What a week for Hubert Burda! The Grandsigneur of German Publishers, ‘Chairman of the Board and Publisher of Hubert Burda Media, President of the Association of German Magazine Publishers, and co-founder of the European Publishers Council’ must have had a great night last night.
Why? Because it seems to me that he, as one of the most conservative protagonists of paid content on the web, has finally won. Earlier this week he had opened Burda’s annual digital conference DLD in Munich. A digital conference which looks like all the industry meetings you know from around the world…except that it was hosted by a brand which publicly asked to disappropriate google because of their online media market share. Sounds ridiculous? Well, it is.
Burda described Google as a “killer application” which delivered almost half of all traffic to local journalism Web sites and yet managed to keep almost one-third of all Internet advertising revenues in Germany for itself. “All of that without making any investment of its own in the expensive business of journalism,” Burda noted.
Burda called for amendments to copyright and even suggested that Google should pay for the use of news it had not produced itself. Of course, the search engine wanted nothing to do with this suggestion. (‘Der Spiegel‘, Sept 09)
Actually your failed business model is not my problem
Earlier, in summer 2009, Burda and other publishers had managed to channel their whining about antiquated business model into the Hamburg Declaration of European Publishers. It demanded a ‘fair share’ by search engines like google. Google reacted with an offer to deny robots the access to the publisher’s pages. The conflict went hot. The web manned the battle stations when Silicon Valley started fighting against Munich. Well, and of course it could get even more bizarre when Rupert Mordoch started to ‘threaten’ google to block them from his newspapers and rumors about a Murdoch pact with Bing versus google made the headlines.
Burdoch’s ‘new business model’ was the old one…translated into digital: Making readers pay for stuff they read online.
In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won’t pay. I believe they will, but only if we give them something of good and useful value. Our customers are smart enough to know that you don’t get something for nothing.
Similar to the music industry publishers never condescended to think about alternative business models. While print advertising revenues worldwide dropped like they were hot, no alternative business model was even explored. The direction was clear: Save mainstream print media at all cost. No matter wether there simply is no need for so many general interest magazines anymore, we do print…with a digital touch to make it look cooler.
The web’s response was unambiguous: Twitter founder Biz Stone commented the Burdoch’s closed payment model will ‘fail fast’ and it would be impossible to ‘put the genie back into the bottle’. Others compared the old men’s inflexibility to the disaster of the music industry etc. In autumn 2009 both, Burda and Murdoch, demasked themselves as dinosaurs – powerful but inflexible, free from creative power and about to make the same mistakes so many others had done before.
Welcome to 2010
By last week everything seemed to be forgotten…at least as long as we talk about the tech industry. Last year Germany’s and Europe’s Tech scene made fun of Burda’s ridiculous demands, mocking about the publisher T-Rexes. But at last week’s DLD in Munich the whole scene found their way to Burda’s digital conference. Well…actually (by what I heard) DLD turned out to be a media event with little debate about paid content and a clear focus on digital philosophies and rather broad concepts to be a good creative human being/brand in the digital realm. If there is a digital version of greenwashing then it was DLD’s output for Burda.
And then came yesterday.
Nobody was surprised when Steve Jobs showed his new toy for us Apple afficionados, the iPad. After weeks of media barrages and daily leaks of new photos, nobody would have expected anything else. For publishers the key properties, nevertheless, were
- Apps instead of traditional software installation
- Kindle-like eReader functionalities
- A new Apple book store
Sure, apart from basically being a big, bulky iPhone, iPad primarily aims at users previously known as readers. For now it will kill amazon’s Kindle. But what it will also do is to serve as a springboard for publishers to do what they always did – offer flipable newspaper pages in a paid model (even though it probably won’t be very succesful). Now look at that, isn’t it nice?
Murdoch’s dream has come true. Apple has just launched a newspaper-sized tool, which runs with paid apps and a traditional newspaper-like UX. Step back two months, in an interview with Fox Business News:
RUPERT MURDOCH: WE TEST MARKETED IT AND PEOPLE I THINK UNDERSTAND THAT IT’S PERFECTLY FAIR THAT THEY ARE GOING TO PAY FOR IT. IF IT DOESN’T, THE NEWSPAPERS WILL GO OUT OF BUSINESS. ALL NEWSPAPERS. THERE IS JUST NOT ENOUGH ADVERTISING TO GO AROUND FOR ALL THE SITES ON THE INTERNET.
ALEXIS GLICK: YOU ENVISION A WORLD THEN WITH A TABLET, A HANDHELD DEVICE OR SOMETHING OF THAT NATURE WHERE YOU CAN OFFER A FINANCIAL MARKETPLACE OR A SUPERMARKET FULL OF MEDIA CONTENT AND DATA ON A MULTI-TIERED SYSTEM?
RUPERT MURDOCH: YES.
ALEXIS GLICK: HOW DOES THAT WORK?
RUPERT MURDOCH: WELL, YOU’D BE ABLE TO GET ON IT, AS WOULD BE TRANSMITTED TO IT, A TABLET. TRANSMITTED THROUGH THE AIR OR OVER WI-FI. A REASONABLE SIZE, ATTRACTIVE TABLET IN FULL COLOR AND YOU COULD READ A NEWSPAPER ON IT. YOU PRESS A BUTTON WHEN YOU WANT IT OR IF YOU WANT TO PLAY EXTRA, MORE THAN THAT, BUT IF IT COSTS $15 OR $19 A MONTH, IF YOU WANTED TRAVEL MAGAZINES OR SOMETHING YOU CAN ORDER THEM UP AND HAVE THEM.
Congratulations, Burdoch. The promised land of subscription tablets has just been reached. Welcome your new friend of paid, digitalized print goods – the Apple iPad. Murdoch’s New York Times has already announced a new paid model for the tablet and others will follow. While everybody expected Bind/Microsoft to take sides with the publishers, it is obviously Apple which has just made new friends among publishers.
Bad news is: It won’t work anyway.