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Twitter, newspapers, new media – some observations

Published on: August 03, 2010

Have just got back to the office from the Australian’s new media breakfast and given the wide range of views, questions about the iPad in the discussion I thought I would see how the iPad worked for doing a blog on the topic.

I am using the Wordpress app, and so far it seems to be working fine – havent had any success accessing Wordpress for my website via Safari on the iPad, so the app seems essential.

Anyway, the discussion at the breakfast which was kicked off by Richard Freudenstein who is CEO of The Australian focussed on the iPad and similar tablet devices and what they meant for newspapers. In particular, would people be prepared to pay for content on the iPad when they have not been prepared to do so on the Web.

Here are some observations which broadly summarise what I said at the breakfast.

1. The question of “will newspapers survive?” is really the wrong question. Nobody imagines that we will get to a point anytime soon when there are no newspapers at all. But the fact is that the newsmedia landscape has become vastly more competitive than could have been imagined a generation ago and as a consequence the profitability of newspapers is under siege. A good if gloomy metric to contemplate is the share price of John Fairfax Group. It is about where it was in early 1992.

2. There are some categories of advertising which are much more amenable to the functionality of the Internet than to hard copy. Employment ads, most classifieds and increasingly real estate are good example. To date display advertising has remained more attractive in hard copy (especially magazines) but the iPad-type format has changed that. Display ads on the iPad are more compelling than even the glossiest magazine.

3. There is so much free content on the Internet, in particular free news content, that newspapers will struggle to generate online circulation revenues that match their old hardcopy circulation revenues. Because we have all been used to paying for financial news content, specialist journals like the FT or the WSJ have a big advantage. The jury is out as to whether enough people will pay enough money for online content from a general newspaper when there is so much free news content available. Put another way, how many people will pay to read The Times and Sunday Times (of London) online when they can access all the other UK newspapers online for free. Time(s) will tell.

4. Web browsing on the iPad is very good, I find. So while I think The Australian’s iPad app is terrific and is a better browsing experience than its website, it is not dramatically better and so the premium I would pay for the iPad app is not going to be very large if the website remains free (which it probably won’t). Clearly if there is more content on the newspaper’s free website than on its pay iPad app, there isn’t any good reason (other than curiosity) to buy the app.

5. The big question which was canvassed at the breakfast this morning was whether and to what extent the big news brands, News Ltd, Fairfax, ABC etc, would continue to dominate news coverage. Everyone on the panel (especially those from News Ltd) thought they would. Maybe. I am not so sure. The ability of new brands to break into Internet categories disruptively has been proven again and again. Yahoo looked pretty dominant before Google didn’t it? But again the big question is this: will the established brands remain dominant sources of online news IF they put up pay walls and others do not? I observed this morning that this reminded me a little of the argument being put fifteen years ago or so by people like AOL in favour of “walled gardens” where people were (apparently) going to prefer to access all their content within the confines of a particular portal. What is most amazing is not that companies peddled this line, but that so many people believed it. Invariably people will seek greater choice, greater freedom. Thats human nature. As to the economics that line of Murdoch’s I quote so often comes back to me: “The Internet will destroy more profitable businesses than it will create.”

6. The role of online media and the election was discussed. Here it is pretty straightforward I believe. Politicians and political parties are in the business of communication which means they need to use every means of communication available to them. The social media in particular enable politicians to communicate directly with the electorate without being edited or filtered by the traditional news media.

7. Another topic touched on was the use of iPads/tablets for education. Here I think it is fairly clear. A textbook on a tablet has so much more functionality than a hardcopy textbook, the advantage is obvious. It seems a no-brainer to me that once tablets are more affordable they will increasingly become a medium by which we will view more and more content which we traditionally read on paper and that will include students as well. Personally one of the best things about my iPad is the way in which it presents not just books but all documents. You have the same ease of page-turning like access with better graphics, ability to zoom in or out and so on. I don’t think I will be reading any more committee reports in hardcopy.

