Browsing Articles Written by

Frédéric Filloux

Apple’s Antitrust Problem

Uncategorized By November 13, 2011 Tags: , 29 Comments

(First in a series)

Will Apple face the type of antitrust issues Microsoft had to contend with in the 90’s? Possibly, but not with the same magnitude. Apple is by no means locking up its market the way Microsoft controlled the personal computer field with Windows. Still, the question arises for the iTunes Store, the App Store and their tightly controlled transaction and subscription systems.

Today, we’ll take a look at the issue from a news business perspective.

The fact that scores of publishers are flocking to the iTunes system doesn’t mean they are happy with it. For any publisher willing to access the burgeoning tablet market currently dominated by the iPad, a presence in the AppStore is mandatory. But I never met a publisher happy with his relationship with Apple. For most, what started as an enthralling partnership is slowly morphing into a feeling of servitude.

That perception is tinged with schizophrenia. Media people are usually fond of Apple products. From top bosses to tech reporters, they cherish their iPads and their iPhones. Then, each time Apple introduces a well-polished new device, it gets glowing coverage worth hundreds of million dollars if converted in media space.
Enjoying great products and admiring Apple for its many achievements does not prevent anyone from taking a stern look at the way the Cupertino folks do business. In a nutshell, publishers feel increasingly locked-in, and sometimes abused by Apple’s tight ecosystem.

As always, there are excesses on both sides. Difficult as it might be, let’s try and take a balanced view of three majors issues:
#1 the Application ecosystem
#2 the validity of a business model build on a 30% commission
#3 the issue of the customer data.
(We’ll start with #1 today, and address #2 and 3 next week)

The following is based on my ongoing contacts with publishers and conversations I had with lawyers specialized in antitrust and intellectual property. They spoke anonymously as they are quietly loading their guns for a possible legal action before the European Commission.

#1 The App Ecosystem

The context. Apple set up a huge technical and human infrastructure in order to provide tools to anyone, large of small, willing to build an application and yearning to make it available to any market. Amazingly, from the outset, Apple decided to provide all this machinery (software development kit, tracking system, testing) for free (let alone the symbolic cost of a $99 developer account).
Entrepreneurs voted with their keyboards and mice: there are 500,000 applications in the AppStore today, and counting. It created a huge new business. As Apple gives back 70% of the revenue for paid-for applications, by June 2011, the company had paid over $2.5B to developers, many of them individuals or very small companies.
Well, is there really a matter to complain about here?
Surely not for the developer working from a high rise in Seoul or a barge in Amsterdam. But for the large publishing company, it’s another story. Once it enters the system, two keywords begin flashing : “discretionary power” and “locked-in”.

Let’s face it, Apple has life and death power over the apps it harbors in its store. Its approval system it completely opaque, left at the discretion of an elusive army of people working at “undisclosed locations”. Welcome to the kingdom of the arbitrary. The same set of features that once raised a red flag triggering a rejection will be accepted the next time around — without explanation. Approval delays vary widely, making it difficult to plan the roll-out of a critical product. What is acceptable for a mom and pop operation becomes anxiogenic for large organizations.

The question of “choice”. To those who criticized its “black box” system, Apple’s retorts we evolve in a free market: if a publisher is not happy with its App Store it can: (a) go to the Android market, or (b) build its own web-app, i.e. an app that will live and function independently of the iTunes Store.

Antitrust lawyers don’t see things that way. Their argument: for someone controlling 75 % of the tablet market, invoking such a marginal alternative isn’t relevant. A publisher willing to join the tablet business has no choice but being available on the iPad. In practical terms, this means investing serious money to join a platform operated in a discretionary and opaque way, with unclear and changing rules.

As for the web app, antitrust attorneys suggest they represent a degraded and dangerously uncertain alternative to the iTunes Store. Degraded because a web app such as the Financial Times’ — the poster child of the “resistance” to Apple — doesn’t work as well as a native app. And this notion of “slightly less good” is absolutely critical. Given the sate of HTML5 (the programming language used for independent apps) and whatever the skills of its developers, a web-app will never be as fast, as fluid, as features-rich as a native application. As for the uncertainty, it lies in the fact that a web-app depends on features Apple can change without warning, such as the ability to use its browser (no choice here, it’s Safari) to store content. Put another way, web-apps are likely to work — no more than OK — until Apple decides otherwise. Again, it’s difficult to build a sound business upon such quick sand.

