Media companies can only succeed in charging users for content if they provide unique value. Here are examples of how some sites try to achieve this.

As news media tries to introduce user payment, I have argued that there are essentially five ways to make users pay for digital content .

The five ways are:

• Unique Content
• Unique Convenience
• Unique Usefulnes
• Unique Packaging
• Unique Experience

Any successful attempt to charge users would need to have a very strong offering in at least one of those five areas. The most successful products will combine two or more of the drivers.

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I recently gave a short presentation of this model at a leadership conference in Estonia of Schibsted, the major European media group that I work for. In the presentation I included some examples of how media companies try to use these five drivers in order to charge users for content.

Here is a summary of the examples (mostly Scandinavian) I used in the presentation – with a few extras that I did not have time to include:

Fiskaren – small niche site with paywall

Fiskaren – or The Fisherman – is a small newspaper in Norway targeting commercial fishermen. The newspaper recently decided to put up a paywall on its site – and succeeded. Traffic to the site went down only very little – and they managed to recruit quite a nice number – comparatively speaking – of paying online subscribers.

The reason is obvious: Fiskaren offers Unique Content. There are very few other sites that write for this niche market. Thus the publication enjoys something close to a monopoly.

The Times – will fail in charging for content

The most talked about example when it comes to introducing user payment is The Times in London, which recently introduced a full paywall around the main web site.

This is a risky strategy, and chances are that they will fail.

The main value proposition to readers is that The Times offers Unique Content. But that is also the big questions mark.

As a national news site in a big English-language market: Do people really perceive the content to be so unique that is worth paying for? The verdict is still out: My prediction is that they will fail.

It is worth noting that The Times also try to offer Unique Usefulness to the readers through its Times Plus concept, with commercial offers and discounts on travels, concerts, etc.

The Wall Street Journal – one of very few success stories

The Wall Street Journal is one of the big success stories so far on user payment. 400.000 subscribers pay for their content online, in addition to many more who have access as part of their newspaper subscription.

Does The Wall Street Journal offer Unique Content?

Yes, it does.

Yet, the most important proposition is Unique Usefulness. The brand is extremely strong in providing financial information – and readers are able to convince themselves and their employers that reading The Wall Street Journal actually make them better at doing their job and in making money for their company.  And with the employers picking up the bill, WSJ got itself a good business model.

Kindle – popular for book reading

Kindle has become tremendously popular for book reading, especially in the USA. Also statistics show that Kindle users buy many more books than other customers at Amazon.

Why is that?

Unique Convenience. 650.000 books are available for sale everywhere, even on the beach. You buy with just one click – and the book has been downloaded to your e-reader one minute later. The screen provides excellent reading quality, even in daylight. The device itself is portable and batteries last up to one month. In short it is just a very convenient way of reading books.

The Weight Club – a combination of usefulness and community

VG in Oslo – and Aftonbladet in Stockholm – both run the Weight Club – a service helping members loose weight. Members are given practical tools to record what they eat and how much they exercise.

It has been a big success – and one reason is how the service combines several of the elements in our model. Foremost it provides Unique Usefulness. Members want to loose weight – and they get practical help in doing so.

There is of course also an element of Unique Content, as the journalists provide in-depth articles about health issues, loosing weight, exercising.

More important, though, is the Unique Experience offered by allowing the members to communicate with each other. Members are in a situation in which they desperately need to communicate with others who face the same challenge. I would guess that the forum probably is an important reason why people choose to stay on as member.

The Wired app – using iPad to its maximum

One of the most talked about iPad apps is from Wired magazine. For the first couple of issues it sold almost as many copies as the paper magazine itself.

This app goes much further than most media apps in utilizing the great editorial opportunities and technical capabilities of iPad, such as integrating video, interactive grapchis, cool functionalities, etc. It really is a different experience than reading the paper magazine.

Unique Packaging is the main driver here. Readers are tech-savvy and appreciate all the cool functionalities much more than an average person probably would.

There is of course also Unique Content. And as with other magazines on iPad it also provides Unique Convenience. You don’t have to go to the store anymore to buy a magazine. Your kiosk has moved into your sofa.

Aftonbladet Plus – a rare success story

Aftonbladet in Sweden has had great success with their Plus concept. Aftonbladet Plus is a subscription service giving readers access to premium content. The Plus content is clearly marked on the frontpage of Aftonbladet.se.
Aftonbladet does indeed provide Unique Content to the more than 100.000 Plus members. The site has separate journalists working specially on writing this content – and often reserves some of the best stories for the Plus members.

