The New Media Journal

John Gruber of the well-read Daring Fireball gets Apple’s back, pointing out that AT&T’s lack of tethering support for the iPhone hurts the iPhone brand in comparison to Android:

Another sign of how bad AT&T makes the iPhone look: the iPhone OS has fully supported tethering since 3.0 shipped 11 months ago. Most carriers around the world have supported it from day one. But, because AT&T still doesn’t support it today, it’s seen as a feature where the iPhone needs to “catch up” to Android 2.2 (which hasn’t shipped yet).

Gruber is right, AT&T hasn’t been able to upgrade its networks as necessary to support all the things people want to do with the iPhone.  And Gruber is right again in that this hurts the iPhone brand, using a quote from Michael Arrington to illustrate his point.

What Gruber doesn’t point out is that the responsibility for the brand shortcomings fall directly on Apple’s shoulders.

Yes, AT&T is disappointing people – but Apple is the one that wanted such control and revenue-sharing out of the carriers that they made an exclusive deal with the only company that would play ball (AT&T).

Since every single iPhone in the U.S. is on AT&T’s network, and the consumer has no choice in the matter, the AT&T network becomes part of the iPhone feature set and brand – for better or for worse. If the AT&T network were flawless, this would be a huge selling point and a brand positive.

But it’s not.

That was a risk Apple had to know they were taking, as brand-savvy as they are.  They obviously saw the tradeoff – control and cash – as worth the risk.

That decision has backfired, especially as of late, where Android phone sales are escalating as it positions itself as the dominant smartphone on Verizon and Sprint.  Android is winning a lot of customers that aren’t willing to switch to AT&T for the iPhone.  Thus, the time is right for Apple to open up the iPhone onto other carriers (assuming they’re contractually able) and stem that tide before too many people become loyal to the Android brand.

Apple has plenty of loyal fans, who will purchase their products regardless of flaws.  I happen to be one of them – I have an iPhone, plan on getting an iPad, and use a Macbook.

But Apple (and their fans) also have to realize that the AT&T exclusive offer has a lot of upsides for the company – and with those upsides, the very large downside of not being able to be fully in control of the image of their product.

And you know that must drive Steve Jobs nuts.

The New York Times has long been talking about moving to a paid-content model. They’ve now apparently set January as their target date to make the big shift.

Interestingly, Apple has been using screen shots of the New York Times as the “model site” for the iPad – it appears in nearly every Safari screen shot produced by Apple. The New York Times, though, likely wants to have users pay for their content via iPad app instead of getting it free through the web.

Like all other media outlets behind a paywall, such as the Wall Street Journal, the New York Times clearly believes its content is unique enough that people will want to pay for it.  According to Alexa, The New York Times is the 5th most popular news site, behind CNN, two BBC sites, and Yahoo! News.

The New York Times probably is willing to concede some of that traffic in exchange for the revenue brought by users.  The big question, though, is what that drop in traffic will do to ad rates.

The New York Times thinks it will more than offset.  But media outlets sometimes seem to have some hubris as to the number of readers that are willing to pay for their news. The internet news market is incredibly competitive – there are plenty of free sources for news.  The News Corp, and likely the New York Times, though, believe that many other news sources are simply rehashing news originally reported by the Times.

The iPad has been touted as a device that might save the media industry (and hurt the free content industry) because of its unique content-delivery abilities through apps.  The Wall Street Journal, for instance, charges $4 per week for a subscription to its iPad app.

If the New York Times is able to succeed with their experiment, it will open the door for many other media outlets to follow suit.  And they definitely will – if the New York Times succeeds.

Facebook’s growth (and pre-IPO excitement) has been focused on its ability to generate revenue as a hyper-focused ad server.

Not as talked about is Facebook, the gaming platform.

A recent AdAge article says that Farmville is up to over 80 million users, all of whom are logging into Facebook to plow their fields — and spending a lot of time with eyes on the Facebook ads that surround the application.

Those 80 million users translate to Farmville’s maker, Xynga, having an estimated value of about $3 billion. (An estimate I’m highly skeptical of, but that’s another story for another day.)

The key is that Facebook has created a win-win situation for itself and 3rd party developers.

Developers have been handed a platform that has hundreds of millions of users — and built-in mechanisms making it easy to share gaming experiences with friends.  People on Facebook are already in timekill mode — why not spend a few more minutes plowing some sunflower fields?

Meanwhile, Facebook gets users spending more time on their pages.  Facebook can show advertisers that users will be sitting for 5, 10, 15, 20 minutes on the same page while a Flash game plays in a window.  A nice thing to show advertisers when displaying statistics — a high average time spent per page.  Create a compelling ad that will get an extended view, and odds are eyes will see it.