Evidently,  Apple is entitled to defend the integrity of its operating system by not giving independent applications access to critical layers of its iOS. This precaution provides better security against rogue code such as viruses and other malware; it is an indisputable justification for tight control. Agreed, said the antitrust lawyers, but: (a) for the native apps, rules could be more transparent and stable, (b) as for web apps, such rules should evolve within a framework of well-documented Application Programming Interfaces (APIs), a set of coding conventions used by programs to communicate with each other and with the underlying operating system. These APIs would be controlled by Apple on the sole basis of technical concern in order to protect the integrity its OS while creating a clear and well-defined framework for publishers.

Evidently, these suggestions sound a bit naïve. Apple has no business interest whatsoever in easing its allowance for independent web-apps. Most likely, it will carefully adjust the cursor to appear reasonably open while, at the same time, protecting its own ecosystem.

Things are likely to get worse before they get better: Apple is likely to unleash features that will benefit only applications and services of its choice in order to preserve its position. The best example is its Newsstand’s background downloading for publications (your iPad automatically wakes up to download the publications you subscribed to in the Newsstand, see a previous Monday Note on the matter). Lawyers says this is the perfect example of a feature that creates an unfair advantage favoring Apple’s own distribution channel.

Apple’s attitude towards competition epitomizes a often-seen scenario of the technological evolution: a company acquires a dominant position in a given market (in today’s case, several ones) thanks to superior products and services. As the company further gains ground over its competitors, the admiration for its quick success morphs into growing suspicion. Features that once were lauded as innovative market boosters begin to be seen as instruments of a market lock-down. At the same time, competition tries to imitate the leader as fast as it can. As it feels both unfairly copied and threatened, the market leader reacts by further tightening its grip on its business, using whatever it takes to buy time. In doing so, it triggers more hostility, etc. A vicious spiral begins.

Next week, considering market domination, we’ll see why Apple takes a different approach from the one Microsoft once used. Unless it becomes completely intoxicated by its own success, a clever “cursor adjustment” could preserve Apple’s lead and, at the same time, favor healthy competition.


The Discreet Shift to Twitter

Uncategorized By November 6, 2011 36 Comments

You hear things about Facebook. You see things. As its audience matures, a subtle shift might be underway. Of course, numbers remains staggering. Facebook is heading toward the 800 million users mark, mostly by conquering new markets. The growth is distributed as follows : Middle-East Africa, Asia-Pacific and Latin America grow by around 60% per year; Europe by 35-40%; and North America by 25%. And demographics are shifting: older people are joining in Western markets while a younger audience grows in emerging ones. More changes are underway as the internet spreads on both landlines and mobile devices: over the last 3 years, China added more internet users than exist in the United States today. Furthermore, in the fastest growing markets, Facebook captures over 90% of all social network traffic. So, for the near future, Facebook doesn’t have a growth problem.

On mature markets, the future looks bright as well. In the United States, unique users grew by 22% between June 2010 and September 2011, reaching a total of155 million. Notably, the average time spent per person grew from 6:02hrs to 7:42hrs.


When you speak with grownups and young adults who used to be Facebook enthusiasts, you hear the following :
— Facebook’s interface, its features have become overly complicated. The result is it takes more time to do the same old things.
— Managing friends leaves you with two choices: spending a lot of time delicately pruning lists, circles and groups, or being swamped.
— Constant and insidious changes in Facebook’s privacy features keep taking people off-guard: all of a sudden, you find many things about your digital life, mostly mundane stuff such as what you read and listen, being broadly available outside your initial circle. Quasi-paranoid caution has become a must. And again, since “opening” is the default setting on Facebook, recovering your own privacy gets increasingly complicated.
— A rise in the advertising presence, which reinforces the impression of being tracked down: users don’t have the slightest idea of the breadth and depth of Facebook’s mining of their personal activities.

It now seems Facebook’s usage is undergoing a split. Active Facebookers become increasingly engaged, spend more time doing more stuff, while “reasonable” users (above 25) become more reluctant and careful.

Who benefits from such shift? Twitter, primarily. Globally, Twitter’s microblogging/social network is much smaller than Facebook, with a reported 200 million users, only a fraction of which are really active. Business-wise, Facebook is 30 times larger than Twitter and is expected to gross $4.27bn this year, according to eMarketer ultra-precise estimates; that’s more than twice last year’s revenue. As for Twitter, its advertising strategy is gaining traction: again, eMarketer expects Twitter to make $139.5 million, up 210% from the previous year.

