iPad: Opportunity or Threat?

30 01 2010

Cooper Mills guest author, Senior Brand Strategist, James Grant Hay examines the implications of the device on the Australian media industry and publishing sector

Many believe the iPad and iBookstore will do for the publishing industry what the iPod and iTunes store did to the music industry in 2001. Back then, iTunes accelerated the decline of their business model and tore apart the original bundles of records subsequently sold to consumers at unit price. Will our local media industry and publishing sector share the same fate or embrace the iPad as a revolution of the digital age?

So far, the signs have been encouraging. The Australian Publishers Association report that Australian publishers have been in extensive talks with Apple over the last few months in an effort to seal licensing deals for Australia. Although the iBookstore is not expected to be available to Australian users on launch, that date is likely to change quickly as the Australian Publishers Association has confirmed licensing deals are well on the way to being completed this year.

In the US, Apple chief executive Steve Jobs has announced eBook deals with five of the world’s leading publishers – Hachette, Penguin, HarperCollins, Simon & Schuster and Macmillan.

These talks have been hastened with the arrival of other eReader devices. Amazon (with its Kindle) and Barnes & Noble (with the Nook) have the potential to diminish the importance of publishing companies altogether through the use of self-publishing platforms by authors.

To avoid this, Australian publishers have in the last 12 months been paying a lot of attention to digitisation and preparing for electronic works to ensure plenty of titles are available to Australian consumers. But until a sufficient number of these titles are in place, it will be imperative for the Federal Government to lift the ban on book sellers from buying cheap foreign imports from overseas sellers. Currently, parallel importation rules prevent stores from sourcing books at lower costs from overseas markets. Retailers, such as Borders will need to respond to the growing consumer demand.

REDgroup, owners of booksellers Angus & Robertson and Borders – are already planning 1 million titles that can be downloaded across multiple technologies in Australia.

The challenge for publishers therefore will be the speed with which they can port their back catalogues to digital. Porting books to the digital world is difficult because entire back catalogues must be digitised in different formats and publishers should seek professional legal advice on redrafting and in some cases renegotiating copyright deals with authors and estates for the purposes of digital distribution.

Only two leading publishers have converted Australian print books to digital form in significant numbers – Allen & Unwin has a library of 1500 titles, while Pan Macmillan Australia has 500 titles ready to go digital.

Newspapers and magazines are also planning to sell content on the device through digital apps, but The New York Times is the only publisher to have revealed its offering so far.

News Ltd spokesman Greg Baxter refused to comment to Australian media on its iPad plans last week, but Brian McCarthy, chief executive of Fairfax Media, has been bullish about the prospects for the new device.

The iPad will allow newspapers and magazines to be easily read electronically in a format that many readers will enjoy while also linking pages directly with breaking news and videos on their digital mastheads, such as The Age. Fairfax is reportedly developing apps that could be used on both the iPad and iPhone.

With sales of Amazon Kindle devices outstripping actual print book sales in the US over Christmas, the Apple iPad is sure to be a hot seller amongst Australian consumers.

Among the questions to be contemplated by publishers over the coming months will be the meaning of their brand in a tablet world – to avoid the fate of the music labels, publishers such as Pacific Magazines will need to determine how to maintain individual brands in their overall stable, rather than individual stories; in other industries, companies will need to decide if the most potent expression of their brand is bundling existing free web products with a premium pay-wall subscription, or in the case of Sports Illustrated below, an entirely new multimedia product.

Watch and embed the Sports Illustrated player

James Grant Hay is CEO of Inshot, Branded Content Specialists

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