Posts tagged Industry
Industry Discussion: The True Nature of Social Media ROI
Jan 27th
There is a common misconception about the return on investment (ROI) via social media. For reasons most of us do not understand, Social Media has been classified primarily as a marketing tool by many. Because of this misconception at the foundation of a social media strategy, calculating actual ROI can be a circuitous and inexact [...]
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Why Apple Won’t Disrupt the Textbook Industry Anytime Soon
Jan 19th
Apple revolutionizes stuff. It’s practically conventional wisdom in the tech world that, even if they’re not first in the game or necessarily even the best, the Cupertino-based giant has a tendency to make a noticeable impact. They didn’t invent the MP3 player, smartphone or tablet, but they sure have redefined all of those products. Even if this tendency is strong, it’s not necessarily always how things play out. For an example, look no further than the Apple TV.
Today, the company set their sights on textbooks, an industry Steve Jobs himself described as being “ripe for digital destruction.” True as that may be, is what Apple planning to do in the space really all that disruptive?
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There’s no doubt that giving authors dead simple tools for publishing their own interactive e-books is a big deal. As Nieman Journalism Lab’s Joshua Benton so effectively outlined earlier this week, creating a “Garage Band for e-books” could do to book publishing what the advent of the blogging platform did for short-form self-publishing on the Web. And it’s also true that the immersive, interactive experience of learning from the kinds of digital textbooks Apple demoed today has far more potential than print ever did.
If the company’s efforts are going to help revolutionize textbooks and education, it’s going to be some time before that happens, and they’re not going to do it alone.
Costly and Not Cross-Platform
Apple released the second version of its iBooks app for iOS today, which includes access to the new textbook titles. One thing the company did not announce is that the app is coming to other platforms. Granted, the iPad is still the leader of the tablet market, but Android is slowly catching up and Amazon just released a device geared toward content consumption that costs less than half of the entry level iPad. And it’s growing fast.
Of course, Apple ultimately wants to sell more of its hardware, but if it really wants its textbook initiative to truly take off, it will have to develop apps for other platforms, just as Amazon has done with its Kindle apps.
Another barrier to widespread adoption of this model is the cost of the iPad. It starts at $500, which is not something every American family can afford, especially with an economy in flux. With hundreds of “pages” of content, 3D interactive graphics, embedded video and other bells and whistles, we have to imagine these books aren’t particularly light on file size. As the books accumulate over time, alongside other content stored on the iPad, the 16 GB entry level model may no longer cut it, making it an even more expensive investment.
Not Aimed at the College Market (and Did We Mention the iPad is Expensive?)
The cost issue might be mitigated somewhat if the initiative were not targeted exclusively at high school students.
At least for the time being, Apple’s digital textbooks are targeted primarily at high school students. That fact alone presents a few roadblocks to the initiative being truly disruptive. For one, not every high school student in the United States can afford a $500 tablet device. Apple may well end up dropping the price when they launch the iPad 3 in a few weeks, but even then we’re probably still talking about a several-hundred-dollar gadget. Many middle and upper class families can afford that, but kids in inner city schools and other low-income areas, some of which can barely afford enough paper textbooks, aren’t going to be learning from iPads anytime soon.
For college students, investing in an iPad or similar device to replace textbooks makes simple economic sense. A single semester’s worth of textbooks can easily approach the cost of an iPad. If the e-books available on the device are drastically less expensive than their paper counterparts, it would be foolish not to make the digital switch. Of course, how dramatically prices would drop remains to be seen.
Apple is Partnering With Big Publishers, Not Killing Them
College textbooks are enormously, obscenely profitable for the the companies that print them. In fact, they’ve come up with all kinds of creative ways of milking more money out of students. Textbooks about ancient history will be revised and re-issued every other semester and the company will package supplementary CD-ROM’s and other digital learning materials, using them as a justification to jack up the price.
To get its new initiative off the ground, Apple is partnering with major publishers like McGraw Hill, Pearson and Houghton Mifflin Harcourt. For the high school market, perhaps those companies can afford to agree to a $15-per-book price tag. But when it comes to higher education, publishers are unlikely to allow a $180 biology print textbook be replaced with a $15 e-book. That would cut into their profits pretty dramatically. At the same time, interactive e-textbooks can’t be resold once they’re used, so perhaps the publishers can be convinced that their e-book revenues will be replenished on a semesterly basis without fail.
Interestingly, at the same time that Apple has unveiled major partnerships with textbooks publishers, it also unleashed what appears to be a powerful, easy-to-use publishing toolkit for producing those books. If independent authors manage to create enough competition, it’s possible that bigger publishers will have no choice but to play ball with Apple’s preferred pricing for textbooks.
Apple’s Not the Only Player
There’s little reason to doubt that a decade from now, the classroom and the tools in it will look very different from what students are accustomed to today. The textbook is indeed one of the educational tools that is most in need of a digital makeover. When paper textbooks are finally a thing of the past, it won’t have been Apple’s efforts alone that got us there.