Given the differences in size and reach, does it make sense to compare the two?

Let’s consider the news media sector. From a pure quantitative standpoint, Facebook remains a solid referral for news sites as people “Like” and link to stories. But Facebook encourages fly-bys, i.e. viewers that  won’t stay on the site. Twitter’s referrals to a news content is of a different nature. Tweets and retweeets usually come from people who have chosen to follow a given individual, a news organization or a specific subject. The referral is therefore much sharper, more targeted than the impulsive “throw-on-my-Facebook-wall” type.

For what it worth, let’s look at an essay published last Saturday in the Wall Street Journal. Titled Why Can’t Wall Street Handle the Truth, it is written by Mike Mayo, a long time banking analyst who made repeated calls to dump banks stocks.

The essay generated 795 Facebook “Likes” — which is small for a story that is freely available in the WSJ Social Facebook application:

In the meantime, the same piece (and the mention of Mayo’s book) has been indexed 140,000 times in Google, thanks to only 392 tweets.

Still using the Wall Street Journal as an example, let’s have look at Walt Mossberg’s presence. (He is the Journal’s world-famous tech writer.) On Facebook, his page got 874 “Likes”. On the WSJ Social application, where Mossberg appears as an editor, he got 252 readers as the app has been able to collect a total “23K Readers”

Not very compelling.

But, on Twitter, Walt has 264,000 followers.

Another key element in Twitter’s favor: the mobile factor. Twitter’s 140 characters format turned out to be a killer on smartphones: it is growing faster on mobile (+75% Year-to-Year) than LinkedIn (+69%) and Facebook  (+50%). That’s the privilege of simplicity and straightforwardness over feature-itis.


Proof by Mask

design By October 30, 2011 22 Comments

Web design is in bad shape. In the applications boom, news-related web sites end up as collateral damage. For graphic designers, the graphics tools and the computer languages used to design apps for tablets and smartphones have unleashed a great deal of creativity. The transformation took longer than expected, but great designs begin to appear in iPad applications (in previous Monday Notes, we already discussed Business Week+ and the new Guardian app). The best applications get rid of the print layout; they start from a blank slate in which a basic set of rules (typefaces, general structure of a page, color codes) are adapted to the digital format. Happily, we just stand at the very beginning of a major evolution in news-related graphic design for apps. And this new world proves to be a killer for the traditional web which, in turn, seems to age fast.

The graphic evolution of the web must deal with two negative forces: its language framework doesn’t evolve fast enough, and it faces the burden of messy advertising.

Less than a year ago, the potential in the latest iteration of the HyperText Markup Language a.k.a. HTML5 thrilled everyone: it was seen as the decisive, if not definitive, upgrade of the web, both functionally and visually. Fact is, it didn’t take-off — yet. Reasons are many: backward compatibility (not everyone uses the latest web browser), poor documentation making development uncertain, stability and performances issues. There are are interesting initiatives but nothing compelling so far. None of the large digital media have made the jump.

For advertising, the equation is straightforward. The exponential rise of inventories coupled to fragile economic conditions have pushed ad agencies to ask more (space) for less money. And, for the creativity, the encephalogram remains desperately flat.

The result is this:

This is the first screen of the French website 20 minutes’ home page. A good site indeed, doing quite well audience-wise, but which yields too much to advertising. In its case, the page carries an “arch” that frames the content; and, for good measure, a huge banner is inserted below the main header. If you mask the ad, it looks like this:

The weird thing is this: On the one hand, web designers seem to work on increasingly large monitors; on the other, the displays used by readers tend to shrink as more people browse the web on notebooks, tablets or smartphones.

The result is a appalling when you try to isolate content directly related to the news. In the series of screenshots below, I selected the first scrolls of pages as they render on my laptop’s 15” display. Then, I overlaid a red mask on everything but the news contents: ads, all sorts of promotions, large white spaces, headers and sections lists are all hidden away.


