The Daily: Exclusive iPad News

Imagine a digital newspaper created specifically for the tablet world and published by News Corp and Apple. No print version, no online just a newspaper delivered direct to your tablet for that Apple preferred price point of 99 cents a week.

Rupert Murdoch, is determined to find the digital solution to newsprint that pays. Murdoch's Times recently claimed 100,000 paying customers for its web edition and the Wall Street Journal claims over 2 million readers, but will he now create a new competitor that will effectively compete with these? The US media claims that ‘The Daily’ will be launched at the end of this month and has been under development in the New York News Corp’s office on their 26th floor and has some 100 journalists onboard today.

The difference is that the Daily is solely focused to be a tablet paper and specifically today an iPad one. Murdoch is aligning with Steve Jobs and is gambling that people will be prepared to pay for what is openly free elsewhere online and that a tablet paper beats a newspaper app designed for the iPad and his own alternative newspapers. With no print and no online the paper is targeted at that Apple price point of 99 cents a week and the will obviously include Apple’s share and any taxes! Finally, the biggest gamble is that they can create a new brand.

The move is brave but with Apple backing could generate the adoption by many iPad fans seeking to be different and read the ‘Apple Daily.’

Meanwhile taking a more traditional route The Economist has launched its iPhone and iPad apps. It will be available every Thursday with all articles being cached for offline reading and also includes an audio edition.Existing print subscribers will get the new rendition free with the digital only edition being charged at $110 a year in the US. Dome content will be free and single issues can be purchased within the new app.

Newspapers and Paywalls

We wrote only this week about the poor figure The Times had since their paywall went up and now sister papers, the Sun and The News of The World, appear to be moving towards implementing their own paywall policy in October. Some would say why not and better to get the cash in the door than give it away free. Others would point to the poor figures from the Times paywall and ask, is it wise.com?

The material in the Sun and The News of The World isn’t highbrow or necessarily intellectually stimulating and therefore it could be said that advertising would be a better route to get revenues. However, if readership numbers online tumble, the adveristing will surely follow in the same direction.

Some believe that the video and celeb trash stories will still generate readership and after all the Sun and The News of The World have lived on the back of this for ever.

It appears the Murdoch is determined to erect his paywall.

Meanwhile the New York Times still is to implement its promised paywall but it apparently testing a paywall on the Telegram & Gazette in Worcester, MA. The paper hides certain local content behind the paywall and gives the rest away. The theory obviously is that local content is valuable. Interesting thought in today's internet world.

The Times Readership Drops With Paywall

Rupert Muroch made a big statement and said that The Times, had to move to a paid-content online subscription system and made the transition. We now read the figure for July from ComScore which shows a 1.2 million user drop for May’s 2.79 million-strong readership, to 1.61 million. More disturbing is the drop in the visitors' average time on the site from 7.6 minutes in May to 4 minutes in July.

News Corp head Rupert Murdoch is quoted "With our paywall around the Times, we have had an encouraging number of people subscribing at a good price,"

However, trends in July impacted the free Telegraph and Guardian who both recording losses of online readership whilst The Mail Online and The Independent, strengthened to 9 million and 3.54 million unique visitors, respectively.

So who is right and who is wrong and who cares? The one thing that is certain is the Murdoch will not admit he was wrong easily . It’s said that obne swallow doesn’t make a summer and it will take more then one readership drop to herald Winter.

News Corp Buys Skiff

News Corporation continues on its somewhat unclear digital strategy and the company has announced the acquisition of the digital Skiff platform from Hearst. Skiff delivers digital newspaper and magazine content to tablets and e-readers, with the capability to deliver high-resolution graphics, rich typography and dynamic updates. News Corp has also taken a stake in Journalism Online which is designed to help online press establish pricing and payment structures and set up the “metered mode” to enable a certain amount of content to be given away free.

So what is Skiff? When Hearst first showed it off it was certainly a big format eInk reader but with the emergence of the iPad and the queue of ‘wantabes’ its hardly a smart reader anymore. Like the Plastic Logic reader it simply took too long to get off the launch pad and by the time it got close it was in danger of looking tired and old. A black and white TV, in a HDTV Technicolour world.

