Apple Continues to Vallidate 2011 as the Year of the App Subscription

Earlier this year, we predicted 2011 would be the Year of the App Subscription.

By that we meant that publishers are going to need to figure out the mechanics of charging for app-based subscriptions. Regardless of whether or not they actually develop an app specifically for the iPad or a competing tablet platform, and whether or not they actually roll out a subscription fee for app-based access, what's clear is that 2011 will a make-or-break year in terms of how publishers and readers approach app-based access to magazines.

Since then, we've seen Apple make a significant change in its subscription policies, as reported in the New York Times -- a breakthrough we had said would be necessary for magazine publishers and subscription platforms: "Apple Offers Subscriptions for All iPad Publications."

The latest validation of our prediction comes from the Wall St. Journal, which reported today that Kobo would not be allowed to sell digital books directly from its apps -- due to pressure from Apple. At the same time, the Journal announced that it will stop "circumventing Apple's payment system by providing links to its website from inside the iPad app, (and) will soon remove ll purchasing option in the app in response to Apple's new rules." Instead, people "will have to either call customer service or visit wsj.com."

While both announcements represent a step backwards for consumers, it shows that Apple is taking a strong stance in protecting app subscriptions.  Making things more complicated is not a win-win for content developers, consumers or, ultimately, Apple, I think, because consumers will be frustrated with both the content developers and Apple. In an interesting article about Hulu, the New York Times reported about consumer frustration with the lack of availability of some TV programs via Hulu -- for example, some programs are available on any platform, some limited to only your laptop.

For app subscriptions and video content to continue to be pervasive, they must make it easy for consumers to purchase. Setting obstacles is the wrong policy. I expect that ultimately consumers will get what they want, but that may turn 2012 into the Year of the App Subscription, Part II -- while things sort themselves out.

You can read more about the issue at Technologizer by Harry McCracken.

Clarifying What We Mean That 2011 is the Year of App-based Subscriptions

We've gotten some interesting and positive responses to our predictions. One theme, however, is about whether app-based subscriptions will work because people are used to accessing news content without having to pay for it.

On that basis, a VC friend of ours specifically questioned whether we were right to call 2011 the year of the app-based magazine subscription.

So let me clarify.

When we say it will be the year of app-based magazine subscriptions, we mean that this year, publishers are going to need to figure out the mechanics of charging for app-based subscriptions. Regardless of whether or not they actually develop an app specifically for the iPad or a competing tablet platform, and whether or not they actually roll out a subscription fee for app-based access, what's clear is that 2011 will a make-or-break year in terms of how publishers and readers approach app-based access to magazines.

There's a cost involved in developing an app that provides a consistent look-and-feel that's similar to the print edition while providing additional value with content that takes advantage of the tablet's multimedia platform. But that all costs money, and somehow publishers have got to have this effort payoff.

That's the real challenge facing publishers as they roll-out and embrace tablet access. They've got to find a way to convince people to pay for app access. They're pretty much doomed if they don't.

As a journalism fan, I think I'm a bit more optimistic that users will be willing to pay for content customized for their tablets -- even as they're used to accessing free content off the web. The key will be how publishers package content on a tablet that's more impressive than what you can get online.

Meanwhile, although we listed a dozen story angles we think the business media will cover, we have missed two topics that unexpectedly are generating a lot of attention:

