E-Book Readers Unlikely to Help Newspapers, Study Suggests

Portable e-readers such as the Kindle are unlikely to win readers back to the newspaper habit unless they include features such color, photographs and touch screens, according to professors of advertising Dean Krugman, Tom Reichert, and Barry Hollander, associate professor of journalism in the University of Georgia Grady College of Journalism and Mass Communication.

Young adults in particular compared the Kindle DX used in the study unfavorably to smart phones, such as the iPhone or Blackberry.

Skeptics might also suggest that changing the delivery channel for an unpopular product should not be expected to change the demand curve. An unpopular product's problem is its features and value, not its channels.

For younger adults, the Kindle fell short when compared to their smart phones, with touch screens and multiple applications, available in a single small package. The e-reader felt “old” to them, the professors say.

Older adults were overall more receptive to the concept of an e-reader. However, the Kindle failed to include aspects of the traditional newspaper they had grown fond of, such as comics and crossword puzzles.

Cost was a factor regardless of age. Nearly all respondents balked at the Kindle DX’s $489 price tag for reading a newspaper.

As a stand-alone attribute, Krugman said, the newspaper feature is likely not strong enough to sell the e-reader.

One might note that decades ago, when USA Today was launched, there was much speculation about how much a colorful, more "TV-like" presentation would change reader interest in newspapers. Despite USA Today's success, it does not seem to have had much impact on overall newspaper readership.

At this point, we might wonder why e-book readers will fare better.

Newsday Pay Wall Apparently Leads to 47% Decline in Visitors

Newsday.com, which has put unlimited access to its content behind a pay wall, is finding what most of you would have predicted: it is losing readers. But Cablevision may be banking on a business model it has used in the past: providing "no incremental cost" access for customers who buy other Cablevision products.

In December 2009, unique visitors declined 47 percent while page views fell 32 percent compared to December 2008.

In December, Newsday.com had 1.4 million unique visitors and 18.9 million page views, according to Nielsen. That was down from 2.7 million and 27.8 million, respectively, for the month in 2008.

December was the second full month where Newsday's policy of charging people $5 a week for unlimited access to the site was in effect. People who subscribe to home delivery of the paper, or receive broadband service from its parent Cablevision, do not have to pay extra.

That provides another clue to the success or failure of "pay walls." Cablevision has ways of supplying "no incremental cost" viewership in the same way that it provides "no incremental cost" access to its metro Wi-Fi network.

If a person is a subscriber to Cablevision's fixed broadband access service, then use of the Wi-Fi network is available at no extra cost.

Cablevision does not appear to expect the new pay model to "materially" impact revenues in the "near term." One reason: many people interested in the site also receive the paper at home or get Cablevision high-speed Internet service.

How Important Are App Stores?

Consumers will spend $6.2 billion in 2010 in mobile application stores while advertising revenue is
expected to generate $0.6 billion worldwide, say analysts at Gartner. But app stores might be far
more important than the simple sales revenues would suggest.

There seems little question that the success of Apple's iPhone App Store came as a surprise to just
about all observers, including Apple itself. Perhaps none of us should not have been surprised.

Apple already used iTunes to dramatically reshape music distribution, music formats and relationships within the music ecosystem.

At this point, it is reasonable to look at the similarities between iTunes and the App Store and suggest that the Apple App Store, and other application stores, and wonder if they will not have a similar impact on some key portions of the software business, and further shape the attractiveness of any particular piece of hardware.

For some, perhaps many buyers, the software library could be the factor that pushes buyers toward a particular device or family of devices.

But there might be equally-important implications for service providers as well.

Ask a telecom service provider executive why they do not move faster to introduce new applications "at Internet speed" and you very likely will be told that carriers have reputations for quality and brand equity that require them to test the reliability of any new products very thoroughly, and that necessarily slows the pace of innovation.

Others might point out that moving "at Internet speed" to create new applications now is how things often are done, and for that reason delay can be troublesome.

Perhaps app stores are the crucial missing element in allowing service providers to emphasize the quality, stability and robustness of their transmission networks, while at the same time allowing them to stay abreast of rapid application innovation.

It is possible, perhaps even likely, that users can differentiate between the quality or userfulness of a third-party application sold through a service provider supported or affilated app store.

If so, that offers a way forward for service providers rightly concerned about their reputations, yet also needing to move more quickly on the application development front.

In that sense, app stores might offer a convenient way forward. Network performance and stability can be be separated from the perhaps less robust process of making available new applications of uneven quality and value.

Mobile application stores will exceed 4.5 billion downloads in 2010, eight out of ten of which will be free to end users, Gartner analysts predict.

Gartner forecasts worldwide downloads in mobile application stores to surpass 21.6 billion by
2013. Free downloads will account for 82 percent of all downloads in 2010, and will account for 87 percent of downloads in 2013.

Something of the same argument might be made for e-book readers and other new devices whose value depends on the availability of content or applications.