All in the name of tilling the fields — an activity I happen to enjoy.  Meanwhile, my yard is a mess.  I blame Facebook.

Yesterday, I wrote a blog post about the positive and negative surprises that came from the Apple iPad announcement.

Looking back, there’s a little bit of absurdity in that.  Not only had Apple not talked about any of the expected specs of their tablet computer, they hadn’t even admitted to making a tablet computer.

Apple’s products have such a rabid fanbase (with good reason — they make good products) that rumors start themselves.  And Apple’s strict policy of not talking about upcoming devices until their official announcement — which often happens on launch day, for devices that don’t need FCC approval — means that the rumors go unchecked.

This is a double-edged sword.

On the one hand, the internet was ablaze with Apple talk — and still is.  The number of sheer characters spilled on speculation is incalculable, both from hobbyist bloggers and from the large media outlets.  Without spending a single penny on an iPad advertisement, everyone was talking about it before it even existed.  You can’t buy that kind of PR.

On the other hand, wild speculation outpaced reality. People were hoping for more device than was likely possible, given space constraints, political agendas, and cost considerations.  Some rumors — such as the iPad being available on Verizon as well as AT&T — seem almost fueled by hope.

Some Mac pundits that have had the opportunity to use the device — notably John Gruber of Daring Fireball — are saying that you have to try the device before you can pass judgement. (Also Michael Pusateri and Stephen Fry).

On a certain level, I agree with them.  It is about the device experience, not just the device specs and a video demo.  But, every internet gadget aficionado passes judgement on devices every day.  It’s simply impossible to try every interesting gadget that comes along — no one has the time or the money.  So, we make judgements based on specs, history, and any other news nugget that catches our attention.

Why should Apple be above those snap judgements?

Their track record is good.  But that’s not enough of a reason.

Apple didn’t manage expectations — by design — so everyone formed their own expectations for the device.  Everyone looked at their particular computing problems and needs, and hoped that the iPad would fulfill those needs.  When it didn’t meet those needs, those same people were disappointed.  It’s a natural human reaction.

Person A gets terrible AT&T reception.  They were hoping for Verizon.  Person B is a Flash developer, and wanted to see their creations come to life on the iPad.  Person C is a movie junkie, and was hoping for more than 64GB of storage on a larger-screened device.  Person D just wanted to run the Pandora app to listen to some tunes while doing crosswords on the Crosswords app.

Each of those people had a problem with the iPhone, and were hoping the iPad would solve their problems.  But it didn’t.  There’s not multiple carrier support.  There’s no Flash support.  There’s limited hard drive space.  There’s no multitasking.

That’s not to say the iPad is a bad product, or will fail.  It just means there’s a large number of people that Apple and its advocates will have to convince to become new customers, that are coming from a negative starting point rather than a neutral or positive one.

A few of the people that have had their hands on the device say it’s wonderful.  But the court of public opinion — a court where everyone has a very loud voice, given today’s “everyone is their own media oulet and pundit” — has put the iPad a few steps behind in the quest for universal dominance.  A lot of those opinions (which include mine) are coming from people that have never gotten to touch the iPad.

That doesn’t make their opinions less valid — they’re just coming from a different place.  They want Apple to prove that their device is magical, not just say it.  And skepticism can be a good thing.

Maybe the time has come for Apple to start talking a little more about their upcoming products.

Nerds everywhere had lunch at their desks today, eagerly hitting refresh as fast as their browser would let them so as to get first peek at Apple’s latest device.

As the hour and a half presentation wore on, we laughed (at Steve Jobs giving a nod to the Wall Street Journal quipping about Apple, tablets, and Moses), we cried (at the prospects of adding another wireless charge to our monthly phone bill).

There were fewer surprises than I was expecting, honestly.  And it was definitely easier to make the negative surprises portion of this list — in large part because expectations were so high.  And I feel the negatives are more interesting… so I’ve decided to list them first.  Call me a negative Nelly.

The Negative

1. No multitasking.
   With a screen that big, there’s plenty of real estate to do more than one thing at a time.  And I’m a big multitasker — I’m that guy that always has 8 programs open and 20 windows.  My Expose button gets a workout.  The iPad’s screen is the aspect ratio of two iPhones — seemingly a perfect storm to run more than one app at once.  But, alas, you can’t.
   
