IFRA

WAN-IFRA 2nd European E-reading Conference
October 1–2, 2009, Hotel Hilton Paris La Défense, Paris
Chairman: Stig Nordqvist, WAN-IFRA

1 October - Day 1

Latest biz buzz and tech rumours in e-reading

presented by Stig Nordqvist, Group Director Emerging Digital Platforms and Business Development, WAN-IFRA

Nordqvist, who has worked in-depth with e-reading within IFRA since 2002, described his view of what the new platform of e-reading will mean from the point of view of news publishers. He stressed that e-readers and the type of reading they offer is a very different experience than what mobile phones and other devices offer.
Nordqvist pointed out that all the technical advantages of e-readers, suchas sunlight reading and low power consumption, mean little if the total offering to consumers is not attractive enough. He compared Sony’s 2004 launch in Japan with Amazon’s 2007 U.S. launch. The devices were very similar, yet the Sony effort completely flopped while Amazon has had a great success with the Kindle. “It’s about the amount of content – consumers are basically convinced that whatever they want to read, they
can find it in the Kindle store – and user convenience; i.e., in Kindle’s case how easy it is to buy books, newspapers and blogs, thanks to the 3G connectivity. Sony didn’t have this.”

Nordqvist said that, although he does not agree with Amazon’s closed market approach and use of proprietary format, he does give credit to Amazon CEO Jeff Bezos: “He believes that a long-term change towards e-reading will happen, something which I think publishers need to learn from. We all understand digital media is here to stay, and now it’s time to stand up and say, ‘We are committing to this future’. The current e-readers are just the ugly, small beginning of a great future.”

He said that although there are now many e-readers in the market, a lot ofpeople are still waiting for “the big bang” in devices, a device that has more of a wow-factor. “Plastic Logic’s upcoming e-reader may well be it. It is flexible, thanks to its plastic back plane, which means it’s drop-proof. They are also saying it’s going to be waterproof. Things like this matter.”

Nordqvist described the early e-reading adopters that publishers need to focus on. They are heavy consumers of text, be it books, papers, journals and/or academic texts; they are on the move a lot; and they need constant access to their reading material. He went on to point out that there is enough evidence from the early e-reading market to know that, to these groups, there are some factors which make an e-reading offer particularly attractive:
• Price is a factor, but not the most important thing
• 3G and/or WiFi connectivity – access to content is absolutely key, and
it needs to be very easy to shop.
• Openness and standard platforms: consumers don’t want to be locked into
one device and one shop – not if they have a choice.

He offered the gathered publishers some final advice: “Remember that e-reading is not about technology, it’s about understanding consumer needsfor different levels of interaction. And don’t give away stuff for free – consumers are prepared to pay for what they really want.”

90 participants from 18 countries attended the second WAN-IFRA e-reading conference in Paris. 

NRC Handelsblad, the first Dutch newspaper on electronic paper

presented by Charles Lansu, Marketing Manager, NRC Handelsblad

With their March 2008 launch, Dutch financial daily NRC Handelsblad is the only newspaper in the country offering an e-reading edition of its publication. The edition is in PDF format, optimised for the Iliad e-reader from Dutch supplier iRex Technologies. The newspaper has two offerings to consumers:
• Offer for subscribers: They get a good discount on the e-reader itself,
plus the e-reader version for free (because they already subscribe) 300
Euros + / year.
• Non-subscribers pay a 700 Euros package price, which includes the device.
To date, 2000 e-readers have been sold and 2500 e-paper subscriptions (30%of subscribers are new subscribers, i.e., didn’t have the print version before).

Lansu emphasised that in NRC Handelsblad’s strategy, it’s key to be as open as possible; to have their content available in all formats, suitableto as many devices as possible. “Ours is an integrated digital approach, ie it’s device independent. We don’t want to focus on devices, rather we try to have holistic approach. We want do digitise our content, distributeit to all platforms and let consumers decide which platform suits them best.”

Based on the experience at NRC Handelsblad, Lansu gave participants a list of key advice to “launch an e-paper in 30 minutes”:

1. Be up-to date with what is going on in the e-reading market, including with devices.

2. Think big but act small – draw roadmap, but be realistic in your first steps. Believe and be patient.

3. Select the right partners.
Which business model suits your business best? Do you have all the knowledge or do you need external expertise? Select partners who can help you.

