When the iPad was announced, I was more than a little disappointed. I had expected this thing could replace my laptop but instead it seemed like it was nothing more than an oversized iPod Touch (not an iPhone like some are saying…there’s no camera. But more on that in a minute).
As a longtime Mac user, I was pissed off. And then I thought about it for a little while and I realized something:
The iPad isn’t a computer. That’s what makes it a game-changing device for both consumers and marketers. It’s a device for consuming media…paid media.
Computers are designed as all-purpose machines for creating content. They have keyboards for entering text, mice for manipulating objects on the screen, and ports so you can get information in and out of them.
As content consumption devices, however, computers kind of suck. Sure, surfing the Web is consuming content, but there aren’t very many of us (based on TV sales numbers) who’d rather watch videos and listen to music on them by choice. If you’re going to kick back with a flick, you’re probably going to want to do it on the TV. If you’re going to listen to music, you’re probably going to do so from your iPod or other MP3 device. If you’re going to read an e-book, curling up with your laptop isn’t exactly the method of choice.
The genius of the iPad’s design and features is that it’s an all-purpose device for consuming media that has a form factor that lends itself to that purpose. What’s more, it’s a device for purchasing media as well. In terms of getting people to pay for content, this is where it’s really going to start.
Paid content’s been a hot topic lately with Rupert Murdoch’s pronouncements on the subject and newspapers starting to pull their content behind paid walls. So far, the results don’t look too good: Newsday’s experiment in paid content has yielded all of 35 subscribers in the past three months, generating around $9,000 in revenue. Surely paid content’s dead, right?
Wrong. While newspapers and other Web sites that have tried to move to paid content have done poorly, the Kindle, the iPhone App Store, and iTunes (and other digital music sellers) still continue to grab great gobs of market share. People are paying for content…just not on newspapers.
Why? It’s somewhat of a complex issue, but the main reason is that people aren’t going to pay for stuff they can get for free somewhere else. In the case of news, unless all newspapers go behind the pay wall, nobody’s going to be able to make a go of it unless they have content people can’t get anywhere else: see The Wall Street Journal and The New York Times. E-books (especially bestsellers and textbooks), videos, and music are all examples of similar content. Even with piracy issues, most folks are demonstrating they’d rather pay for convenience, quality, and to stay within the law.
There’s another reason, too: for e-books bought through the Kindle, music purchased through iTunes and Amazon, and video purchased through similar venues (including downloaded via the Zune store or other on-demand services in cable boxes and gaming consoles), the push-button ease of buying content coupled with the fact that these services automatically bill you “later” (at least, that’s what it feels like) makes spending money a lot less stressful. Ditto for the App Store and other content purchased via mobile devices: it just doesn’t feel the same as whipping out your credit card every time you want something. In many ways, it’s like getting chips in a casino: it’s one thing to plunk down a $20 bill on a bet, it’s another thing to just toss in another green chip. The chip doesn’t feel like money and is a lot easier to spend.
While the iPad may have a ways to go in terms of consumer acceptance (it’s not even on sale yet), it’s hard to believe that other content providers and hardware manufacturers aren’t going to understand this paid content equation. While many have been searching for “the answer” to paid content on the Web, the real answer may be that the future of paid content isn’t on the Web at all: it’s on media devices like the iPad that have been optimized for personal media consumption and to wirelessly connect to stores where you can buy new content with the push of a button.
It’s for these reasons that the iPad’s a game-changer. Maybe not immediately, but it points to a tectonic shift in the way that we consume media. The trend vectors have been pointing towards digital distribution of media for a long time, but in many ways we’ve been hampered by our computers. Many kludges have been developed (various “media center” computers, for example, and e-book readers on small-screen smartphones), but the iPad (and its imitators sure to follow) are a real recognition that people will pay for content, provided that it’s delivered in a way that’s convenient and comfortable to use…especially if it reminds us of how we used to enjoy curling up with reading material when it came on paper.
Is the iPad perfect? Not by a long shot. Apple missed out big-time by not including a camera to tap into the social experience that connected media can provide.* Imagine a book club (or a study group) all reading on iPads and all able to video-chat with each other as they read or have group discussions alongside the book (or film or whatever). Especially with younger consumers (potentially a huge market, especially if they can start getting their textbooks through the device) who don’t use e-mail and communicate almost exclusively through social networks, the lack of more social features is going to hold iPad adoption back. The “kids” don’t want “insanely cool e-mail applications”: they want to be connected to each other all the time. E-mail’s for old people, dude.
What does this all mean for marketers? Primarily it means that immersive experiences are more important. As people move away from their laptops to media devices such as the iPad, marketers are going to have to realize that they’re not marketing through the “Web” anymore (where models like search and banners dominate). Instead, they’re going to be marketing through media. In many ways, the future might look more like the past of TV advertising than what we’ve seen.
What types of marketing vehicles will lend themselves to this kind of future? Advergames and branded experiences will be huge. Don’t believe me? Go watch a 12 year old entertain herself on a computer today. They’re not reading content: they’re watching videos, playing games, downloading music, and sharing things with friends. And I don’t suspect they’re going to be changing as they get older.
Sponsored content may also be a bigger opportunity. Sites like Hulu have shown that inserting commercials into online video content (when done respectfully) can work. But that’s just video: an all-in-one media device like the iPad means that we might be seeing sponsored e-books available for free or at a reduced cost to those willing to view a few ads.
Other types of paid content – such as The New York Times’ apps – when used in the context of a device optimized for reading “publications” also lend themselves to more traditional “display” advertising. It’s one thing to dodge banners and pop-ups on your laptop, but it’s another to perhaps stop and watch a video after reading an article in what appears to be a “publication” you hold in your hand.
So far, media consumption on computers has been about multitasking, browsing, surfing, and snarfing up quick bites of information. Computers, because of their construction and their operating systems, lend themselves well to that. Advertising has evolved on computers to take into account these consumer behaviors, bringing us to where search marketing (designed to perfectly intersect with the behavior of those who are quickly moving around a crowded World Wide Web) has dominated.
But the iPad’s not a computer. And it may just be showing us a glimpse of how consumers get their media (and how we market to them) in the future.
*This column has been updated; an earlier version incorrectly said the iPad did not have a microphone.