Media's Act II - Report from Digital Downtown

Media’s Act II at the Digital Downtown Conference at the CEA Lineshow in NY

Alan Brody, ViziPress (and the iBreakfast); Debbie Steirs, HarperStudio; Eric Frank, Flatworld Knowledge; Brad Inman, Vook.com

Last week I joined 3 other publishers to talk about the next phase in publishing at a consumer electronics road show in New York. We did something unusual – we talked about the way media content needs to change – and we showed eye-opening examples.

Clearly, Consumer Electronics guys are mostly interested in TV and mobile apps. Reading is not their highest priority - but then you never where convergence is going take you.

So here we talked about eBooks, mobile reading devices, the digitization of books generally but, more importantly what the title of this panel was all about: the change in media – its Act II. How content is about to become something different because the Media has changed - and so have we.

This phrase, Media's Act II, came from Google’s CEO Eric Schmidt at the American Newspapers Association convention earlier this year. He informed the execs, nervously watching their papers edge out of existence, that they had done a great first Act in the 90’s by going online but now they needed an Act II.

So what was Act I? I argue that it was what we used to call, in an earlier era, “shovelware” – they shoveled the contents of a newspaper online and threw in a few bells and whistles – a little search, a little feedback, a slide or two and a place to click. But for the most part, you read just like you did in print but with the inconvenience of a monitor.

Shouldn’t the computer enhance the reading experience – either make it faster, better or something else? And now, with mobile (why we were at the Consumer Electronics space), something more suited for on-the-go reading?

We showed 4 new publishig models, each unique but each complimentary in a way that probably defined the 4 corners of this coming universe: We showed books that are way shorter (ViziPress), way richer (Vook.com), way more social media involved (HarperStudio) and way more adaptable to higher educational needs (Flatworld Knowledge).

Vook.com is about taking you into the world of a book – using video, interviews, multimedia and so on. If you love Sherlock Holmes, you’re in heaven. They hope that every great author will bring you into this afterworld of their creative space. If you’re the kind of person who watches the extras on your movie DVDs then you’re going to want this for your favorite books. They even hope you will pay a little extra for the privilege and publishers are interested in - not just the book - but the book world.

ViziPress, my creation, is about visual condensations – a kind of visual "Cliff Notes" – of popular business books. If you are lacking in time we can tell you what a book is about in around 3 minutes - and do it in a profound a memorable way. We add music because it makes the process a lot more digestible (according to mysterious research) and we think their world will demand this for every book in existence. Interestingly, it doesn’t kill books - it excites interest in books that people may have otherwise ignored. It also helps that we can cite Albert Einstein as using visualization in all his theorizing (remember the one about riding next to a light beam?) and that we have the best-selling "What Would Google Do?" as an example of a visual summary.

HarperStudios is a new kind of publishing arm of HarperCollins – like Saturn was for GM but, we hope, with all the upside. Their idea is to create a new kind of relationship with authors and booksellers alike – something like the 360-degree relationship record labels are establishing now with their artists. They look for authors to share the burden on marketing - especially through social media and they actively seek out authors who have already developed major online followings (e.g. Gary Vaynerchck from the Wine Library). Instead of high advances and low royalties, they offer low advances and high royalties hoping the author is more motivated to make waves. And they don’t take returns, so they force the booksellers to be more judicious in how they order and place the books. All told, they represent the newer, leaner and more entrepreneurial style of publishing.

Flatworld Knowledge is a start-up comprised of savvy college textbook people who have similarly reinvented their space but with even more twists – they have added a kind of modified Wiki. They hire the top educators to create college textbooks, enable the professors to customize the books for their own courses and then they give it away online. What students pay for is the on demand version of the book - printed for them at the college bookstore - but at much, much lower prices than typical textbooks. They also sell multimedia course material. As their investor explained to me, they plan to take a declining $10bn industry and turn it into a high growth $1bn industry – with Flatworld leading the growth.

One thing is clear, the book as we know it – this final and only product of the writer’s creative process is about to become something quite different – an ongoing conversation delivered over many media and probably on the go…..