But the service also has a very strong element of Unique Usefulness to it. Much of the content are different types of guides making life easier for readers, such as travel guides, guides for buying cars, fixing your house, etc.

The TV Guide – charging for free content

Norwegian news site VG har moved very quickly up on Apple’s Top grossing apps list in Norway with its TV guide for iPad.

The content is easily available for free in any newspaper or news site. Why are people paying then?

First of all the app offers Unique Usefulness. Different functionalities, like the possibility to schedule your TV-night, makes it more practical to use than just a regular TV schedule.

But there is also an equally strong element of Unique Convenience. The primary user situation for iPad is in the sofa at night. And where do we watch TV? In the sofa at night, of course. Therefore the app is not only useful, but also very convenient to use. It’s just there in your hands – as you watch TV. VG has hit very well with a useful product designed for a particular user situation.

Aftenposten: E-paper with 150 years’ archive included

Aftenposten’s digital archive contains newspapers from 1860 up to today’s fresh edition. Containing almost 2 million pages there is no other newspaper in Norway with a similar historic archive. Thus this is indeed Unique content.

In fact this content has been free before. But you had to go to a library, ask for the micro film rolls and patiently go through themthem. It took for ever.

Now readers can do the same in their own home. It is Unique Convenience.

Consumer Reports- helping people solve their problems

People need practical help with their problems – and not only academic approaches.

Consumer Reports in the USA has managed to get more than 3 million peopole to subscribe to surveys, consumer tests and product comparisons on its site.

The reason is clear: Consumer Reports offers Unique Usefulness. It helps people make wise decisions in their everyday life.

An important element is that the service also offers Unique Convenience. Hundreds of sites offer product tests and for users it can take a lot of time to search through all of them and select which are the credible ones. Consumer Reports has over a long time succeed in building such a strong and credible brand that users save time by going directly to its site instead of searching all over for advice.

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What do you think of this way of looking at user payment? Do you have other examples that should be included on the list? I would love to hear your thoughts.

Media companies face a critical choice as they struggle to introduce user payment for digital content:

Should they introduce separate products for each new platform, such as iPad, or try to sell a cross-platform subscription?

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I love reading books – and I love Kindle. Not only the e-reader device Kindle, but the Kindle platform as such. And I think media companies would be wise to learn from Amazon‘s Kindle platform.

Yes, it is a device. But much more important is the great platform agnostic service targeted at book lovers. Let me use myself as example: I read digital books on three different platforms. Most often I would read them on my Kindle e-reader. Occasionally I would continue reading on iPad. And on a seldom occacion, when I have no other choice and is very into a particular book, I will read on my HTC Desire smartphone.

The huge benefit Kindle offers me, besides having the largest selection of books, is the possibility to read my purchased books on whatever platform I choose. What I buy is not a book on the Kindle device, but a book that I can read on whatever platform I choose to use.

Compare this to Apple’s book app iBook. If you buy a book here, it will only be accessible on the iPad and iPhone. If you move outside Apple’s world you have no longer an easy choice to read the book you just purchased on the device of your choice.

I think media companies should learn from services like Kindle rather than iBooks.

Let me explain why.

As media companies move into the user payment area and try to distribute their premium content on different platforms they face two alternatives:

• Introduce a separate product and subscription for each digital platform.
• Merge the different digital versions into one platform agnostic product and subscription.

Many media companies are tempted to try the first alternative. They argue that it is possible to make more money by separating the products.  It is also very natural to stay focused on one platform at the time. At the moment many companies concentrate on developing a compelling app for iPad, hoping that readers will be willing to pay a premium price for their content on this new platform.

I think for most news media companies it will be smarter to merge the different digital versions into one platform agnostic product.

Following this path readers deciding to buy a digital subscription would get access to the premium content package on all available platforms: The web, mobile, iPad, e-readers, etc.  One price gives access to all. The different versions do not need to be the same, of course. They should utilize the benefits of each platform. But for the reader it should be one subscription.

Why is this the best alternative? There are many reasons:

Most readers will consume media content on more than one digital platform

Just about everybody has a PC, the number of smart phones is exploding and experts expect that iPad and other e-readers will grow significantly as well.  For users it is not an either-or decision when it comes to media content. Rather they will read on all the platforms available to them, depending on which user situation they are in. But it will be a hard sell to try to make them pay again and again for the same content. Rather they would expect that once they have established a premium relationship with a news brand that goes for all the platforms the content is available on.

The strongest relationship of readers is to the media brands, not to the specific digital product version

Readers relate to and engage with media brands rather than the specific products. If I read The New York Times on a Kindle, for instance, I do so because that brand already gives me strong and positive associations.

