Sunday, February 20, 2011

Apple's Publication Subscription Strategy - good business or magazine-killer?

This one is slightly off-topic but one that is close to my heart - Apple's policy on subscribing to newspapers and periodicals through iTunes. I have an iPad and one of the things I love is being able to read all manner of magazines on it - particularly overseas mags such as Wired that I can get on the iPad for $4.99, instead of paying $15-20 for an imported print copy. If I lived in the US, I could get a print subscription for very little but the international subscriptions are fairly pricey. So I've been looking forward to being able to subscribe on the iPad and get the benefits & discounts over the per-issue cost.

Apple finally released their strategy for magazine subscriptions through iTunes this week. And it's a little bit controversial. On the surface it looks great and in the usual Apple way, they are making it as easy as possible to make a purchase. You will be able to download the publication's app through iTunes / App Store, then hit a button and subscribe to the publication using your Apple ID and iTunes account. All good so far. The controversial part is that they will take 30% of the revenue and pass on 70% to the publisher.

On a per-issue basis, 30% is probably not unreasonable for the store front and distribution - be it iTunes or your local paper shop. But subscriptions work differently. Normally if you purchase a magazine subscription - particularly from the bigger publishers - you engage the company directly. Subscriptions are usually an economical way of getting every issue at a fair discount below the cost price. Part of this 'discount' is due to the fact that there are less middlemen involved in the transaction. In the modern age of free information on the internet, that is the preferred way for the publishers to go in order to thrive and survive. Subscriptions and sales of newspapers and magazines are down considerably on a few years ago - google for magazine circulation figures and you can find plenty of examples.

Apple's 30% cut will mean that either subscription prices go up or the publishers profits go down. Either way it isn't great for an industry starting to struggle. But this is only part of the problem. Publishers will give you cheaper subscriptions because they will capture your personal data, which they will use to advertise other products and services to you, or sometimes sell to third parties. This data is pretty valuable these days. When a company has free access to this information and knows your habits and preferences, they can target advertisements and special offers to you, making marketing and selling that bit cheaper (in theory at least). With Apple's subscription model, they will have this data and not the publishers. Another example of why they will either need to increase prices or reduce profits.

Well why don't the publishers go direct, you say? Because Apple won't let them. OK, not strictly true. While the publishers can market and sell directly to you, part of their agreement says they must still pay 30% to Apple. Wow! I understand Apple should still be able to take some cut for handling the distribution but if they are not having to do any marketing, financial transactions, etc then 30% becomes very greedy indeed.

So what's the answer? I think that what we will see is publishers creating web readers, so they can sell you these subscriptions directly and you can view the magazine on any web browser. That way they can manage the costs. There could well be an issue with security / piracy with this model but I can imagine that development is already in hand to address these. Normally what Apple wants, Apple gets and this will be the case at least initially. Ultimately this will cause a lot of pain to publishers but let's hope they use this pain to motivate them to provide some better, where consumers can pay a little less and they can make a little more, cutting out the middleman.

Tuesday, February 15, 2011

Business and IT Objectives - Service Management / ITIL Focus

It sometimes seems that IT is just another expensive function of the business. Even in these modern times when we rely on IT for everything from checking out the latest news to processing payroll and way more, there is still some kind of disconnect.

ITIL good practice says that we should align our business objectives with our IT objectives. They both have to support each other so that's obvious isn't it? But does it happen in your organisation?

Bob Anderson's Blog shows some common business goals and their corresponding IT goals. Straightforward thinking it may be, it certainly does get overlooked.

Think about it. You set your goals and targets and budgets every year but many companies don't even consider how their IT processes and systems are even going to be able to support and promote these goals. Some people expect their IT to 'just work' but if there is no strategy around it and no investment in it, it will soon turn into a sick puppy and quite possibly bring your business with it.

Saturday, February 5, 2011

Time for IPv6

IPv6 has been around now for a long, long time. I have a book on my shelf from 2002 on the subject (IPv6 Essentials - O'Reilly) - as yet unread I might add. 9 years in IT terms is a lifetime, and yet IPv6 is rarely seen or heard from. That will change very soon, when we run out of IPv4 IP addresses. This is predicted to happen before 2011 is out.
So what does this mean for the average Joe? Well quite a bit actually. If you have any level or responsibility over a computer network, you have some work to do. If you manage any kind of public network, then things are going to change for you in a big way. The crux of the problem is that the original IP addressing scheme - IPv4 - can only account for a little over 4 billion addresses. When the creators of the protocol devised the rules back in the late 70’s, the internet was still a closed system, open mostly to government agencies such as universities and the military. The idea of needing more than 4 billion addresses would have have seemed ridiculously large and never likely to be met or exceeded. But since then, the internet has taken over the world, with every man and his dog having a web site, large scale control operations, media publishing and all manner of other systems using it. Each and every device on the internet has an IP address, and the original 4 billion is almost gone.
And that brings us to IPv6. When it was first recognised that we would soon start running out of IP address, the Internet Engineering Task Force (IETF) wrote up the spec for IPv6 and published it as RFC 2460 in 1998. IPv6 addressing will cater for 340 trillion, trillion, trillion addresses, a mind-bogglingly huge number. When the IPv4 addresses dry up, we’re all going to have to start talking in IPv6. At the very least this is going to take some learning and some strategic planning. Most likely it is going to mean a whole lot of spend on new networking hardware too.
Many routers and switches up the higher end of the scale will have the feature set to handle this change. You need to start looking at the impact of IPv6 in your network and work out which devices you will be able to keep and use and which ones you will have to either replace or re-purpose. It may be that parts of your network remain on IPv4 addressing and parts are migrated to IPv6. You need to start thinking about that soon and working out budgets, project plans, etc. Then you will also have to get your technical guys and girls up-skilled so they understand the new protocol so that they can re-program those routers and switches to maintain the status quo in your network.
You might want to sit on your hands and wait it out. Maybe something better will come along? Maybe somebody will find some more IPv4 addresses down the back of the sofa? If you do this, you will be in trouble. The exhaustion of IP addresses is akin to - and potentially far worse than - the Y2k problem. Remember the panic at the end of the last millennium and businesses spending large on protecting themselves from a problem that never eventuated? Well this problem is one that will eventuate but so far nobody is reacting (proacting?) and to ignore this issue is to create a digital disaster.

References:
IPv6 on Wikipedia
Is IPv6 part of your Risk Management Framework?