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February 03 2011

15:30

The Newsonomics of apps and HTML5

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

Apps are all the rage, with The Daily’s taking center-stage this week. With tabletmania sweeping the country, you can almost hear the howls of publishers across the country, as they implore their IT chiefs: “Get me an app, pronto!” Consequently, there are many busy hands at companies like Mercury Intermedia, Verve, Mediaspectrum, Bottlerocket, Mercury Intermedia, DoApp, WonderFactory and the New York Times’ Press Engine operation, all of which are meeting the demand.

Apps are a wonder, a come-out-of-nowhere phenomenon that Apple invented for the iPhone and has been perfecting ever since. Apple just passed the threshold of 10 billion app downloads, and has spawned an entire new industry of entrepreneurs and rival (Android, Blackberry and Amazon) stores.

And yet, if you talk to tech people at the tops of news companies, they don’t focus mainly on apps. They talk about HTML5. If apps are the popular phenomenon of 2011, publishers’ on-ramp to digital reader payment, HTML5 is the future, they’ll say. And they are rapidly building the foundation for that future now.

I’m far from a tech expert, but I have talked with enough people to know that the unfolding behind-the-scenes drama of app and HTML5 development is an important one, vital to the future prospects of the news industry as it forages for new sustainable business models and forges new digital products for the mobile age. So let’s take a peek at the interplay between native apps (those we know from iPhone and iPad  innovation) and HTML5 apps (those quietly being developed in great number). Most importantly, let’s begin to explore the newsonomics of these technological changes.

Beyond Apple vs. Adobe

Most of us non-tech people first heard of HTML5 when Steve Jobs told the world last April why he wouldn’t allow Adobe’s Flash in his apps. The announcement was played by much of the press as an Apple vs. Adobe power struggle, but technologists tell me that Flash had had its issues for awhile. It made Google search engine optimization, key to everyone, difficult — and then Apple’s very public non-support gave a strong push to the alternative of HTML5. Yet the handwriting was on the wall. “We are abandoning Flash as a way to solve problems — with its coding and weight issues — for HTML, Javascript and CSS [cascading style sheets],” says Rob Covey, senior vice president of content and design of National Geographic Digital Media.

Now companies, from The New York Times to NPR to National Geographic, are rapidly building out both staffs and products based on HTML5, “rethinking interactivity,” Covey puts it. They’re also determining how that new, expected, pervasive interactivity — witness The Daily’s debut — will be accomplished most efficiently. The technology, they say, is the essential foundation for next-generation products, web and mobile, more elegant and faster than previous HTML in its presentation and more flexible in its implementation.

One big benefit: the browser-delivered HTML5 app experience is remarkably like our gee-whiz experience of Apple’s native apps. “The big deal here is is that there is no latency,” says Guy Tasaka, a New York Times Company and NewsStand alum, who now heads Tasaka Digital, a tech consultancy to news companies. That means that the fluidity we’ve all come to love about apps is built into emerging browser-based applications. It also means, as Tasaka emphasizes, “the sense of a beginning and an end…. HTML5 apps give the user a sense of a package.”

For a good tour of these apps, check out Paul Miller’s recent Engadget piece, which both describes the phenomenon and provides screenshots of HTML 5-based sites from Flixster and Amazon to the Huffington Post, USA Today (even with one for Google iTV) and the New York Times’ Times Skimmer, updated from an earlier version produced two years ago. Use these pages and you get a similar sensation to that of Flipboard’s on the iPad. (Flipboard CEO Mike McCue talks with Om Malik about HTML5+ here.)

So, in effect, the coolness of apps can be replicated, more or less, through the browser-based apps.

The app conundrum

The impact of an app-like browser experience is a big, and multi-edged, one.

On the tech level, it means a major re-training of staff in HTML5, a process that began more than a year ago at The New York Times, says Times CTO for digital operations, Marc Frons. (The Lab talked with Frons earlier this week about the paper’s new article recommendation engine.) “I knew HTML5 would have a major impact, but it has happened faster than I thought,” he tells me. Frons says much of that training, a reskilling really, is done — and that the company is well on the way to using HTML5 as the basis for most of its digital development. Rob Covey says that the retraining issue is a nuanced one, a smaller challenge with savvy developers ramping up their skills, and larger one for website producers used to using more basic coding to create pages.