These brand relationsships with large numbers of people is the greatest value many media companies possess, especially those that have relied on a subscription-based business model. In selling digital content it might be smart to think that we monetize the relationships rather than just the specific products. And the relationships of our most loyal readers are by definition platform agnostic.

Selling digital content is hard: We need to build as rich experience as possible

To sell digital content you must provide Unique Value. Unique Content is only one of several ways of doing this. The richer experience you can offer your reader, in terms of both content, convenience, usefulness, packaging and emotional attachment, the better. For many general news media companies just offering the content for sale on new platforms will not be enough.

By offering the different digital versions as one product you also provide a richer experience. Users will be reminded about the benefits of the product several times each day: As they check the news on their mobil, when they check the web site for news during office hours or when they relax in the sofa  at night. The perceived value of the product will be higher, increasing chances that people actually might decide to order a subscription.

It also gives you the chance to build premium cross-platform functionalities that are useful for readers, such as syncronization of users’ activities and the possibility to save interesting articles for later reading.

It is much easier to administer and market one product than many

A good advice is always: Make it simple!  And it is much easier to develop one main digital subscription and communicate this product than selling a number of different versions individually. You can concentrate on one marketing campaign and one simple message with an easy-to-understand pricing structure.

Also it is easier to organize. Employ one manager to be in charge of your digital offering rather than one responsible for each of the separate products.

One main product will get much higher volume than many small ones

I think most media companies will discover that each platform-specific product on its own will generate a low volume. One reason is that readers feel they are not getting value for money. Why pay a full subscription price for access to the content on one device only when you every day relate to the media company on at least two or three different platforms?

By combining the versions the total number of subscribers probably will be significantly higher than if you sum up the numbers from a number of different products. Readers will get a richer experience and be reminded about your product on many more occasions.

It is a less riskier approach in a market with frequent changes

Say you put a lot of effort into making a state-of-the-art application for iPad. What if  iPad does not prove to be a success in your market? What if your product sucks in the view of your readers? Then you are stuck as your subscribers will run away as fast as they can.

You have a better chance of keeping the customer relationship strong by including all different digital versions in one product. In fact you are reducing your risk regarding which platform will win. The main challenge is to make sure that you are available on the most popular platforms at any time.

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Is this the best approach for all media companies?

Of course not. There are a number of exceptions. For instance media companies with a single copy sale business model might very well choose otherwise. However, for many newspaper companies which traditionally have depended on subscriptions I think this is a wise strategy to follow.

A platform agnostic news media product could be composed of a number of different elements:

- The e-Paper. A PDF version of the newspaper

- An iPad app

- An epub version for e-ink based e-readers

- A premium app for iPhone and Android smartphones

- A premium level or benefits on the news site (not necessarily paywall)

To tie them together all the different elements would need to be linked to a login/payment the media company controls itself. That way the media company also is in charge of its own customer relationships.

This is how I think. I would love to hear your thoughts on this.
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I love reading books – and when it is time for vacation it becomes a major pleasure. But rarely do I now read books in my own language: Norwegian. The reason is simple: Only a few of them are available for e-readers!

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In analyzing digital media trends, I strongly believe in the following statement: If it can be digitalized, it will.

This is true for all media formats: Films, music, games, news, radio, TV, magazines, books, etc.  The analog formats are loosing, while the digital versions are taking over. In some markets there is a revolution, in other markets we are only seeing a slow evolution – step by step. But the direction is unmistakingly the same: Physical media products, like DVD, newspapers and paper books, will eventually disappear or become irrelevant.

As the smart Danish blogger Thomas Baekdal writes: People want digital, so give them digital.

One piece of recent news exemplified this development in a symbolically strong way: Amazon announced that is is now selling 143 digital books for every 100 hardcover books. No exact numbers were given, and there was no mention of paperbacks. Yet it illustrates a paradigm shift in the book industry, which is now feeling the power of the digital wave.  In the US digital book sales this year (up to May) has quadrupled compared to last year, according to the Association of American Publishers.

Let me get back to my own book reading habits. For me e-reading on a high quality screen has been a revolution. I use a Kindle myself, but imagine I can get most of the same advantages on a number of different e-readers, including iPad. Advantages are plentiful:

• The reading quality is as high, or even higher, than in a paper book. Just the small detail of adjusting the font size is worth a lot.
• My e-reader is light and easy to carry around. Going to the beach? I just throw it in the backback.
• No need anymore to bring a number of heavy books on vacation. I have them all in my e-reader. And e-ink screens work great in the sunshine as well (sorry, iPad, on this particular vacation user situation you cannot compete yet.)
• I can buy new books anywhere, even on the beach. Several times I have impulsively bought books after having read the review in a newspaper.
• E-books are cheap. USD 12 for a novel! Great!
• I can continue reading my books on other devices if I prefer, such as my Android phone, iPad or even on my PC.

