The iPad isn’t About Apps: It’s About the Future of Media and Content

With the introduction of Apple’s iPad last week, a good chunk of internet weighed in with opinions, verdicts, and jokes. In doing so they fell into predictable biases, which obscured an important takeaway: Apple’s iPad will be vastly different from the iPhone in that it will be about media and content, not about applications. By understanding the media formats the iPad inspires we can better understand the future of content, as it might exist across the entire digital spectrum, from mobile phones to PCs.

The Sigh of the Thoughtleader: “The iPad is just a big iPod Touch”

But let’s back up. Last week Apple announced the iPad, their take on a tablet computer. According to Apple PR, the iPad is,

“…A revolutionary device for browsing the web, reading and sending email, enjoying photos, watching videos, listening to music, playing games, reading e-books and much more.”

With their announcement, Apple ended years of rabid speculation and rumors concerning their fabled tablet.

But as the initial rush of the reveal faded, technology tastemakers sighed with disappointment. “The iPad is a big iPhone – and that’s it,” wrote one commenter on The Guardian’s tech blog. The “big iPhone/iPod Touch” critique was iterated by gadget blogs across the Internet. The mood was similarly tepid at a developer meet-up in Silicon Valley’s Mountain View. Most programmers were disappointed: the iPad doesn’t offer them anything new. “The iPad doesn’t have any new functions that weren’t already on the iPhone. It has less features than my current netback. I don’t understand the excitement,” one developer commented.

Developers Want Function, Not Form: Content Partners will Drive this Device

The critique that the “iPad is just a big iPhone” isn’t wrong, per se. But it’s like saying, “a magazine is basically a big business card.” You’re ignoring the interactions users have with products.

Unfortunately, this context-devoid argument is a popular response among the tech elite. It tends to arise anytime a company makes a gadget for an audience other than the tech-obsessed. In fact, the tech community issued the same “nothing new” response when Apple unveiled the iPod, in 2001. In a MacRumors forum discussing the then-unveiled iPod, one member wrote:

“I still can’t believe this! All this hype for something so ridiculous! Who cares about an MP3 player? I want something new! I want them to think differently! Why oh why would they do this?! It’s so wrong! It’s so stupid!”

The thread is littered with similar replies.

The “nothing new” response illustrates the core desire of technologists: bleeding-edge function. To them, form is merely window dressing. Time and time again, products that package existing technology for mainstream audiences are ridiculed for not pushing boundaries. Yet, time and time again these products succeed, because they understand that most people want to simply use technology, not bask in its potential.

3rd party support for the iPad will not come from unenthusiastic developers. Rather, it will come from content publishers. Context experiences from media companies like newspaper and magazine publishers, blogs, book publishers, TV studios, and sports leagues will make the iPad valuable.  Without this outside support, the iPad will fester as an expensive way to browse the web, something competitors will quickly match at lower price-points.

The Universal Format: The Future of Content

Right now, the iPad is still an early adopter device: many people want it, but no one needs it. However: there is no denying that the new form of content born today is a potential solution to many of the problems plaguing media companies. Dated companies like Harper Collins, Penguin, and The New York Times look fighting fit on the iPad. Many laughed a few weeks ago at the concept of a New York Times pay wall. But on stage last Wednesday, The Times showed off an experience worth paying for.

And while I don’t think there’s a current need (yet) for a device that sits between the mobile phone and the PC, I do think that the space between mobile and PC is a proving ground for future content. The most valuable result of developing content for the space between mobile and PCs is the creation of a universal format that works across the entire digital device spectrum. And there is a strong need for a universal format.

As media professionals we’ve been given a gift. Apple has thoroughly explored the future of content and returned with the iPad. So rather than spend money on trend reports and futurists, we should become familiar with the iPad and the media formats that it inspires. Because it doesn’t matter whether or not the iPad is a hit. What matters is that newspapers, booksellers, magazine publishers, advertisers and all others  media companies have been handed a blueprint for contextualizing and selling their content in a fully digital future.

This article was originally published on JackMyers.com

Balancing on the Edge of the Internet

Quick work of closure at the Virgin Megastore

In a study released last week, Harvard Business School professors John Deighton and John Quelch set out to determine how much the Internet is worth. Working towards their appraisal, they spend the bulk of their paper addressing a question essential to their goal and ultimately more interesting: where does the Internet begin and where does it end?