2. No camera at all.
   Leading up to the big announcement, the only debate on cameras seemed to be whether the iPad would have both a front and rear facing camera, or just one or the other.  No one seemed to think it wouldn’t have a camera at all.  But it doesn’t.  Presumably, this was done for space and cost reasons — but I still find it extremely surprising, given that every cell phone in the world has managed to find room for at least one camera.
3. It features Apple silicon.
   I spent some time debating whether or not the device running Apple’s own processor was a positive, or a negative.  It has aspects of both, really.  On the plus side, it likely means lower costs — Apple can take a lower margin on it, since they see the profit from the entire device and its software sales (and 30% of the App Store).  It also means the chip can be designed and optimized for Apple’s very specific devices — for instance, this chip can be streamlined for situations where there is very little multitasking going on. Those positives don’t override two negatives, though.  First off, Apple is not a silicon company.  They’ve brought in silicon expertise through purchases and hires, but it is not their core competency.  I always worry when companies stray too far from what makes them great, which is in Apple’s case brilliant devices and sparkling interfaces.  Secondly, it removes the threat of competition.  Intel would make better chips, knowing that Apple would ditch them the second AMD made something better.  Now, Apple will likely be using their own chips exclusively — regardless of which is best on the market.  You make that kind of investment, you’re going to use it.  I’d rather see Apple stick to making devices and letting Intel make chips.
   
4. The display is 1024×768.
   Not a hi-def aspect ratio.  Certainly not enough pixels for 1080p.  720p is the best we can do. What does that mean?  A lot of black bars when watching movies. This would bother me less if I could multitask to fill up the empty space… but we covered that already.  That having been said, I think this could lead to 1024px width (or a few pixels less) becoming a standard for websites.
5. It’s really just a giant iPod Touch.
   To me, the biggest surprise was the lack of really big surprises.  For weeks, we’d been hearing about how this device will change everything.  How it will save the book publishing industry, the magazine industry, the newspaper industry.  Magazines and newspapers still have to build their own apps (expensive, and non-standard) or websites (which they’re already doing, and not profiting enough, to hear them tell it).  Book publishers got the iBooks app, which is a nice app with seamless integration to iTunes accounts for easy buying.  But, all in all… it’s just a big iPod Touch.  Jobs opened by saying that this device isn’t supposed to replace your laptop or your phone, and he’s right — it won’t.  But will it do enough to justify purchasing?

The Positive

1. The sucker is thin.
   Photos and videos confirm this.  If anyone was worried that Apple would try to cram too many features into the form factor, resulting in size bloat, that worry was put to rest.  Really, the opposite is true — Apple clearly left out some features (such as a camera) to ensure form factor and cost.
2. $500 (on the low end) and $829 (on the high end) is less costly than expected.
   Most predictions put the street price at somewhere between $800 and $1000.  While $500 is less than that, the $500 feature set is less than what most were expecting: 16GB storage (less than high-end iPhone 3GS models) and no 3G data. The souped up model (64GB storage, 3G data) lands at $829 — which is still nicely under $1000.
3. The interface looks great, and is zippy.
   Apple’s got the whole touch-interface and gestures thing down — so really, it’s not a big surprise that the interface looks great and usable. But those that have gotten hands-on previews of the device really rave about how responsive it is.  The first generation iPhone struggled with lags in typing and loading, and it’s nice to see the iPad apparently won’t.  John Gruber of Daring Fireball absolutely gushes about how fast the device is.
4. No data contract required for the 3G models.
   There were rumors everywhere that the iPad would fly the Verizon route, or at least go either AT&T or Verizon at the user’s choice.  Those ended up not being true — even though it is an unlocked GSM antenna.  The nice part is that no contract is required to purchase a data plan — just sign up with AT&T from the iPad and go.  No penalties, no fuss.  The downside to this, of course, is that it means the carriers won’t be subsidizing the cost.  It’s all out of pocket up front.
   
5. Great battery life.
   Apple is touting a battery that can support 10 hours of video and 30 days of standby.  While they haven’t released battery life expectancy for web surfing or eBook reading, one would expect similarly impressive numbers.

All in all, I give it a “meh.”  It’s cool, and I’ll likely buy one.  But it didn’t make me say “WOW!  I have to have it!”  Hopefully, app developers will take the extra real estate to heart, and really make the device happen.  Because I really think there is a market for this type of device.  I’m just not convinced Apple has hit the niche on the head.

An interesting side-story of the tragic earthquake in Haiti has been the outpouring of support coming from the US.  Even during this difficult economic climate, Americans have been donating time, money, and items to the relief effort.

And on the new media front, text messaging has really taken a step forward as an avenue of micro-philanthropy.  While every organization hopes for the $20 million gift, the Red Cross used $10 micro-payments via text message to amass a significant amount of money for Haiti.