On vacation on the beautiful west coast of Norway I enjoy reading a great novel - in English - on my e-reader while my son is fishing.

These days  I am enjoying my summer vacation on the beautiful west coast of Norway.   I bring my e-reader with me everywhere, loaded with great novels I would love to read.

But the books are all in English! I don’t have a single book in my own language, Norwegian, on my e-reader.

In fact I have almost stopped reading books in Norwegian. I find reading books on a device like Kindle so convenient that I rarely bother about getting paper books anymore. And since hardly any books in the Norwegian language are available in digital formats, I have just stopped reading them.

It is a pity, of course. And not what I really want. But convenience tends to win when it comes to digital media habits. I choose among the books that are available rather than put on an extra effort to search for the other alternatives.

Actually everything is ready for Norwegian book publishers to be have their offering available on e-readers. The major book publishers have cooperated in setting up a technical solution at the Norwegian Book Data Base – and it is all fully developed. But so far the publishers have decided not to push the “start” button. The reasons are mainly political, as I understand it: A number of issues need to be sorted out in a tightly regulated small book market. One of them is the question of value-added tax. In Norway paper books are exempt for this tax, while digital versions are charged the full rate of 25 per cent.  That makes it difficult for book publishers to offer e-books at a significant discount.

The result is that I can not read most of the books in my own language on e-readers. And because of that I choose English language books instead. Not really a victory for Norwegian book publishers, I guess.

I realize of course that I may not be a typical customer. So far, that is. I am used to reading in English and perceive myself as rather internationally oriented in my thinking. Also I belong to the small minority in Norway who has actually purchased an e-reader device.

Yet I think this personal example, as well as the speed e-reading now is growing in the USA,  demonstrate the risk publishers take if they avoid making digital versions of their work. As the whole business is turning digital, customers are not just going to wait for you. They will go somewhere else instead. And people like myself may turn out not to be so marginal after all. There is a growing group of highly educated people in Norway who find it almost as easy to read in English as in Norwegian. Many of us also use English regurlarly in our work. And e-readers and tablets like iPad are gaining ground very quickly.

Convenience wins. If you want to be a winner in providing content, you need to be sure that you offer it in whatever way is considered most convenient by your users, be it on Kindle, iPad, iPhone or whatever other device is being preferred. Otherwise your customers, like myself, will make a quality tradeoff: Ideally I prefer Norwegian. Of course I do. But for the time being I don’t mind reading in English. And boy, am I surprised! There are so many great books available in that language! And they are so cheap! I love it!

The changes are radical also from the perspective of authors:

I am actually writing a book in Norwegian myself – about Cambodia. It will most probably be published as a paper book in Norwegian early next year. For the time being it is OK that way as e-reading is still uncommon in my country. But I am pretty sure that for the next book I might decide to write, everything will be different.

For this book I am thinking the paper version first, then whatever digital versions the publishing house might come up with next.

For the next book chances are that I will be thinking digital publishing first – with the paper book as only one of several versions. The role of my publishing house probably have changed – and my guess is that I, as the author, will be more in control. In fact I may not need a traditional publishing house at all, at least not for the whole value chain.

As a writer I look forward to that. Readers should too. There will be more choices, sophisticated and compelling reading experiences, lower prices and great convenience in where, when and how you read your “books”.

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User payment, the tablet revolution and more clever advertising solutions. Those are some of the digital media trends that are putting their mark on 2010.

In the beginning of the year I wrote the blog post “8 digital media trends to watch in 2010″.  It has been one of the most read articles on BetaTales this year and I decided it is time to update it. This is a new version of the post, in which I have included some of the developments that have proved to put a strong mark on the year.

Here are 8 of the ditigal media trends that I think are shaping 2010:

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1. Searching for new business models: Lots of experiments with user payment are taking place

Many media houses have signalled that they will try to charge customers for content. “User payment” has become the new buzz word within the media industry, and a large number of experiments have been initiated.

The wave has been headed by media tycoon Rupert Murdoch, who just put the web site of The Times behind a paywall.

Most media houses probably will not dare to go as far as The Times. Rather many are trying to find solutions where the most loyal readers are paying. One example is The New York Times, which will introduce the socalled meter model in the beginning of next year.