1. The medical leave from Apple by Steve Jobs. Since that news hit after our predictions were posted, I think it's okay to let us off the hook on that one. We wish him well, and a quick recovery, but in the meantime, expect that to be a theme, and that reporters, analysts and bloggers alike will question the role of celebrity CEO, the nature of a senior management team, the role of the board, etc., in managing and running companies. Also expect that questions about disclosure and succession planning will be important topics.
2. Tiger Mother. Amy Chua is a Yale law professor who wrote a book, “Battle Hymn of the Tiger Mother,”which the New York Times described as "a memoir about strict Chinese parenting (that) reads as criticism of Western practices. Since a Wall St. Journal excerpt from her book was published Jan. 14 (after our list of trends was first posted on Jan. 10), it's been difficult to avoid the controversy about Tiger Mothers, which even reached People Magazine. I'm not sure of Tiger Mothers (a very different species from Mama Grizzlies) will be a hot topic once the initial furor has passed over the next few weeks. However, I do think the role of parents, particularly women, could continue to be a top topic for two reasons that are changing family dynamics: the lingering impact of the jobless recovery, in which women may be working while their husbands may still be unemployed; the new way of working, in which people don't have one full-time job but have a number of part-time jobs, which might make traditional family dinners a thing of the past as parents no longer work nine-to-five jobs.

Let us know if you have other comments to our predictions or to our clarification of our predictions.

Birnbach Communications' Top Predictions for 2011, Part V

Here's Part V of our predictions, Top trends from 2010 that will continue in 2011.

• Mobile access will become increasingly important in 2011, thanks to the popularity of tablets and the rollout of 4G wireless networks.

• In-flight Internet access did become more widely available in 2010, and we expect it to grow more popular in 2011.

• Online credibility will continue to be important.

• Location-based services and behavioral targeting by advertisers.

• Online privacy will continue to be important.

• Three tech companies received the bulk of media attention in 2010, and they will continue to so in 2011. According to a study for the Pew Research Center’s Project for Excellence in Journalism, those companies were Apple (15.1 percent) and Google (11.4 percent), followed by Microsoft (3 percent). (Tech writer Farhad Manjoo wrote an article that discusses the reasons in an NPR interview, "Does Apple Get Too Much Media Love?") We think that Facebook will join AAPL, GOOG and MSFT in being the most written about tech companies.

• Two main topics were the focus of much of the consumer tech coverage in 2010, and they will continue to do so in 2011, too. The two topics: smartphones and digital cameras (although fewer people feel the need to use the word "digital" to describe cameras anymore). Tablets will become a more important topic in 2011, as noted above.

• Videoconferencing no longer resides just in executive conference rooms. You can now get videoconferencing a growing number of devices and a growing number of carriers thanks to 4G rollouts.

• The continued growth of e-books and e-reader sales, following record e-reader sales and some e-books outselling their deadwood version. There are now best seller charts for e-books, for example. And after a record year in the sales of e-readers, expect another record year in e-book sales, leading to articles in 2011 that talk about the inevitability of the shift to e-books, especially after the expected launch of Google Editions, which is set to offer read-on-any device e-books. The one exception will be children's books, especially popup books (to be known as 3-D books).

• The continued evolution of communications. People under age 28 don't use their smartphones to place or receive calls – instead, they use them to text, not email, their friends. People above the age of 28 prefer email. The telephone carriers love texting because they make significant margins from texts. Expect more coverage, and more people switching to texting.

Notice, too, what did not make this list:

• MySpace: Obviously not 2010 technology, but clearly not one of Rupert Murdoch's successes. I saw an article in my town's local weekly paper that touched on MySpace by asking, "Does anyone remember its URL?" Ouch.
• Chatroulette: Which blasted onto the scene in early 2010, quickly becoming the source of jokes for late night comedians, hadn't been in months until an article in the Times reminded everyone. The Times thinks that options you might call Son of Chatroulette -- connecting via text, connecting via video using Facebook IDs (to reduce the likelihood of bad behavior) will succeed where Chatroulette's naked men failed the effort. We're not so sure. We can't keep up with our friends and friends of friends even now, much less to make connections to new people the way these Sons of Chatroulette make possible.
  

Check out Part I, Part II, Part III and Part IV.

Let us know if you agree or disagree.

Birnbach Communications' Top Predictions for 2011, The Top 12 Business & Technology Stories, Part IV

Here's Part IV of our predictions, The Top 12 Business & Technology Stories in 2011.

1. The economy, including the deficit, unemployment, taxes, the incoming class of GOP legislators, regulations, and the "new normal."