It’s unclear whether News Corp. will develop Skiff as a mere platform or continue to develop it as a device. However it is clear that they are serious about making content pay.

News Corp has struggled with its digital strategy, most notably their acquisition of MySpace and their ability to tie together the disparate parts of their digital empire. The other aspect that is interesting is News Corps ability to go in what appears the opposite direction to the market and their competitors.

Brown Backs News For Free

One has to guess who is quoted as saying

“People have got used to getting content without having to pay. I don’t think you are going to be able to put things behind paywalls in the way that people think. People will pay for certain things, and should pay for certain things, but I think there’s a whole sort of element of communication that’s got to be free. People mind paying for basic news.”

The quote is from UK Prime Minister, Gordon Brown and was given in an interview with the Radio Times. So at a time when the Digital Economy Bill is hardly dry and on the table and a general election is only weeks away, Brown has decided to speak his mind against Rupert Murdoch's plan to implement paywalls to access the Times and Sunday Times online, arguing that internet users will not abide being told to pay for news content.

Murdoch plans to start charging for online content from June, with the Sunday Times and Times, with the Sun and News of the World to follow.

So is Brown's opposition based on the fact that Murdoch's Sun recently switched allegiance from supporting Labour to backing the Conservative, a support for the creative industry and journalists who the recent bill said needed to be rewarded, or is it a realisim that business models must change and the ‘free’ economic models are here to stay?

It will be interesting to read how Murdoch’s editors react.

The Radio Times has a weekly circulation of 1,000,648.

Newspapers Behind the Pay Wall

The newsprint industry is now watching Rupert Murdoch’s News International with interest as it moves online readers from free reading to a pay to access of The Times and The Sunday Times newspapers from June. The UK papers will become the first national titles to charge for access to their whole sites which will cost £1 per day or £2 per week. They also have announced the intent to move their Tabloid papers , the Sun and The news of the World to a pay model later in the year.

What will be the outcome? Will consumers switch to the pay model or simply click to other sites who offer the same or similar content for free. Until now only The Wall Street Journal and the Financial Times have operated a pay wall online, but many argue that there content is more focused and a must have in financial sectors and to many of their readers it’s a chargeable expense. On the other hand papers such as the Guardian has built a significant online following based on free and don’t intend to make any moves away from it today. The New York Times tried to move to a subscription service for features and opinion content but withdrew it when few readers took up the option.

At a time when; broadcast news is available 24x7 over the Internet to even your mobile, when you can get free services to aggregate access to tens of leading newspapers around the world for free, when you can get Google to aggregates snippets and even feed specific interests to you on the move and where the line between journalism and social comment blurs under the democratisation of writing - is the pay wall viable? Over the last decade 24x7 broadcast news, free commuter papers and online news have reduced people's reliance on printed news but set an expectation of free.

The papers expected the business model to shift to one based on advertising but they have seen previously highly-profitable classified adverts and display advertising migrate online to others.

The Times and Sunday Times sites will be redesigned and re-launched in may and move to the new model in the summer. Will additional applications, moving images, dynamic infographics, interactive comment and personalised news feeds entice people to pay or will they merely vote with their clicks and leave Murdoch frustrated.

So will we be curling up with our laptop and tablet on a Sunday morning or still immersed in a mountain of print supplements? Will the newspaper delivery boys get a day of rest? Will online give the heavyweight newspapers a real sense of what articles actually count and which are mere fillers? Will we pay for what we can easily get elsewhere for free? Is newspaper loyalty that strong?

The State of Digital News

How we access news and what news we consume is changing. The annual assessment of the state of the US news industry ‘Project for Excellence in Journalism's’ was released last week by the Pew Research Center. It contains a comprehensive review of the news and insights into the habits and beliefs of some 60% of Americans who are estimated to get some news online during a typical day.

Only 19% of all surveyed, which includes people who already pay for news, said they would be willing to pay for news online. 82% of those surveyed who had preferred news sites said they'd look elsewhere if their favourites start demanding payment. That clearly demonstrates the size of the challenge news services has in moving to a subscription or pay to view models.

