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Tablets will be saviors of traditional media: ad:tech keynote

SAN FRANCISCO ? During his keynote address at ad:tech, the editor in chief of Condé Nast?s Wired magazine said that tablets such as Apple?s iPad will revolutionize traditional media by enabling print publications to make money from digital content.

The key to a sustainable business for traditional media companies is making a freemium model blending paid and ad-supported content work. The user experience of the iPad and other tablets just might be compelling enough?and exclusive enough?to make consumers willing to pay for digital content that contains advertising.

?Tablets are the third great computing platform?first PCs, then smartphones and now tablets,? said Chris Anderson, editor in chief of Wired, San Francisco. ?The coherence of a print publication is lost when the content is itemized in a Web browser?much is lost in translation on the Web.

?If only we could find a way to design a digital edition simultaneously with the print edition, with the same people doing it, thinking about both editions from the very start,? he said. ?If it were possible to do both at the same time, we could finally achieve the Holy Grail of an integrated print-digital experience.

?The tablet may finally be able to both, provide a platform for digital advertising that is engaging and digital content that people are willing to pay for and that is not less engaging than the print product but more so.?

Wired  is a full-color monthly American magazine and online periodical owned by Condé Nast Publications that reports on how technology affects culture, the economy and politics.

Tablets to the rescue?
Mr. Anderson said that when he first heard about Apple?s plans to release a tablet computer, he was skeptical.

There had been many efforts to release tablets and other hybrid devices with touch screens and other stylized screens, but none of them had taken off.

However, as Wired editors thought more about it, they realized that three things had changed.

First of all, the iPhone had shown that there is a massive market for a powerful rich-media touchscreen device that consumers carry with them.

?The iPhone shifted people?s thinking from the model that everything is done via a Web site to apps geared to a specific use and a specific device, often monetized via a paid or freemium model, which suggested that there was an opportunity for other app-centric devices that we carry with us,? Mr. Anderson said.

The second factor was Amazon?s Kindle.

?The Kindle doesn?t do anything different than a book but it offers a more flexible, convenient distribution experience, which is so important that consumers are willing to buy it in the millions,? Mr. Anderson said.

The third factor was the rise of cloud computing extending to mobile devices.

?As our lives became more hosted, our data has started to live out there in the cloud, which meant that these devices could be thinner and give us longer battery life,? Mr. Anderson said. ?The idea that tablets were underpowered computers no longer held sway as the work is being done in the cloud, so that enables a lighter device and a better user-interface experience.

?If it fit into your life without the performance weight or cost downsides, then it could be a hit,? he said. ?Those were the three factors that convinced me that tablets would sell in the tens of millions.?

Business models
Mr. Anderson and his team at Wired started to think about the economics of content on the tablet.

?We are invested in this in a big way?we?re working with Adobe to create not just tablet content but an entirely new publishing process for this era,? Mr. Anderson said. ?We?re not porting iPhone apps, we?re creating a publishing process that we think makes sense in a way that a Web site for a magazine has never made sense to date.

?If we get this right, if we as an industry figure out how to use this platform well, and reset the economics on both sides of the equation, the production and distribution sides, then we will have found the future of the industry,? he said. ?For the first time in my career, I can see the path to a 21st-century magazine business that makes as much sense or more than the 20th-century economic model did.

?If we use the power of this new platform properly, we can regain sustained attention power, and rather than digital content being a loss leader, there will be an opportunity to make money from digital distribution alone.?

Paid, free or freemium?
The Web has resulted in consumers expecting free content, with bloggers and niche sites outcompeting traditional media giants.

Mr. Anderson believes that the barriers to entry of the iPad and competing tablets, as well as the fact that the larger screen is a compelling platform for applications, will enable publishers to charge for content.

?With tablets we can once again charge for something that people have proved that they value with the minutes of time they spend with it,? Mr. Anderson said. ?We may once again charge for things, not because we say so, but because people value it and they are willing to pay for premium content.

?There is the potential for digital economies of scale with analog pricing like the old model or perhaps even better,? he said. ?And the tools available to us as magazine makers will also be available to advertisers.?

That is the key for publishers to be successful monetizing the tablet platform?they must find the balance using the freemium model, keeping the price points attractive and the advertising compelling, even entertaining.

?We?re still figuring out how advertising works on tablets, not only creative aspects such as animation and video, but as they swipe, your job as advertisers is to stop the finger and make them do something,? Mr. Anderson said. ?Let?s not reinvent the blink tab or banner, let?s come up with something inventive.

?It?s not about clicks but about finger flow, time spent, but also the ability to record data offline as well as online,? he said. ?Apps have intelligence and can measure beyond what we?ve been able to do on the Web.?

Mr. Anderson believes that the industry needs to move away from CPM and CPC advertising to other models.

?What is engagement on the tablet remains to be seen, as we?re still in an experimental era,? Mr. Anderson said. ?We need to create a better economic model to gauge ROI, actually measurable sales and brand impact.

?We need to measure and measure and measure, operate based on data rather than gut instincts as to what we think should work,? he said.

Free and ad-supported digital content just does not cut it for large media companies with lots of overhead.

Still, advertising will always play an important role. The key is to enhance rather than distract from the user experience.

?If we have a new publishing process that can tap all of the skills of the traditional industry and does not project Web assumptions on to this tablet, we have the opportunity to fix what is broken in media, fix the balance of monetization, which is extremely ad-based, tilted towards the advertising side of the equation,? Mr. Anderson said. ?We have the opportunity to rebalance that, not necessarily by charging consumers more.

?Digital distribution via tablets is so efficient that a $10 subscription could be a $9 profit rather than a loss,? he said. ?The efficiency of digital distribution is extraordinary, and the environmental costs and all of the negative aspects of print are no longer necessary if we can find a digital medium that can have a similar impact.

?We?re not wedded to print, we?re wedded to deep consumer engagement.?