Transcript: In Europe, iPad May Mean iPay

Listen to Podcast Download Transcript PDF

Interview with Max von Abendroth, Executive Director, European Magazine Media Assoc. (EMMA)

Speaking with Victoriano Colodrón, Executive Director, RightsDirect

For podcast release Monday, March 26, 2012

COLODRON: Across Europe, magazine publishers have greeted the arrival of the Apple iPad with cheers. As media consumption of such tablets and other handheld devices grows in popularity, publishers see an opportunity to establish new business models for digital news and entertainment. Subscriptions and app purchases are among the ways magazines hope to engage readers and remain economically sustainable. If the publishers are successful, consumers may come to equate iPad with iPay.

Hello, this is Victoriano Colodron from RightsDirect, the European subsidiary of Copyright Clearance Center. From Madrid in Spain, welcome to our special programming within Beyond the Book, the podcast series produced by CCC. My guest today, joining me from Brussels on the phone, is Max von Abendroth, the Executive Director of the European Magazine Media Association, EMMA, which represents 15,000 magazine publishers across Europe. Welcome to Beyond the Book, Max, and thank you for being with us.

ABENDROTH: Yeah, thank you for giving me the opportunity to join you for this conversation.

COLODRON: And we should tell our audience that Max von Abendroth joined EMMA in 2005 as Director of Communications and Sustainability, and he became Executive Director of this organization in September 2009. Before that, he used to work at the German Association of Magazine Publishers, VDZ. Max, who holds a degree in economics and business administration, is the co-founder of the sustainability network 3 Plus X. So Max, to start with, what does the magazine publishing industry look like in Europe? Can you perhaps share with us any relevant figures that give us a sense of how large and how relevant this sector is?

ABENDROTH: Yes, sure, thank you very much, Victoriano. Well, the magazine publishing industry across Europe that we represent includes 15,000 publishing houses publishing more than 50,000 magazine titles in print and digital. 360 million people read magazines on a regular basis, so that’s the audience that we reach over a period of a week or a month or a year, depending on the periodical that we’re talking about. People read magazines for news, for special interests, for professional information, so we have business to business magazines also, and for scientific content, so scientific journals in this case. The magazine sector is obviously in a transition process, and I guess we will talk about this in more detail in the next questions.

COLODRON: Absolutely. I think it would be interesting also to know, as we go forward in this conversation, also the differences between consumer magazines and B2B magazines in the ways they are embracing – are not new technologies, etc. But before we go into that, I would like to ask you a general question about how magazine publishers in Europe are looking at the transition to the digital world. How are they generally embracing the new technologies, and what is the role and the place of print magazines going forward?

ABENDROTH: Yeah. All right. Well obviously, the transition from print to digital is happening in a way that we today talk about a technological neutral magazine publishing sector, rather than a printed magazine sector or a digital magazine publishing sector. Because magazine publishers consider themselves as content providers, they provide quality content on all different platforms. And therefore, they’re following the reader, and the reader is obviously now into the new devices. So it goes, of course, beyond online and reading text on Internet. It is really the mobile devices like e-tablets and smartphones that are making a real difference to the sector today.

And really, the introduction of the e-tablet like the iPad can be considered as the biggest revolution since Gutenberg, if you want to say, for our sector. Some figures to indicate what that means. In April 2010, magazine publishers had 66 magazine apps out there. One year later, in April 2011, there were 1,863 magazine apps out there. And today, almost another year later, we have more than 10,000 magazine apps out there. So you can see there’s an enormous growth rate, and that of course changes a business sector, that changes our sector significantly.

On the other hand, I think it is absolutely important to have in mind that most of the people in our sector believe that print will continue to exist. Maybe in the future, print is a bit more the haute couture. So it’s a luxury product that will cost probably more and be read in special situations, while the digital print can be more considered as a prêt-à-porter. So I think this is a very nice picture to indicate where the trend might be going in the next years.

