Category Archives: Publishing

Apple’s subscription system: A mess

From ‘Apple Just Fd Over Online Music Subs’ | paidContent:

“Music and video services do not have a 30 percent margin to give away to Apple NSDQ: AAPL. It means you’ll see them exit the market on iOS devices, paving the way for Apple’s own iTunes streaming.”

Does the subscription system include music content? No one knows, and Apple isn’t saying.

Does it cover content sold piece by piece, like books? This quote:

“We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.”

from Apple’s Trudy Muller certainly says it does. But no one really knows, and Apple isn’t saying.

I doubt that Amazon could follow this rule, even if it wanted to. What’s more, the only ambiguity in that statement is around “outside of the app” – because if that also means “in a browser from any machine” then Kindle on iOS is dead in the water. Is Apple confident enough of its own position to do that?

Of course, some publishers will just go for it. Apple is betting that the publishers will see the opportunity as great, and the risk of being left behind as greater still. The fear factor of missing out will loom large.

But it will leave a sour taste, and publishers will know they’ve been screwed over. In the short term, that won’t matter much. But when a company keeps playing hardball constantly, insisting on the same cut no matter what service it provides because it’s in a position of power, sooner or later it gets bitten back.

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I couldn’t have put it better myself

Mathew Ingram, writing for GigaOm:

“Call it a deal with the devil or whatever you want, but Apple is the one that came up with devices that are so appealing, and a content-distribution model that is so effective, that it has sold 10 billion apps in less than three years, and created a whole generation of users who look to it for content such as newspapers, magazines, e-books and games. Putting your eggs in Apple’s basket is a great way to get them to market — but just remember who owns the basket, and who you have to pay for carrying it, and who controls the route to your customer. Meanwhile, over in the corner stands Google, waving frantically.”

A thought on journalism for Boxing Day

I’ve spent part of the Christmas break reading Andrew Marr‘s book “My Trade“, which is a kind of personal history of journalism. If you like Marr’s history programmes, and have any interest in the history of media, I’d highly recommend it as his writing style, a mix of good research and excellent lively prose brings newspapers and newspapermen to life in a way which is fun to read.

Reading Marr’s account of early journalism is particularly interesting. The first British “journalists” – corantos, because they wrote about “current affairs” – mostly spent their time writing up other people’s stories, lifted from the pages of similar publications across Europe.

Sound familiar? In other words, they engaged in much the same work as most bloggers (and far too many journalists) do: lifting stories from other publications and presenting them to their own audience. Continue reading

Phil Gyford on why Murdoch’s iPad newspaper might not fail

Why the iPad newspaper might not be doomed:

“Next, Tate says that News Corp. “sucks at the internet”. One thing I hear a lot is “the internet is different, you must get it to succeed, you old media folk don’t get it, ha ha, you’re doomed!”. Which is enormously comforting when you’re pointing and laughing at those silly old media people who persist in acquiring piles of money via all that attention people still give their products.”

What net people rarely understand about Murdoch is just how successful he’s been at the news, publishing and media businesses. To understand the scale of his success, consider this: The 2009 profits of Facebook, the poster-child of the web, were in the same ball park as the total profits of just two of Murdoch’s newspapers. I tried counting how many papers, magazines, and companies that Murdoch owns. I gave up. I doubt that even he could name them all.

Remember, Murdoch has been an outsider who was sneered at by the incumbents before. When he moved from Australia to the US, he was nothing in American publishing, and nothing in television. Now he owns the Wall Street Journal, Fox TV and 20th Century Fox studios.

There is nothing Murdoch likes better than being told that he’ll never “get” an industry. Study your business history, and you’ll usually find that people saying Murdoch doesn’t “get” something are proven wrong – usually when he eats them alive.

I don’t like the guy. But I would never, ever be foolish enough to write him off.

Paywall or not paywall? It’s not black and white

Roy Greenslade asks “where’s the proof of paywall success?“.

“What we have yet to know is whether paywalls work. Even magazines that have erected them for a good while are either unsure about the results or, more usually, secretive about them. Similarly, News International isn’t revealing figures for its subscriptions take-up.”

