Putting the new rules to work

Archive for the ‘Tablets & e-Readers’ Category

I just read my Sunday Birmingham News, the last remnant of the newspaper I grew up with. The one where I spent the first decade of my career. The one where I learned to write. Advance Publications, which owns the newspaper, also publishes print editions on Wednesday and Friday, but I dropped all but Sunday a while back.

In retrospect, it’s all about habits. Let me explain.

Advance’s logic was sound as far as it went. Keep producing the news daily, but only print it three days a week. Save megabucks on newsprint, ink, trucks, pressmen and such. For a while, I thought the industry would follow their lead, because Advance has a strong history of success.

The problem is that you don’t take a seven-day-a-week habit and break it up — getting the news three days in the driveway and four days a week on the computer or tablet. A lot of people just aren’t wired that way, and from a reader perspective, it makes no sense.

I quickly found that my tablet brought me the news very nicely. It was never wet, and I didn’t get ink on my hands. On Wednesdays, Fridays and Sundays — the three days the physical paper came — it became an inconvenience. My habits had been formed in a different direction. Now I’ve cut back all but Sunday, and it’s hanging by a thread.

It now looks to me like we know the right direction for the newspaper industry. Newspapers that have begun charging readers for the news are stabilizing. We don’t know how the Advance papers are doing, because they’re privately owned and don’t have to publish financial data. The Advance way (primarily relying on cost cuts an online advertising growth) may or may not be working. But the path of charging for the news apparently is turning out to be successful.

Pew’s annual State of the Media report came out a few days ago, and they found that digital pay plans (aka paywalls) are being adopted at 450 of the country’s 1,380 dailies. Along with the return of some classified advertising and an improving economy in general, paywalls seem to be producing good results.  Savvy investors — notably Warren Buffett — are buying newspapers. It’s true that they’re getting them on the bargain counter, but they see opportunity on both the digital and the print side of the business.

The New York Times rolled out a plan last spring that allowed visitors a limited number of stories per month, after which they had to pay. There were a lot of holes in their paywall by design, but now they’ve tightened it up. The Washington Post and San Francisco Examiner have also announced paywalls. Other papers charging for online news include most of the Gannett papers, Lee’s 47 papers, McClatchy’s 30 and E.W. Scripps’ 14.

And why not? If you hired reporters and paid them to do the hard work of interviewing sources, sitting through meetings, going through files and writing stories, wouldn’t you think it was reasonable to be paid for their work? If publishers can’t make enough money to pay the journalists, they’ll have to keep letting them go. There’s still plenty of that happening. Pew estimates that 1,000 newsroom jobs have disappeared each of the last two years, and newsroom employment is down 30% since 2013.

For years, we were in the habit of reading our local paper, and paying for it — although at a price heavily subsidized by advertising. As news began to appear on the Internet, we all expected that online advertising to cover the cost of unlimited online news. For a lot of reasons — not all of which are clear — that hasn’t happened. So now we have to break the habit of having unlimited news from unlimited outlets. Many of us will have to pay  a bit, especially for local news. That seems like a reasonable habit to me.

The Economist has been a remarkable story in its own right, emerging in the past few years as a dominant news source for American readers. Clearly, they’ve been doing some things right, so it’s worth watching to see where they’re going next.

That’s why it’s significant that they just put Oscar Grut, who heads up their tablet editions, in charge of the website and all other digital products.

This doesn’t come out of the blue. In November, Economist chief executive Andrew Rashbass told The Guardian (another British medium that’s getting it right) that the magazine already had more than 100,000 digital subscribers — most of them through its iPad app. Even then, the Economist’s numbers showed that 28 percent of its readers already owned a tablet and another 23 percent expected to own one in the next year.

This is even more stunning in the context, coming before the Christmas rush in which Pew’s numbers showed tablet ownership almost doubling.

Most print newspapers will disappear in five years. Social media is the future of communication, but more than half of us don’t believe what we read there. Meanwhile, privacy is a lost cause, and we’re paying a high personal price for being connected.

