Outsell Insight - 2010 The Year of the Digital Platform

2010: the Year of the Digital Platform

by Ned May, Director & Lead Analyst - Boston, Massachusetts


* A series of recent industry moves suggests the end of publisher attempts to create a consumer reading device. These initiatives, so prominently announced in 2009, are now giving way to efforts around digital platforms instead. That's good news for all involved.



Important Details: On June 14, 2010 News Corp announced [1] several moves to capitalize on digital content developments. The company acquired the Skiff digital reader platform - but not the actual device - from the Hearst initiative of the same name, and also announced an investment in Journalism Online, and the appointment of Jon Housman as the president of its Digital Journalism Initiatives.

The following day, Next Issue Media -- a joint venture of News Corp, Hearst, Conde Nast, Meredith and Time Inc that is tasked with, amongst other things, developing a digital reader platform -- announced [2] that it had hired a new CEO to replace the interim CEO John Squires who came to the venture directly from Time. The new CEO, Morgan Guenther, brings an outside-of-publishing background but one that centers around digital media and disruptive devices, including two years as the president of TiVo.

Then, on June 29, LibreDigital acquired [3] the e-commerce platform Symtio from Harper Collins. The technology is described as "a multi-channel digital media platform that enables customers to purchase and access digital media - including eBooks, audiobooks, music, and video - online or through an in-store retail card program." Said another way, it is an all inclusive digital media storefront that is agnostic to walls and containers.

Implications: These announcements signal the end of those short lived efforts by many publishers to build a physical e-reader device. The Skiff announcement says as much about Hearst as it does about News Corp. First, publishers should not be in the business of manufacturing (or sourcing) devices any more than they should be in the business of building printing presses. That's not to say that, at the time, the investments by Hearst and others were not warranted nor wise. They were both made as Amazon's Kindle was emerging as a dominant platform (see Insights 17 September 2007, Amazon's Kindle Device Re-Ignites e-book Interest), tipping the balance of power away from the content producers and toward that retailer instead. But with more competition in the device marketplace, not the least of which is Apple's iPad, Amazon's power has diminished (see Insights 10 September 2008, iPod? Check. Laptop? Check. Kindle? Not So Fast) and the point of competition, and thus investment, has now re-focused around the underlying platforms.

Initial speculation around the News Corp announcement was that it might indicate a lack of commitment by them in the Next Issue Media joint venture, given its outright purchase of the competing platform from Skiff.
But seen in the context of this LibreDigital announcement, the appointment of Guenther to head Next Issue seems as important and strategic as any of the announcements. LibreDigital is putting in place the pieces necessary to sell any media in any locale - be it an online storefront, a big box retailer, or a coffee shop. News Corp is merely hedging its digital initiative bets, given the persistent lack of visibility into future landscape of devices, platforms, and business models.

How unclear is this future? The LibreDigital announcement and Next Issue Media's appointment of Guenther to head a digital content initiative point to how truly meaningless yesterday's media containers may become. Pick up an iPad and you have the option to watch a TV show, a movie, or even a live sports event. You also have the option to read news, a magazine or a book - with or without videos - and you can listen to countless audio feeds - from a live stream from around the world to an archived item from years ago.
Finally, you can also play thousands of games, from digital versions of childhood classics to entirely new ones that incorporate the tactile advantages of the newest digital devices. That breadth of choice means content producers will need to either make their content so compelling that at times it trumps the other experiences available or they will need to make their content so devoid of boundaries that it can be delivered as an element of any other experience outlined above.

The smart money is currently doing both - building out proprietary delivery platforms while also engaging in efforts of cross media and cross company collaboration. We advise all participants in the industry to do the same.


Links contained in this article:
[1] http://www.skiff.com/press-release.html" target="_blank [2] http://nextissuemedia.com/blog/?p=142" target="_blank [3] http://www.libredigital.com/libredigital-acquires-symtio-ecommerce-business-from-harpercollins" target="_blank

Links to Outsell profiles of companies mentioned:
Amazon.com, Inc.:
https://clients.outsellinc.com/vendormarket/co.php?c=4756
Apple, Inc.:
https://clients.outsellinc.com/vendormarket/co.php?c=29254
Conde Nast Publications, Inc.:
https://clients.outsellinc.com/vendormarket/co.php?c=4255
HarperCollins Publishers, Inc.:
https://clients.outsellinc.com/vendormarket/co.php?c=3786
Journalism Online, LLC:
https://clients.outsellinc.com/vendormarket/co.php?c=32335
LibreDigital:
https://clients.outsellinc.com/vendormarket/co.php?c=4323
Meredith Corporation:
https://clients.outsellinc.com/vendormarket/co.php?c=6503
News Corporation, Ltd:
https://clients.outsellinc.com/vendormarket/co.php?c=1744
The Hearst Corporation:
https://clients.outsellinc.com/vendormarket/co.php?c=6534
Time, Inc.:
https://clients.outsellinc.com/vendormarket/co.php?c=4365
TiVo, Inc.:
https://clients.outsellinc.com/vendormarket/co.php?c=6813
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