One might equally ask which, if any, magazine or newspaper publishers are making a success of the advertiser funded-only models? Where’s the proof of the success of advertiser-funded publishing for big companies?

As far as I’m aware, The Guardian (for one) is losing money on its online properties. Clearly, The Times was – otherwise there’s no chance it would have retreated behind a paywall. Magazine publishers seem pretty reluctant to talk either way, and certainly not in detail.

In other words, one could equally argue that for both magazine and newspaper publishers, the “everything is free” model has failed.

However, I wouldn’t argue that. What I would argue is that different business models will prove successful for different audiences, and it’s up to publishers to find the path which works for their individual publications. There is no One True Path to success.

But, really, it’s myopic to think there ever has been. There have always been print publications which charged a high amount to readers, but carried no ads. Likewise, freesheets which subsist solely on advertising are as old as the hills.

So why are we pretending that the online world will be different?

Marketing Week Live goes all iPhone AR crazy

I’m pretty skeptical about augmented reality applications in general, but there are some occasions when I think they’re actually quite useful. Events, for example, are a particular case where AR makes sense. The location is relatively small, but there’s usually a large amount of information surrounding particular areas within the event – seminars, press releases, and so on.

Add in an audience which actually needs to get to grips with the technology of communications, and it’s obvious why next week’s Marketing Week Live 2010 has an AR iPhone app associated with it. And judging from the pictures I’ve seen of it, it looks pretty good.

There’s the usual AR features: hold the phone up, and the app layers useful information on top of it (I’m hoping this information includes the location of bars and toilets, which are the kinds of things that journalists are always after). Perhaps more useful, though, is the image recognition function: point the app at the logo of a company on a stand, and it will recognise the company and list information that’s relevant, including the option to book a meeting with them if they’re taking meetings.

The app was put together by Yuza Mobile, and it looks like a nice piece of work, balancing out the obvious need for an app that’s a bit of a showcase for marketers of what AR can do with stuff that’s useful for people attending the show.

I’m going to be along at the show at some point (and if you’re going to be there, give me a shout) so I’ll probably be running around taking pictures of people pointing their iPhones at logos and swearing about the data connections being swamped. But kudos to MWL2010 for creating something that looks both interesting from a technology perspective and actually useful to its audience.

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And that’s why there will never be Flash on the iPhone

The Wall Street Journal story on Steve Jobs’ statement on Flash includes some telling quotes:

Dave Wolf, vice president of strategy at Cynergy Systems Inc., a Washington, D.C., design firm, calls Apple’s no-Flash policy “a pain.” Mr. Wolf had planned to build mobile apps for clients using the new Adobe software; the apps cost upwards of $40,000 a piece, meaning that without such a tool most customers can only afford to build apps for one device. They almost always choose the iPhone, said Mr. Wolf.

“If it weren’t for the play against Creative Suite we wouldn’t have to make a choice, we could say you could make it in Flash.”

And that’s the point. You wouldn’t be making iPhone apps: you’d be making Flash apps. There’s a difference.

Has Gizmodo broken the law with its iPhone story?

I am not a lawyer. But I do play one on the weekends.

More importantly, over the years I’ve become intimately familiar with the law as it affects journalists on both sides of the pond. I’ve covered cases like the “trade secrets” disputes between Apple and various news sources, and even had a couple of cases where companies (including one or two very big ones) have wanted to sue me. I’ve learned about this stuff because I’ve had to, in order to avoid ending up in court.

With that in mind, I’ve been looking through the various statutes which might just affect Gizmodo’s legal case over the putative new iPhone.

Trade secrets law

Jared Earle pointed me in the general direction of the Economic Espionage Act of 1996, which makes it an offence to steal or (and this is important) misappropriate a trade secret. There’s no doubt that a new iPhone prototype constitutes a trade secret – so isn’t Gizmodo guilty here?