Readers tend to roam to gather their news with only 35% of consumers saying that they have a favourite site that they check each day. However the big sites; Yahoo, CNN, AOL, New York Times, MSNBC dominate the market. The top 7% news sites attract 80% of the traffic with the top 20 sites attracting the majority of that. Pew's survey claims that 25% of readers now get some news on their mobile phones and sourcing news more frequently on social Web sites.

Advertising continues to struggle and saw its first decline since 2002 and some 80% of those surveyed said that they never or hardly ever click on ads. In 2009n newspaper advertising revenue fell 26%, local TV and radio 22% and network television ad revenue was down 8%. Newspaper industry-wide circulation is falling by 10.6% and a loss 25.6% in daily circulation since 2000. These declines, show a loss in print revenues on top of a loss of ad revenues. Without charging for online newspaper are being hit by a double wammy.

The Wall Street Journal already charges and The New York Times has announced a metered system, allowing readers to click on a certain number of stories for free each month, with fees kicking in for readers who exceed that level. The Associated Press will charge for an application it is developing for use on the iPad, Apple's tablet computer.

The news media is no longer finely segmented into cable, online, network, local tv, magazines and newspapers. They are all going after the same online dollars. Some are part of conglomerates that cross media forms. Finally aggregators are now offering snippets and choice at a click and news on demand. How will news adjust its economic models and its resource in what is certainly a Brave New World?

To read to full report click here:The State of News Media

Newspapers on Demand

Travellers at Frankfurt airport can now access the same day editions of some 1,000 newspapers in 38 languages and walk away with their own printed copy from the store. The Print-on-Demand service was introduced this week at HDS Retail Deutschland’s Virgin Media Store in the Shopping Plaza in Terminal 2. In addition the airport operator's VIP service will also offer the service to international guests.

This obviously is a plus for travellers wanting their local news as they travel but it begs the question why not a digital copy download to a USB stick, mobile or laptop? If the POD machine has access to the content it would be a logical step to offer these download options. Such a service could then be widely deployed using the POD and download hub in major airports and stations and the download only in smaller ones.

Today we have access to literally hundreds of major news and newspaper services via apps on our mobile. Although we experience immediate access, we are often restricted abroad due to internet mobile roaming constraints. However, as wi-fi becomes more ubiquitous and publicly available for free, then the logic of buying a POD machine and the set up starts to look more questionable.

Unroll the News

Can you imagine sitting on a train unrolling or unfolding your flexible screen and having instant access to whatever newspaper you want and merely rolling it up at the end of the journey?

The technology predictions of many in the past may have now landed today and may make it onto the market in a few years. LG, the Korean electronics giant has been showing off news of its 19” wide display, which is only 0.01” thick s, it's slightly thicker than a piece of paper (about 0.06mm), and weighs in at 4.5 ounces. LG say that the large screen is a prototype and the actual mass produced screen will be 11.5” by the middle of the year.

So we potentially have flexibility in the shape of Skiff, LG and the likes of Sony’s full colour flexible OLED displays. However the screen is only part of the equation and we still need all the ancillary electronics, the power, transistors and circuitry. We still believe that OLED offers more than eInk and with other technology platforms moving towards OLED, eink looks a one trick pony.

Herding Cats can be Impossible

Hearst has announced ‘Skiff’ and now finds itself either at worst, working against the news consortium being led by Time Inc’s John Squires which we covered last month, or at best , imposing the adoption of Skiff on the new news consortium. It shows yet again, that sometimes working in cross industry collaberation can be like herding cats. The consortium includes Time Inc., Conde Nast and Meredith.

Skiff, will deliver digital magazine and newspaper content to a number of platforms using Sprint's 3G network and claims to preserve newspaper and magazine layouts via its "high‐resolution graphics, rich typography and dynamic updates." The Skiff platform is not just about technology but also a total ecommerce shop window, ad revenue generator and a one stop shop solution.

Skiff is claimed to be also working with the semiconductor company Marvell to create a "system on a chip" for e-reading. This would then be available to be integrated into a range of devices. Marvell's Armada 166e chip will power the EnTourage Systems Edge reader/netbook, be in the dual-screen Spring Design Alex e-reader, and also the long overdue Plastic Logic device.

