CES 2007 Video Explosion, the Digital Future and Your Internet Publishing Strategy

Will dedicated digital readers using e-ink technology save the “printed” word?

As I fly east from CES 2007, I am contemplating the new Internet Gold Rush. While most publishers are still focused on using the Internet to deliver text and pictures, the world’s video producers, including millions of amateur video makers, are already streaming their content over the Internet. Experts count as many as 10 Internet TV (IPTV) protocols that will soon be bringing video to your computer, TV and mobile phone. More than 60 percent of U.S. Internet users have experienced video over the Internet.

Yahoo!, for example, is deploying a new video service that will include content from professional producers and user-generated content (UGC) from Google’s YouTube. Apple and others are deploying remote set-top boxes that will allow you to watch digital video content stored in your living room on any TV or computer in your home. And Comcast is partnering with companies like Sling Box to allow users to view content stored on their set-top-box DVR (digital video recorder) anywhere on the planet via the Internet on their computer.

Why print publishers should care about the video Internet explosion

Consumers have only so many hours in the day. They are NOT dramatically increasing the time they spend consuming media. They are dramatically changing which media they spend time experiencing, viewing, hearing and reading.

As the chart above shows, traditional use of offline media continues to decline
for online users. TV, radio, magazines and newspapers seem to be most impacted
by this dramatic change in media consumption patterns.
(Image from: Presentation “Surveying the Digital Future” A Project
of Centerfor the Digital Future—USC Annenberg School, 2006)

In setting your near and long-term Internet publishing strategy, you might start by thinking about your readers as users and how they will prefer to consume the type of information and entertainment you produce in the digital future.

  • Is the information best presented as text, pictures, audio or video?
  • Is the user experience enhanced when the content is interactive?
  • Is the user browsing for content they did not know they needed, such as breaking news?
  • Is the user looking for reference information that answers a specific question?
  • Is the user looking to be educated about a complex topic in depth?
  • Is the user looking to subscribe to an expert feed to stay up on a subject over time?

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Digital readers are the future of the printed word

In the future, the printed word will be digital. The Internet will replace both the post office and retail store as primary distributor of books, magazines, newsletters and newspapers. After more than a decade of investment, 15 companies will roll out digital readers this year using e-ink technology. Many will be digital readers tied to a daily newspaper and will be given to readers free when they commit to a digital newspaper subscription for one or two years. The economics for newspaper publishers are a no-brainer—give the reader a $200 device (the publisher’s cost) that will eliminate $100 to $300 in annual printing and distribution expense per reader and become a digital publisher.

It will take five or ten years for most major newspaper publishers to convince their readers to switch to a digital reader even though the user experience is compelling:

  • A lightweight, almost paper-thin device that is truly portable
  • Access to updated content throughout the day
  • A familiar page layout that can be browsed, page by page
  • Web-like hyper links that offer direct access to any page with one touch
  • New content every day (or every hour) and access to the newspaper’s archives
  • A battery that lasts for 50 to 100 hours because the display only uses power to change the content on the page or access the publisher’s remote server
  • A screen that reflects light, making it easy to read in sunlight, because it is digital “ink on polymer”. (It really does look like 120 dots per inch ink on paper!)

But what of magazines, newsletters and books?

Newspaper publishers, based on their new digital distribution platform, high frequency and geographic relevance, will once again rule the domain of print media.

In addition to their own content, they will become distributors of vast libraries of digital books, newsletters and magazines that can all be read on the digital readers they give to loyal newspaper subscribers. Those subscribers will be offered the opportunity to add books, reports, newsletters and magazines to their digital library on a one-shot basis. They will also be offered premium subscription services that include thousands of books and periodicals for a single monthly fee. Books will become shorter in length as they no longer rely on girth as a selling point. Magazines will become shorter and more frequent as they lose the need to bundle content and hold it for weekly or monthly printing and distribution efficiencies.

Other non-newspaper aggregators will also emerge offering a free reader when users join a magazine or book club and agree to spend a minimum amount each month on content. Look for companies like Verizon, AT&T, Sony, Apple, Phillips and HP to lead the charge, perhaps partnering with Zinio or Texterity for the library management software and user interface.

Amazon and Barnes & Nobles will be forced into the conversion or risk becoming irrelevant in a future where digital readers that offer access to every newspaper, magazine and book in print are as common as cell phones and TVs. Imagine a future B&N store that looks like a giant Starbucks inside that offers you and your digital reader wireless, unlimited access to their entire inventory—while you’re in the store. And for a small fee, books and periodicals previewed on your reader in the store, can be added to your personal digital library—available to you forever via your personal digital reader.

The publishing economics of digital readers are overwhelmingly positive.

The user benefits are becoming increasingly clear.

The winners in digital periodical and book publishing will be tied to the user interface that tips users away from their beloved “ink on paper”; to “e-ink on polymer”.

Special-Interest Media Internet Publishing Strategy 2007

For now, we must prepare for the shift and keep a close eye on the big players.

  • Build digital relations with your customers through the web, email and RSS.
  • Grow your multimedia skills using text, pictures, audio and video.
  • Diversify onto other platforms, such as TV, live events and digital books, magazines and newsletters.
  • Become a user of new media, such as blogs, podcasts, text messaging and video on demand.
  • Be the domain expert in your special-interest niche.

The digital media revolution is just beginning. Change will be chaotic, rapid and inevitable. As an industry, we will make many false starts and mistakes. But there is no denying the digital future of book and periodical publishing. It is happening now and the adoption rate will do nothing but accelerate.

At the end of the day, we have three choices:

  • Be an industry innovator and invest heavily in unproven media technologies, formats, and channels, knowing that only one in 10 will pay out.
  • Be a fast follower who knows who to follow.
  • Get out now while you can still sell an “ink on paper” print media company.

Agree, disagree or add your own perspective on the digital future below…

All the best,

Don Nicholas

Disclosure: Don Nicholas and the Mequoda Group are investors in and advisors to numerous media and high technology ventures covered by the Mequoda Daily Network. All content Copyright © 2007 MequodaDaily.com


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