I spent a long time looking at the issue of trade secrets back when the Think Secret/PowerPage case was going on, which gave me a little insight into the issue. And my take on it is no, Apple can’t claim violation of trade secrets because Gizmodo published the details of the phone.

Why not? Because in order to be classed as a trade secret, you need to “take reasonable steps” to keep it secret. In this case, unless the Apple employee had actually stolen the phone, by allowing it out in public Apple did not take reasonable steps – and hence cannot enjoy the full protection of trade secrets law.

The classic case law in this is all about cars. Car makers go to great lengths to keep the designs of new cars secret. However, inevitably, they want to test them on public roads – there’s only so much testing you can do on private tracks. So they drive them around on quiet roads, usually with some element of “disguise” like fake bodywork added. This is an exact parallel to what Apple did with the new iPhone. It disguised it, and allowed it out into public spaces.

When something is tested internally, it is a trade secret and you are not allowed to takes pictures of it and distribute them, or even write a description of it. There’s plenty of cases which make this clear.

However, if something is seen from a public space, it loses its trade secret protection. You can photograph it, describe it, or examine it in any way which doesn’t violate any other laws. You probably can’t open up a car and poke around in its innards, but that wouldn’t be because it was a trade secret – it would be because you can’t do that with someone else’s property.

So, in my view, neither Gizmodo nor the finder of the phone have a trade secrets case to answer. By testing the phone in public, even under a disguise, Apple lost its trade secret protection.

(UPDATE: Jonathan Ballerano has a good rejoinder to my points about trade secrets, with some insightful comments on how California law specifically affects the issue.)

Lost property law

In California, what you have to do with lost property is covered by the California Civil Code section 2080. Compared to many US laws, it’s actually a model of clarity, but there’s plenty of clauses and sub-clauses to trip the unwary.

The code sets out a pretty clear set of responsibilities for someone who finds lost property. First, within a “reasonable” amount of time, you have to contact the owner if you know or suspect who it is. Second, if you don’t know who it is or the owner “has not claimed the property”, you have to hand it over to the police – again, “within a reasonable time”.

In the Gizmodo case, assuming all statements made by Gizmodo are accurate, the finder attempted to contact Apple and hadn’t had a response within a few weeks. So far, he’s done the right thing. And note that while he has possession of the phone, the law says he has the rights and obligations of a “depositary for hire”. These are defined in section 1852 of the code as showing “at least ordinary care for the preservation of the thing deposited” – in other words, you can’t break it, dump it in the river, leave it lying in the street, and so on.

The legal problem that the finder will face in this case is showing that, in selling it, he was acting in accordance of the duties of a depositary for hire. I don’t think, in fact, that he can: selling property you know you don’t own when you are the depositary is analogous to you leaving something with a storage company for safe keeping and them selling it (storage companies are, in fact, literally “depositaries for hire”).

Secondly, by selling it, he clearly violated his secondary duty (after attempting to contact the owner) of giving it in to the police, which is established under section 2080.1. So there’s a double-oops here.

Theft and stolen property

But it also gets a lot worse – and our finder may have got himself into criminal trouble. Section 485 of the California Penal Code says that anyone who finds lost property and “appropriates such property to his own use, or to the use of another person not entitled thereto, without first making reasonable and just efforts to find the owner and to restore the property to him, is guilty of theft.”

Oh dear. Suddenly, we’ve moved from a civil matter between Apple and the finder to a criminal matter between the State of California and the finder. Oops.

Of course, were such a charge to be brought, everything would hinge on whether the actions taken by the finder amounted to being “reasonable and just”. Much will depend on exactly what he did. Personally, I think that “reasonable and just” would involve more than a couple of phone calls and raising an automated support ticket – I’d be driving over to One Infinite Loop and walking into reception demanding to see someone (and hoping I got a free new phone when they came out for my trouble).

Up till now, we’ve mostly been talking about the potential legal issues regarding the guy who found the phone. Gizmodo didn’t find the phone, so arguably doesn’t have the responsibilities of a finder with regard to lost property. As outlined, I also think they’re in the clear with regard to trade secrets.