Apple’s Newsstand: Wait for 2.0

online publishing By October 24, 2011 Tags: , 18 Comments

Can Apple crack the digital news market the way it did with music? The comparison might not be relevant. Here is why:
— Today, in the new business, imperfect as it is, the transition from print to digital is much more advanced than the music industry’s similar transformation was when, in 2001, Apple launched the iPod. There are thousands of web sites now. They come in all shapes, from powerful pure players to paid-for legacy media. Many already make serious money, showing evidence of strong strategic thought.
— The two industries are structured in different ways. In the news business, there is plenty of players; the market is more scattered than ever, unlike the music business in which securing one of the few key distributors is the only way to a sizable market share.
— Technically, when compared to the news business, the music market was easy to standardize: very few digital formats as opposed to many and complex web sites and applications.
— The foray in the music business was driven by Steve Jobs himself. From the outset, he was really fond of music. By and large, he was not a news freak (nor did he liked journalists very much). For Apple, digital news was meant to be a second class business.

For all of these reasons, Apple had no hope to succeed organizing the news business the way it did with music. That’s why it came up with an ultra-simplistic approach for its Newsstand: aggregating pre-existing news applications while taking advantage of its control of the server side (iTunes) and on the device side (iOS).

In its first iteration, Apple Newsstand is no more than a super-shortcut for news related applications. Once a publisher offers subscriptions in iTunes and selects to go for the Newsstand, its app automatically migrates to there. First you get a  push message such as this one….

…Then the publication is displayed on the store’s wooden shelf…

… where it shows up with a clever updated icon reproducing the publication’s most recent cover or front page.

But the Newsstand’s real killer feature is background downloading. Once you’re subscribed, your issue is automatically downloaded on your iPhone and iPad. This feature was actually sought for by all developers working on news application: everyone dreamed about the iOS device being able to wake up following a request from the iTunes Store and download the latest issue of a newspaper or magazine. At the time, no one knew Apple intended to keep this functionality for itself. As expected, its works fine and proved to be extremely useful.

How did the service perform since its October 12th launch? Magazines are doing well, but newspapers are still absent from the platform. I was expecting to get all the English-speaking publications I’m subscribing to or reading on a regular basis. But the Newsstand is mostly filled with leisure magazines — for now.
Take UK’s Future Publishing: with no less than 50 titles, it went full steam ahead to the Newsstand. Future said it logged two million downloads in four days — but we don’t know how many actual in-app copies purchases it generates. Still, that’s an impressive result for a company that sells 3.2 million magazines every month.

Again for the magazine industry, other data seem similarly compelling. According to Paid Content:

Exact Editions, [an US aggregator of paid-for PDF versions] which says it made about 10 percent of the Newsstand app titles on iTunes Store, says downloads of freemium sample editions jumped by 14x in just a few days, whilst some titles’ actual sales have more than doubled.

And reports the following (emphasis mine):

The week Newsstand launched, the NYTimes for iPad app saw 189,000 new user downloads, up seven times from only 27,000 the week before.

That’s impressive, but it’s nothing compared to the NYTimes iPhone app, which saw 1.8 million new downloads that week, 85 times more than the 21,000 downloads the week before. Nearly one-fifth of the 9.1 million people who have ever downloaded the NYTimes iPhone app did so last week, with the launch of Newsstand.

The NYT’s performance is truly amazing given its subscription system’s weird price structure. It is also surprising considering its iPad application isn’t the best in its class.

Why do magazines take the lion’s share of the Newsstand? Two main reasons. First, when it comes to subscriptions, magazines are extremely inexpensive; for a full year subscription, single issue prices can fall to a symbolic level of 50 cents or less. Second, magazines are best suited to the PDF format that still plagues most of the e-publishing industry. Therefore, without redesign expense, publishers can shovel magazines by the bulk into any newsstand. It limits the reader’s engagement, but no one really seems to care yet. Copies are counted as sold.

By contrast, subscriptions to dailies remain quite expensive since they are expected to contribute a great deal to the bottom line. As for the format, most newspapers can’t be reduced to a zoomable PDF to be read on a tablet (let alone a smartphone).

In order to really take off, daily publications’ digital editions will have to morph into dedicated applications designed for tablets (or smartphones). That is exactly what The Guardian did with is brand new iPad, iOS5-only applications that is by far the best on the market.

This app scores well on many items: navigation is reduced to the basic 10 sections of the newspapers; story layout and readability are optimal; photographs are spectacular (although Apple doesn’t allow The Guardian app to be linked to its photojournalism’s Eyewitness app); pricing is right (£9.99 – $13.99), plus there is a huge incentive with 82 free issues (!!); the app is not autistic as it is tied to the brand’s website and to the social media sphere; finally, it downloads fast (which is appreciable but less of an issue now with background downloading).

