{"id":210424,"date":"2010-01-21T16:24:33","date_gmt":"2010-01-21T21:24:33","guid":{"rendered":"tag:contentnext.com,2010-01-21:article\/419-how-content-companies-should-deal-with-apple-in-an-islate-world"},"modified":"2010-01-21T16:24:33","modified_gmt":"2010-01-21T21:24:33","slug":"how-content-companies-should-deal-with-apple-in-an-islate-world","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/210424","title":{"rendered":"How Content Companies Should Deal With Apple In An iSlate World"},"content":{"rendered":"

\n\t\t\t\t\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\"Arnon
\n\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t<\/p>\n

Arnon Mishkin is a partner with Mitchell Madison Group<\/a>, where he consults for media companies on improving legacy businesses as well as making the internet profitable. Prior to MMG, he was a partner at the Boston Consulting Group, where he did some of the firm\u2019s earliest work on the web.<\/em><\/p>\n

Most content creators (who once thought they were kings) are clearly looking forward to the launch of Apple’s iSlate, supposedly next week. Indeed, there hasn’t been this much anticipation about the unveiling of a tablet since, well, biblical times – and maybe not even then (because this time, the former slaves are ignoring the golden calf, i.e. Steve Balmer’s Window’s tablet).<\/p>\n<\/p>\n

I happen to think much of the optimism is well-placed. The iPhone – and presumably the iSlate, which is said to be an “iPhone on steroids” – will most likely enable companies to supply full apps rather than simply browse-able (and thus disposable) web pages. (See my previous piece<\/a> for more detail about how apps benefit content companies.)<\/p>\n

Moreover, because of Apple’s knack for using new approaches to existing technology to redefine not only the businesses it enters but also adjacent businesses, it is likely that Apple (NSDQ: AAPL<\/a>) will find innovative ways to “leapfrog” the existing products; the iPod re-defined the music business and the iPhone defined the mobile web. The iSlate will be designed, priced and promoted in a way that will create a market for iSlate apps, just as Apple created a market for iTunes and iPhone apps. One can be fairly confident that the iSlate, unlike other e-readers, will expand the nascent market for mobile-content devices.<\/p>\n

But over the next few years, content creators and audience aggregators should be careful about how they deal with the e-readers or it could turn into primarily a bonanza for Apple, as the Kindle may be primarily a bonanza for Amazon (NSDQ: AMZN<\/a>). With the launch of the iSlate, Apple (and its iTunes store) could truly turn into the mythical tollgate on the content web, supplying music, apps, print and movies to their market-dominating media players. <\/p>\n

For music companies, Apple’s tollgate has accelerated the destruction of their business model. iTunes has torn apart the original bundles of records for consumers who were not already pirating the music, thereby reducing the importance and profitability of the record companies. Amazon (with its Kindle) and Barnes & Noble (NYSE: BKS<\/a>) (with the Nook) have the potential to diminish the importance of publishing companies and could wind up cutting deals directly with authors.<\/p>\n

But tollgates don’t always destroy the economics of an industry—sometimes they police it. In the mid-1980’s, the cable operators had made themselves into a very effective tollgate between content producers\/cable networks and their subscribers, who paid a monthly fee to receive a better signal and a range of cable-only products.<\/p>\n

Originally, most of the cable networks offered their programming for free. Content was king. Audiences were beginning to flock to cable.  And investors believed that there was a windfall in cable advertising due to the stronger ability to target audiences. But soon enough, it became clear to cable companies that they were not going to be profitable from advertising alone. Just as today, no one felt they ought to pay for CNN or ESPN (NYSE: DIS<\/a>). But the companies were able to go to the operators, as personified by John Malone, and make the case that unless they shared in the monthly fee that the cable companies got, they would go out of business.<\/p>\n

Malone, known more for his ability to get ownership shares of networks he programmed than for spontaneous generosity, did not want to agree. In fact, in the case of CNN, he personally convinced NBC to begin planning a cable network of its own, as a negotiating ploy against the over-leveraged Ted Turner. But, in the end, the cable operators agreed to pay fees to the content creators and aggregators.<\/p>\n

Obviously, it’s too early to say whether Apple is going to become that tollgate—and it’s too early to figure out its impact on the content creators. But even today, they need to think carefully rather than just experimenting with how they want to contribute to the anticipated iSlate and the plethora of other existing or announced e-readers.<\/p>\n

Among the questions to address are:<\/p>\n

1. How do your customers’ needs and wants differ by digital channel?<\/p>\n

2. How do your tablet initiatives fit in with your overall digital strategy?<\/p>\n

3. What is the meaning of your brand(s) in a tablet world—and how can you maximize the brand value of bundles of your content, rather than isolated bits of it? For example, magazine businesses, to avoid the fate of the music labels, need to figure out how to maintain the brand of the overall magazines, rather than individual stories; in other industries, the companies need to decide if the most potent expression of their brand is some bundling of their existing web products, or the creation of a new, more segmented product, and whether it makes sense to also sell through some larger consortium of publishers. <\/p>\n

4. How much value are you delivering to the tablet company and how do you approach licensing your products to them?<\/p>\n

5. Whether and how to participate in the various consortiums—are you doing it to make your consortium the strongest player or to gain advantage to help negotiate with the tablet companies.<\/p>\n

6. How to use one’s free web sites not as a way of cannibalizing other sales but to promote tablet sales and subscriptions. For example, while the New York Times (NYSE: NYT<\/a>) tries to promote its “skimmer” on its web site, it does not demonstrate any superior product features or content on that skimmer.<\/p>\n

7. How to promote tablets without getting wedded to one platform over another.<\/p>\n

8. How to try to ensure that there isn’t just one company that functions as a dominant tollgate; and if such a dominant player does emerge, how best to manage relations with that company.<\/p>\n<\/p>\n

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Arnon Mishkin is a partner with Mitchell Madison Group, where he consults for media companies on improving legacy businesses as well as making the internet profitable. Prior to MMG, he was a partner at the Boston Consulting Group, where he did some of the firm\u2019s earliest work on the web. Most content creators (who once […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-210424","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/210424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=210424"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/210424\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=210424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=210424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=210424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}