But if Section 485 does, in fact, mean that the phone is stolen, Gizmodo is placing itself in the potential position of being in violation of California Penal Code section 496, which deals with receipt of stolen property. To be guilty, you must knowingly obtain the goods – being in receipt of stolen goods when you believe them to be legally-obtained is the classic defence.

On the face of it, this would be a good defence for Gizmodo. However, it may not be enough to cover them.

A classic example of how the courts test for this is the “back alley” thought experiment. If you buy an expensive watch from a shady-looking guy in a back alley, it’s reasonable to for the court to believe that you know it’s stolen, or at least strongly suspect it is. In this case, the circumstances make it impossible to believe you could have formed a reasonable judgement that the watch wasn’t hot.

In the Gizmodo case, a prosecutor would argue that the site should have known about the law on lost property, and in particular Section 485 of the Penal Code which makes it theft to appropriate lost property. We are, after all, talking about a multi-million dollar organisation that can, at the very least, afford some lawyers.

If successfully argued, that would make Gizmodo guilty of knowingly being in receipt of stolen property – at which point, some of them could end up going to jail for a year. Perhaps more painfully, Apple would be entitled to claim up to three times any losses it had suffered because of the theft and receipt – and I suspect it would argue that the losses it had suffered amounted to many millions of dollars. The bill would be far more painful to Gizmodo that any likely criminal sanctions.

Conclusions

This case is very much not like the earlier ones that Apple brought against Think Secret and PowerPage. There’s no issue about trade secrets here. Once that phone is out in public, even disguised, it’s no longer got much in the way of trade secret protection.

By my count, our unnamed iPhone finder has violated California’s lost property law in two different ways, and could easily be charged with theft because in doing so he misappropriated lost property pretty wilfully. On the statements that Gizmodo have made about the efforts he made to contact Apple, I’m pretty certain that he didn’t do enough, and even if he did, once he got no response he should have handed it over to the police rather than selling it.

Gizmodo, on the other hand, gets off relatively lightly by only being up for a potential charge of receiving stolen goods (assuming the theft charge is also brought). A year inside for Messers Denton and Chen, and a big enough set of damages to bankrupt the company may ensue.

Or it may not. In fact, I think the odds are that Apple will make no attempt to get criminal charges pressed (and it’s pretty unlikely the police would pick it up otherwise), and will take no civil action against the finder of the phone.

Why not? Because I don’t think there’s any benefit to them to doing so. Getting dragged into what would undoubtedly be a long-running case, involving a website which would undoubtedly play the “chilling effects” “press freedom” card wouldn’t benefit them.

But you can bet that Gawker won’t be getting any press access to anything from Apple soon.

Law and ethics

As a reporter – and make no doubt, Gizmodo is reporting here, actually doing journalism red in tooth and claw – you inevitably end up walking close to the edge of what’s legal every now and then. Whether it’s being in receipt of confidential information, publishing something that’s potentially defamatory, or standing closer to the front line of a protest than the police would like, you occasionally have to put yourself in some legally-risky positions.

What I’ve talked about here is purely the legal position. I’m not making any judgements about the ethics of it. In (potentially) breaking the law, has Gizmodo overstepped the line that journalists occasionally have to dance around? In paying $5000 for the iPhone, did it do something that isn’t justifiable?

I’ll save that for another post. Suffice to say, it’s complicated.

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This is what is killing newspapers

From the comments on The Times’ Q&A about it’s pay-model:

“£2 a week is too rich for my blood even considering the quality reporting but this depends on what the annual rate will be.”

If people genuinely believe that news isn’t worth £2 per week – less than the price of a latte at Starbucks – then newspapers are doomed, whether they are in print, online, or a mixture of the two. If the content is something that’s so throwaway to you that it’s not worth 29p per day, then you’re just not engaged with it and it’s effectivel just time-filler, wallpaper.

And if news is just wallpaper, then advertisers aren’t going to pay for it, either. At which point, goodbye news – online or off.

“Don’t it always seem to go that you don’t know what you’ve got till it’s gone…”