UPDATE Google is about to launch its version of news condensation with Flipper. Look out for this market to take off!

iPhone Apps - Report from May Mobile iBreakfast

iPhone & Mobile Apps

As cell phone users increasingly turn to smart phones – how important is it to offer a mobile App? It is cheap ($99 registration fee with Apple), relatively easy to develop and distribution is assured. However, with 35,000 apps out there, it is tough to stand out from the crowd.

THE APP LOTTERY
If you are lucky, like iBird (see NY Sunday Times) and Apple thinks you can really showcase the iPhone - they will give you millions of dollars of free advertising. A little less lucky - and you become the featured selection and so on. But this is a kind of lottery, most developers have to think about the long hard slog and such time-tested techniques as piggy-backing on other platforms.

AD SUPPORTED
According to Eric Litman, whose company, Medialets helps companies track and optimize the use of apps, having a mobile app may be a necessity of doing business. Instead of selling them though, many will become ad-supported. Think mobile widgets…..

BUSINESS TRANSFORMATION – GOING MOBILE
More significantly, as mobile increasingly becomes a business platform as well as a lifestyle utility, the applications will become useful extensions to existing businesses – whether it is mobile sales people on a contact- and order-management system, or field engineers using specialized software to solve technical problems. These will be more than cool apps - they will be the future of the workforce. Any business that can put you in the field, will. And they can manage their workforce through control software - and stop paying rent on your cubicle.

MANY SMART PLATFORMS
While Apple is leading the mobile App charge because of the iPhone’s extraordinary range, power and graphics, the other platforms are already in the game and are likely to follow their example. In the case of Alex Muller’s Slifter, local shopping has been an important driver. Since his company began developing in 2007, having reached out to many platforms and worked with many telcos - they are mindful of the developments from Google’s Android, Nokia, Palm Blackberry and that dark horse in the race, Microsoft. Apple is hot but still has only 26% of the Smartphone marketplace.

No one expects Microsoft to lay low for long. When they wake up to this marketplace - it could spell opportunity for developers since Microsoft has a way of spending itself to the top.

NEW WORLD TRADING PLATFORM
Mobile use is not only likely to grow, but it is poised to become a ubiquitous platform: it is a computer that happens to be a phone. In many parts of Europe, where the telco’s charges are less onerous, it is a kind of charge card. In the 3rd world, especially Africa, phone usage has grown in 15 years from a few million landlines to over 50 million cell phone users with generally high quality service. As smart phones enter the picture they have the potential to become the standard trading platform that could transcend national borders and economic systems. Ditto for many parts of Latin America and Asia. The new versions of SmartPhones (iPhone 3.0) will greatly enhance the eCommerce possibilities of this platform.

MULTIMEDIA TRAINING AND SUPPORT
The specifics of Ken Engels' Curious Brain, a guitar teaching tool that uses the sound and graphics of the iPhone in an extraordinary way – think iChord instead of iBird - make it clear that the iPhone's potential to train, inform and empower will be tapped worldwide.

That may just be the beginning - Version 3 of the iPhone adds the ability to sell within applications. This way users of an app – say a training store - can buy more lessons or other content while they are on the training site. This opens to the door to new kinds of upsells and giveaways. The current model is typically, the Fremium – give away a trial, low-cost or free app and then upgrade the user. Now it’s about selling add-ons or more content – giving away the razor and selling the blades.

NEW TECHNOLOGY LINEUP
While no one thinks that mobile will displace the laptop or even the desktop, it is clear that a reordering is taking place – technology will exist over a complex system with a server, a network, possibly a desktop and a laptop workstation. In all cases, whatever can be done quickly, on the road or on the run, will be on a smartphone. Everything bigger will be support or back-up, the smartphones will be the tip of the technology spear

So have have you taken your place in the mobile App space yet?

“Blogola” – FTC to go after paid blogs

Defining a new Social Media Contract
[More on story reported in BusinessWeek]

It’s about time that we got real with the Social Media world. If you have an audience and you want to pay off your rent/mortgage/student loan/Tesla Roadster, you’re going to have to confront the issue of getting paid for your blogs.

Companies will offer them to you – generally in the form of goods – but sometimes cash. So why shouldn’t you take it. I don’t have a problem with it although most Social Media orgs do.

My only issue is transparency – if you’re getting paid, let me know. Not only that, but what is the level of sponsorship? Are they giving you stuff or money and is it your unfettered, if perhaps biased impression? Or do they have the final word or feeding you the talking points? There’s quite a difference and an industry symbol cold clear that up in a heartbeat.