COLODRON: Right, right. And I had the chance to attend the Future Media Lab that your association held in Brussels a couple of weeks ago. And one of the main discussion topics was exactly one of the things you were mentioning right now. Media consumption habits, how they are changing and how this changes our effect in the magazine publishing. Can you share with us what the main conclusions to this regard were in that meeting in Brussels?

ABENDROTH: Yeah, I think we all had a very good understanding following this meeting that, indeed, the new devices that are more intensively used by the readers or users, as you call them, in the digital environment have an impact on the sector and how we publish certain things. But what is really interesting, of course, is how much magazine content do they indeed consume on these new devices? And probably the best way of getting your head around this question is to look at some statistics that analyzed how much money do e-reader owners or users spend on magazine content, compared to what they spent before they had an e-tablet. And I picked three countries from Europe, France, Germany, and Spain, to give you a few figures here.

COLODRON: Yeah, that’s interesting.

ABENDROTH: So in France, 31% of the readers that now own an e-tablet spent more on magazines and magazine content, 55% about the same, and just 40% less than they did before they owned an e-reader. In Germany, it’s 26% of the readers that spent more on the content, 49% the same, and only 23% less. And in Spain, you have 11% of the readers that spent more than they did before, 55% spent the same since they have an e-reader, and 34% less. So with these figures, you can see that the e-readers do something to the user and give them the possibility, or even motivate them, to consume more content, and even spend more for that. And that’s, I think, very good news for the magazine publishers.

COLODRON: Yeah, it is. And that leads me to my next question, which is about one of the most compelling issues from magazine publishers, which is, of course, they need to find ways to monetize digital content that in many cases they have been basically given away for free for some years now. And I still remember this line from one of the speakers in the conference in Brussels a couple of weeks ago, Juan Senor, who said that it’s not about whether to charge or not, the current discussion, but what to charge for. So what are the current trends in Europe around this issue of, you know, business models to monetize content?

ABENDROTH: Yeah. Well, to start with, I think it was one of the biggest mistakes of publishers to give away content for free once the Internet came up. At least, that’s what we can say looking backwards from now. The good thing – the good news is that the new platforms and the new devices allow to have paid content models. And, of course, you can charge for general content, but it will be difficult because you have competitors like other sectors who are publishing the similar content. But if you have more specific content, then it is more likely that people will pay for that. And on the e-readers, for example, there are very nice subscription models, but also pay-for-issue models, and the people are used to pay for it from the very beginning.

So coming back to your question, I think certainly subscriptions are one way of making money in the digital world, so you can subscribe to a title in the form of an app. But also, if you want to have only one article or share specific parts of the content, then you can buy that separately. And through these micropayment models that are out there today and through the possibility of publishers really going into this transaction process of selling one or two or three articles and not the whole publication, this is indeed the basis for a new business model.

COLODRON: Yes. And changing the subject a bit, copyright protection was no doubt another of the major concerns for the publishers who attended this event – your event in Brussels. What are the specific challenges around copyright protection for magazine publishers?

ABENDROTH: Yeah. Well, copyright is obviously one of the biggest issues for us. And it’s very unclear how this topic will develop into the future, as we depend very much on the politicians to make sure that there is an appropriate legislative framework that protects content from misuse. I firstly would like to note that the professional content produced by magazine media, as well as providing information or topics that are relevant for society, constitutes an important element in shaping of public opinion that is essentially a democracy. So there’s a real role to play for the media in democracy.

The high-value, quality content costs a significant amount of money to produce, so therefore effective copyright protection is key to securing the journalism, comments and analysis that are fundamental elements of any democracy. Publishers must be able to rely on copyright protection to secure remuneration for their investment, and for the sustainable delivery of creative content.

Well, in terms of specific challenges that you were asking for, there are many. But perhaps I should just focus on two of them to make the case a bit more clear. The first one is that magazine publishers believe that current copyright rules are broadly fit for purpose, and any further exceptions to copyright rules should be rejected. I mention that because there is the trend at the political level here in Brussels to introduce some more exceptions in the existing copyright rules.

