(E-)Reading the Tea Leaves of Digital Magazines
On the negative side, no one should assume that doing a designed-for-digital magazine is going to be a huge cost savings. If you're embedding video and Flash animation, reformatting everything for a computer screen, embedding links and social media tools, and all of the other things that interactive digital magazines can have, that can get expensive. You certainly do save on distribution costs—printing, mailing, buying paper. So there's huge cost savings there, but some of those will be offset by increased production costs.
INBOX: How will the recent launch of Apple's iPad and the emerging e-reader marketplace affect traditional print magazine publishers?
GORDON: It's changed a lot. But it's not just that Steve Jobs stood up and introduced a new gadget. In fact, that's almost insignificant. What's hugely important is that others are heavily invested in this product category of development, including all of the big names. HP is releasing a reader; Google has demonstrated a prototype reader. When Steve Ballmer of Microsoft gave the opening keynote address at CES [Consumer Electronics Show], he featured a digital reader—the HP digital reader that runs on Microsoft software—as part of his keynote address.
You've got the biggest technology companies in the world all vying for a chunk of this yet-to-be-launched gadget market, and the Apple iPad is only a part of that. The gadgets themselves bring tremendous potential to the market, but what's much more important for publishers is the new dialog about business models that will result from them.
The dialog has just begun. There's consortia being created, there's a robust dialog about how publishers can make a buck. For example, the iPad. There's no question that Apple is going to to try and do what it did with the iPod with the iPad. Instead of music publishers, it's going to try and get book and magazine publishers. And it'll probably be a proprietary system, where a book or magazine you download through iTunes won't be playable on a Kindle.