Why Flipboard Won't Help Publishing's Smoldering Model
Good news! Flipboard is ready to log me in via Twitter and Facebook. It took a while because demand for the new iPad app -- a visual, social reader that lays out the content that you choose and that your friends choose for you into beautiful magazine format -- overwhelmed their servers when it was released last week.
Publishers are understandably dying to work with Flipboard, just as most see RSS feeds as key to serving their audiences, but Flipboard isn't going to save media. In fact, I'd be stunned if any publisher really thought it was going to make a dime from working with Flipboard. Ever. And for its founders to say that it could, as CEO Mike McCue did to Business Insider, is just ludicrous.
For those who haven't read any of the acres of coverage on this iPad app, it pulls in web content and displays it in lavish chunks of beautifully laid-out text. It turns web content into a nice sit-back read on the iPad. The app generally pulls the first three or four grafs of a story, and includes a button to read more that takes you to the originating site. In some cases the person who passed along the story via Twitter or Facebook gets credit where you'd normally see a byline.
Mr. McCue told Business Insider that web pages are cached in the background, so they load very fast when the link is clicked. All good, and an upgrade from web-based aggregators like Newser or Huffington Post.
But where Mr. McCue starts talking about publishing economics is where he stops making sense. Like other aggregators, Flipboard will no doubt surface stories that a reader might not otherwise see --and may net the publisher an ad impression if the reader happens to click through. I can buy that, even if I'd guess that for every incremental click-through, there's an existing reader who's satisfied by the first three or four grafs and won't click.
But let's set that aside. Mr. McCue goes on to say that web advertising sucks (true) and that Flipboard's format will allow lavish magazine-like ads, the kind that net Vogue $300 million a year, and that Flipboard will share revenue with publishers. Further, he says publishers will "end up actually making 10x the revenue from advertising they are on their websites today."
Does anyone buy that? A generous $10 CPM for an online publisher becomes $100 when that content is pulled into Flipboard? Seriously?
We're about in year five or six of the web-aggregation craze, where much of the innovation and venture capital dollars ($10 million for Flipboard!?) has gone to startups that package, parse, optimize and deliver content. (Content, by the way, is what we started to call journalism, essays, photos, movies, etc. during this era.)
Does it make any sense that a startup like, say, Capital New York, which is probably what Clay Felker would be involved with today instead of launching New York Magazine, is launching on a couple hundred G's while Flipboard, which creates no content but adds a shiny layer to what exists, gets $10 million? Flipboard is a way bigger idea than any single publication, but is it that much bigger? Does it add that much more value to the ecosystem?
It may, but it also adds another layer between publication and reader, and it appears they hope, a layer between advertiser and publication. That's why publishers have got to be way more excited about their own iPad app environments than about Flipbook. At least they get to keep a direct relationship with advertisers, even if Apple is making it impossible for them to actually sell iPad subscriptions so far.
Publishers have two sets of customers, readers and advertisers. They can directly monetize some readers through advertising (those who subscribe, visit the site, fit the demo, etc.). But publishers who ONLY try to serve those readers will quickly die. Why? Once you lose your share of voice on the web or elsewhere, you are outside the conversation and cannot win over new readers.
Publishers have to reach out to readers they can't necessarily monetize if they ever want to grow and stay relevant. And that's the real reason smart publishers will want to be on Flipboard. It's about being hip and getting in front of a few new readers on a nice device. It has nothing to do with fixing a smoldering business model.
|ABOUT THE AUTHOR|
Michael Learmonth is digital lead at Advertising Age. Yes, he's on Twitter at http://www.twitter.com/learmonth.