Jan 29, 2010
Steve Jobs can be sure of at least one success and that is the instant domination of all blogs around the world with one product launch. There have been many things stipulated, but I would like to get back on the influence the iPad could have on the publishing industry. There are remarks abound, about the great opportunity the iPad poses to publishers. But it should be spelled out explicitly: Steve Jobs is not interested in saving the publishing industry. He wants to sell iGadgets including software and everything around it. What will publishers gain?
Let’s have a look at the numbers: Assuming a consumer buys an iPad for publishing products it means a one-off fee of $500 and then every month an additional $30 (the web access charge) less to spend on publishing products. This money goes into the pockets of Apple and the network provider. Of course a consumer will expect a huge discount in return for the publishing content he reads on the iPad. That is the money the publisher is not getting. Sure, the publisher is saving money by producing e-content. Printing is only a small fraction though, about a seventh of the retail price. The biggest cost factor though is the retail channel which typically receives up to 50% of retail price. However this is the portion Amazon or iBooks are vying for and what they are already charging. In the end there will not be a lot of margin left after giving consumers the discounts they expect.