E-publishing gap a chance for iPad rivals to catch up

So it's now thinner, lighter and comes in two colors. No, I'm not talking about Steve Jobs...
Written by Eileen Yu, Senior Contributing Editor

So it's now thinner, lighter and comes in two colors. No, I'm not talking about Steve Jobs...he only wears black. I am, of course, referring to the iPad 2.

Unveiled yesterday, the latest iteration of Apple's popular tablet also touts faster computing power with its dual-core processors and comes with a front- and rear-end camera.

The launch has the fanboys cheering--surprise, surprise--and some predicting iPad rivals are well and far behind.

But, the box alone, however shiny, doesn't draw the crowd, it is the contents that make the whole package and this is where iPad's competitors still have an opportunity to step in.

Apple has undeniably done a fine job with the App Store, giving itself a lead that key rivals Android Market and Windows Marketplace are still struggling to close. The iPad maker, though, has yet to make significant strides in one market segment, e-publishing. And this is where its rivals have the chance to step in and take over the reins.

Apple last month unveiled a subscription service for magazines and newspapers bought through its App Store, allowing publishers to set the price and length of their subscription term. However, payment will be handled via its appstore--as will customer data--and the company will take a 30 percent cut.

The announcement has attracted the attention of US antitrust officials and incurred the wrath of publishers including the European Newspaper Publishers' Association, furious over Apple's hefty cut of the revenue and concerned about losing access to valuable subscriber data.

A CNN reader wrote: "It is not only the publishing industry that lost, but we as consumers. Can you imagine a world where every media company or software developer had to pay Microsoft 30% to be able to have their content viewed on or software run on MSFT's platform? GLOBAL FAIL!"

So herein lies a gap that needs to be addressed.

In a BBC report, Forrester Research analyst James McQuivey says it will likely encourage publishers to seek out other platforms. Google's own subscription service, Google One Pass, takes a lower 10 percent cut from publishers but McQuivey believes even this is too much and not low enough to sustain the subscription services market.

The analyst suggests appstores should instead structure their subscription billing model to be on par with credit card processing charges.

According to the Yankee Group, global e-reader sales will spike to US$8.2 billion from just US$1.9 billion last year, with Asia-Pacific accounting for 49 percent of overall revenue. These numbers indicate that consumers are willing to pay to read digitally, but whether they're willing to do so on tablets will depend on how easy--and affordable--the likes of Apple and Google make it.

I bought my first digital magazine last month, forking out US$4.99 for the February 14 issue of The New Yorker just so I could read a particular article in that issue on my iPad, from the comfort of my bed. At US$120 for a year's subscription totaling 47 issues, it would have cost just US$2.55 for that same copy to be physically mailed to me.

The math is baffling. I'd saved The New Yorker significant overheads from not having someone pack the magazine into an envelope, print a label of my mailing address, stick it on to the envelope, and pay international postage to ship it halfway across the globe to my mailbox. And yet, I had to pay almost two-fold more to access the same issue digitally.

Sure, the tablet version of the magazine is packed with additional multimedia features such as video and audio clips, but when I buy to read, that's all I want to do--read. No need for moving images and audio sensory gimmickry, thank you very much.

The idea of being able to read without having to lug around magazines, so laden with pages of ads that they weigh heavier than even a tablet, is extremely appealing to me. I'll also not have to fret about running out of shelf space.

Especially alluring is the fact that I no longer have to worry about who had touched the magazine, while browsing at the bookstore, before I purchased it and not have to wipe it down before I start reading it. Yes, it's a quirk I'm not proud of but OCD is just that, an obsessively compulsive and unexplainable disorder. If you have never watched Monk, please do because maybe then I wouldn't seem as whacky.

Moving on...

It's clear that Apple hasn't found the right model for subscription service and the e-publishing space has yet to be properly addressed. So it's now up to the iPad competitors to figure out the sweet spot that will keep publishers happy and enable them to come up with subscription fees that e-readers will be happy to pay for.

On their part, publishers--and all content providers, for that matter--should also recognize that digital platforms offer a great distribution channel for their products, and like it or not, readers will eventually move to all things digital.

Question is, when that happens, will the key stakeholders be there to tap this market?

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