For one, education is already being blown wide open by the Web. The mere concepts of “the lecture” and “the textbook” begin to look antiquated in light of things like Khan Academy, Wikipedia, Wolfram Alpha, iTunes U and MIT’s Open Courseware.
Those examples are just the tip of the iceberg. You’d be hard-pressed to find a student in the U.S. today that isn’t already using the Internet to supplement their educational experience to some extent. Apple is well aware of the changes that are already underway. That’s why they’re doing this. That’s why their DIY publishing tools include the ability pull in pieces of the Web and incorporate HTML5 and JavaScript.
Apple is also not the first company to try to re-imagine the textbook for a digital world. The so-called “smartbooks” offered by e-textbook startup Inking are in some ways more advanced than what Apple is bringing to the table. Other companies already active in this space include Chegg and Kno, as Audrey Watters points out on Hack Education.
Indeed, Apple is anything but the first entrant into this space. Not that that’s stopped them in the past.
Lead textbook photo by Stephen Cummings. Phil Schiller photo courtesy of The Verge.
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The Google/Microsoft Comparison: Industry Reaction to Antitrust Debate
Jan 13th
The Electronic Privacy Information Center is considering filing an FTC complaint, even after two of the senators involved in the first subcommittee investigation suggested an FTC investigation last month. Google has cherry-picked positive quotes f…
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Search Quality & Twitter’s Outrage: Industry Reaction to Google Changes
Jan 13th
Google’s new personalized search has segments of the tech world in an uproar. Twitter is ticked and released a statement that said, in part:
We’re concerned that as a result of Google’s changes, finding this information will be…
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Search Industry Call to Arms: SOPA, Keyword Not Provided and Lying SEOs
Jan 12th
Mike Essex hopes to spur SEOs into action with recommendations for protesting eight issues outlined in his video What Every SEO Has to Fight For in 2012. Koozai’s Online Marketing Manager has put together a wish list of items he wants the co…
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Search Industry Call to Arms: SOPA, Keyword Not Provided and Lying SEOs – Search Engine Watch
Jan 12th
 Search Engine Land |
Search Industry Call to Arms: SOPA, Keyword Not Provided and Lying SEOs
Search Engine Watch by Miranda Miller, January 12, 2012 Comments Mike Essex hopes to spur SEOs into action with recommendations for protesting eight issues outlined in his video What Every SEO Has to Fight For in 2012. Koozai's Online Marketing Manager has put together a … 5 Tips For Optimal Mobile Site Indexing |
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2012 Online Video Advertising Forecast – Industry Experts’ Predictions – ReelSEO Online Video News
Jan 9th
 ReelSEO Online Video News |
2012 Online Video Advertising Forecast – Industry Experts' Predictions
ReelSEO Online Video News The following is an index of our more popular video search engine optimization (Video SEO, VSEO,… Many of us here at ReelSEO are still settling back into our routines following the awesome SMX West… Google has been giving users "instant previews" … |
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A Reliable SEO Company from India is Steadfast in Offering Guaranteed Service – Industry Today (press release)
Jan 9th
 Industry Today (press release) |
A Reliable SEO Company from India is Steadfast in Offering Guaranteed Service
Industry Today (press release) 3G Logic is one of the foremost companies online for reliable SEO solutions. You can find comprehensive web solution right at your finger tips. Posted via Industry Today. Are you into it? Follow us on Twitter @IndustryToday SEO Company India is widely … |
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2011 Online Video Advertising Year In Review – Industry Leaders Reflect – ReelSEO Online Video News
Jan 8th
 ReelSEO Online Video News |
2011 Online Video Advertising Year In Review – Industry Leaders Reflect
ReelSEO Online Video News This week's look at the Reel Web covers tips for YouTube SEO and several news stories from the… The placement, context, and library surrounding online video is critical to success in growing… One of the top viewed pages on ReelSEO is that of a post … |
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The Movie Industry Can’t Innovate – the Result is SOPA
Jan 7th
This year the movie industry made $30 billion (a third of it in the U.S.) from box-office revenue. But the total movie industry revenue was $87 billion. Where did the other $57 billion come from?
From sources that the studios at one time claimed would put them out of business: Pay-per view TV, cable and satellite channels, video rentals, DVD sales, online subscriptions and digital downloads.
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The Movie Industry and Technology Progress
Steve Blank is a retired serial entrepreneur, educator, thought leader and creator of the rigorous “Customer Development” methodology detailed in his book, “The Four Steps to the Epiphany.” Blank teaches entrepreneurship at Stanford University and UC Berkeley and blogs at steveblank.com.
The music and movie business has been consistently wrong in its claims that new platforms and channels would be the end of its businesses. In each case, the new technology produced a new market far larger than the impact it had on the existing market.
- 1920′s: The record business complained about radio. The argument was because radio is free, you can’t compete with free. No one was ever going to buy music again.
- 1940′s: Movie studios had to divest their distribution channel – they owned over 50% of the movie theaters in the U.S. “It’s all over,” complained the studios. In fact, the number of screens went from 17,000 in 1948 to 38,000 today.