From a reader’s perspective, the Apple Newsstand is a first step. There is no decisive momentum — yet.  The real transformation will occur when newspapers and magazines will move to applications really designed for tablets as opposed to unimaginative adaptations of their print editions. This means: approaching the market with new interfaces (such as the Guardian’s or Bloomberg BusinessWeek — our story here); moving to ARPU measurement instead of old-fashioned auditing; and setting up new productions schemes. That’ll be version 2.0. not just for Apple, but for the entire industry.


You Cheat. We Cut Prices

Uncategorized By October 16, 2011 7 Comments

Surprise: To boost its circulation, Rupert Murdoch’s Wall Street Journal Europe engaged in massive channel stuffing. No kidding. It sounds like everyone discovers, all of a sudden, how medias (old and new) actually work. Granted, when it comes to cheating, News Corp is in a class all by itself. The phone hacking scandal pushed the practice of checkbook journalism to the pinnacle of massive corruption. As for the circulation scheme unveiled last week by the Guardian, WSJ Europe has pushed the envelope of bogus circulation numbers much farther than any other newspaper in the world.

From May 2009 to April 2011, the WSJE had a deal with a Dutch company called Executive Learning Partnership by which ELP purchased thousands of copies of the Journal for a price as low as 0.01€. If such deal is not uncommon, the scale was: 41% of the WSJE’s total audited circulation was inflated via this little scheme. The deal also involved a positive coverage of ELP. On Tuesday October 11th, Andrew Langhoff, the publisher of the Wall Street Journal Europe handed his resignation out.

The next episode is likely to unfold inside the soundproof walls of News Corp’s boardroom. While the phone hacking scandal might still hold more juicy bits in reserve (Guardian’s full coverage here), the circulation scandal involving the Murdoch empire’s most prestigious asset could be the one transgression too far. The board could be tempted to demote the aging boss. The rationale behind their putative decision would point to the rigid, top-down News Corp chain of command. In such an environment, practices such as this amazing circulation scheme must have been directed or, at the very least, tolerated by top management.

More broadly, this scandal raises another question: What is the real value of an audience, print or digital, when it is artificially bought — instead of naturally sold?

In the newspaper business, inflating circulation is hardly new. In fact, it is standard practice. The way copies are counted is a soft encouragement to blur the line between loyal and occasional readers. Officially, audit organizations across the world make subtle distinctions between distribution channels. They break down paid/unpaid circulation, mass subscriptions, types of deliveries, etc. On most Western markets, roughly 20% to 35% of the circulation for supposed paid-for newspaper is actually free.
Beyond that, we have what I’d call “near-free” circulation, i.e, copies that are paid a fraction of the cover price, usually just above the minimum rate imposed by audit organizations to be counted as paid distribution. This includes copies made available in airline lounges and hotels. In the end, this circulation is free. First of all, end users won’t disburse a dime for their newspaper (it is part of the service). Second, the price paid by the corporate distributor will likely be offset by side arrangements such as logistics fees charged by airlines or hotel chains (let alone advertising deals that could also be part of the package). Taking in account such arrangements, the share of free distribution can rise well above 50%.


The Teacher

Uncategorized By October 9, 2011 Tags: 8 Comments

Steve Jobs taught us so many things… To us whose professional life strides tech, ads and media, his way of fostering innovation, of creating an obsessive culture of perfection remains both inspirational and enigmatic. For those who like design and engineering, there isn’t a single field Apple hasn’t entered — or at least influenced. When I fumble with the appalling multi-function display of my Prius, when I struggle with the remote control of my office A/C, or when I wonder why in hell the $2000 battery-assisted bicycle I consider buying doesn’t have an programmable memory chip to upgrade software that looks forever stuck in version 1.0, I wonder how the Cupertino guys would have handled it. Needless to say, I do the same when I look at media applications or newspapers/magazines designs, many of which seem to have succumbed to a sad mélange of sloppy execution and a lack of decisiveness in design.

For years, I have been reading everything I could about Apple from the management/innovation perspective. As a business journalist, I find Apple being the most frustrating company to follow. Very little comes out. The culture (and the cult) of secrecy extents way beyond any employee tenure; even the usually profligate academic literature is rather bare when it comes to Apple.