On a business level, it creates a conundrum.

Steve Jobs not only created an unexpected revolution with apps. He also proved that people would pay for them. Indeed. Analysts say this new (native) app industry generated $5.2 billion in 2010 and could hit $15 billion this year. The great majority of that revenue is non-News, of course, but news publishers have begun to build their “paid content” hopes on apps nonetheless. The Guardian, The Washington Post  and CNN are among those charging small subscription prices for smartphone apps, but the big expected payoff is coming this year, as many news publishers see tablet apps as the route to cementing paying digital relationships.

Why? There seems to be some mental toggle that consumers do, swapping their demand for “free online” for a willingness to pay for mobile apps. Maybe it’s the perceived freedom of mobile. Maybe it’s the sense that we are buying something tangible — an app, a product — and making it our own on the smartphone or the tablet. Maybe it will last; maybe it won’t.

A balancing act

Yet if news technologists are right that browser-based HTML5-powered apps can deliver great experiences, then why do we need native apps? Some will tell you that apps are just a front, a way of productizing something that their new browsing experiences can deliver just as well. The power is in the code, not the app. But will readers pay for something they don’t own? Maybe apps will just become shells for delivering HTML5.

Which brings us back to the tablet. On the iPad, we can both consume news through an app and through a browser. Publishers report, among early adopters, a range of experience as to how much access comes via one or the other. As various paid tablet models go forth, this question may become a big one.

Publishers have to wonder: Is it the romance with discrete, ownable apps that consumers are willing to pay for, or is it the wider experience? We can see, in the makings of Apple’s evolving publisher subscription policies, an understanding of this dilemma. That may be why Apple is forcing news publishers to restrict browser access to news if they want to retain their direct customer relationships with readers — and continue to offer enabling apps through iTunes. There’s a balancing act here, in the uncertain interplay between native apps and HTML5 apps, as both publishers and Apple try to hedge their bets.

“Give it a year”

For now, it’s a twin development path. Apps are still a big news rage in 2011 — most would pay the price of admission to both the tablet and the paid reader content games — so the app creation companies are doing land-office business, and big news companies are creating apps even as they focus increasing peoplepower on HTML5.

Yet the promise of next-generation (later 2011-2013+) user experience seems solidly rooted in HTML5. That twin development is costly, a headache for smaller publishers, and still another factor separating out the big news boys — the Digital Dozen I identified in the Newsonomics book — from the rest of more local, smaller, more struggling news companies. Further, it’s just one more example of how the future of the business of news is rooted in technologies, from HTML5 to vastly improved analytics, which, among industry leaders, are now starting to drive strategy and execution.

In the end, we’ll see technological possibility and business heft mix and match in unpredictable ways. One technologist suggests that “application of the web using HTML5 is just a phase. Websites will eventually surpass apps in readability and usability as designers and technologists combine the best features of an app with the immediacy and depth of the Web.”

It’s hard to know at this point what that quite looks like, but, as he says, “Give it a year.” Then, though, business realities will determine how stuff gets built and sold. Remember those 10 billion downloads? The new app store ecosystem — not just Apple’s, but Google’s, Amazon’s, Palm’s and Blackberry’s — will drive some of that decision-making, as well.

[Image by Justinsomnia used under a Creative Commons license.]

December 22 2010

18:17

'The Social Network,' Streaming Boom Dominate Film in 2010

From Pandora to Palo Alto, digital and social media grabbed movie headlines in 2010.

The year started with a box office record-breaker that captured our 3D imaginations ("Avatar") and is ending with David Fincher's fascinating look at Facebook ("The Social Network") collecting awards for film of the year (American Film Institute, Los Angeles Film Critics, National Board of Review, New York Film Critics, et al). Although, according to Facebook (Top Status Trends of the Year), the most talked about films among its members were actually "Toy Story 3" and "The Twilight Saga: Eclipse." The latter was also the most watched trailer on YouTube this year with 17 million views.

