On monday evening i tweeted:
#nyt #timesreader2.0 IMHO more important 4 newspapers than all #eReaders. AAPL media pad has 2 support AIR until Canvas + CSS kick in
Since some context had to miss from this tweet, and threaded discussions are difficult to do on twitter, i’ll try to explain my rationales for this tweet over here.
Lets look at “#nyt #timesreader2.0 IMHO more important 4 newspapers than all #eReaders.” first. I’ll cover the “AAPL media pad has 2 support AIR until Canvas + CSS kick in” part, in a separate post (due to its more technical nature and my time constraints)
On May 6th both the Kindle DX and the NYT TimesReader 2.0 were launched. While the DX launch was eagerly anticipated and covered by nearly every publication (see e.g. WSJBlogs, WSJ, PaidContent (more), Engadget, ReadWriteWeb, DownloadSquad, …) , the only publication that covered the Times Reader 2.0 launch and caught my eye was the mediashifd blog.
Although the Kindle DX launch was mainly about textbooks, New York Times chairman Arthur Sulzberger characterized the subsidized (around $290) bundling of a NYT subscription with a Kindle DX as an “experiment” and this bundle is only available where there is no home delivery option (i guess these places are hard to find in the lower 48), the general anticipation and reporting was around the lines of “will this be the future of newspapers”? The analysis and reporting on the TimesReader 2.0 was more or less not existing.
So how do i dare to have a different perception of the respective relevance of the two launches?
NYT on all platforms
But before we dig into this, first an important message to the newspapers. The parallel launch of the NYT on the Kindle DX as well as Times Reader 2.0 is a perfect example of the mantrai’m telling newspapers and other newsorganizations such as news agencies :-)
“Try to be on all platforms, instead of try to be THE platform”
Which is btw. the direct consequence of one of Jeff Jarvis favourite quips: “If the news is that important, it will find me” (a quote from a college student that originally appeared in this NYT article).
The NYT understood that it has to be on all platforms and provide the best possible reading experience on them, for the geeks as well as their general audience.
Since a couple of pictures tells more than a lot of words watch this video with Nick Bilton (of NYT R & D Labs) (from Nieman Journalism Labs).
Rem.: Love to see the chumby in the video. Chumby / Yahoo Widgets on the big screen are definitely the next thing to watch
So after this introduction lets see some additional arguments why the launch of TimesReader 2.0 is more important than the Kindle DX.
Mono-functional vs. Multi-functional ereading devices
I’ve argued for a long time (at least 2 years) that multifunctional (read: devices capable of full web browsing, color, videos etc.) are better suited ereading devices for general audiences than the monofunctional devices that current eReaders (like the Kindle, iLiad, …) are.
This is the reason that my favourite eReading device right now is the iPhone/iPod touch. It lets me also watch movies as well as google tech talks etc. use all kind of applications (right now i guess 50+ apps are installed on my iPhone) and even let me build new apps myself.
There is no way of saying that the iPhone as a device is no success. There is also no way of saying that eReading on the iPhone is no success. I personally read through a couple of books using Stanza and other eReaders, regularly use the NYT, WSJ and HuffPost apps (as well as a couple of apps by german publishers), and the fact that Amazon bought Stanza and just yesterday updated its own app (Bits) as well as added an iPhone/MobileSafari optimized version of its kindle store (CNET, CIO).
For the curious: My dream eReading device has for years been an Apple media pad. Right now my specs for this device read as follows: around 1.5 pound (hopefully lighter), beefed up iPhone OS (or better dual boot, full OS at a premium price), 7 – 10” display, wi-fi 801.11n plus 3G, all app store goodness, bluetooth for external keyboard connectivity as well as all other bluetoothy things, plus a PixelQi multitouch display.
The exiting thing : everything except the PixelQi display is available right now, the PixelQi schedule will allow for a WWDC presentation (or a launch at the traditional september special event).
Installed Base & Availability devices vs. PCs
The kindle devices definitely are by far the commercially most successful eReaders. Since Amazon is not giving any numbers one has to rely on estimates, closing in on around 400000 Kindle 1 and around 800000 Kindle 2 at the end of this year (TechCrunch on WaPo). Let’s be optimistic and say that there will be 1.5 million devices out there at the end of the year. This might be grow significantly if Amazon can figure out how to do a deal with other operators in order to do launch globally. But this would also mean another set of devices (presumably with a UMTS connection and or WiFI)
Let’s compare this to the number of iPhones and netbooks sold: The latest numbers for the iPhone/iTouch i could find easily are from the last quarterly conf call, saying that 37 million devices have been sold until the end of march with around 3.8 million iPhones sold each quarter. (Apple, CIO). Hence there is a good reason that both Amazon and NYT have launched iPhone apps.
The latest figures on the netbook market are estimates of 26 million units sold in 2009 (iSuppli), and 14.6 million units sold in 2008 (engadget). So we are talking 40+ million netbooks at the end of the year.
The engadget article also says that the 14.6 million netbooks represent 11% of the total notebook market meaning giving us an estimate for this market at around 132 million in 2008.
Rem. 1: A very good post on the perceived vs. actual market place impact of the kindle, blu-ray and friendfeed that helps us geeks to remind us that the general audience still sees things differently.
