The Face Of Media In 2011 Is Not What What Is Being Marketed, But What You Actually Use

Reggie Middleton's picture

Steve Jobs, of Apple fame, apparently has many talents. Among them are a visionary outlook, a knack for
product design, a fiery entrepenurial spirit, the ability to find and
hire capable staff, and most importantly… the uncanny ability to market
nearly anything to anybody. The man has been able to sell rain coats and
umbrellas in the desert.

Case in point, in releasing the iPad, a truly evolutionary take on
the tablet computer that Microsoft failed to properly execute, Mr. Jobs
commenced selling proprietary add-on services. The kicker was that this
was for
a device whose primary strength was capitalizing on the most open,
non-proprietary technology of the century (the WWW). As he approached
big media houses and ad agencies and stirred up so much interest and PR
over proprietary apps to run on the iPad, complete with premium priced
advertising and paywalls, I literally laughed. I was not surprised, for
the man is skilled in his art, but I would think that those on the
receiving end should be a tad more skilled in their arts as well. Pray
tell, what would make someone thing that an expensive to build,
proprietary app that costs extra money to consume and pigeon holes you
into a single device that will encounter fierce competition that will
probably outsell it in the medium term will successfully compete with
much easier and cheaper to build, nearly comparable quality, web apps
that will be available across all connceted devices whose current
iteration is actually free? Yes, I know that’s a long ass sentence, but
there is a  lot to be said.

Those who are pouring resources into iPad ads and apps should take a step back and start running their businesses for their investors and not for Steve Jobs shareholders. I really like the iPad, and I own one. The reason is because it is an excellent tool for
media consumption, primarily web content and video. Big media vendors
should keep those strengths in mind when attempting to create paths that
actually detract from the primary motivation for using the iPad. On that note, I introduce this update from Endgadget.com:

iPad magazine sales numbers show steep decline over a few short months

Uh oh. Since its debut, the iPad
has been variously hailed as the final nail in the coffin of all
physical media and the savior of the magazine and newspaper industries. A
few magazines, such as
Wired, had truly impressive
digital launches, with over 100,000 downloads of its first issue in
June. It doesn’t seem, however, that the stellar start was in any way
sustainable. According to the Audit Bureau of Circulations, which
collects magazine circulation data from companies willing to furnish
numbers, all iPad magazinesWired
was averaging 31,000 downloads from July through September, had 22,000
and 23,000 respectively in October and November. Other magazines have
seen similar declines: Vanity Fair sold 8,700 downloads of its November issue, down from an average of about 10,500 from August through October; GQ sold 11,000 copies, its worst showing yet. Now, not all magazines release their numbers, of course — including The New Yorker, People, and Esquire
— but the numbers we do have seem to be indicating a trend of general
decline after a short burst of excitement. have seen fall offs in
downloads over the past few months.



Honestly, there is relative little of practical use and interest that
you can do with a proprietary app that you can’t do in HTML(5) that
will justify the expense and more importantly the lock-in to Apple
products. You see, Steve Jobs and Apple are not just experts at
marketing pretty shiny things to mass retail consumers, they actually
excel at selling the producers of the content as well. This, or course,
is a good thing if you’re an Apple shareholder, but not so good for everyone else. The reason media execs were able to be sold on the iPad magazine app ideas was because they are still searching for
ways to monetize the new media system of near frictionless content
distribution. Back in the days, they were able to make fatter margins
because there were significant barriers to entry in distributing
content. Those who owned or controlled the distribution channels, owned
or controlled the revenues – nearly regardless of the quality of the
content. This was true for print, radio, TV broadcast, etc. Now, with the advent of the web and frictionless distribution, they have untold competition for
content, which quickly commoditizes it. In addition, aggregators with
difficult to replicate technology platforms such as Google, further
commoditize the content, and remove the power of brand from it. Content
vendors have been complaining across the board that they are having
problems charging for
content, and the ad model often doesn’t generate the revenues to keep
the operation afloat, much less profitable. The results??? Massive and
serial bankruptcies/insolvencies across the board.

Well, here’s a solution from Reggie Middleton – and it doesn’t entail
you spending $300,000 to a half a million dollars customizing a
proprietary app for
my devices whose greatest strength is surfing the non-proprietary web.
Everybody, quite now…. Are you ready??? Create better content. You see,
truly capable content cannot be commoditized. I mean, really juicy, hard
to come by content. I don’t mean adding flash widgets, slide shows, and
other tricks and gadgets. I mean producing stuff of interest and of
use. Why is Wikileaks so popular?

When news organizations started suffering due to collapsing margins
as a result of their inability to grasp the power, potential and risks
of frictionless distribution via the Web, they moved in the opposite
direction of prudence. They reduced their staff and cut expenses INSTEAD
of investing in the business. Why pare down or eliminate the
investigative journalists and when they are the assets that can truly
set you apart from the commoditizing content aggregators, and the run of
the mill web site?

