SUMMARY 1
Catalyst 1
Ovum view 1
Key messages 2
The iPad is important but not sufficient to secure the future of news and magazine publishing 2
Success in the browser is possible but still challenging with a dynamic pay-wall and the right product 2
Publishers face a systemic market share challenge online 2
Technology vendors need to deliver robust, multi-platform publishing tools with integrated analytics 2
MARKET CONTEXT: PUBLISHING INDUSTRY IN CRISIS IN PRINT AND ONLINE 4
Paid circulation is hemorrhaging 4
Newspapers face a market share challenge online 7
Display advertising CPM rates are declining 9
Search and aggregation are commoditizing editorial: in an easily searchable knowledge system, the price for information tends to zero 10
Magazines lag newsprint but are now face a structural migration of audience and advertisers to digital 10
Digital tablet editions are a natural fit for magazine content 10
The strategic challenges for news and magazine holdings 11
BUSINESS FOCUS: STATE OF THE ART PUBLISHER RESPONSE STRATEGIES 11
Learning where to build the pay-wall 12
Niche, differentiated content is most effective behind the pay-wall 12
Metering the pay-wall 12
Secondary revenue sources 13
Smartphone apps-new formats and distribution: product differentiation and distribution strategy 14
App market has huge growth potential 14
Dominance of the Apple App Store 15
Newspaper app case study: the Guardian 17
iPads, ebooks and digital editions 18
The digital edition concept is not new but has lacked a market 18
The iPad installed base will take time to ramp 18
The reality of the iPad media market over aspiration 20
Ovum would like to emphasize that this analysis excludes revenues from: 21
The multi-function, video capable tablet market and eBook market are not comparable 21
Publisher-controlled retail: value-chain control 22
Publisher distributed devices 23
Innovation in print 23
Driving higher advertising rates and engagement through diversification into video and casual gaming 24
TECHNOLOGY FOCUS: INTEGRATED OPERATIONS AND PAY-WALL SOLUTIONS 24
Operational integration of digital and print infrastructure 25
Competitive landscape for pay-wall technology platform solutions 26
Business challenges for vendors looking to enter the publishing market 27
Solutions from within the media eco-system 27
WSJ.com Mosaic 27
Journalism Online 28
Google 28
Yahoo! 29
Solutions from outside the media ecosystem 29
Microsoft 29
Oracle 29
IBM 29
Streamlining the production workflow and integrated analytics 30
Omniture 30
Metadata generation and management 30
Adobe Flash Platform 31
Adobe Packager 31
The threat to Adobe: HTML5 31
Recommendations for news and magazine publishers 32
Tablets revenues will not be enough, they must be one aspect of a multi-platform strategy 32
Publishers define their target position in the digital value chain and structure their operating model accordingly 33
Recommendations for vendors 33
APPENDIX 33
METHODOLOGY 34
FURTHER READING 34
AUTHORS 34
OVUM CONSULTING 35
DISCLAIMER 35
List of Figures
Figure 1: US national & local newspaper advertising revenues: 1995 to 2009 5
Figure 2: US daily average circulation for all national and regional newspapers: 1995 to 2009 6
Figure 3: UK daily average circulation for all national dailies: 2001 to 2010 7
Figure 4: Online US newspaper audiences: 2004 to 2009 8
Figure 5: Newspaper's market share crisis: dwell time on all US news domains versus top web destinations 9
Figure 6: Forecast total free & paid packaged media application downloads and revenue: 2008 to 2014 15
Figure 7: Free versus paid application downloads & average monthly spend on applications 16
Figure 8: Ovum estimates for tablet sales, including iPad: 2010 & 2011 19
Figure 9: Gross application retail value of iPad & tablet market: 2010 - 2011 ex. iBook store & iTunes 21
Figure 10: Worldwide eBook reader installed base: 2010 to 2011 22
Figure 11: Publisher operational strategy: digital innovation to transformation 26
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