An interview that Marc Andreessen gave to Erick Schonfeld of TechCrunch on Friday is causing much discomfort in the "old media" ranks. In essence, Marc said that the only way for newspapers and magazines to save their businesses is to fully commit to digital media, instead of taking halfway measures designed to protect their print businesses. It's the cannibalization argument--it's much better to cannibalize yourself than to allow competitors to do it for you.
Those thoughts were interpreted by some to mean that he was suggesting that publishers should get out of the print business, but what I believe he meant is that they should be prepared to give up their print businesses, once it becomes clear that those businesses are no longer sustainable. However, what Marc said about the iPad is even more interesting. Rather than paraphrase, I'll quote the article precisely (with my apologies to Mr. Schonfeld and TechCrunch for the length of the quote):
"With all the recent excitement in media quarters recently over Apple’s upcoming iPad and other tablet computers, and their potential to create a market for paid digital versions and subscriptions of newspapers and magazines, I wondered if Andreessen still felt the same way. Does he think the iPad will change anything?"
"Andreessen asked me if TechCrunch is working on an iPad app or planning on putting up a paywall. I gave him a blank stare. He laughed and noted that none of the newer Web publications (he’s an investor in the Business Insider) are either. 'All the new companies are not spending a nanosecond on the iPad or thinking of ways to charge for content. The older companies, that is all they are thinking about.'"
"But people pay for apps. Wouldn’t he pay for a beautiful touchscreen version of a magazine? Maybe, if it were something genuinely new that blew him away. It would have to be more than an article with video and graphics though. (I agree, otherwise it’s no better than a CD-ROM)."
"Oh, and he points out, that the iPad will have a 'fantastic browser.' No matter how many iPads the Apple sells, the Web will always be the bigger market. “There are 2 billion people on the Web,” he says.' The iPad will be a huge success if it sells 5 million units.'"
Last week, Penguin showed a number of iPad applications based on its books; only one of them looked like a conventional eBook. However, all but one of them could easily be written in Flash and run in any modern browser, and the one that required use of the compass and accelerometer could probably be customized to use those features without having to be a completely native app. The problem, of course, is that Flash doesn't run on the iPad and won't run in the future, not for any serious technical reason, but because Steve Jobs hates Flash.
Writing applications for the web allows them to be used just about anywhere, on any device; writing them for the iPhone/iPod touch/iPad means that they can only be used on those devices, in the Apple environment. Time will tell if Marc's prediction about iPad sales will pan out, but why would a publisher lock itself into a single platform from a company that has a history of dictating terms to its content partners?
If you talk to executives from the record companies, they would probably say that they turned Apple into an 800 pound gorilla in the media business by ceding pricing control. The book publishers have apparently just done the same thing, in part to attack Amazon's pricing model, but at the price of giving Apple pricing control at slightly higher levels.
My opinion is that the iPad is going to be successful, more for its applications and user interface than simply for media consumption. Nevertheless, Marc's comments are on target. Publishers should build their digital businesses sustainably rather than defensively, and they shouldn't depend on the iPad to save them.