Like advertising, once the public realized that ads underwrote their newspapers and TV, they accepted it – it was a social contract. We clearly need the same thing here – and business will take off.

Since the Social Media community couldn’t develop its own Social Contract, it appears that the FTC will take a crack at it. Hope it works……

[iBreakfast’s March Social Media Report Anticipated FTC Action on Blogola]

Social Media Report Anticipated FTC Action on "Blogola"

iBreakfast’s March Social Media Report Anticipated FTC Action on Blogola

According to the FTC in a story reported in BusinessWeek, bloggers who get paid for mentioning products – sometimes known as Blogola – will become subject to their scrutiny.

For those of you who took the time to attend or read the iBreakfast’s Social Media Council Report, you’ll know that not only did we discuss this issue, but we described its resolution as an essential part of the Social Media Economy – providing of course, that it was transparent.

More than that, there are various degrees of blogola – from free product usage to our right payment and control over the actual content - and we should be able to rate that so the reader knows.

The main point is that if we establish an open, transparent system, we help everyone. But someone has to establish the ground rules and they have to be implemented.

My guess is that we’d all hate the FTC to be the ones to do this (just look how hard the banks are trying to pay off the TARP so they can get the government off their backs). But can we, as an industry, do it ourselves? WOMMA and Blog Council have guidelines but who really

Share your thoughts with us – maybe we’ll be the ones to take on this quixotic effort!

iBreakfast/LA report: Social Media Invades Hollywood

Jayson Dinsmore, NBC Universal · Cristian Cussen, MySpace Video · Allison Dollar , ITA · Kevin Chou, Watercooler, Inc.

Social Media Invades Hollywood. This event was sold out thanks to great speakers from MySpace (Christian Cussen), NBC Universal (Jason Dinsmore), ning and Watercooler (Kevin Chou) plus a cameo appearance by a child star Aria Wallace from Niceklodeon. Social media is having a great impact in managing the fan base for shows and in developing the career of individual talents. Most significantly, both MySpace and NBC a re suing social media to develop shows both in generating ideas, tsting them and then building buzz. MySpace has developed custom concerts and NBC has synergized well with reality TV shows.

Click for the full report

Alternate Funding Conference report

Todd Walters, Loanio David Feldman, Feldman Weinstein & Smith Lawrence Langs, iBusiness Partners Dana Stetson, The Receivables Exchange How do you access capital in these very trying times? VCs and Angels still have money but unless you are a successful serial entrepreneur or are prepared for ridiculously low valuations and high equity giveaways you may want to hold on to your business plan. Likewise, banks are tighter than Fort Knox, so unless you don't need their money and your credit is too good to be true, you might not want to bother. That seems leaves a few choices other than rich Uncle Joe, assuming he kept his money out of the market. So, in this half-day conference we looked at some of the near and long-term solutions to this problem. If you are a company with receivables - purchase orders from creditworthy companies - then factoring is the shortest way to raise money. However, the rates are legally usurious - up to 38% APR. But with the internet, a company like The Receivables Exchange has opened your receivables up for auctioning and could theoretically lower that rate by half or more. For those who need smaller loans - under $25,000 - then you could have used crowdfunding with sites like Loanio, Prosper etc. At least you could have until November of last year. That's when the SEC, probably reeling from its criticisms over poor market regulation and overlooking the Madoff's $50bn scam, stumbled upon the one true threat to the banking system - the online aggregators of people to people loans backed by little more than good credit scores. This $100 million industry worth say, one grommet on the "Tarp" was determined to be in the business of selling securities, so they shut them down pending new filings. The solution appears to be some legalistic maneuver of repackaging the loans as bonds and so on. Nevertheless this type of funding will in likelihood return and probably become increasingly available to small business. One side benefit is that Loanio found that it could go public by self-registering, which is way to dramatically lower their underwriting cost. This leads us to the closing presentation by reverse merger guru David Feldman and iBusinessPartner Larry Langs who specializing in taking companies public through so-called sell deals - i.e. using a defunct public company shells to go public instantly (the stock exchange used this technique itself when it went public!). This is a great idea if you can attract investor money - especially when the market recovers. The only downside is the high cost of quarterly filings. Then again with the internet, those costs could come down.