Hearst was an early investor in E-Ink and now hopes to establish a uniform platform that will appeal to other publishers for digital delivery to all other devices such as mobiles, netbooks, PCs etc. Skiff has spared no expense in collecting an impressive set of executives which include vets from Sony’s Digital Reader launch, Intel, Microsoft and Apple. There again SpiralFrog had a great board but didn’t deliver.

News Corp Cuts Cloth as Friedman Moves On

News Corp. has had to act in the face of disastrous results and the press is now awash with stories of their various initiatives’. These include; forming a consortium that would charge for news distributed online and on portable devices, a potential move from ‘fortress Wapping, the sale of their free London paper and a pay reduction for Rupert.

Chief Digital Officer Jonathan Miller is believed to have met with news publishers including New York Times, Washington Post, Hearst Corp. and Tribune. Ever since William Dean Singleton, chairman of the AP and chief executive of MediaNews Group Inc., spoke in April against the "misappropriation" of news on the Internet, the momentum to look at charging has been growing. Robert Thomson, Wall Street Journal has gone as far as to call the news aggregators who believe in free content, "parasites or tech tapeworms in the intestines of the Internet."

Although newspapers have built an online readership, the revenue hasn't followed and Internet ads are still not significant. However, erecting pay walls may prove counter productive and just fuel infringement. Instead News Corp. is proposing a single online registration for readers to use across all news sites and to track the stories each person reads. They believe this accumulated demographic would appeal to advertisers but a consortium of newspaper publishers also risks raising issues of antitrust.

Murdoch needs to move fast to stem the flow of a red balance sheet and wishes the new charging model to be extended to tabloids such as the Sun and the News of the World where they believe they can capitalise on the perceived popularity of celebrity stories, scoops and what some may regard as high reader interest and low quality content.

News Corp are also looking to move from ‘fortress’ Wapping in the East end of London which grew to fame through often violent picketing in 1986. It has apparently agreed to occupy about 180,000 sq ft of the Thomas More office scheme, which is big enough to accommodate the majority of its Wapping workforce. This would free up the Wapping site for residential development but even with the Olympics in 2012 the timing in the current climate may prove a bit premature.

Mr. Murdoch’s son James has announced that they plan to close the 3 year old London Paper, which posted a $21 million pre tax loss for the year. The London Paper handed out over 500,000 copies a day, compared with 400,000 for the free London Lite, which is owned by Associated Newspapers. Mind you giving away papers is easy so the numbers are irrelevant really.

Cuts at News Corp. have included large-scale job losses at the social networking website MySpace. In response the 78-year-old Rupert Murdoch's pay has apparently dropped 28% down from $27.5m, to $19.9m (£12.1m) . Although Murdoch's base salary of $8.1m remained unchanged, his performance-related bonus slumped from $17.5m to $5.4m. He did received a $6m in pension contributions and share awards and his son James Murdoch, who oversees News Corp's operations in Europe and Asia and chairs BSkyB television, saw his total remuneration drop from $10.9m to $9.2m.

Finally. Just as if the news wasn’t bad enough, OpenRoad Integrated Media, a new New York based eBooks marketing and publishing start-up, has raised $3 million in funding. What is interesting is that the company was founded only this year by Jane Friedman, former CEO of HarperCollins Publishers Worldwide. She left Murdoch last year and with Chris Lederer, former CMO at HarperCollins aims to go beyond books into “integrated media”. So even Rupert’s ex employees are now striking out to make it on their own.

So where is HarperCollins going and is it a long term News Corp asset or a liability in these changing times?

FT.com Plots Pay-per-Article System

Rupert Murdoch has declared no more online news for free but has yet to declare how, when and the impact is going to be interesting to watch. Now the FT.com aims for one-click pay-per-article system by next summer, and plans a review which could put an end of any free content on the website.

FT.com currently offers users who register their email address access up to 10 articles a month free of charge and some 1.4 million have registered for this service. However, internet users can currently browse a couple of articles each month without registering. An online subscription costs £150 a year, a premium-level service that includes added content such as the Lex column costs £199 a year.