Deighton and Quelch never really manage to draw a firm line in the sand. Despite their best efforts, they issue several valuations. For those keeping score at home, the Internet is worth somewhere between $300 and $680 billion. Clearly, there isn’t an easy delineation between the Internet and everything else.

Despite this, most businesses (media and otherwise) operate as if there’s a hard and fast line where between the online and offline worlds. Budgets are often meted out as if the two never meet. As a result, departments furiously guard their respective fiefdoms, further encouraging the disconnect between the two sides.

The existence of this hard divide is a tragedy. Because, the gray area between the Internet and everything else is where innovation occurs and new value is born. Businesses that have learned to optimize themselves within the blurred edge of the Internet reap huge benefits, while ones that ignore this balancing act fall by the wayside. And while businesses and agencies continue to divide their departments to the extremes of either online or offline, consumers are steadily embracing the blurred edge between the two. In fact, most of them are already acclimated to this digital borderland.

Balancing on the Edge of the Internet: Apple’s Ecosystem

To witness the benefits that come with balancing on the edge of the Internet, look no further than Apple. But to understand the scale of Apple’s success, we first need to revisit companies that ignored the balancing act and insisted on business as usual.

On 4th St. and Market in San Francisco, the Virgin Megastore sits abandoned and empty. The headphones from empty listening stations hang tangled next to piles of unused mannequins. Half a block down, hand-painted signs advertise off-brand, wholesale menswear in what used to be a CompUSA. Five years ago, both stores would be packed with shoppers. Today, they’re neglected relics of another age.

Neither Virgin’s or CompUSA’s markets disappeared. Rather, they just shifted into the blurry edge of the net. Their continued existence (and vitality) can be seen across the street from Virgin, at the Apple Store. Here, the Macs once sold at CompUSA are gateways to iTunes, which sells every bit of content Virgin once housed.

The inside of the Apple Store is a madhouse. An employee lectures from a theater in back while one-on-one tutoring sessions take place to the side. The Genius Bar is swamped. You’d have to push through two rows of people just to make it to the counter. Downstairs, away from the help areas, every computer on display is occupied. Apple staff are everywhere.

Apple understands how to balance on the edge of the Internet. The store is dedicated to tactile and personal interactions with high-ticket items that generally aren’t purchased by consumers online: MacBooks, iPhones, iPods, etc. Everything else Apple sells is sold online through the high-ticket items catered to in-store. It’s a perfectly balanced ecosystem. Each channel drives the other.

All of this is immensely successful: according to Bloomberg, Apple increased revenue at its stores by 2.5 percent in the first six months of this year, to a grand total of $3 billion. Sales for the rest of the retail industry, however, fell 9.2%. Digitally, Apple can’t be touched: NPD estimates iTunes accounts for 25% of all the music sold in the US and 69% of all digital music total.

Consumers Already Balance their Behaviors

Apple’s success illuminates a greater, game-changing consumer insight: people are already balancing on the edge of the Internet. They have digitally optimized their lives, moving offline behaviors online when it makes sense and using each channel to support their actions on the other. According to a a Forrester report released last week, 70% of US consumers research products online and purchase them offline. For most of these consumers, adding one retail channel doesn’t eliminate the other. Rather, more purchases are made in total, with even savvy online shoppers consistently reserving certain purchases to be purchased offline. Which purchases? The same high-ticket items that Apple stocks in store: computers, cell phones, and televisions.

Apple has perfected the digital balancing act better than most. They smartly focused their business around music, which is easy to digitally distribute. But as broadband spreads, smart phones become become ubiquitous, and consumers further adapt to digital living, more markets will be overtaken by the edge of the Internet. Video, in the form of television and cinema, seems a likely candidate. Already we’re seeing glimpses of the future marketplace: Major League Baseball is offering a multichannel video solution that is simply incredible and Netflix is embracing digital video as fast as the movie studio lawyers let them.

But wherever the borders of the Internet are drawn, understanding their mutability is key to designing smart strategies. As we can see with Apple, when channels drive each other the ecosystem is worth much, much more than the sum of its parts.