That’s the stark picture painted in a new report by USC’s Annenberg School for Communications & Journalism, which has been studying our digital future for 10 years.  While we have virtually unlimited access to  information and ability to connect with others, this is creating “extraordinary demands on our time, major concerns about privacy and vital questions about the proliferation of technology,” said Jeffrey I. Cole, director of the Center for a Digital Future.

Here are the findings that jumped out at me. You can read a full summary here.

Tablets will become our primary tool for personal computing, and it’s happening faster than you think. Annenberg says that over the next three years, the desktop PC will dwindle to only 4-6 percent of computer users, and even laptop use will decline.

You can’t leave the office behind. The study found that there is a greater expectation that we will be at the beck and call of our offices and customers 24/7.

Most print newspapers will be gone in five years. Only the biggest and smallest will survive. Cole predicts that only four major daily newspapers will continue in print form: The New York Times, the Washington Post, USA Today and the Wall Street Journal. Ironically, local weeklies may survive.

Privacy? Forget about it. “The issue of privacy is simple – if you go online for anything at all, your privacy is gone,” said Cole. “Americans love that they can buy online, look for information online, and join social communities online.  But the price we pay is that we are monitored constantly; private organizations know everything there is to know about us: our interests, our buying preferences, our behavior, and our beliefs.”

The Internet is growing as a political force, but its impact remains fuzzy. The Internet helps us understand politics better, and it helps politicians get their message to us. On the other hand, only 33 percent of us think it’s safe to voice our political views online.

One question we’ve all had from the first news of the iPad is whether tablets will replace desktops, laptops, print and television as a way to get news. The answer seems to be yes, according to a new study from the Pew Research Center (collaborating with The Economist Group). The study — conducted during the summer and early fall — found that 79% are using their tablets for news that they used to get from a desktop or laptop. Another 59% are using their tablets for news they previously got from a print newspaper or magazine, and 57% are using them for news they previously got on television.

I’ve been a tablet skeptic from the start, but the stats reveal a very encouraging sign: Tablet users appear to be spending more time getting news, turning to new sources of information and reading more in-depth articles regularly.

The new findings show that 53% of tablet owners consume news daily, 30% spend more time getting news than they did before buying their tablet, and 42 read in-depth articles regularly.

Some of this may just be a matter of demographics: Tablet owners are generally middle-age, higher-income people who follow the news more closely and frequently than the general population, according to Pew.

Still, it’s encouraging that tablet users have a strong preference for reading and listening to news rather than watching it on TV. The researchers found that 71% of tablet users prefer reading and listening, compared to 45% of all U.S. adults. As a frequent critic of TV news, which focuses on the moment-by-moment ripples and too often fails to provide a meaningful context for the news, I can’t help regarding this as good news.

Another major factor is that tablet users are going straight to specific news sources rather than relying on aggregators like Google News. That could pave the way to new advertising revenues, though only 21% of the respondents said they were willing to spend $5 a month if it were the only way to access their favorite news source on the tablet. A huge majority of those installing news apps — 83% — say that being free or low cost was a major factor in their decision to download them.

One finding runs counter to the trend of making news a “shared experience” — tablet users seem to be more solitary, sharing news less than those who get it on other platforms. Even among 18-29 year olds, only 19% regularly share news they read on a tablet.

We’re about to learn a lot more about tablet users — who they are, how they’re using their tablets, and how tablets change the way they consume the news.

That’s the word from the The Pew Research Center’s Project for Excellence in Journalism, which collaborated with The Economist Group on what they are calling “the most comprehensive and detailed analysis to date of tablet users and how they get news on their tablets.”

Here are some of the answers they’re promising us in the study, which will be published Tuesday:

• Who are tablet users? What kind of news consumers are they?
• How does having a tablet affect what we read, and where we get our information?
• Is tablet use replacing use of other devices to get news, or is it simply adding to it?
• What leads people to download an app?
• How does the experience using apps compare to using a browser to access news?
• How willing are tablet users to pay for news content?

I’ve known for a decade that physical storage (paper and plastic) would eventually die as a delivery mechanism for movies and music. I just didn’t know when. Now it’s becoming clear to anybody who connects the dots that judgement day is here.

