why do so many people expect do much from eMags when the genre is still finding its way? The early Web was simplistic and sparse. Today it is richer and there is a long way yet to go.
I disagree with gregorylent. I look to media for content. I am not interested in spurious pictures or videos. It is the textual content that contains the core message that I might be interested in. I don’t need to be entertained if I am after information although relevant multimedia supplements can be great. But it is the message that matters. The style of presentation is far less important and busy busy pages are a pain to wade through. Many page designers produce output I would expect from a demented spider on crack cocaine. Your point about the Economist is well made. It is just right for its genre – rich in information and ideas, has gravitas and isn’t noisy.
Give eMags time.
I also disagree that it is impossible for new entrants to gain a toehold in eMags. It’s not easy but, if the content is good, if it hits the spots it aims to hit for readers, it can start small and build a following. We are all drowning in an ocean of information. One answer that will serve and sell to many is abstraction and opinion with links to other related content like full-res pictures and video/audio. Links are key to offering information in a palatable form. Cover the core ideas simply and link to the rest. Give the reader the right to choose how much or how little he wants to review.
I see a market for 99c a month SIG eMags that can shine. It will be a struggle for the first 12-24 months but the idea is to build profitability through scalability. The key to scale in the e-Reading market is usefulness of content at a low price. Ad revenues can kick in gradually to put some icing on that cake.
I hope to see many low-cost magazines covering SIG genres.
I believe that the days of the publishing empire are numbered if they do not grasp the nettle of the new measures of Price to Value in publishing.
I agree with dave on Apple overhyping the ipad, but its almost seems this is what every company does for a new gadget they develope. I mean its all about selling your product, seems sometimes companies forget to match what they say their product can do with what the product itself can actually do. Also with new technology you need to give it time to develop, I mean rome wasn’t built in a day
For everyone who feels it is fair or unfair to blame the pulishers is missing the fact that the new technology just came out, and is not available to everyone yet. Only about 10 million people have access like Jeff says. It is not quite a digital breakthrough that people can all have as easy as buying from the street. I feel the writter and editor made paper magazine’s better because only the rich and luxurous people ready only from the interent or there IPAD, and also the paper magazine is a better ready on his opinion.
Comparison Kills: This is a habit of yours and many content consumers. Availability of the information in other mediums like digital have been around for quite some time. The publicThere was a reason or intent of you entering a publication kiosk, be it at an airport or mall, you instinctively went in to look for various publications that either were not available to you on your iPad or were touting an article that interested you.
Convenience: The interactivity seeming gimmicky is one of 2 things, either it is because the publication is indeed using it as a gimmick to sell more content and presenting it to the user as such or, this is the ramifications of other publications use of it spilling over to those that are using the available options in order to provide a more rich and engaging experience to the content that was previously unavailable to do.
Execution: The execution is something that cannot be commented on in full yet. As you state earlier, the technology has been available for the last 6 months and is. mostly / only, on 1 device. Many publishers are trying to embrace the technology as it is coming out, something that the printing industry is not well known for to begin with. The filesize concerns with many of the current methods of providing content is well known to producers of the content and it is something that many of the vendors of the solutions are looking at solving. Their initial concerns were more focused on, as with any new and emerging technology, being the early leader.
Price: Publishing costs for digital and printed material are very similar. Contrary to many peoples’ beliefs, providing an engaging, content rich article, let alone full publication, is a time consuming and difficult thing to do. Video production needs time to work on the post production, interactive elements have to be tested for various bugs, content has to be developed, designed, and placed in a layout for multiple orientations and soon to be multiple aspect ratios. Then there is the service of providing the content to the end user. Bandwidth, like stated in Execution, is something that is currently a concern for both consumers and content providers. This comes with a price. The cost of manufacturing the digital edition, in most cases, exceeds that of the printed with the exception of the actual physical printing and shipping. That cost is taken up in the distribution at this time by Apple. Any in-app purchases will be cut by 30% to the producers. There are a multitude of costs that I am not mentioning as I only have so much room, however know that there are even more to come for anybody developing this technology.
#1 Don’t try…: I agree mostly with this statement however believe, and am trying to, put together a group up publishers that can work with the technologies available and that are being developed to create a sort of standard for aspects of best practice. For instance, notification of navigation options for users, file size guidelines, format standards, etc…
#2 Make up your Mind: This is coming and has been on the road map for all publishers and solution providers. The problem is that because the technology is a mere 6 months old and for the majority of that, there has been only 1 ‘tablet’ device available, it is hard to develop for products that do not exist and for markets that still have yet to decide what they are.
#3 Encapsulate the web: This is coming. Trust me on this. I have and I know others that are developing abilities for just this. It is something that both magazines and newspaper publishers want most likely more than you.
#4 Price wisely: As stated above, price is something that a lot of people have yet to understand when they talk about the cost of the digital version. The one thing that will help however is the understanding that publishers want to know you. They want to understand who you are, your interests, and who impacts your life. Advertising is the one thing that most of the publishing industry leans on. If the advertisements in publications were able to target individuals directly along with provide an engaging experience to the user, publications would be able to charge the advertisers more and in turn reduce the cost of the issue itself. The cost of the publications to produce would remain the same but the economical balance shifts.