The big challenge for media houses is of course to determine what of their offerings that really provide Unique Value. There is a good thing about these experiments, though. As 2010 draws to an end, the business model of news may have gone through some significant changes. We will know a lot more about which models may actually work and which will be doomed to fail.

One thing is for sure: Most media sites need to improve their business model. Unless you are a market leader, display ads alone normally is not sufficient to run a sustainable news business online. This is becoming even more evident as display ads have become under increasing price pressure in the market. Somehow news sites will need to find additional income sources.

2. Smart phones are revolutionizing mobile web use

We are in the middle of a revolution when it comes to connecting to the web through mobile services. The basic initiator is the iPhone, which revolutionized how people use the web through mobile devices.

This trend is now being accelerated by Google‘s open source operating system Android, which is gaining speed very quickly.

The result is a radical shift in how people use their mobile phones. The apps economy is exploding and a lot of people are now using their mobile phones for tasks previously taken care of by their laptops.

3. Media sites are connecting much more closely to popular social networks

Only a couple of years back many media sites thought they could develop huge social networks on their own. This approach has largely failed. Media sites soon discovered that developing their own social networks required consistant dedication and allocaton of resources. It proved to be very hard to compete on an every-day basis with the huge global players.

Look for instance at this Alexa graph of how the once huge popular Norwegian social network Nettby has lost visitors. Nettby is run by VG.no, the news site of Norway’s second largest newspaper.

Giving up the ambition to create their own social network, a lot of media sites now instead connect to the social networks people do indeed use:   Facebook, YouTube, Twitter, etc.

One of many examples is Washington Post, which has introduced the concept Network News. Connecting to Facebook’s API, the news site lets its readers know of stories recommended by their friends.

We are now seeing a large number of media sites using Facebook Connect and similar tools in an effort to create engagement. The reason is simple: The the ability to create engagement and loyalty among users is a determining factor of which media sites will be the winners in the future. This is even more important as much general news have been commoditized.

The trend also forces media companies to realize that the age of one-way communication is a past. In today’s digital world media  need to be in continuous dialogue with their readers – or slowly die.

4. Geo location are becoming the basis of exciting new services

As mobile services explode, the location of users will be more important. Most new smart phones have a GPS included, and content providers will offer services which utilize where users are located at any specific time.

At the same time a number of new social networks are built around the location of its users, such as Foursquare and Gowalla.

Media sites are not necessarily prepared for this trend. Many media sites are accustomed to preparing their content primarily for print and secondarily for the web. Typically they have not added the meta data necessary to offer geo  located services. Now it is the time to do it!

5. Tablets are changing our media habits

The launch of Apple’s iPad has put high speed on the e-reading market for media companies. Media companies are running as fast as they can to come up with them most exciting news apps for the new tablet.

Apple will soon face competition from lighter tablets with even better screens, many of them based on Google’s competing Android platform.

For media companies an interesting user pattern is emerging. iPad is proving itself to be a sofa device – as many users primarily reserve it for the late night time.

And then there are Kindle and other e-ink deviced, designed to offer a very good user experience when reading books and other forms of text.

The number of e-reader devices in the market will grow significantly in 2010 – and so will also the buzz around this technology.

We are bound to see a large number of tablets and other e-reading devices launched in the market within the next year. So far iPad has taken a lead, but the landscape is still in the storm and huge changes will happen.

6. Much greater emphasis on new advertisement models

As space for display ads is abundant and prices drop, media sites are forced to spend a lot of time and money to develop more sophisticated ad models for their customers.  Advertisers demand documentation that ads actually work – and media sites are under increasing pressure to prove the effect of ads on their sites. We will probably see a lot more innovation in this area as the sites try to develop premium ad models which can offer high value both to the advertiser and the users.

7. Real-time

Delaying publishing is yesterday’s method – news and other content today is published as it happens. We are now experiencing the real-time web, driven forward by news feeds of services like Facebook and Twitter.

Users increasingly demand immediacy, a way of presenting news which is both compelling and addictive. At major news events users have increasingly sophisticated ways of following the aggregated real-time news streams from numerous eye witnesses.

This of course poses great challenges for traditional media companies as they face competition from observant amateurs at the scene of the news.

I am convinced news sites increasingly will take advantage of this real-time web and find creative ways of making their coverage evolve live and continuously as new information is being gathered. This includes making efficient use of social media and user content in the daily journalism.