4. Set up a dedicated team
You need all the different functions; editors, designers, IT, marketing and suppliers (hardware, software, retail, publishing) Limit the size of the team, and keep them away from daily business. Evangelize to the whole organisation – from the beginning.

5. Manage expectations
At the start NRC Handelsblad launched a forum where all consumers were able to interact with each other and the paper – this removed expectationswhich may have been too high.

6. Be prepared
When you innovate you have to try new routes and this means trial and error. Many things went wrong, the key is how you handle the situation when they do.

7. Have a flexible strategy
Do not focus on a specific medium or device. Adjust your strategy when the technology and/or market demands it and remember that the future is not predictable

8. Stay ahead
Keep the fire burning! It’s important to keep up a continuous development of your offering. Expand to other platforms and use the strengths/ USPs of each platform.

Lansu had a final word of advice for publishers: “Remember that it’s about digitising your journalism, not your newspaper.”

Les Echos E-paper experience

presented by Olivier Delteil, Business Development Manager, Digital edition, Groupe Les Echos

In September 2007, French financial daily Les Echos launched an e-reader version of its publication, bundled with either the Iliad e-reader from iRex Technologies or a more light-weight e-reader from PVI. Les Echos is also published for the Kindle through Amazon’s online store. As of January2009, the business model no longer includes device bundling, instead Les Echos offers subscriptions to content formated for e-readers (compatible with open devices in the market) as well as advertising.

“The e-reading launch was about reinforcing and extending the brand as well as reinforcing our relationships with our readers, by providing them Les Echos content anytime, anywhere and on any platform. The value of our brand is in the atom of the newspaper, not primarily in the paper product as a whole,” said Delteil.

In order to enrich the e-reading offer, in the summer of 2008 (during the Olymics) Les Echos added content from l’Equipe, France’s leading sports paper, during a four month test, which was successful. That showed the newspaper that it is better to offer more content from more sources. ”We are currently negotiating with other newspapers to set up an e-reading kiosk offer, and I believe some will join us before the end of 2009. If weset up an offer with e.g. Le Monde and Le Figaro, we will give the customer contact info to the other newspapers as well, not keep it to ourselves.”

Delteil listed a number of key lessons learned from the e-reading experience thus far:
• Content has to be adapted to the device (however, once the design has been optimised for the devices, daily updates are handled fully automatically with no manual interference).
• For newspaper content, e-readers need to have wireless connection (i e not via USB/PC).
• The offer should be built with multiple sources of content. Les Echos are now in discussions with other players on the French market to enable this.
• The content unit is no longer the newspaper edition but the article, andit should be possible to access/purchase single articles.
• To reach above goal, XML is better than PDF.
• It is essential to keep direct contact with the customer. Issues concerning the future of the e-reading offer include the fact that there is a different VAT rate for digital (19.6%) vs print (2.1%) content (similar in many countries).
DRM is another issue, which so far has not been a problem as users have not tried to send on content, and we do not want to impose DRM, we want to retain our strong relationship with our readers.
And they still believe in striking a balance between the ad and subscription revenue streams, see no reason why this would change in the future.

How are the press product and book distribution specialists positioning themselves? The task of the HDS digital kiosk.

presented by Aymeric Bauguin, General Manager, HDS Digital

HDS Digital runs Relay.com, a French digital kiosk for buying online versions of magazines. Today, it contains 500 titles from about 200 publishers.
They have 50,000 users in their database, 100,000 buyers in a year, and about 1000 active subscribers every month. Bauguin emphasised that selling on the internet is not like selling in the physical world, particularly when it comes to publications.
“We knew we had to make the offer very attractive, in order to be able to sell. For a fixed price of 17.90 Euros a month subscribers can download however much material they want. We also made a deal with the World Wildlife Fund, because our focus groups said that by downloading magazines online, rather than buying the paper versions, they were making a choice for environment – we wanted to capitalise on this.”

Bauguin went through some findings of a recent customer study:
• 75% of the magazines bought online would not have been bought in their respective paper versions.
• 40% of users had never bought their particular magazine in paper before
• 20% of users said that they would buy the paper version later

Commenting on e-reading, Bauguin said that for them as a magazine retailer, non-colour devices are not viable, although he’d be interested to consider this technology again once that issue has been resolved. For now, HDS Digital has a deal with Samsung, by which when consumers buy a netbook, they get one month’s free subscription to relay.com.