Front page of Liberation

However, over a span of fourteen years, as it impacted so many sectors, Apple’s unprecedented turnaround yielded a few clues. I tried to isolate some with potential applications outside the tech world. What interests me in Apple ranges from their choice of frosted-glass for my MacBookPro’s trackpad (instead of cheaper plastic), to the use of its immense cash hoard, to the way the company prepared itself for the post-Steve Jobs era.


Dreaming at the Kindle Potential

Uncategorized By October 2, 2011 12 Comments

With each introduction of a new reading device publishers around the world are overcome with the same recurring same fantasy: What if it worked, this time around? Could a reliable business model emerge for news publishing companies?

Last week’s launch of new Kindles is no exception to the cyclic fantasy. For those who where on Mars last Wednesday, here is a look at the revamped family:

To sum up: the new lineup features the widely expected Kindle Fire (full color display, multimedia capabilities and the clever, cloud-accelerated Silk browser — see Jean-Louis’ column). In addition, Amazon redesigned its e-Ink based Kindle with two models, including a small 6 inches version that fits in a pocket. All of them priced aggressively, below their production cost.

A lot has been written comparing Apple’s iPad and Amazon Kindle devices. Exciting but not relevant. The two companies’ strategies can’t be more diametrically opposite. Apple is in the hardware business and all other product lines — software, media offerings — exist for the sole purpose of raising perceived value and units volume. Then, great product execution and streamlined operations help maximize margins. Apple’s gross margin on iPads is about 30%.
By contrast, Amazon is a digital retail company in which all forms of media — books, videos, music, games —  account for about 40% of its sales. Its hardware strategy is designed to funnel customers to its retail business.

This explains why Amazon doesn’t care much about Kindle hardware margins, and is much keener to strike deals with content providers than Apple is. In parallel to the launch of its news Kindles, Amazon has harvested a large set of deals with media companies. Its Kindle Fire Newsstand is already impressive and features a 3-months free trial for a selection of magazines. Symmetrically, a growing number of publishers keep complaining about Apple harsh terms; as a result, in the coming months, we’ll see many prominent publishers exit the Apple ecosystem and switch instead to web-based apps (a move that is actually more complicated than it appears).


The Capsule’s Price

online publishing By September 25, 2011 16 Comments

Do encapsulated digital editions make sense? Is the notion of having a “news container”, similar to a newspaper or magazine, a relic of the past or is it still associated with quality journalism? In an era of instant information, is it worth proposing a self-contained, stop-motion shot of the news cycle?

For some, the reflexive answer involves market research, readers samplings and the like. I don’t think so. I’d rather abide by one of Steve Jobs’ sayings:

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

He was only referring to electronic devices and the software that powers them, all being complicated indeed. But great news products have yet to be invented, and developing them can be quite involved, too: they combine interface design, contents structures and… technology (the latter’s importance being largely underestimated by legacy medias).

First of all, a matter of definition. By “encapsulated edition” I mean a decisive evolution away from the Zinio-like PDF replica of the paper product. Some publications have added XML layers that considerably improve the reading experience and allow numerous features — creating files, sharing on social medias. But very few are willing to get rid of the PDF’s bulkiness (for more on the subject, read a recent Monday Note Tear down this PDF). For “PDF-shovel” editions, the result is unsatisfactory: broadsheet newspapers that are six times larger than an iPad screen, 80-pages magazines loaded with ads that you must painstakingly leaf through.

Certainly not the right template for the future.

On the other hand, BloombergBusinessweek+ looks like a good start. I’m a long time reader of BusinessWeek magazine (when it belonged to McGraw Hill, before Bloomberg bought for a few million dollars). Then, last March, Bloomberg launched the weekly’s digital edition. I was curious to see how the switch to digital would look like.

Today, after a few dozens issues, let’s see what makes “BBW+” a great digital encapsulated product.

#1:  Investment in Design. BBW+ obviously gives design a great deal of thought, both in terms of graphics and structure.

Today’s web is plagued by cheap design. Many sites, especially in the tech field, use stock photographs or copyright-free Flickr pics ad nauseam, quickly messed with by some enslaved intern. No such thing is allowed in an app. And BBW invested a lot in graphic design for both print and the digital products. The short video introducing every issue usually features the editor, Josh Tyrangiel, and the creative director, Richard Turley, or Robert Vargas, the art director, as they explain their cover story choices for the two versions of the magazine. (See examples in Coverjunkie, a good graphic design blog). No stock photos in BBW+: most pictures are produced on spec, and it screams. As for infographics, they are redesigned for the digital version.