@Jarvis Have you re-bought an iPad yet? Because as far as I recall you took it back to the store after 2 weeks(?). X millions iPad buyers seem to disagree with your quote that “the iPad falls between two devices; it will fail”.
Now that doesn’t mean I disagree with you on HTML5 being the future vs apps, but your negativity is bad.
After reading this article, I agree that reading an actual magazine on paper rather than on an iPad is more beneficial. I prefer reading an actual magazine rather than using technology because I am able to “dog ear”a page or rip out a page that I want to keep and use (i.e tips on something). You cannot do this with an iPad. I have an iPad and rarely use it. I rarely use it mainly because I also have a Macbook and an iPhone, and find that owning an iPad is no different than using either of these machines. I only use my iPad to buy books. I like using the iPad for reading books because I usually get irritated reading from paperbacks for several reasons. However, I agree with this article on the fact that actual magazines and newspapers are better than reading a newspaper or magazine on an iPad. I also agree that they should not charge the same price.
One thing not mentioned is the roll of advertisers in digital magazines. Advertising helps offset some of the production costs. Print advertisers look at magazine circulation, readership income, and quality of product to determine where they spend their ad dollars. With digital editions of magazines, will advertisers back out?
Will there be more opportunity for advertisers to get more for their buck? Can they change their ad mid issue? I believe there is an opportunity somewhere in all this, but it’s evolving too fast to keep up.
when the ipad first came out, i was so excited to get one because instead of carrying around a bunch of books and magazines, i would have it all on one device. Now after having the iPad for a couple of months, i feel like i have bought more printed magazines and books than i have bought on the iPad. Printed books are so much easier to read than reading books/ magazines on the iPad. iPads dont have as much to offer as magazines do. Perfumes/ samples of products, for example. You cant smell a perfume while reading Vogue on the iPad. So, not only are magazines being hurt by this, but companies putting samples of there products are in the magazine are being hurt also. Also, i think iPads should lower the price of the book/magazines. They should not charge the same price as they would if you were buying the printed version.
I think the article makes a very good point about e-magazines taking away from the “fun” of browsing through magazine aisle at your local bookstore or grocery store. I have considered many times getting an e-reader because I enjoy reading and I think it would be great to just be able to download another book wherever I have wi-fi. Although it would be very efficient for when I travel, there is just something about having the physical book, and besides I wouldn’t have anything to put on my bookshelves. Being the nerd that I am, I also enjoy browsing around Books-A-Million whenever I have free time. I also think the ipad itself still has a long way to go before some people are convinced they “need” one.
I think that this article is very interesting and helpful for people that are in between buying an Ipad or e-reader. I believe that once these devices get more advanced that they could very easily be more popular than physical books or magazines. The idea of having all of your favorite readings all on one device sounds very appealing. I do agree with many comments on how having the physical book or reading material in your hand is more satisfying but times are changing. Ipads and e-readers may very well be the future of reading in no time at all.
The iPad is the most overrated device by the media industry. They simply think that taking paper content adding some mulitmedia like video and, volià, they will have a winning platform on the iPad.
Well, as your article has shown that is not the case. First, the media industry has to understand what new media is all about. And unfortunately, multimediality is the most unimportant ideosyncracy of new media. Activity, Interactivity, Ubiquity of the media are by far more important. Second, design new business model that fit to new media. Do we know what will be the winning business model? Unfortunately, no. We have to experiment and work via try & error.
Take a look at http://blog.business-model-innovation.com/2009/09/who-says-paper-is-dead-business-model-innovation-in-the-newspaper-industry/
By the way, I earn money with my free content. No ads, no direkt income from my blog but I can share some ideas on business model innovation, a niche topic in strategic management. And via good articles, I get payed jobs. Can newspapers do this? Not with sticking to their traditionell content model.
Thanks Frederic for your great blog on “Failing ipad Magazines” the best we have read so far!
It’s a very thorough analysis of what is happening and it explains why TRVL is probably one of the only magazines which is doing well.
It’s iPad exclusive, it’s free, it’s reinventing magazine publishing and not surprisingly it sees a steady increase in both positive feedback and downloads.
Kind regards,
Jochem Wijnands
Still early days, but evolution is rapid…from my experience speaking with all sorts of publishers, most do get that their CMS will become very important moving forward with custom HTML applications. In addition, templates are now available to make the design transition quite easy. Many may in fact use their own feeds to be read in these new web environments. Readers certainly appreciate dynamic content coupled with an “app-like” reading experience.
What is the problem with an iPad magazine being a magazine on an iPad? Why does it also need to do other things such as iron shirts, make the tea or have sex? It’s a magazine!
As a former hack, I can see many people’s expectations about creating content are a little, um, naive. If you want to create a title that works, be ready to support two years of loss before knowing if your title has a chance to fly. You could get lucky, but you’re better planning for the mid-term.
It would be nice if Apple developed tools for creating content on the iPad. Why leave it to Adobe, they obviously haven’t cared enough to develop an App specifically for content creation on tablets.
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Därför är försäljningen av tidningsappar på iPad inte så dålig…
Förra veckan skrev jag om att försäljningssiffrorna för iPad-utgåvorna av tidningar har haft en sjunkande trend. Flera stora amerikanska titlar har fått se försäljningen dala. Nu publicerar Mashable en bra artikel som försöker förklara varför. En intre…
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[...] via mondaynote [...]
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