They allowed salesmen to sell them web widgets and gadgets (ex.Flash
apps, iPad apps, etc.) that will magically bring profits and sticky
readers to their respective businesses. I pray thee, tell me, since when
do web programmers and technology company execs know more about the
media business than media execs? If they would have taken the resources
spent on creating fancy schmancy gadgets and put them into their
investigative journalism departments, they would have a thriving
operation with content that runs across all devices (you know, regular
text, pictures and video?). Again, why is Wikileaks so popular? Much of
their content could have been ferreted out by a strong investigative
staff. Don’t believe me? Look at what my little skeleton staff was able
to dig up, with a budget akin to lunch money, as excerpted from Who is Reggie Middleton!!!

Reggie Middleton is an entrepreneurial investor who guides a
small team of independent analysts to uncover truths, seldom if, ever
published in the mainstream media or Wall Street analysts reports.
Since the inception of his BoomBustBlog, he has established an
outstanding track record, including but not limited to, the call of….

  1. The housing market crash in September of 2007: Correction, and further thoughts on the topic and How Far Will US Home Prices Drop?
  2. Home builders falling and their grossly misleading use of off balance sheet structures to conceal excessive debt in November of 2007 (not a single sell side analyst that we know of made mention of this very material point in the industry): Lennar, Voodoo Accounting & Other Things of Mystery and Myth!
  3. The collapse of Bear Stearns in January 2008 (2
    months before Bear Stearns fell, while trading in the $100s and still
    had buy ratings and investment grade AA or better from the ratings
    agencies): Is this the Breaking of the Bear? | After the collapse, a prudent bullish call as well… Joe Lewis on the Bear Stearns buyout Monday, March 17th, 2008: “The problem with the deal is that it is too low, and too favorable for
    Morgan. It is literally guaranteed to drive angst from the other
    side. Whenever you do a deal, you always make sure the other side gets
    to walk away with something.  If you don’t you always risk the deal
    falling though unnecessarily. $2 is a slap in the face to employees
    who have lost a life savings and have the power to block the deal. At
    the very least, by the building at market price and get the company for free!” |
    BSC calls are almost free and the JP Morgan Deal is not signed in stone Monday, March 17th, 2008 | This is going to be an exciting, and scary morning Monday, March 17th, 2008 | As I anticipated, Bear Stearns is not a done deal Tuesday, March 18th, 2008 [Bear Stearns stock goes from $1 and change to $10, front month calls literally explode from pennies to several dollars]

  4. The warning of Lehman Brothers before anyone had a clue!!! (February through May 2008): Is Lehman really a lemming in disguise? Thursday, February 21st, 2008 | Web chatter on Lehman Brothers Sunday, March 16th, 2008 (It would appear that Lehman’s hedges are paying off for them. The have the most CMBS and RMBS as a percent of tangible equity on the street following BSC. The question is, “Can they monetize those hedges?”.
    I’m curious to see how the options on Lehman will be priced tomorrow.
    I really don’t have enough. Goes to show you how stingy I am.
    I bought them before Lehman was on anybody’s radar and I was still to
    cheap to gorge. Now, all of the alarms have sounded and I’ll have to
    pay up to participate or go in short. There is too much attention
    focused on Lehman right now.
    ) | I just got this email on Lehman from my clearing desk Monday, March 17th, 2008 by Reggie Middleton | Lehman stock, rumors and anti-rumors that support the rumors Friday, March 28th, 2008 | May 2008
  5. The fall of commercial real estate in general (September of 2007) and the collapse of General Growth Properties [nation's 2nd largest mall owner] in particular (November 2007): BoomBustBlog.com’s answer to GGP’s latest press release and Another GGP update coming… (among over 700 pages of analysis, review the January 2008 archives or search for “GGP” for more research).
  6. The collapse of state and municipal finances, with California in particular (May 2008): Municipal bond market and the securitization crisis – part 2
  7. The collapse of the regional banks (32 of them, actually) in May 2008: As I see it, these 32 banks and thrifts are in deep doo-doo! as well as the fall of Countrywide and Washington Mutual
  8. The collapse of the monoline insurers, Ambac and MBIA in late 2007 & 2008: A Super Scary Halloween Tale of 104 Basis Points Pt I & II, by Reggie Middleton, Welcome to the World of Dr. FrankenFinance! and Ambac is Effectively Insolvent & Will See More than $8 Billion of Losses with Just a $2.26 Billion
  9. The overvaluation of Goldman Sachs from June 2008 to present): “Can
    You Believe There Are Still Analysts Arguing How Undervalued Goldman
    Sachs Is? Those July 150 Puts Say Otherwise, Let’s Take a Look
    ”, “When the Patina Fades… The Rise and Fall of Goldman Sachs???“and Reggie Middleton vs Goldman Sachs, Round 2)
  10. The ENTIRE Pan-European Sovereign Debt Crisis (potentially soon to be the Global Sovereign Debt Crisis) starting in January of 2009 and explicit detail as of January 2010: The Pan-European Sovereign Debt Crisis
  11. Ireland austerity and the disguised sink hole of debt and non-performing assets that is the Irish banking system:
    I Suggest Those That Dislike Hearing “I Told You So” Divest from
    Western and Southern European Debt, It’ll Get Worse Before It Get’s
    Better!
  12. The mobile computing paradigm shift, May 2010: »

Related links:

There Is Another Paradigm Shift Coming in Technology and Media: Apple, Microsoft and Google Know its Winner Takes All Monday, June 21st, 2010

Has the Web and the Blogosphere ushered in the Death of Radio? Monday, November 17th, 2008