1. Matthijs Leendertse, Leo Pennings Centralized Content Portals iTunes & the Publishing Industry

2. Purpose FLEET project; Flemish E-Publishing Trends Raise questions / awareness for media policy makers and publishers around the rise of centralized content portals in the e-publishing domain.

3. Centralized Content Portals Characteristics Portals that facilitate finding, selecting, purchasing and distributing of (third party) digital content. Typically not designed by and around the requirements of content suppliers. Often combining hardware, software and network connectivity. Once consumers subscribe to a centralized content portal, they tend to be excluded from rival services

4. The Highlander Theory Media have a natural tendency towards concentration

6. The Highlander Theory For (most) consumers that are locked-in to a centralized content portal, there is only one provider of premium digital content. PC based: iTunes for music, MySpace for social networks Digital TV: infrastructure provider Game consoles (Microsoft, Nintendo, Sony) Mobile platforms (Vodafone, Drei)

7. So what? Several questions can be raised as a result of the rise of centralized content portals. Access (e.g. legal challenge posed in European countries against iTunes) for (a) consumers, (b) suppliers and (c) advertisers. Diversity of content (e.g. news provision) to protect democracy, rights of minority groups etc. Centralized content have de facto become a market for a locked-in consumers, and perhaps has to be treated as such by law makers.

8. iTunes

9. Wii Channels

10. Scenario Exercise Learning scenarios to raise media policy issues: Hypothesize effects of different configurations of content portals on strategies of publishers, and resulting market performance. 5 year time frame Pitch 3 models: 1.One dominant centralized content portal (a Highlanderesque situation) 2.Several interoperable open content portals 3.A web full of wiki’s

11. Scenario 1: the iPub The Apple iPub 2008: Apple launched the iPub, its e-reader device In 4 years time, the iTunes bookstore overtook Amazon, Bol.com Copyright protected content that can only be read on the iPub. Pricing is fixed: in Germany: €5, €10, €15 or €20 Apple takes 20% of all sales.

12. Scenario 1: the iPub The Apple iPub Large publishers have a preferred partner status, and dominate sales in the iTunes Book Store. Smaller publisher pay higher royalties and get less promotional perks. As a result: niche products find it difficult to get attention from iPub users.

13. Scenario 1: the iPub A repeat of iTunes Music Store dynamics: “iTunes does sell a reasonable volume of niche music, but as a mainstream music retailer, it markets to and mostly attracts mainstream music fans” (The Guardian, 2007) Diversity from a supply side, but not from a usage perspective. Access restricted to iPub owners. Financial access is less well guaranteed. Access for large publishers is good, and relatively high prices for their products, serves as an incentive.

14. Scenario 2: Interoperable Content Portals Dominant content portals? What dominant content portals? In 2012 open content portals reign. Open content portals that are interoperable using open source standards, and standardized metadata sets to improve retrievability. Network of marketplaces form a large content market. Drivers: search engines, software providers, technology companies

15. Scenario 2: Interoperable Content Portals Larger publishers also have a significant online presence (around 40% of turnover achieved there)

16. Scenario 2: Interoperable Content Portals Small content creators bypass publishers and sell directly using open interoperable content portals and payment / advertising solutions.

17. Scenario 2: Interoperable Content Portals Non-profit organizations enter the market, and drive down prices. Access is high for consumers (‘open’ access, low prices) Access is high for suppliers Access is high for advertisers Diversity is high, as so many suppliers compete Increased dependency on advertising revenues might threaten this, as revenues flow to products with the largest and / or most attractive audiences.

18. Scenario 3: iWiki-Publishing Birth of a new publication model, based on peer based production (Benkler).

19. Scenario 3: iWiki-Publishing “i-wi-ki-pub-lish-ing Pronunciation [ai-wee-kee- publ-ish-ing] derived from a verb. Meaning: an e-publishing product that has been created on or for an open platform and is continuously subject to changes from visitors. iWiki-publishing now added to Wiktionary

20. Scenario 3: iWiki-Publishing Official declaration on January 4th 2012 that iWiki- publishing has become dominant method of e-publishing. No business models, non-profit concept No payment, no advertisements (revenue sharing would be near impossible). Specialized & professional content owned by commercial publishers hidden behind walled gardens.

21. Scenario 3: iWiki-Publishing Traditional publishers that struggle online, increase prices of printed materials, especially in educational sector. Advertisers have difficulties finding audiences using e- publishing products, and migrate their advertising euros to other media (e.g. TV). Innovation is dependent on end-users, which could undermine incentives to produce more expensive content. Diversity appears high, except for specialized / professional content. Financial accessibility of content is either high (free on Wikis) or low (high prices for access to content on walled gardens).

22. Conclusions & Limitations Desirable scenari? Need more empirical validation of hypothesized effects of content portals, especially on strategic behaviour on publishers. Access becoming increasingly important policy issue. Innovation could should be added as market performance criteria, entire discussion on intellectual property rights.

23. The End Thank you for your attention! Questions? Matthijs Leendertse matthijs.leendertse@tno.nl