8. News content continue to disaggregate

It seems to me that most editors underestimate how news content is disaggregated. Yet this trend somewhat undermines the very business model of traditional media companies with their emphasis on broad edited packages as their main product.

As a journalist it hurts me to point this out. Yet I am convinced that the content focus slowly moves from one-size-fits-all packages to the single piece of news content and associated meta data.  For many news sites today a significant portion of their users don’t even visit the front page, but go directly to a specific news article from a Google search og aggregator service.

I think there is a clear parallell to the music industry. Their basic product used to be the album, an edited package of an appropriate collection of songs. This made sense when you had to make a physical product – like a record or CD.  But as music was digitalized, the individual song took over as the popular product.

I am not saying there will not be a market for edited packages.  Certainly people will still appreciate qualified editors making a choice for them.  But content pieces will no longer only live within a broader package, but also take on a life of its own being distributed wherever users want to consume it. And media sites will be forced to make their packages much more unique and focus on specific user needs.

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These days everybody is praising iPad. I could do that too – and probably will. But let me first describe how Kindle was my perfect holiday companion this Easter.

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This Easter my family spent five days in Barcelona in Spain. It was a great vacation for everybody, with beautiful attractions, cosy restaurants, a lot of laughing and many nice experiences.

And quite a few hours of reading.

I love to read. Crime, dramas, magazines, newspapers … And when I go on vacation I have more time to read than normal. Typically I will read 2-3 novels during a week of vacation.

Before I always had to prepare my vacations carefully. I would drop by the book store in Oslo and select a few books I would like to read. And the books would certainly challenge weight limitations in my luggage.

Not anymore.

I now got my Kindle. This time I spent about 10 minutes at Amazon‘s web site a few hours before leaving – picking two books I found interesting. One-click-buy  - and they were safely distributed to my e-reader.

On my Kindle I already had my paid daily subscription to the Asia edition of International Herald Tribune. You may ask why I pay for that. Couldn’t I find the same articles on the web for free? Yes, I could. But, you see, in my daily routine I have a free half hour slot as I take the train home from work. That is the 30 minutes I have for International Herald Tribune – and Kindle is able to provide Unique Convenience by offering me that content in that particular situation.

Back to my vacation in Barcelona. How did I use my Kindle?

• I read crime novels on the plane going back and forth
• I read for hours in Barcelona. The weather was nice – and usually I was sitting in the sun light on our roof top terrace or in a cafe.
• My Kindle was always in my backpack – and I would take it out when I had a few minutes available.
• I kept track of the major international news by reading the International Herald Tribune.

I was never online during this vacation. Why not? Well, there was no wireless network in our apartment. I could have used my mobile phone to surf on the 3G, but I was of course worried about the costs. Internet cafes? No, this was family time! No room for daddy so sneak away for a web cafe

But my Kindle delivered. I read hundreds of pages, let myself be drawn into the most compelling stories, kept track of the news.  And it was all so easy and convenient.

I hear you asking: Couldn’t I have done all this on iPad?

I don’t think so. And in any case it would not have served my purpose as well.

Here is why:

• iPad is build around connectivity to the web. This vacation I did not have connection easily available.
• The e-ink screen of Kindle is far superior to any LCD screen when it comes to reading text.  You can read for hours without experiencing any eye strain. Especially this is true when you are outdoor. I don’t know about you, but for me I tend to spend as much time as possible in the sun when I am on vacation. In that situation a reflective screen as what iPad has is bad. E-ink is great, providing a reading quality on the same level as paper.
• The battery lasts forever. This is so nice on a vacation, when you tend to forget to charge all your gadgets. At least I do
• Buying a new book was done in a couple of minutes  - from my bed. No need to be connected to the web. No need to worry about 3G connection charges – it is all a part of what you pay for the book.
• My newspaper subscription was delivered to me automatically.
• Kindle seems durable – and I had no worries about throwing it in the backpack as I went around exploring Barcelona. I have a feeling I would be more worried about an iPad.

Many will of course point out that Kindle is only in black and white and does not offer any of the rich multimedia experiences of iPad. It doesn’t even have any kind of graphic presentation of the content. And that is true indeed. But still it served my purpose excellently – and proved a valuable companion on my travel.

Am I saying Kindle is better than iPad?

No, I am not.

It all depends on your specific needs.

In fact I don’t think you can compare the two. In my opinion they are really not in the same marked, as I have blogged about before. Kindle is for reading text. For that particular purpose it offers a few very unique advantages. iPad is much more a multimedia web surfing tool designed to be used in your living room. But while iPad may be great in your home, it may not necessarily work as well on vacation. And for book lovers Kindle may still be a preferred device, in particular because of the superior screen quality.

