Google and Apple are slugging it out in the publishing domain as they up their ante to woo publishers, who are still emerging from the recessionary shock and are looking for a viable digital content-related business model.
WSJ reported that Google is in the throes of creating a digital newsstand for its Android users and is fervently seeking support from publishers of newspapers and magazines. Google is vying for the digital publishing space where Apple has an early mover's advantage with its iTunes store.
The report stated that Google's e-newsstand will enable newspapers and magazines to showcase their apps for Android smartphones and tablets. Some of the publishers that Google has approached are Time Warner's Time Inc., Conde Nast and Hearst. Also Google is due to take a lesser share from the revenue compared to Apple's 30 percent charge on sale of apps over iTunes counter. Google is also wooing publishers by offering them some personal data of app buyers.
While publishers attempt to carve a model to generate revenue on the web, even as a glut of free content makes their time-tested subscription model obsolete, the smartphone and tablet landscape offers some hope to the beleaguered publishing community. With an onslaught of devices like tablets, smartphones and eReaders, publishers see an opportunity to carve a new revenue stream by offering content directly on these devices through apps overriding the web.
The likes of Google, Apple, Amazon and Barnes & Noble are vying for attention from publishers, as publishers see hope in resurrecting their subscription-based revenue model through selling apps.
Apps stores' paid environment:
Apps stores replicate a regular paid newsstand environment. The primary channel of distribution for apps is the apps store rather than the web and has a systematic payment structure. Also users have to give payment details to open-an account in the store like credit card information is required to open an account in iTunes. TechCrunch reported that Citibank claims that Apple's App Store will generate $2 billion in revenue in 2011 while research outfit Gartner expects that Global app sales will total about $4 billion in 2010. Publishers see potential in this environment as they flee from the ad-based free content revenue environment. It offers them an opportunity to sell content.
Subscription and paid app model:
Apps offer publishers an opening to revive their traditional business models of selling content through subscription and direct sale of content. The WSJ report confirms that Apple is currently tweaking its iTunes to make it easier for publishers to sell subscriptions along with single issues. Also Apple is due to share more personal data of app users, to assist publishers in targeted marketing for subscription sales.
Market for old content:
Publishers have created huge databases of past content which they can sell by developing apps that could repackage the data and deliver it on the new Android and iOS devices. In Sept. USA Today opened its data set to developers in a bid to create an ecosystem of developers and applications around its content. Some APIs that USA Today exposed include APIs for extracting best-selling books list compiled by USA Today and dataset pertaining to sports salaries. Thus publishers can differentiate their content based on packaging and delivery even as content becomes uniform across publishers.
Creation of Mindshare:
To win on the new device platform publishers have to gain mindshare in the form of developers who can repackage and deliver apps for devices like iPad, iPhone and eReaders. Currently many publishers like NY Times, WSJ and Reuters have apps targeted at iPhones and iPads. Thus, involving third-party developers into the value chain to create an eco-system of apps and devices around the content is an indispensable strategy for publishers.
Cross selling of products:
Publishers can create in-app purchase model by offering complimentary products to drive sales of other digital content. They can use free apps to drive sales of paid-content by launching paid-apps embedded on the free-apps.
Also publishers can follow the strategy of offering bundled products by offering a host of services through a single-app by offering targeting both pure-bundling and mixed-bundling options.
Google's plan for a digital newsstand is sure to heat up competition with Apple, Amazon and Nook primarily between devices like iPad, iPhone, Android tablets and smartphones and eReaders Nook and Kindle. As these companies attempt to plug-in content around these devices, developers and publishers can surely look ahead to promising times.