The news reader Cybook Opus, by Bookeen – How a small “pure player” can compete with the leading suppliers of the market?

presented by Laurent Picard, Cofounder of Bookeen

In 2007, Bookeen launched a new e-reader on the market, based on E Ink technology. (Previously they had launched their very first Cybook in 2000–2002, with LCD display) The Cybook Gen3 is produced by PVI, with Bookeen’s software added in, including compatibility with various e-book formats (the device is e g compatible with Les Echos’ e-reading content without either party having had to tweak anything). So far, Bookeen has had one core customer target: heavy readers, and one main selling channel, the internet. 130,000 book titles are available through the Mobipocket
library (acquired by Amazon in 2005). For the past two years, Bookeen has been pushing the Epub format rather than Mobipocket. The audience of readers can be split into three groups: avid readers, nomad readers and professional readers.

Bookeen has just launched a new e-reader device, called the Cybook Opus. The device has a 5-inch display, weighs 150g (the lightest on the market, according to Bookeen) and is priced at US $250. There is no wireless or 3G connectivity. It has 1GB memory and uses the ePub/PDF format. It is 200 dpi, which is the highest resolution of any e-reader device, and provides a reading experience very much like newspaper quality, said Picard.

Today, Bookeen’s main markets are the USA, Europe and Russia. Interestingly there doesn’t seem to be any digital copyright laws in Russia, which explains the success of e-readers there. Bookeen have been in the U.S. market for one month. Bookeen sell their devices through book stores as well as electronics stores, and they think sales work better through book stores. Exclusivity with retailers is ending, so devices like Sony Readers and Cybooks will compete face to face in the shops soon. This will also mean that there will be a proper e-book section in the shops, in French fnac this will occur in the next months. For 2010, Picard sees that Epub will be key format for global growth in the e-reading market. Also, content will be consolidated, i e both newspapers and books will become more widely available on e-readers. Furthermore, devices will be better connected, through 3G, wifi and Bluetooth (one or several), which will mean better access to content from the consumer’s point of view. Picard also believes more mobile operators will launch their own offerings with subsidised devices – of course they have the advantage of their own 3G networks.

According to Picard, Bookeen are working on both a wireless reader and one with a touch screen. “With touch screen technology, there are currently two options: Either you use iRex Technology’s technology, which is very expensive and requires a pen. Or you go for Sony’s touch screen, which is a so called pure resistive display with the major draw-back of decreasing the optical quality, i.e., resulting in a poorer reading experience. We wouldn’t use that even if it was cheap. With Plastic Logic, I’m not sure
they will be able to licence their touch screen technology. Next year you will see how we will solve this.”

When asked what media companies should do to not end up in the same position with the mobile operators as they have in the mobile content area, Picard advised publishers to cooperate with their competitors. He suggested creating a new publisher platform in each market which companies like Google, Amazon and mobile operators then have to plug into. In other words, to control the content market before someone else does.
By the end of the year Bookeen will have sold 30,000–40,000 devices,
including the Gen3 and the Opus. 

PressDisplay: A proven method for newspapers to monetize on online content

presented by Igor Smirnoff, Director of Strategic Development, Newspaper Direct, USA

Newspaper Direct is behind PressDisplay.com, a portal through which publishers can make their digital editions accessible to readers around the world. It currently includes some 1100 newpapers. “This is truly premium content,” said Smirnoff, tying in with statements form many of theconference speakers, that e-reading should be based on subscription – it’san opportunity for publishers to charge for content.

With PressDisplay.com, readers can see the front pages of all the newspapers for free, only paying once they click on a specific article. The business model from the newspaper’s point of view is simple: each timea user clicks on an article they in effect buys the entire publication forthat day, and the publisher receives a standard royalty for each purchased edition, on average about US $ 0.25. An added bonus for newspapers is that issues sold through PressDisplay.com count towards their ABC figures. Another option for newspapers that don’t want to open up access to all
PressDisplay users is an individualised e-paper called a SmartEdition that only appears on the publication’s own website. Publishers create their own pricing plans for these e-editions, giving NewspaperDirect a share of the revenue. The service costs newspapers nothing for set-up and maintenance, and offers the same features for all publications regardless of the revenue model, including automatically updating with all the latest features. “We do want to make sure that publishers see us not as a vendor, but as a development partner,” said Smirnoff.

PressDisplay.com, probably the largest online newspaper and magazine kiosk in the world, will be available on the newest wireless eReader to hit the market – the IREX DR800SG- unveiled in New York shortly before the start of the Paris conference.

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• Continue to day 2