The (Overly Personal) Litmus Test

online publishing By September 18, 2011 19 Comments

Over the past three weeks, I’ve been followed. By advertising. Like many, week after week, I land on dozens of sites. Some visits originate from my set of bookmarks, others from the usual click hopping that defines internet serendipity.
In numerous instances, I get the same ad in different formats. The advertiser is called Litmus. I’m testing it. Since it sounds like a good product, I’m happy to link to it. Litmus is owned by Salted Services Inc., a Cambridge, Massachusetts company founded in 2005. It specializes in mass emailing analytics and optimization. You send it a test email, it previews your layout in numerous mail readers, flags any rendering issue, measures its ability to go through spam filters (a publisher’s nightmare for legit newsletters) and provides incredible analytics. (In the Monday Note’s case, these analytics are extremely encouraging and a good incentive for Jean-Louis Gassée and I to continue ruining our weekends.)

I’ve been testing Litmus for three weeks now, on advice from my friend Kim Gjerstad, a great WordPress and emailing specialist.  Now, Litmus wants me as a regular customer, and they are stalking me all over the web. Fair enough. How do they do it?  They — in fact, the digital marketing firm they hired — installed tracking devices in my computer. Since I subscribed to their service and since I’m professionally transparent on the internet, Litmus has been able to reconstruct my complete profile. Therefore, each time I visit one of its thousands of affiliates, the site will identify me as a potential Litmus customer and serve me the right ad. (As I write this, I discover I’m also targeted by Litmus competitors — some internet marketing arms merchant is making money on all sides).

After a while, I realized how saturated I was with Litmus ads when my synapses (slowly, I admit) finally added-up the number of pages I saw carrying the company’s rainbow logo. At the same time (but unrelated), I noticed how my advertising environment surreptitiously changed, depending upon the “freshness” of the browser I used. On one, I never delete cookies; on another I regularly flush tracking devices.


The Blogosphere’s Soft Corruption

journalism By September 11, 2011 24 Comments

The TechCrunch / Arrington saga is the perfect illustration for the stealthy corruption plaguing digital information. Skip this paragraph if you know the story. In a nutshell: on September 1st,  Michael Arrington, founder of the site TechCrunch, announced the launch of a venture fund (Fortune broke the story). Rather small token by Silicon Valley standards: $20 million (to put things in perspective, according to the National Venture Capital Association, 37 funds raised a total of $2.7 billion in Q2 2011, which gives an average of $72 million per fund). No big deal, except Arrington is also TechCrunch’s editor and he intends to continue writing about startups — startups his venture would fund. (To make things even weirder, one of the main contributors to the fund is AOL, TechCrunch’s owner since last year).

Even the most twisted ethicist would have detected a looming conflict of interest. Not Arrington. Because he is one of most arrogant pricks in this business. And because he lives elsewhere. He resides in the blogosphere, where the simplest ethical issues are distorted like space-time at the edge of the universe.
Back on Earth, a controversy erupted. The loudest shot was fired by Kara Swisher, the co-executive editor (along with Walter Mossberg) of All Things Digital, the Wall Street Journal Digital Technology site.

I can’t help but sharing with you the first graf of her 6:00am (Pacific) outburst:

Of course I have something to say about the news yesterday that AOL would be a key investor in a new early-stage venture fund being started by TechCrunch’s perpetually petulant editor Michael Arrington — with a big, fat and decidedly greasy assist from a panoply of Silicon Valley’s most powerful VC firms and angel investors.

As Alfred Hitchcock said, it starts with an earthquake and it’s getting worse. Then, she summed up :

In fact, the creation of a $20 million investment kitty that Arrington has dubbed CrunchFund is simply the formalization of a long-standing arrangement that has already been going on since he founded his popular tech blog.

Eventually, after a public, web-enhanced, dispute with his owner, Michael Arrington was fired. (On the matter, New York Times’ media columnist David Carr wrote the best piece, as usual, well-crafted and documented).

Now, here is why I find this subject interesting. Three things: the revolving door between journalism and industry; the blogosphere distortion field; the pervasive conflict of interest.