8. In terms of the evolution of the media, a generation ago there were a limited number of windows (media) through which the public could receive content. The providers of the content (writers, producers, actors, publishers) were at a disadvantage relative to the owners of the windows (newspaper proprietors, television proprietors etc). Now however there is an almost infinte range of windows and the Internet and social media offer the theoretical potential at least for everyone to publish to the widest possible audience. So inevitably it seems to me that greater leverage is now with the content creation side of the media business. Logically that would mean journalists and writers will do better in an online world – but if so much content is free will they be able to capitalise on that change of leverage?

That about covers this morning I believe. The advent of the iPad begins a new era of tablet devices. Inevitably they will soon have functionality currently denied to the iPad by Apple – telephony, full range of computing functions and so on. And as we have seen with so many other devices this will all drive the demand for more and more wireless broadband, a point Senator Conroy seems to have missed.

Final observation. The winners online will not be those with the best technology, but with the best technological imagination. Very little that has happened online in the last ten years would have been predicted ten years before, so be bold and dream big dreams. They are more likely to be realised than you think.

42 Responses to “Twitter, newspapers, new media – some observations”

beeso says:

Walled gardens are increasingly irrelevant. I follow writers who i trust and are recommended to me, through things like twitter and rss, i have no loyalty whatsoever to a media company, in fact i think they are so slow to react they are increasingly being left behind, despite the talent they have writing for them.

Interesting thoughts. I don’t have much of an argument against what you are saying at all. What I find very interesting is that while the big, traditional news orgs are struggling, there are blogs that are quite profitable thank you very much, and growing.

Take a close look at the some of the most popular independent blogs in the world http://technorati.com/blogs/top100/ They are profitable, or about to be.

They also have readerships that are climbing every month and some are well over 10 million unique visitors a month. In the case of The Huffington Post (“The Internet Newspaper”), I understand it is a lot more than that.

The situation looks different if you just look at the Australian situation. Can you make substantial money from a blog just aimed at an Australian readership? We’ll see. Maybe it won’t be the big news orgs that do it.

John says:

This is all wonderful Malcolm but if the broadband plan gets scrapped as the liberal party are talking about if elected, new media won’t be very good as we will be stuck in the stone age with terrible internet speeds.

Simon says:

The question of use in education is key here. A focus on the brand of the iPad in particular I think is foolish – in Australia, a Kindle costs about one-seventh the price of an iPad. It has all the functionality for reading schoolbooks and simple websites and features none of the distracting games which continue to pose problems for teachers in schools with laptops or, worse (as some schools have quite foolishly begun adopting) iPod Touchs.

As for ‘replacing’ newspapers, I think the only way apps will gain any success is if either more effort is put into making the app high quality, or – more likely – the website itself goes behind a paywall. As it stands there is little to no reason to pay for a newspaper’s iPad app.

Malcolm Turnbull says:

Simon, you may well be right. I am not hung up on the iPad – clearly cheaper tablets with more functionality will emerge and they will compete in this space and especially for education. The iPad has trumped the Kindle because of its better graphics, colour, etc etc. But eInk does have appeal for many because it is easier on the eyes. So this is a “tablet revolution” in which iPad is the harbinger, not an “iPad revolution”.

beeso says:

But you are missing the big key advantage of an ipad over a kindle, the apps. Dept of ed can write specialist apps for ipad that make it ten times more functional and useful than a kindle. And text books demand colour.

Malcolm Turnbull says:

I don’t deny the advantages of the iPad of today vs the Kindle of today – my point simply is that we will shortly have a number of tablet devices with more functionality than the iPad of today which presumably will evolve to compete.

Rob Manson says:

It’s interesting to note that we’ve already reached an inflection point for books on tablets. Amazon claim that in the last month they sold 180 Kindle books for every 100 hardcover books.
http://techcrunch.com/2010/07/19/kindle-sales/

But I think that techcrunch article misses a key point. While at the device level the iPad is competing directly with the Kindle…I believe the iPad is actually opening up a whole new flood of Kindle book sales. The Kindle App on the iPad is really compelling because of the wide range that Amazon provides and the ease of the “one click” purchases. Personally I’ve spent a lot more on books lately than I did over the last year or two…and none of them were paper based…or read on a Kindle device.

Interesting piece Malcolm…

Nick Porter says:

In reference to point one I tend to agree with @beeso.