Rem. 2:Multifunctional devices are also more cost effective to produce than eReaders. I think it is safe to say that at least 10x the number of 9”’ and 10” inch displays are manufactured than eInk displays (this should be easily accounted for by netbooks alone let alone all the other type of devices with lcd screens). According to BusinessWeek iSupply estimates costs of $60 for the display of the kindle 2, and since the kindle dx display is 2.5x the size i think it is save to estimate the price of the display to be at least 2.5×60= $150. Meanwhile the latest figure for 10” lcd screens i could find around $40 (CIO), the same price range as the lcd plus capacitive touchscreen component for devices with a 320×480 display like the iPhone and the PalmPre (EMSnow). Lets also assume that a higher quality screen with higher resolution will be double the cost of an average 10” display. Then we will end up at $80, a major saving wrt. an eInk display. PixelQi also promises to be a game changer on price
Newspaperish Look and Feel
I already hear a lot of web advocates saying “WTF” should we use a dedicated application like the TimesReader when the browser is a much better and much more versatile way to read. Like this tweet from the ever outspoken Mark Pilgrim:
TimesReader 2.0, powered by Adobe® AIR™ http://is.gd/1JFg – hey dumbasses, you know what’s good at displaying text? a fucking browser.
As much as i like Mark Pilgrims work and rants, i think the reason that right now general audiences wouldn’t agree with that (especially until their browser doesn’t support css-multicolumn, but that is the topic of the explanation of the “AAPL media pad has 2 support AIR until Canvas + CSS kick in” part of my tweet.
I believe that feed based publishing / reading of news (see my essay / post on “Why feeds matter” which is also already over two years old) is not ready for general audiences and especially not the average newspaper publisher. They both still need a product /application that is close enough to the product they know: the printed newspaper.
The challenge is to build a product that delivers such an experience while using standard web technologies. Nick Bilton gives a perfect analogy in the video above: While there is a web version of twitter, most people use applications like Twitterific, Tweetie, Tweetdeck etc. to use Twitter. TimesReader is to the NYT what these applications are to Twitter: It exposes a better user experience and it enables monetization.
Rem. 1: IMHO there is one interesting difference between Twitter and the newspapers n the web: Twitter, different from the newspapers was successful in building a thriving web property without exposing too much functionality and leave enough room for monetization. This is most often characterized as “Twitter does not know where to make money from”. Newspapers will never be able to get back to paid content in the traditional web.
Rem. 2: I didn’t sniff into the content exchange between TimesReader and the NYT servers, but i expect them to use the NYT APIs to fetch the content similar to Twitter apps using the Twitter API.
While i never paid for twitter i already paid for Twitterific and Tweetie on the iPhone and might be willing to pay a couple of dollars for Tweetdeck.
TimesReader 2.0 (opposed to 1.0) has a very good monetization strategy:
- The user experience (offline-reading, multi-column reflow, big pictures, …) together with enough content that is freely available make the application useful for the users that don’t want to pay.
- It triggers new subscriptions at a reasonable price. This subscription povide the comfort of offline reading.
- The electronic subscription is free for all existing print subscribers
- There is always a deep link to read the content behind the paywall on nytimes.com
Especially the last bullet point is often overlooked. AFAIR TimesReader 1.0 offers only 1 (have to start it up again).
What is important is that the NYT is in complete control of the monetization, as opposed to the 30% rev share that Apple is taking with Apps in the app store. Don’t get me wrong, i think that 30% is a fair deal, giving the complexity of the operations, and given the rev shares that mobile operators take out of premium mobile services.
It is especially of if Amazon stcks with it’s 70% revenue share (yes 70% Amazon, 30% newspaper) as the CEO and publisher of the Dallas Morning News, James Moroneytols the US Senate:
“The Kindle, which I think is a marvelous device, the best deal Amazon will give the Dallas Morning News>—and we’ve negotiated this up to the last two weeks—they want 70 percent of the subscriptions revenue. I get 30 percent, they get 70 percent. On top of that they have said we get the right to republish your intellectual property to any portable device. Now is that a business model that is going to work for newspapers? I get 30 percent and they get the right to license my content to any portable device—not just ones made by Amazon? That, to me, is not a model. Maybe what Plastic Logic comes up with or what Hearst comes up with, might provide a good model but today Kindles are less than 1 percent penetration in the U.S. market. They’re not a platform that’s going to save newspapers in the near term.”
Build for netbooks and devices
I think the real target market for TimesReader are not the notebooks and desktop systems it most often is deployed to today, but the netbooks and other devices (see Nick Bilton’s remark in the above video). Adobe is hard at work to bring Flash to all possible screens and bulding up a consortium with the Open Screen Project. The NYT is one of the few content owning partners in that consortium.
Rem.: It must be particularily embarrasing for Microsoft, since the TimesReader 1.0 was THE showcase for Silverlight, their Flash-Killer. See my 3-year old post on Bill Gates himself unveiling the TimesReader 1.0.
So, in summary:
It makes a awful lot of sense for the NYT and other newspapers to provide the best possible reading experience not only to the nascent eReader market but also the existing the iPhone/iTouch and netbook markets as well as the general notebook / PC market.
The TimesReader 2.0 is a big improvement over TimesReader 1.0. It has the right functionality for a general audience (advanced users will miss personalization and social features) embedded in a great user experience. It also has a good mix of monetarization options and should a good starting point for the whole slew of connected devices that is coming.
Now on to the post about the second half of my tweet (and comin up with stylesheets fror the remark sidebars)