Three events within the last month dramatize this reality:

• Netflix raised prices 60% overnight.  It’s hard to believe, but Netflix didn’t start streaming video until 1997, when it was already 10 years old. When streaming began, it was clearly an add-on, but that is changing quickly. Now people are bailing on the mail-based service and keeping the streaming service, even though the streaming service has far less content available.
• Spotify hit the United States with flat-rate music streaming. Everybody seems to have a “cloud-based” music streaming service these days. Amazon has one. Google has one. Apple has one. But the one that seems to have made the biggest splash so far is Spotify. I’m using Spotify now and love it, but it’s too early to pick the ultimate winner.
• Borders went into bankruptcy. I love books, and for some reason I’ve bought more physical paper books in the last month than I have in the last year. And I think we’ll always have physical books, but I’m not sure why.

Why are we seeing these shifts? Because movies, music and books are all information, and information doesn’t have to have a physical medium.

I think we’re arriving at the same place where the phone business was in the 1980s and 1990s. When I worked with BellSouth (which is now part of AT&T) beginning in 1984, we understood the non-physical nature of information more quickly than most, because we’d been transmitting our information (voice telephone calls) for decades without local storage. You didn’t download your conversation. You didn’t store it on your phone. You certainly didn’t go to the store and buy it on record, CD or tape. You had your conversation. You paid the phone company (flat rate for local service and toll for long distance), and you were done.

Music, movies and book content are no different from telephone conversations, except that they all include content that we have historically wanted to keep and call our own. This is why we all have books rotting in the attic, LPs warping in the closet, and VHS tapes we can’t even play any more. We like to think we own them, even if we can no longer have much use for them.

We came to this point in stages. With iTunes, Apple brilliantly showed us that we didn’t need a CD. We could simply download our music and store it on our iPods. If we insisted on having CDs, we could burn our own. We were halfway there, but we were still using physical storage. iPods are, after all, little hard drives (or more recently, flash storage units).

The Kindle brought the iTunes model to books, magazines and newspapers. We buy the information and download it to our device. But we still store it locally, on our Kindles, Androids, iPads and iPhones.

Video took a slightly different path. Blockbuster got us accustomed to the notion that we didn’t have to have our own copies, though we all still got DVDs for Christmas. Netflix’s mail order service transformed that to a flat rate, but we still used disks that had to be manufactured and transported.

Then streaming began to take hold with Netflix’s streaming product, which was an add-on to the mail service. You could get both for $10 a month. Since they’ve unbundled the disk and streaming services, it’s now $8 a month for streaming and $8 a month to get disks in the mail. The interesting part of this is that people are dropping the disk service and keeping the streaming. I believe this is what Netflix intended all along. They understand that physical storage is dying, and they want to start getting out of the business of buying, storing and mailing physical disks.

Finally, Spotify is doing for music what Netflix streaming and Hulu have done for video: Transformed it into a streaming-only service and eliminated the hardware. This is why it renders the “buy, store and keep” business model of iTunes obsolete.

In all cases, streaming is a clear winner, because information isn’t physical. It’s going to take some time for some of us — especially those who grew up on records — to get our arms around this.  But it’s a reality.

When the iPad rolled out in the spring of 2010, a lot of us assumed that it would immediately eclipse the humble e-Reader (aka Kindle), but so far, that hasn’t been the case. As of May, 12% of us own e-Readers, whereas only 8% own tablets, according to a survey by the Pew Research Center.

Pew found that 9% own an e-Reader but not a tablet, and 5% own a tablet but not an e-Reader. Three percent own both.

In hindsight, it shouldn’t be totally surprising. The cost of an e-Reader is less than one-third that of a tablet, and for reading text-oriented books or magazines, it’s better. The battery lasts longer, it weighs less, and you can read it by the pool, because most e-Readers have no-glare screens and use E-Ink displays. The E-Ink displays are monochrome and do a poor job with graphics, so they’re not suitable for photo-heavy documents like fashion magazines or biology textbooks. But for novels and history books, I like it better. (Disclosure: I own a Kindle II and do not own a tablet.)

Tablets are different animals entirely — built for browsing the Internet and handling heavy graphics, including video and even video-conferencing.

Laptops overtake desktops

Pew’s spring survey was the first in which laptops passed desktops in popularity, with 61% owning laptops compared to 53%.