Newspapers/media organisations are only as good as the people who produce their content.
We currently identify with a ‘brand’ like SMH or Daily Telegraph however this will shift more towards the individual writers and their own name/identity will become the new brand.

I believe media organisations will evolve more into the role of aggregator for these individual journalists/content producers.

If and/or how these organisations/individuals will profit from this content is still going to take some time to resolve.

beeso says:

I’ve bought about 15 books for kindle on iphone/ipad

Adam says:

The iPad is becoming more common in the lectures I give – in a class of thirty it seems that at least one or two students will have one, and in a bigger lecture the numbers increase accordingly.

The important thing with an iPad, though, is that the functionality is reduced to match what works within that form factor: while I agree that I’d like to see a bit more, the Microsoft tablets never took off except in niche markets, and they had a much higher level of functionality. Price played a part in that, but they also had much shorter battery life, apps that were designed to work primarily with a keyboard or precise pointer (pen or mouse) instead of a finger, and longer boot times. If the iPad’s functionality was increased, it is likely to tend to start suffering from those problems – the clever bit, for me, in the iPad’s design was cutting it back to something that works in that form factor (media consumption) and leaving the existing devices to focus on things that work better on them (media creation).

As an side, I’ve spent a lot of time working with the eInk devices, and I love them – but they are limited to reading text, as the refresh rate is low. The iPad isn’t as good at reading text, and costs more, but it replaces that with a screen appropriate for a wider range of tasks. If I just want an eBook reader the Kindle or alternatives are wonderful – but if I want something to take a few notes, get email, watch some videos, and do some quick online research, the tablets will win. :)

beeso says:

I also tend to think that tech that is shipping now with known feature sets is a lot better than tech that has been announced that we might never see.

adam says:

@Simon, @Malcolm, @Besso – Apple have always been strong in the educational sector and they are working very closely with schools, colleges and universities in the US. So that and the point that beeso made about colour and the ability of an education department to write their own apps (inc. to disable parts of the iPad) will mean that the iPad is going to be a the forefront of the education revolution, not the Kindle.

As for Malcom’s comment on wireless internet yes we are going to need a good wireless internet but that costs MUCH less and the telephone companies are more than capable of providing that themselves without government funding at all. This is where competition will be very strong as there are some very good technologies emerging in this area. But we will still need the NBN. Wireless internet might be able to reach similar speeds in burst mode but it won’t be sustainable for bandwidth hungry applications that might be used in hospitals, classrooms and at home. The benefits in hospitals and classrooms and business are obvious. But at home the applications take a little more imagination and this is good because it means there’s a lot more business opportunity out there once the NBN is in place. Perhaps the most obvious is high def. video streaming for movie rental, on the same internet connection which provides VOIP services and connects to your utility providers helping you reduce electricity and gas bills. There’s so much yet to come and the NBN is going to be core to that.

Coggins says:

Newspapers like the closed app world because they believe it will allow them to put the distribution genie back in the bottle. Initially consumers like it too, because the presentation is slicker and simpler than on the web. At the same time, we have become accustomed to the power of aggregation online, and I think that as more attractive third party news apps/sites/platforms come along that pull in feeds and rich media from many (user customised) sources, people will start to feel that traditional newspapers, whether paper or digital, are somewhat limited. Some smart old media houses will find a way to evolve this way, many will not.

@beeso In the specific case of the iPad, the Dept of Ed can only write specialist apps at the mercy of Apple. An open platform like Android or even Windows will be a much more appropriate choice for Education, although the hardware does not yet exist.

Malcolm I think you are missing the edgy unbroken water on this technology wave.
You are talking about the tools.

I suggest you engage, as a civic leader, the far broader opportunity that the wave delivers in preparing for the “pull” power ordinary people now have.

As I understand it, when the “push” power of the printing press began its epochal era the power was in the hands of the printers. Within a hundred years they were put into the back room by the new entity of the publisher.

Today the “push” industries are rolling out the very technologies that can and will place the power of the “pull on demand” for a few cents into the hand of the consumer.

I would debit a few cents for an article by Malcolm Turnbull if he published an article on a subject on my interest list. Who needs Fairfax or News? On a per article basis I am sure you would be ahead on the deal. There would be a base rate and it would adjust down in line with the popularity of the article. We do not want to make you too wealthy. I could write the logic of the code easily using my old Cobol or Assembler language coding.