2. The battle for healthcare reform or the repeal of ObamaCare, depending on your political perspective.\

3. The continuing battle among tech giants: Google vs. Apple vs. Microsoft vs. Cisco vs. EMC vs. HP vs. Oracle vs. SAP. Also expect reporting on the battle between the iPhone carriers: ATT vs. Verizon.

4. Mergers & acquisitions will likely increase in 2011, and some coverage look at the implications and impact of those mergers. There were more than 2,700 acquisitions last year, and this year the tech giants listed immediately above still have lots of cash on hand to acquire companies that will help converge service offerings.

5. Are we ready for 3-D TVs. (Last year the coverage was all about the invasion of 3-D TVs. This year, the backlash to a trend that failed to live up to its hype.) We do expect a lot more attention devoted to interactive TV-like devices, including Internet-ready TV sets in the living room that are also tied to smartphones and tablets.

6. The state of the media, especially print media, online-only business models and online subscriptions. The media – traditional and online can't help but cover itself.

7. The status of Facebook, its policy towards privacy, and the demise of MySpace. (Last year, it was Twitter's business model – which has yet to be fully answered.)

8. The status of OWN, the Oprah Winfrey Network.

9. The advertising recovery.

10. Local search, personalization and the growth of Groupon and similar businesses.

11. Net neutrality, web traffic speeds.

12. The new small business model. It used to be that small businesses were the real job engine in the U.S. economy. That's no longer the case as technology allows for contractors and virtual teams to launch new companies and products. Where you once needed dozens of employees to launch a new software product, these days you need a few employees and an outsourced team in another country.

This is not to exclude the other topics we've included in our 2011 predictions, available here: Part I, Part II and Part III.

Let us know if you agree or disagree. And check back tomorrow for additional predictions. Next up: Top Continuing Trends.

Birnbach Communications' Top Predictions for 2011, Part III

Here's Part III of our predictions. Here are links to Part I and Part II.

• Traditional media will move to stable, if fragile, footing as the economy recovers – but they can't relax. The worst may be behind them, based on the reduced number of traditional newspapers and magazines that have either shut down or shifted to an online-only business model in 2010 as compared to the prior two years. But the old ways of doing business won't survive the "new normal" because even with a recovery, media properties will never again see revenue at the 2007 pre-recession levels -- unless they innovate and find more ways to generate revenue aside from traditional ad sales.

  That means finding a way to charge for online content on the revenue side. That also means fewer staff and resources, perpetual deadlines and multichannel content.

• Live integrated real-time interactive multimedia events – we used to call those events "TV shows" – will become more common in 2011.

  Producers will seek to combine active social media with passive viewing on one screen. You won't be limited to just voting for a contestant on a reality show, you can also comment on everything about the show. Hate Ryan Seacrest? Now you can let everyone know. The difference is that in 2010, you had to comment on Twitter or Facebook. In 2011, you'll be able to comment next to the action, and be able to interact with others on one screen as opposed to watching your TV and typing away on your computer. (Bravo has already embraced this approach, according to a Bloomberg BusinessWeek article, "For Bravo, One Screen Isn't Enough.")
  

• Hybrid will be the overused word of the year, followed by mashup and "curation."

  The word "hybrid" is no longer relegated to plants or, more recently, cars. The continued popularity in the business world for cloud-based computing and virtualization -- and yes, we know: they're not the same thing – will also drive businesses to want to maintain some control of their data and processes onsite, in their own servers, leading to a hybrid approach, for example.

  Mashups used to describe the combination of two songs (on "Glee") or two musical styles, but can be used to describe anything that combines elements of two different things.

  As used in 2011, curation does not have anything to do with healing. Sometimes known as "digital curation," the term generally refers to the concept of a website that offers information selected and maintained by an actual human (who might be known as a curator if this were a museum), not by an algorithm. In newspaper circles, this person used to be called "editor."

Let us know if you agree or disagree. And check back tomorrow for additional predictions. Next up: Tomorrow, Top 12 business and technology stories for 2011.