The switch. For one, I have nothing against switching from journalism to another kind of activity. In that respect, I disagree with most of my fellow journalists – especially those in France who like to believe journalism is an apostolate (both come with a vow of poverty.) Last week, I met a former London-based business reporter, who is now back in France; he is being offered a top communication job in a Fortune 500 company. He feared being marked with the seal of infamy and no longer allowed to come back as a journalist. I told him things have changed; after five years or so as a communication guy for a large conglomerate, a business news organization would be even more interested in hiring him because he would know his sector pretty well, and would be able to detect all the manipulation tricks of big corporate PR machines, which could be invaluable to his junior co-workers.

As for someone writing about startups, I find it perfectly understandable the desire to cross the Rubicon and to join or create a venture fund. Trying to detect what could be a great product or even the Next Big Thing, nurturing great teams of engineers, designers or marketers, is an enthralling occupation, which, in addition, is both intellectually stimulating and financially rewarding.

Unfortunately, Arrington doesn’t see things that way. He got drunk in a kind of power game, intoxicated with his supposed “make or break” power over startups. (By the way, I always found the alleged power of tech writers over the fate of a startup to be vastly overstated; unlike in the analog era, the disintermediated world allows every product to find its path to success – as long as it deserves one.)  Anyway: I do find the revolving door is a good thing. As long as the previous door has been properly locked.

Enter the blogosphere and its tolerance for conflicts of interest and — let’s use the word – soft corruption.

Ten years ago, Arrington’s case would have been a no-brainer. Neither for him or his employer. He would have simply been let go. Now, it seems to trigger a quarrel between Ancient and Modern, the former being – obviously – representatives of the old medias, the likes of the Swishers and the (David) Carrs and the latter being the tech blogosphere and is elastic value-system. Fine.

I’m not going to denigrate the blogosphere as a whole or TechCrunch itself, which harbors good reporters. Blogs are part of my daily media routine and, for the record, I’ll say many bloggers do a better job than presumed professional writers. Still, by construction, bloggers are more prone to serve third party agendas: many are penniless, young, untrained, unsupervised and their writing is unedited. A target of choice for manipulation.

A couple of years ago, I witness firsthand the blogosphere’s vulnerability. I was called by a non-profit organization to take a look at their digital strategy (I can’t be too specific, I’m still under NDA). The whole things was in the hands of a couple of communication agencies, which had detected a gold mine, loading the project with outrageously overpriced services. I pissed them off quite a bit by donning a bean-counter’s suit — which I found, in that case, enjoyable – and by suggesting many budget cuts. (When done, I quickly moved away from that fishy mission).
One of the promotional tools proposed by the flacks, was dubbed as “The Blogger Army”. In short, a few hundred bloggers worldwide, presented as “influencers” that would convey pre-packaged messages concocted by the communication agencies. The bloggers didn’t have to care about the product or its underlying value, they just had to cut and paste the material they were provided with. All of the above for a $100,000 budget paid to a firm specialized in deploying the “army” — including a couple of well-know “influencers”.
That very same year, as I dug a bit further, I realized how many bloggers are deluged with gifts from the tech industry and how, to that crowd, the notion of flashing a Visa card to pay for gadgetry was seen as utterly ridiculous…

In the information business, the conflict of interest is looming at every corner. All the time, someone is trying to buy you with something. It could be a product, “exclusive” access, the transcript of legal depositions, a heads-up to a report. Everything. The more vulnerable (or hungry, or ambitious) a writer is, the better target he’ll be for the corrupters. Years ago, as I was writing about Hollywood, a writer from The Los Angeles Times explained how an interview with an agent or a movie producer often ended up with a cajoling “… And what about you my friend, you must have a script buried somewhere, hmmm? Let’s discuss it someday…”

That’s why, when it comes to get an credible review of a tech product or service, I’ll trust Walt Mossberg’s Personal Technology column much more than any blogger.  Mossberg is a seasoned professional (he’s 63) who had developed his craft well before the tech boom. He actually sharpened his claws covering the brutal automobile industry, as recounted is this 2004 Wired profile. Mossberg lives by his reputation of independence, that’s why the Wall Street Journal (and AllThingsD) consider him as an important asset – and pays him accordingly. I took him as an example because I’ve been reading his column since he started it in 1991 (I was then living in New York).

His 1000 words ethics statement is an example of what should be the standard in journalism. Many news organizations, newspapers, magazines, websites, have adopted similar codes. Are they foolproof? No, certainly not. But it is worth considering having one.