Whether they arrive on the iPad or a nice cheap little device from China, who cares.

The sleeping giant of public awareness of our “pull” power needs to be given a shake. That is our current challenge for the next decade or so.

Cheers

beeso says:

Coggins
You really need to read more. Dept of ed can write specialist apps that don’t go thru the app store like this http://www.apple.com/iphone/business/apps/in-house/
right now, on a device that exists, is proven to work and there are hundreds of developers for.

Michael Byrne : ww.localforlife.com.au

beeso says:

I really think someone like the abc which has a huge range of content could build an app like flipboard to quickly scan through and pick out what you want.

It’s no so difficult. Apple lead the pack with innovation, functionality, ease of use and product quality, and open-source a good bit of it (e.g. Google Chrome). Google will keep the pressure on Apple to continue to innovate, and the mainstream will move to Android/Chromium. Microsoft will focus on the games they do well as they lose their limited mobile share and desktop dominance. All we need now is ubiquitous, reliable broadband. Kindle has probably seen its day.
Beeso is right – Apple has provided all the developer tools needed for in-house deployment.

Stephen Coates says:

I tend to agree with the theme that news is more and more Pulled by the demanders, rather than Pushed by the suppliers. This weakens the stranglehold the suppliers (bricks and mortar newsapapers) had in the first place. I continue to believe that users don’t entirely remember where they got the news (do we care) but we do remember where we got it FIRST. Those that can be early adopters clearly gain an advantage. If I want news do I wait for it to be in tomorrow’s paper newspaper, or do I follow newsmakers / reporters on Twitter? Clearly I follow Malcom…

Janne Ryan says:

The iPad is becoming the new place for reading, viewing and browsing. But it isnt revolutionary, as per Jobs promise. It is a stepping stone in terms of getting some new skills. This is why I bought an Ipad .. to learn incrementally the new skills. Like learning to drive a car. The iPhone was the revolution.

Coggins says:

@beeso I stand corrected, thanks for helping to remove a small chunk of my vast ignorance. And I agree that it is foolish to get overly excited by vapourware that is always just around the corner.

Julia thornton says:

Re point 5. I tend to agree with you, Malcolm. And it is sad that News executives don’t fully appreciate the opportunity before them. If I was in charge, I’d be creating apps of old, popular publications. They’ve only just put together Taste, but it has only 70recipes.

And I think a lot of people who are sick of carting their home delivered carbon footprint to the bin each week, will pay a bit more for the content. I paid $1000 for my iPad. I’m hardly going to baulk at $5 a month for a newspaper.

Totally agree with all points Malcolm. I was saying these very same things to a friend this morning. (Synchronicity is a wonderful thing.)

I feel the news agencies should concentrate on how they are going to create revenue sufficient to pay the Editors and Reporters, because professional reporting which is fully vetted is the one thing the internet generally lacks. The opinion chatter is so loud and diverse that those who have done the job of ferreting out the facts are in short supply and hard to hear. To me the traditional paper news sheet is a thing of the past already. Only the quality of content matters now. News agencies are no longer in the business of cutting down trees, mashing ink onto them and dropping them in driveways. It is now incumbent on “the press” (now an oxymoron) to pay the rate for the reporting and surface it on the net in a compelling, easy to find and quote way… fees be dammed.

Paul says:

Great Speech Malcolm. I was there and thought it was great and those people that have commented above should have been there!
My personal opinion is that if you want functionality, you want to use the internet, read a book/newspaper, write a few notes or have fun playing a game then the ipad wins!
Thanks Again and i hope you become PM

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molly says:

cannot beleive as a business man you are against the NBN , i dont have to tell you the benefits of this, why would you accept this shadow min.
Surely finance is where you should be.
or leader.

Richard Ure says:

@ Darin, “Only the quality of content matters now.” Meanwhile the quality is in decline as some (nameless) media organisations switch from news to propaganda while complaining readers are reluctant to pay. I can imagine paying for content and never getting to consume it because there is so much accessible competitive content to catch one’s eye

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