When it came to Twitter, the dream merchants of "Inception" produced a summer blockbuster and the top film-related Twitter trend this year.

Inception.jpg

As an overall trend, however, moviegoers continue to explore different platforms to experience films, from streaming and downloading to apps or social networks. As a result, they are disrupting traditional models of distribution and revenue sources (see Blockbuster Files for Bankruptcy After Online Rivals Gain, a report from Bloomberg, for example).

I asked several filmmakers and digital executives for their thoughts on the biggest trends, behavioral shifts and technology developments of 2010. Below are their responses.

Film Trends of 2010

Opening Friday Reviews
"Mobile apps and social media came into their own this year, as one of the most important ways by which moviegoers share their opinions, read reviews and decide which movies they're going to see ... Moviegoers relay their opinions to millions of other people the minute they leave the theater. Opening weekend used to forecast box office -- now, it's opening Friday." -- Steve Polsky, president and COO, Flixster, whose app is used by more than 23 million people

EpixHD.jpg

Multi-Platform Viewing
"Consumer demand for anytime, anywhere access to movies means it's not just about watching in theaters and on television in living rooms, but also about watching on computers and mobile devices like iPads and iPhones. This was the biggest transformation of the movie industry in 2010. Studios are realizing that they need to reach consumers on their terms and that we have an opportunity to reach more people if we embrace what consumers want. The demand for entertaining movies has never been higher; people are watching them in new ways and Hollywood continues to tell stories that captivate audiences around the world." -- Mark Greenberg, president and CEO, EPIX

Internet-connected HDTVs
"Although 3D has been the hot topic this year and received most of the press, I believe the real story was the quiet rollout of consumer HDTVs with Internet capability. Over the last year, I have been testing this exciting new delivery method and have discovered that it is a viable alternative to traditional broadcast to the home. If you understand the power of social networking and direct marketing, it becomes obvious the worldwide potential of this exciting new opportunity." -- Randall P. Dark, president and CEO, Randall Dark Productions

Movieclips.com.jpg

Streaming Content
"The greatest trend in 2010 was the growth of viewers watching movies and TV over web-enabled streaming devices. Of course, Netflix is leading the charge in streaming content, but other players will emerge in 2011 and I think digital historians will look back on 2010 as the year the streaming wars began and DVD started to assume its place alongside the cassette tape and laser disc." -- Richard Raddon, co-founder, Movieclips.com

Happy kickstarter.jpg

Crowdfunding
"Continuing the trend towards the democratization of filmmaking that began when affordable cameras and editing equipment became available in the past 15 years or so, crowdfunding has opened up new avenues for film financing. IndieGoGo.com and Kickstarter.com offer a simple interface through which fans and investors can help fund film and media projects that often would not meet traditional financing requirements. This revolution enables independent artists to not only get the financial support they need to complete their projects, but also to build a fan base that can later become essential to the marketing and distribution of the project." -- Academy Award-nominated director Roko Belic, Wadi Rum Films (Happy - The Movie)

2011: Transformative Innovations?

With "The Social Network" an early favorite to win the Oscar for Best Picture, 2010 may end up being remembered as the year when our web-connected way of life finally reached a tipping point on the big scren. As Sean Parker stated in the film, "We lived in farms, then we lived in cities, and now we're gonna live on the Internet."

The release of "Tron: Legacy" furthers this theme for 2010, giving moviegoers a new digitally immersive experience, while also spurring conversation on the future of our virtual existence and networked worlds. 2011 is sure to expand upon the trends above and quite possibly introduce some transformative innovations.

Or as Kevin Flynn states, "Now, I kept dreaming...dreaming of this world I thought I'd never see. And then, one day, something happened. Something extraordinary."

*****

What do you think were the extraordinary innovations and trends of 2010? Share your thoughts in the comments.

Nick Mendoza is the director of digital communications at Zeno Group. He advises consumer, entertainment and Web companies on digital and social media engagement. He dreamstreams and is the film correspondent for MediaShift. Follow him on Twitter @NickMendoza.

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