- 1950′s: Broadcast television was free; the threat was cable television. Studios argued that their free TV content couldn’t compete with paid.
- 1970′s: Video Cassette Recorders (VCR’s) were going to be the end of the movie business. The movie businesses and its lobbying arm MPAA fought it with “end of the world” hyperbola. The reality? After the VCR was introduced, studio revenues took off like a rocket. With a new channel of distribution, home movie rentals surpassed movie theater tickets.
- 1998: The MPAA got congress to pass the Digital Millennium Copyright Act ( DCMA), making it illegal for you to make a digital copy of a DVD that you actually purchased.
- 2000: Digital Video Recorders (DVR) like TiVo allowing consumer to skip commercials was going to be the end of the TV business. DVR’s reignite interest in TV.
- 2006: Broadcasters sued Cablevision (and lost) to prevent the launch of a cloud-based DVR to its customers.
Today it’s the Internet that’s going to put the studios out of business. Sound familiar?
Why was the movie industry consistently wrong? And why do they continue to fight new technology?
Technology Innovation
The movie industry was born with a single technical standard – 35mm film, and for decades had a single way to distribute its content – movie theaters (which until 1948 the studios owned.) It was 75 years until studios had to deal with technology changing their platform and distribution channel. And when it happened (cable, VCR’s, DVD’s, DVR’s, the Internet,) it was a relentless onslaught. The studios responded by trying to shut down the new technology and/or distribution channels through legislation and the courts.
Regulation/Legislation
But why does the movie business think their solution is in Washington and legislation? History and success.
In the 1920′s individual states were beginning to censor movies and the federal government was threatening to do so as well. The studios set up their own self-censorship and rating system keeping most sex and politics off the screen for 40 years. Never again wanting to be at the losing side of a political battle they created the movie industry’s lobbying arm, MPAA.
By the 1960′s, the MPPA achieved regulatory capture (where an industry co-opts the very people who are regulating it) when they hired Jack Valenti, who ran the studios’ lobbying efforts for the next 38 years. Ironically, it was Valenti’s skill in hobbling competitive innovation that negated any need for studios to develop agility, vision and technology leadership.
Management of Innovation
The introduction of new technology is always disruptive to existing markets, particularly to content/copyright owners whose sell through well-established distribution channels. The incumbents tend to have short-sighted goals and often fail to recognize that more money can be made on new platforms and distribution channels.
In an industry facing constant technology shifts the exec staff and boards of the studios have lawyers, MBAs and financial managers, but no management skill in dealing with disruption. So they rely on lobbying ($110 million a year), lawsuits, campaign contributions (wonder why the President won’t be vetoing SOPA?) and Public Relations.
Ironically, the six major movie studios have a great technology lab in Silicon Valley with projects in streaming rights, Video On Demand, Ultraviolet, etc. But lacking the support from the studio CEOs or boards, the lab languishes in the backwaters of the studios’ strategy. Instead of leading with new technology, the studios lead with litigation, legislation and lobbying. (Imagine if the $110 million/year spent on lobbying went to disruptive innovation.)
Piracy
One of the claims that studios make is that they need legislation to stop piracy. The fact is piracy is rampant in all forms of commerce. Video games and software have been targets since their inception. Grocery and retail stores euphemistically call it shrinkage. Credit card companies call it fraud. But none use regulation as often as the movie studios to solve a business problem. And none are so willing to do collateral damage to other innovative industries (VCRs, DVRs, cloud storage and now the Internet itself.)
The studios don’t even pretend that this legislation benefits consumers. It’s all about protecting short-term profit.
SOPA
When lawyers, MBAs and financial managers run your industry and your lobbyists are ex-Senators, understanding technology and innovation is not one of your core capabilities. The SOPA bill (and DNS blocking) is what happens when someone with the title of anti-piracy or copyright lawyer has greater clout than your head of new technology. SOPA gives corporations unprecedented power to censor almost any site on the Internet.
History has shown that time and market forces provide equilibrium in balancing interests, whether the new technology is a video recorder, a personal computer, an MP3 player or now the Net. It’s prudent for courts and congress to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.
What the music and movie industry should be doing in Washington is promoting legislation to adapt copyright law to new technology- and then leading the transition to the new platforms.
The U.S. State Department has been championing the Internet Freedom initiative across the world. Secretary of State Clinton said, “…when ideas are blocked, information deleted, conversations stifled, and people constrained in their choices, the Internet is diminished for all of us.”
It’s too bad the head of the MPAA – an ex Senator – made a mockery of her words when he wondered “why our online censorship can’t be like China?” We wonder, “Why can’t the film industry innovate like Silicon Valley?”
Lessons Learned
- Studios are run by financial managers who have no corporate DNA to exploit disruptive innovation
- Studio anti-piracy/copyright lawyers trump their technologists
- Studios have no concern about collateral damage as long as it optimizes their revenue
- Studios110M/year lobbying and political donations trump consumer objections
- Politicians votes will follow the money unless it will cost them an election
Movie camera by Jeremy Burgin
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