Information Technology Industry Council Reaches Common Ground on Net Neutrality

The "network neutrality" debate is becoming more nuanced, with possibly greater understanding by many participants that it is important to find common ground that does not jeopartdize the Internet's future in a misguided attempt to preserve its past.

The Information Technology Industry Council, which includes Microsoft, Ebay, Intel, Apple, Qualcom, Adobe and Cisco, seems to be threading a needle, for example.

Everybody seems to agree that "certainty" is needed or innovation will be impeded. Everybody also seems to agree that innovation "at the edge of the network" likewise should not be impeded.

One way of getting there is by avoiding the temptation to write overly-detailed rules in advance of issues that could arise. That means the ITIC prefers that issues be settled on a case-by-case basis, as needed, rather than by creating new rules in advance of any conceivable set of issues that could arise.

"The FCC cannot posibly anticipate all future circumstances, and it is entirely possible that conduct that may appear to be harmful today will in fact be beneficial to consumers in light of future circumstances," the ITIC now says.

Managed services, for example, should be allowed unless it is proven that the services are "anticompetitive or harmful to consumers." That suggests a new openness to the possibility of enhanced services that take advantage of user-defined and user-requested packet prioritization features.

Quality of experience, especially during periods of congestion, almost requires that such mechanisms be available for users and applications that want to make use of such features.

Cbeyond Asks FCC for Mandatory Wholesale Optical Access

Cbeyond has the Federal Communications Commission to reverse its rules on wholesale obligations for fiber-to-customer networks. On copper access networks, competitors have rights to buy wholesale access. The FCC has ruled that on new fiber-to-customer networks, competitors have no similar rights.

Predictably, incumbents say the current rules should remain in place, which allow any voluntary wholesale deals, but do not require incumbents to offer wholesale access. The rules are consistent with rules that apply to U.S. cable companies, which likewise have no obligation to sell wholesale access to competitors.

The Telecommunications Industry Association  and the Fiber-to-the-Home (FTTH) Council have filed comments opposing the change.

The debate is an old one. Incumbents argue that the business case for FTTH is troublesome, and that they need the ability to profit from FTTH investments without being required to make those faciltities available to competitors who do not have to build expensive facilities of their own when they can simply lease capacity from others.

Though it is difficult to prove, one way or the other, the FCC has faced a dilemma. It can seek to spur competition by mandating robust wholesale access, or it can spur deployment of new optical access facilities, but might not be able to achieve both goals.

The reason is that incumbents can simply refust to upgrade their networks when they do not feel they will get an adequate financial return. There is some important evidence that incumbents are right about the ability to raise investment capital for FTTH.

Investors punished Verizon Communications for pushing ahead with its FTTH program, preferring AT&T's less-costly FTTN approach, for example. Calle and telco executives point out that all competitors are free to build their own facilities if they want, and most observers would note that in markets where there are three ubiquitous FTTH or FTTN networks, it has proven difficult to sustain business models allowing all three competitors to remain in business.

The calls for mandatory wholesale come at a time when everybody acknowledges that the business case for traditional cable TV and voice services is becoming more difficult, and that neither cable companies nor telcos can rely on their mainstay businesses (video and voice) for future growth. In fact, both types of companies are seeing steady shrinkage of those legacy businesses.

Under such circumstances, and given the shift to Internet-based applications, it might not make lots of sense to weakent he business case for robust optical access investments at a time when the financial returns for doing so are under pressure in any case.

Supporters of mandatory optical access obviously would benefit from a rule change, as they could offer optical access without incurring the expense of building new facilities. So the dilemma the FCC faces is an emphasis either on innovation or competition, in some clear sense.

Since virtually all applications now can be delivered over IP-based connections, it no longer makes as much sense as it once did to directly link "access" and "competitive" services. With or without broadband access, companies now can deliver virtually any service over the top, on any broadband connection.

Under such circumstances, robust competition occurs at the application level, not the access level. In fact, that is precisely the problem telcos face with VoIP, and that cable companies face with online video.

Google Voice Extension for Chrome Browser Now Live

Google Voice now is available as an extension for the Chrome browser. Adding the extension
adds click-to-ccall functionality to Web pages. If there is a phone number on a Web page, or your online address book, it will now have a hyperlink. Click it and Google will open a pop-up window asking which phone you want to use to set up the call, and does.

Google Voice, you will recall, is not an IP telephony or VoIP application n the sense that Skype or Vonage are. Basically, Google uses the Web to set up and complete calls using your existing mobile or fixed connections, adding some interesting call management features.

The extension also adds a small icon in the upper right of the browser. You can type in a name or phone number and call or send a text message from the browser, and read recent text messages and transcribed voicemails (Google automatically transcribes voicemails, usually not all that well).

Many observers think Google ultimately will add softphone functionality, allowing Google Voice to function as an VoIP client.

Geolocation's Downside

Don't get me wrong. Location services will be really useful. But as with everything else connected with the Internet, there are downsides. This is one of them. UYou may want to use location services. But you probably don't want to allow "broadcasting" of that location.

The Secret Service knows the location of POTUS on the second or third floor of the White House. The rest of us should not.