In April 2009, Mediebedriftenes Landsforening (MBL)*, the Norwegian publishers’ association, initiated an e-reading project that will lead to a large-scale field test this year.
MBL is investing € 250,000 in the project, and each of the newspaper and magazine groups that joined the project will pay a participant fee. MBL has also tried to open the discussion to as many potential partners as possible: book publishers and Norwegian players in the e-reader market as well as telecom operators….
Since the end of 2009, a team, headed by Mikal Rohde (formerly Schibsted, now Managing Partner at Consello AS), is dedicated to the project, looking at technical issues but also the business model, database, contracts, and what part MBL should play in the longer term.
MBL has managed to bring together all the Norwegian newspaper companies to build a common e-reading project under its umbrella. How is the project evolving almost a year after its start?
Rohde: We are now searching for a partner who would provide us with a technical platform. We still need to find the best solution to ensure the conversion of our print format to an e-reading format. We would also like to have one common system that would take care of the storage of all the publications that participate in the project. The idea is to create in a few months an open structure where everybody wishing to sell their products though this e-reading portal could do so. We know already that probably several newspaper companies would also like position themselves in the sales part of this project. So far, there is an acceptance from everybody that they will not only sell their titles but also those of the competition.
One important component of this project is a consumer test; how is that part going?
Rohde: During the next four to five months, with the help of a media professor working on the e-reading topic at the University of Stavanger, we will carry out a consumer test. The test includes using different e-readers and our digital store (including books, newspapers and magazines). During this phase we will explore the marketing issues, the willingness to pay, etc. At this early stage we are using the available tools and the ePub format. We know the limitations of ePub in terms of navigation, design, etc., but it’s important to get started now and learn with real end users, so we can actually dig down to what they need, what they would like, what are the limitations… A device such as the iPad brings additional functions and we will also track how the users behave with this new tool.
How did you select the e-reading devices that could be used for this test?
Rohde: We wanted devices that don’t have any relationships with an existing “digital store”, like Kindle and Amazon. What is important also is to attract as many 3G readers as possible. It is a key issue that you can push your content to the e-reading handset rather than having to connect to your PC to retrieve your digital version, etc. Finally, if we are certainly interested in high-end devices equipped with a bigger screen, we also believe that some people will read books and newspapers on smaller and less expensive screens. It’s the same as with mobile phone industry: you will get different prices, functionalities, sophistication, etc.
Do you have discussions with the Skiff initiative in U.S?
Rohde: We had discussions with the Skiff people. They would like to propose a complete “value chain” themselves. But at least in the beginning we don’t like that sort of structure because we will get less revenue. They will charge us for all the steps: the billing system, the distribution, the storage, etc…
We don’t want to be locked into another Apple Store or Amazon Kindle model. But Amazon and their Kindle iPhone application is a very inspiring model to us. The Kindle application is cost-free to the users; then when they buy a product in the Kindle app they use Amazon payment system and don’t need to pay Apple so much anymore.
In Norway, we want to convert content from various publishing systems; store them in one place and control the delivery process. Then if Amazon or another company wants to distribute our content we are in a better position to negotiate the commercial conditions to use our content.
Do you include the iPad in your thinking?
Rohde: If we convert all our contents into one common XML format it should be able to be read on e-reader devices and iPhone and be the starting point to produce very fast iPad applications for the newspapers at a low cost.
The iPad is a multimedia device; don’t you think it requires a different approach than adapting content to suit an e-reader?
Rohde: I agree with you on that but one of the key things about e-reading is that you can not afford to produce a unique content combination or a unique distribution channel. We need to be ready to distribute on all sorts of devices and there will be plenty of new readers coming out using different formats and, besides the Apple products, many e-readers will be using Android also.
If you have the possibility to browse for free a newspaper website on the iPad it will be difficult to get money out of that same newspaper app unless it offers something unique.
Rohde: We have been very poor at newspapers at building “tailor-made” or personalised papers and the e-reading devices, just like the mobile phones, deal with individual behaviour. But we can now produce more customised newspapers though an application or on e-readers. If we can aggregate different contents though our platform we will be able to let users build collections around “special interest”, define what they want to read, when and how. And I believe users will be ready to pay for those services.
*Norwegian Media Businesses' Association is the media trade and tariff organisation in Norway. The organisation has approx. 311 member businesses, of which 172 are newspapers, 21 printing offices, 26 distribution companies, 24 TV companies, 13 advertising groups, 15 media groups, 11 magazines, 9 multimedia companies, 3 press agencies, 2 radio stations and 1 advertising company. 14 companies are defined in the member group as others.