Do not misunderstand me. I am very enthusiastic about iPad and similar tablet products that will be launched in the months to come. I think these tablets offer great opportunities both for consumers and content providers. But let us not forget that user situations and needs are very different. It is not like iPad will solve any challenge users have – and in some particular situations, like vacations, it might just be inferior.

At least for me personally Kindle was a perfect travel companion this time – despite its technical limitations. And I suspect it will stay like that.

But I will probably get an iPad as well! For my home!

Numerous technology writers have called Apple’s iPad launch a Kindle killer. That may not automatically be so.

Here are some reasons why.

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Bye, bye, Kindle! Apple fans are laughing and lining up big lists of reasons why iPad will kill Amazon’s Kindle.  In my opinion that is premature. I think Amazon has a good chance of still doing very well with its Kindle platform. For books, that is!

Kindle and iPad are completely different devices. Basically they are not in the same market at all. Comparing them as if they are trying to do the same is missing the point.  Kindle is a specific book reading device designed to display text in the best possible way. iPad on the other hand is a multimedia entertainment tool to be used for a wide range of media consumption, entertainment and personal tools. Buyers of Kindle will never expect their device to do all the stuff Steve Jobs promises. They want to read books. Period. And for doing that many of them will still appreciate the e-ink screen and long battery life. My guess is that many still will find it a strain on the eyes to read a long book on iPad.

Kindle will stay much cheaper than iPad. The small Kindle is now selling at about half the price of the cheapest iPad version. I would be surprised if Amazon does not lower the price even more soon. In addition using iPad will typically involve a monthly charge for 3G connection, a cost which is included in the book purchase on Kindle.  For book lovers the much lower price will be attractive if all they want to do is to read books.

Amazon has a long and close relationship with book buyers.  For Apple books is a new business, while Amazon for a long time has been running the biggest online book shop in the world. A huge number of people are used to searching for books on Amazon and appreciate their intelligent recommendation engine and service. This relationship will not disappear overnight.

Kindle is a platform, not a device. This is the most important point, but often forgotten by experts comparing the two. Yes, Kindle is also a device, but more than anything Amazon has been building a platform for digital books. As customers you can read your books on many different devices, even the iPhone. And you will be able to read them on iPad. Steve Jobs has promised that all iPhone applications can be used also on iPad – and that will include Amazon’s nice Kindle app. Be sure that Amazon now will put every effort into making the best book reading app for iPad. And to be honest: Apple’s iBook app looked nice, but did not seem to revolutionize book reading in any way compared to the Kindle app.

I am sure Amazon will introduce new devices to the market in the next year, but probably they will not try to compete with Apple’s full range of functionalities. Likewise I don’t think the iPad use will be driven primarily by book reading, but rather by gaming, video, entertainment, personal tools and media consumption.

And even if the sales of Kindle devices drop dramatically, Amazon’s Kindle platform as such might do quite well.

Amazon does have two big challenges, though. The first is their relationship to publishers, which are not happy with the terms they have been offered. The second is the proprietory format Amazon is using. While Apple smartly has chosen the open standard format epub for its books, Amazon keeps its own format.

However, both of these challenges can be taken care of very quickly by Amazon if the company so decides. In fact I would expect both publishers’ terms to improve and Kindle opening up for epub within the next months.

That’s for books. I think Amazon has the potential of being a huge player in the e-book market for a long time still – even though I am sure they worry like hell (and should) about Apple’s launch.

For newspapers and magazines it is a different ball game, which I will write more about later.  Obviously iPad offers a superior experience for news consumption. I don’t think Kindle has a chance to be a huge platform for news. For sure many newspapers will offer their content on Kindle as well (it is quite effortless for them to do so), but iPad stands a much bigger chance to define how we will consume news in the future.

Don’t outrule e-readers with e-ink or similar technology quite yet, though. New technology is being developed fast and I am pretty sure we will see numerous of exciting devices in the next couple of years.

But so far Steve Jobs scored 1-0 for the news business. And I am incredibly curious as to how this will all play out!

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Not sure what to think? New York Times had its bloggers argue for both sides:

• Three reasons why the iPad WILL kill Amazon’s Kindle
  
• Three reasons why the iPad WON’T kill Amazon’s Kindle

Norway’s Consumer Council warns Amazon that user terms for Kindle e-readers violate basic consumer rights. The watchdog is considering launching a formal process against Amazon, just as it did against Apple’s iTunes store.