Sending the message “HAITI” to 90999 will place a $10 donation on your next phone bill.  Some numbers on the Red Cross Haiti campaign, via the New York Times:

• Of the $103 million pledged, $22 million came from the text message program
• During the NFL’s promotion of the program during their games over the weekend, donations were coming in at $500,000 per hour
• By comparison, text donations for Hurricane Katrina totaled $250,000

Of course, the Red Cross campaign has had the support of the NFL (with promos running during playoff games) and of President Obama, so not every non-profit that signs up for the service from mGive.com (the organization powering the Red Cross campaign) can expect similar returns.

But, the success of this campaign points toward a few conclusions:

• Removing barriers to donations encourages people to take action.  It’s immediate and it’s easy.  No credit card number to enter, no registration.  It takes 5 seconds to do.
• Awareness helps.  The Red Cross campaign has had a huge reach, so micro-payments quickly added up.
• Text messaging tends to target a younger demographic, while monetary philanthropy is commonly associated with an older demographic.  But, whether its because the disaster is fairly close to home, or because of the number of casualties, or because of the heartbreaking and graphic images coming out of the country, or because young people are simply more philanthropic than expected, the mix of technology and giving has been a success.

I think we’ll see a growth in the number of non-profits using similar text message solicitations after the high-profile nature of this campaign.  The costs aren’t trivial, but hopefully increased user bases will allow the companies that provide this type of service to lower barriers to entry for smaller organizations.

Everywhere you go, there’s pundits writing articles about the fabled Apple tablet (iSlate?  iTablet?  iEtch-A-Sketch?) Not since Apple’s iPhone has there been so much hype about a product that does not even officially exist.

And while there are certainly skeptics abound, I’m openly optimistic and excited.

I’m not going to make predictions about the tablet — heck, the form factor might not even be a tablet, but let’s call it that for simplicity’s sake — but my hope is that it will revolutionize mobile computing much like the iPhone did.

The iPhone was no miracle, from a technology standpoint.  There were already phones that ran 3rd party developer software (Windows Mobile had apps in scads), the camera was sub-par, and the first iPhone didn’t have a GPS or even 3G connectivity.

But what it did do was making computing on your phone easy, enjoyable, and productive.

I’d like to see a tablet do the same thing for portable visual media.  The iPhone is a bit small for watching movies, and way too small to do any real amount of reading. (Twitter doesn’t count.)

The iPhone has changed media — mobile is now a necessary portion of every e-marketing plan.  That might be giving the iPhone too much credit, but I don’t believe it is.  It upped the ante and made mobile a real mass communication platform, not just a potential one.

Similarly, tablets and e-readers exist now, but they haven’t hit their Tipping Point (tm Gladwell). The Apple tablet has the opportunity to bring that market to the forefront.

And really, any company could bring that industry to said point — but everyone expects Apple to, because of their track record.  Me included.

We have our entire music library perfectly replicated in portable format.  Why not our reading library?

The print industry is ready for a revolution.  Again, Apple has the opportunity to be the catalyst for a revolution.

A recent article by Media Shift looks at a few different mobile tactics being employed by print magazine publishers.

Notably at contrast are the methods from Hachette Filipacchi Media U.S (publisher of Elle and Woman’s Day, among others) and Rodale, Inc. (Men’s Health, Runner’s World) versus those from Conde Nast (GQ, Wired, and The New Yorker, among others).

Hachette and Rodale are developing apps that compliment their brands and raise reader engagement.  Media Shift reports Yaron Oren, director of mobile strategy and operations at Hachette Filipacchi, stating:

Oren said the goal of his company’s iPhone apps — which include Woman’s Day Cooking Assistant and the Car and Driver Buyer’s Guide — is not just to repurpose content, but to build the app users’ relationship with magazine brands by providing useful information or a fun experience.

Conde Nast, on the other hand, is aiming to bring their full magazine onto the iPhone with “replica” apps.

The app presents the content of the entire December 2009 issue, reformatted and packaged with some exclusive extras, for $2.99 — less than the print edition’s cover price.

[...]

The app allows users to read articles, zoom in on pictures, and purchase some of the clothing and other items contained in the magazine. It’s also possible to buy a subscription to the print edition of GQ through the app.

The idea of bringing magazines directly to the iPhone, verbatim, and expecting users to pay almost as much for it is a very “old media” way of thinking about digital distribution.

Different mediums require different approaches to content. I love my iPhone, and consider it my wingman — but I don’t believe it’s the right device for trying to consume a large number of words.  The screen is small and requires a ton of scrolling to do any reading.

Beyond that, the app is not a transient medium, but a single issue of a magazine is.  Apps that sell well are apps that have a long shelf-life of utility, not apps that are to be deleted days later.