The balance is between offering too much free content, which could result in a reduction of subscriptions and registrations and obviously restricting general traffic that could generate revenue through advertising or converting occasional visitors to paying users. If users can’t get in they may well, irrespective of quality, go elsewhere. Advertising may not be happy with restricting views and effectively containing subscriptions.

So the online questions facing newsprint are not simple and its not certain that the brand and content can always carry the migration from paying for physical newspapers to subscription payments for online. If all you ever buy is the FT then maybe its and easy switch if not pay to read is a pain and subscriptions may not be justified.

Trinity Mirror To Close Down 9 Locals

We all are aware of the advertising and digital challenges facing the newspaper industry worldwide. The locals are being hit hard by free models and a downturn in advertising and the nationals are losing the meatier advertising and are competing with there own free and online challenge.

Today Trinity Mirror announced the closure of 9 UK local newspapers in the Midlands and the lay off of some 120 staff. They are proposing to close the Loughborough Trader Xtra, Lichfield Post, Tamworth Times, Burton Trader, Ashby Trader & Echo, Coalville Echo, Walsall Observer,the Bedworth Echo, Rugby Times and two niche publications, the Earlsdon Blog and Farm Ad and merge the Solihull News and the Solihull Times in Birmingham. In addition Trinity's Midlands printing business is also being impacted by the layoffs.

The problem with the changes that are happening is that they are breaking up the newspaper infrastructure which develops journalists, feeds larger newspapers and news industry with validated stories and sustains many business print demands via their presses. The change could have long term effects on the quality and authority of what we read and the development of people writing it.

Making Your Mind Up or Not?

Apparently by some divine intervention, or stab in the dark, The New York Times will decide by the end of June how to charge content and what content it will charge for. So what are the options that they are considering and what will it mean to their readers the news and the future of the paper?

But in the same week it announced its charging review it also announced that is changing the way it delivers online news to its readers, in rolling out its new Times Reader 2.0 desktop application. The app is built on the Adobe AIR platform, offering a desktop readers news by categories in easy-to-read columns. The important difference will be that the days news is downloaded at the start of the connection , obviating the need to be online to read it. Each section of the paper is represented in the Times Reader 2.0 and appears on the same day it would appear in print. It also provides the user with the opportunity to browser the paper and happen on stories they way they would with the physical paper. It also supports video and crosswords.
The Times Reader 2.0 will be included in the cost of a print subscription. Otherwise, interested readers can download the Adobe AIR application and read the news for a subscription rate of $3.45 per week.

So what about these other options and why the mixed stories. The New York Observer claims that in its report that Executive editor Bill Keller told a staff meeting last week that one includes a "meter system." The user roam freely on the Web site until hitting a predetermined limit of word-count or pageviews, after which after the meter starts and the reader is charged for every movement thereafter. This is obviously fraught with negatives; the user may be prepared to read under the limit then switch off, alternatively set the meter too high and the reader will never pay. The second proposal is a membership to the community. “You write a check, you get a gift and access and join the club. Again how do you plan on such a club having the right appeal for the right numbers to join? It is reported that Kerr said that once the decision is made it may take some time to implement that a pay model may be applied to The Times' mobile Web site first before the Web site as a whole.

So either we have contradicting stories in circulation or NYT is tapping the keyboards whilst Rome burns.

News: Thought for today

Nicholas D. Kristof recently wrote in the New York Times, The Daily Me:

“The decline of traditional news media will accelerate the rise of The Daily Me, and we'll be irritated less by what we read and find our wisdom confirmed more often. The danger is that this self-selected 'news' acts as a narcotic, lulling us into a self-confident stupor through which we will perceive in blacks and whites a world that typically unfolds in grays.”

News is Not Grey

Are those enlarged eInk devices such as the Kindle DX/3, Plastic Logic and other big tablets really going to save the world of the newspapers?

We don’t think so, nor do we believe that replicating a broadsheet on a slab in greyscale is going to turn the masses on. It reminds us once again of Michael Douglas running up the beach with the earlier mobile that resembled a brick or Fred Flinstone reading the daily news from a stone slab. To some size matters but over and over again the consumer tells us convenience, portability, compactness and style score over clunky. Let’s face it the thieves are going to have a birthday with these as they aren’t exactly things one puts in one pocket and they aren’t cheap! Picture a busy tube, bus or train and everyone reading a grey slab.