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“Forbrukerrådet” – the Consumer Council in Norway – gained international attention when it threatened to take iTunes store before a Norwegian government agency, the Market Council, for failing to make its online store compatible with other music players than iPod. The council also criticized that iTunes without any ado could change the rights to the music you already had bought. The complaints were dropped after Apple promised that its songs would be compatible with all other MP3 players.

Now the same Consumer Council is warning Amazon that its user terms for the Kindle e-reader violate basic consumer rights. In an interview with the Norwegian newspaper Aftenposten today Consumer Council representative Hans Marius Graasvold strongly criticized the user terms buyers of Kindle have to sign. He said these fundamentally violated consumer rights which in Norwegian law are considered obvious.

Here is what he considers unreasonable to consumers:

• Most important is that e-books from Amazon only can be read on their own device, Kindle. In the opinion of the Consumer Council this can be compared to how Apple locked iTunes to its own iPod devices.
• Amazon reserves itself the right to unilaterally change the user terms.
• Amazon will withdraw your books if you as a consumer violates the terms, even if you have bought and paid for the books. A similar action would be impossible to consider in the analog world.

I sat in a panel discussing e-books with Graasvold today (see a Norwegian summary of the discussion here). In his introduction he elaborated on his criticism and confirmed that the Consumer Council is considering very closely whether it should launch a formal process against Amazon, just as it did against Amazon. He also expected that the user terms would cause reactions from the European Union.

It should be interesting to see how this plays out. My own analysis is that Amazon uses the lock-in temporarily to build a strong market position. Eventually I think Amazon will be forced to open up its platform. Just imagine the reactions when hundred thousands of users loose all their purchased books just because they decide to switch to a different e-reader device.

For sure e-readers are great for reading books. But what will it take for the technology to succeed with newspapers and magazines as well?

I have had the chance to test several e-readers over the recent months, including the newest model from Amazon, Kindle DX.

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Here are some of my reflections:

• The e-ink technology makes it just as pleasant to read text as it is on paper. And it is much easier on the eye than a computer screen, be it a laptop PC or a mobile phone.
• Reading books on these devices is very convenient. You can store hundreds of books on a single e-reader, and the reading experience is about the same as holding the paper books in your hands.
• Battery life is another great advantage. You can go from two to three weeks withouth having to worry about the battery. Please compare that to an iPhone or a laptop!

But what about newspaper content? Can it be a success on e-readers? If so, what would it take?

My own conclusion is that e-readers may prove to be a great platform for newspaper content – but we will still need to wait a short while for the technology to improve. While it will not replace the print newspaper as such (even though some people like to believe so), it can give users a unique reading experienc that is different than using the web and approaches the biggest advantages of the print paper.

At the moment the e-reader technology is immature. Still screeens are in only black and white, and there is virtually no interactivity. Most of the e-reader devices have no online connection. (Try E-paper Central for good updates on the technology)

All this is about to change.   3G connection as well as wifi is becoming the standard of new e-readers, as it has been in Amazon’s Kindle models. The first e-readers in colors will hit the market within a year or two, and we will soon see e-readers that are rollable, extremely thin and very flexible in appearance.

I think these are some of the prerequisites for e-readers to work well for newspapers:

• There absolutely must be a 3G connection. Newspaper content needs to be updated regurlarly – and the users should not be bothered about having to do this manually through a USB cable. Updating the content must take place automatically, as it does if you use a Kindle in the US.
• The more flexible the e-readers are, the more successful they will be for newspapers. Rollable e-readers that are thin like magazines might very well be a killer app.
• Newspapers must be able to present at neatly edited package in an attractive way. Users are not primarily paying for the news (which today is free everywhere), but rather for the reading experience browsing through content that is carefully picked by skilled editors.
• Newspaper content needs to be designed much better on e-readers than what we have seen so far. Today’s newspaper product on Kindle, for example, is rather crappy.

E-readers will not replace newspapers in print. And they will not replace the web product either. I imagine it will be somewhat in between, with focus on convenience, availability and a good reading experience. It will primarily be a product for people who like to read and who appreciates being able to do so at their own convenience  and in a more comfortable way than on a computer screen.

For newspapers it offers a chance to make a digital subscription model. It certainly is more friendly to the environment than the paper product and the huge costs associated with printing and distribution are basically gone. A number of newspapers are already planning bundling experiments, in which readers are offered the e-reader device for a very low price provided that they subscribe to the e-paper version for a certain period of time.

With Kindle Amazon has proven that e-readers now have a mass market. With all the new devices and partnerships that will be launched over the next year we are in for an exciting development.