I don’t speak for everyone, but I know I’d rather pay cover price (or a greatly reduced subscription price) for a printed edition of GQ to read comfortably and at my leisure than I would to pay $2.99 for an iPhone app that’s just not a pleasure to read.

Specialized iPhone apps from the print publishers that tie their brands to persistent utility apps — apps that you use over and over, and look at for months on end — are more likely to be met positively.

Will those apps be able to replace lost revenue from the drop in advertising in magazines?  Definitely not.  They’ll be lucky to simply cover development expenses.

The problem remains for print publishers — how to support their massive infrastructure with dwindling sources of income.  iPhone apps aren’t going to solve that problem for them, and in my view, creating apps that try to move the magazine to the iPhone will result in a waste of time and resources.

Now, could magazines duplicate their publications and make money on another format, such as digital readers (or the fables Apple tablet)?  Entirely possible, given a critical mass of users.  But the iPhone is not the right medium.

New media has often been touted as a great equalizer: any individual with something to say could get out there and get the same attention as the corporation next door spending millions.

Anyone could get a Blogger account and have a place to put your pictures and words up minutes later.  And if you wanted extra storage, or extra customization and monetization options? Even the moderately web-savvy could buy a domain, get a web host, and install WordPress with only a modest learning curve and time investment.

And the same still holds true, of course. But one can argue that individuals and large organizations aren’t fighting on level grounds in new media anymore.  The latter have access to specialized, sophisticated software and the manpower to implement solutions and tend to massive amounts of content.

New media trends are holding a lifecycle pattern.  Let’s use the web in general as an example.

1. A disruptive media emerges – in this case, the web.
2. Complexity of using the media grows.  Web sites went from being designed, developed, and curated by one-man-bands to having entire teams (and even companies) running them.
3. A software breakthrough levels the playing field.  For instance, WordPress CMS makes publishing easy again.
4. Developer communities emerge, and individuals are able to implement solutions that once took entire departments of developers.
5. Simultaneously, new disruptive media emerges again, taking us back to step one in a new technology.  For instance, sites are now expected to participate in social media while also having mobile-specialized versions of their site available.

At the end of the pattern, it’s very difficult to cut through the massive amounts of competition within the same space.  The web has reached a certain level of maturity.  Domain names are being gobbled up by the minute, organizations have at least one website that’s tended to by a small army of specialists, and millions individuals are blogging.

So, yes, right now, large organizations have an advantage on a mature new medium such as the web.

At the same time, however, individuals are able to do more with their limited resources than at the beginning of the cycle, thanks to the leveraging of the community that happens in step #4 above.  Thus, the advantage is not one that precludes the individual or small organization from achieving success.

Remember, however, that new media is not just web.  It’s the entire spectrum of new communication tools.

Right now, the mobile world is maturing.  There are open-source software tools to help website owners have mobile-friendly versions of their content.  The maturation isn’t complete, however, as fully-featured mobile applications have a higher barrier to entry: they require, at the very least, advanced coding skills and likely also design and user interface skills.

It’s more difficult today to make a splash with a mobile application than it was one year ago, but it’s easier today than it will be one year from now.  One year ago, individual developers were behind many of the iPhone apps making a splash.  Now that corporations have seen the size of the audience available on the iPhone, they’re throwing more resources at trying to capitalize on the trend.

Conde Nast, the old-media publishing group, is fighting to stay relevant in an age of new media.  They’ve thrown their resources behind iPhone versions of their magazines. The apps, as described, are complex and indicative of an organization with resources to spend.  It’d be tough for a startup web publisher to be able to match that level of mobile application.

The thing to remember is that while it is harder to make a splash in a mature product, it’s not impossible.  Creativity and quality content will always be strong sellers.  By the same token, just throwing money at something won’t guarantee its success.

The thing about new and emerging media is that it’s always just that – new.  There will always be new opportunities.  Big companies and their budgets tend to go in the safe direction, making a move after a product has hit critical mass.  Conde Nast might be on the leading edge of print magazines, but they’re way behind the curve to be considered innovators.

Meanwhile, the small, nimble media explorers have moved on to try to capitalize on the next big thing.  Android instead of iPhone. GPS-based localized content and augmented reality. Social media.  Collaboration software. Whatever.

So, regarding the initial question raised: will big budgets always emerge as leaders in new media?  I feel that the answer is yes and no.  No, they won’t always emerge as leaders in the sense of bringing about innovation and setting trends.  But, yes, they will always come into mature markets and shake them up.

That does not preclude everyone else from success, however.  Learn from the past, take risks, and create quality content.  That’s as important as a big budget.