April Report: Google & the Future of Newspapers

Gordon Crovitz, Journalism Online · Stephen Arnold, Arnold IT Myles Fuchs, Pressmart · Jeff Bogart, Bogart Communications · Mo Krochmal, Hofstra University by Alan Brody This breakfast came at a critical juncture in the Newspaper industry - Seattle, Chicago and now, Boston face the possibility of losing newspapers. So what has happened and where are we going? It was no small irony that the headlines of the day trumpeted the "Craigslist Killer" - the med student who found his victims on the classifieds site - because in many ways, Craigslist, by undercutting the formerly profitable newspaper classifieds sections (by some $64 million in one year in San Francisco) became the Jack the Ripper of the newspaper world. The other big player in the newspaaer world is Google - but whether they are the Jekyll or the Hyde is no small debate. According to Google's Eric Schmidt, Newspapers did a great Act 1 in the 90's by going online - but haven't come up with an Act 2. I couldn't agree more - what they did was to put print up on a screen and add search with a little feedback mechanism. But that is really what we used to call "shovelware." They took the content from an old media - print - and shoveled it onto a new medium - online. (As a matter of disclosure, I have a dog in this race - a new publishing company called ViziPress that addresses this issue through visualized storytelling.......) Over time what I believe happened is that online papers taught people they don't really need to pay for the print product, and then they learned that reading a paper online wasn't such fun either. But then, returning to print was now unwieldy and a huge time sucker. Ergo - newspapers actually trained their readers into becoming dissatisfied customers seeking their news elsewhere. From a strictly viewing point of view - they need to find a way to tell stories that are more readable online - especially as we go to mobile. We also need information compression and that calls for way of telling stories conceptually. (With ViziPress, by experimenting with semiotics, graphic novels and music we have developed a kind of visual "cliff notes" for business, non-fiction and entertainment. You be the judge!) The presentations began with Journalism.com's Gordon Crovitz, a new venture backed by the legendary Steven Brill that hopes to gang the newspapers together and, in some ways, take on Google to overcome the "original sin" of giving away their stuff for free. Through subscriptions and the artful of use of "fremiums" (giving some stuff away and then charging for the more desirable parts) they believe the public can be encouraged to fork over again. It happed with iTunes vs. the pirate music sites and certainly, as former publisher of the Wall Street Journal, Crovitz has shown it can be done with a business newspaper. But according to veteran Google analyst, Stephen Arnold, while that might work - assuming as in my analysis, the victim has already been dispatched (sorry about the metaphor, but that was the news of the day!), the better answer may just be in finding more ways to work with Google. In Arnold's view, Google is a technologist with the world's biggest audience, finding ways of working with them and their various payment mechanisms (Adsense being the simplest) will probably enable you to do very well indeed. Fight them and they will incrementally swallow you because the news flows to them anyway. In his view, their ability to bring all data types - the video and pictures as well text along with fantastically big audience are unstoppable and their way to aggregate advertisers and buyers is not to be ignored either. Message to publishers, if Google doesn't call you, call them. You'll be glad you did! Myles Fuchs at PressSmart offered another view which is that by using multiple digital delivery systems, his company can monetize whatever content newspapers already have. This is particularly the case in the one healthy area of the newspaper economy: hyperlocal news. Jeff Bogart agreed, noting that his local town blog outdistanced the big area newspaper in terms of true local coverage - events, town hall meetings etc. Interestingly, locals may have survived since most local newspapers stayed behind the technology curve, so their resistance made them a subscription necessity when everything went online for free. But again, according to Bogart, his success with aggregating local bloggers could also undermine that sanctuary - it only takes one local news blog aggregator and the local papers will be staring down the same storm the big city papers are facing. Finally, Mo Krochmal a former journalist turned J-School professor at Adelphi talked about what he teaches his students. If, like me, you are about to fork over $160,000 for a fancy degree for one of your kids you might want to reflect a moment. According to Krochmal, as long as the students are comfortable with the fact that no fancy job awaits with a corner cubicle and networked computer, that they understand the reporting fundamentals and can blog well then, with a little entrepreneurship they should be happy. They might not make rent but they'll be happy. Download presentations. See other reports on Steve Arnold's blog.