We think we have already given too much space to the eink slab reader, however we note that eink obviously feel that they are on a winner bring a grey world to the masses. Wired reports that they have released a new line of its broadsheet prototype kits aimed at attracting newspaper developers. The AM-300 kit offers a 9.7-inch display and allows companies to experiment and build their own prototype readers on the larger format. They did something similar in releasing a kit for ebooks last year which was priced at $3000 and was taken up by companies looking to create ebook reader lookie-likies and we’ve see plenty of them!

The new developer kit has a graphical electronic paper display with pen input and also includes a Linux x86 operating environment, E Ink API software for Broadsheet, sample images, open source software drivers and other applications that support MMC cards, Bluetooth and USB. The 9.7-inch AM300 kit will begin shipping on May 27th, priced at $4,000.

We believe that newspapers like all media needs to navigate the stormy waters of digital change, but it has to first decide what it wants to offer, how that offer can be communicated, paid for and value be perceived by consumers. It is a journey of baby steps and experimentation. News isn’t dying, nor is the demand for it, just the way its communicated, consumed and paid for.

Another Day Another Kindle

We have been away on business whilst the Kindle 3 hit the market. The device was as expected and the reaction and pitch has been interesting to catch up on after the event:

Digital Demographics
Bowker, at a BISG's ‘Making Information Pay’ conference revealed demographic information that claimed that older readers are the biggest buyers of ebooks. The statement caused many industry thinkers to start to ponder about the attraction of large print, weight, ease of handling and much more perceptions. The reality is that older buyers are those that buy books full stop; they have more time, disposable income and much more. Is it surprising they are the ones buying ebooks – No? Some would say that it’s obvious that the grey market is the one with the largest opportunity and its somewhat condescending to find it a surprise.

Newsprint and magazines are going to go Kindle.
Newspapers may be going downhill but that doesn’t mean that the wave of large screen eInk devices have the answer. We now have PC news sites, smartphone apps and the ereader device. We know that Murdoch wants one, Hearst wants one and we assume the public want one, but the operative word may be one not three or four.
One important digital newspaper issue is how do readers want the news presented? Do they want it in alerts tuned to their personal preferences? Do they want it to look and feel like a paper, after all it has taken many years to perfect the user experience? Do they want it in summary with detail on request? Do they want ads or ads free? Do they want a fully interactive experience and animated experience or merely a captured textural one splattered with the odd greyscale image? Do they want colour?

Once we have addressed the format then there is the price or subscription issue? Then there is the issue about geography and getting the news delivered locally wherever you are in the world. We could go on...

Making the ereader bigger so it looks like a newspaper may not be the answer.

Textbooks are going to be Kindlebooks
Students are going to embrace the new Kindle. The logic appears to be that textbooks are too expensive so ebooks will take the market. So we expect the students to carry around a laptop or netbook, a Kindle and a smartphone? As we walk around the streets of Amsterdam this weekend we wonder who has smoked the most weed? Students require more than ebooks and they already have laptops and smartphones so why would they spend on a device that will give them nothing they don’t have today? Cheaper books have to be offset against the device cost. Students have to live and study with an open, connected campus world and will that fit with fortress Amazon? Princeton and other campus may adopt the device to drive their paperless dream but why not simply adopt a netbook and offer the student’s real choice. Some may say that its easy to create a news splash but living up to the logic can be hard.

Finally, the Kindle DX is priced at whopping $489, a higher price point than a Netbook.

Standards
The Kindle does not handle epub and the standard’s world will continue to argue that this the biggest weakness. We agree that an open standard is the best way but we also recognise the power and openness of Adobe’s other protected format Adobe eBook based on PDF. It may not offer everything that epub offers, but is supported by the same DRM services, ereader devices and is cheaper to produce. Amazon’s propriety format is either their Achilles heel or their trump card and until we see what others do over the summer, we believe that it remains difficult call for the independent.

Finally, we are disappointed that Amazon chooses to change the name as we were looking forward to reaching the K9 version in the future, but more on the DX brand later….