COLODRON: Yeah.

ABENDROTH: Further exceptions would pose a direct threat to publishers’ economic sustainability, and therefore their ability to develop digital business models. So we need to have this protection. Just to give you an example, maybe, in Poland at the moment, so one EU member state, there’s a proposal on the table to extend the already broad exception for personal use under the Polish Copyright Act, which covers people maintaining any social relationships to specify that these relationships can be – and then, that’s now the quote from the text, both direct and indirect as exists in personal contact made by means of electronic communication, including through the Internet. So this would be like carte blanche for using content in all different circumstances and not paying for it.

This is now a national issue, but we know from our Polish member that if they don’t succeed in Warsaw (sp?) they will move on to Brussels and bring it on the table here. So we have the battle to fight. Also it is important that the EU does not allow any weakening of copyright law, also in this specific context here, as to (inaudible) would pose a risk to Europe’s magazine media, and therefore we cannot continue to produce the trusted, quality content that our readers enjoy.

That’s the one element. So not weakening the current copyright rules. The other one is to improve the ability to enforce intellectual property rights. We have a big piracy problem in the magazine world, and therefore enforcement is a very important topic for us. So the different possibilities to utilize content on the Internet and via tablets make it very easy for third parties like aggregators, search engines, and pirate sites to use publishing and (inaudible) creative content for free, and without authorization and remuneration of the publisher.

So therefore infringers make money from advertisement carried on illegal Websites, and also charge for the downloading of illegal obtained content. So therefore it’s important that copyright draws the line between reference to content and unauthorized reuse. Maybe on the two different issues here, we have the aggregators and the search engines on the one side. So while these operators claim the publishers have the possibility to ask that their articles are not republished on their Websites, we would agree with European Commissioner Ban Yee (sp?) that this form of opt-out seems to be contrary to the logic of copyright, which supposes, on the contrary, an opt-in. So aggregators of information should always ask the consent of publishers to reproduce their articles.

And on the other side, on piracy, we need to make sure that enforcement is quicker and cheaper in the future, and it should be easier to identify the infringer. So this is really where we stand as the magazine sector, but I should also say, while asking for quicker and cheaper enforcements –

COLODRON: Enforcements, yeah.

ABENDROTH: – yeah, that at the same time publishers provide valuable forums for expression. So we have to avoid a situation whereby a threat of liability will discourage intermediaries from allowing users to comment online. Because that encourages free expression and exchange of opinions that are vital for a vibrant democracy. And if a posting is illegal, it should be taken down. But we should not come into a situation where the intermediary should be forced to monitor or even censor posts of users in general. So this is very important to us.

COLODRON: I see, yes.

ABENDROTH: So I would say, just to conclude here, that a proper respect for copyright is essential to enable publishers to provide quality content and to protect press independents and to develop new online services. So that’s really relevant for us.

COLODRON: That was very, very interesting. Max, even if very quickly, I would like to end this conversation with our asking you about other two very key issues for magazine publishers, I believe, which are those of advertising and competition. I know they are broad, big issues, which were also part of the discussion at EMMA’s Future Media Lab in Brussels. And perhaps you can comment on each of these briefly? Any specific concerns to highlight regarding advertising on one hand and competition issues on the other hand?

ABENDROTH: Yeah, sure. Advertising, very briefly, the challenge I think is coming more from the market at the moment, even though we also face always advertising restrictions or bans, which are a substantial source of revenue for publishers. But the market looks like that, that we have an advertising fragmentation, so we have lots of different platforms today where advertisers can reach their target audience. And it’s not like in the past, where there was only printed press and television, so quite an easy decision to take and to spend the money from the advertisers’ point of view. So this fragmentation makes life a bit more difficult and more challenging for us. We have to compete with more different platforms.

COLODRON: Right.

ABENDROTH: And competition, I would say the issue here is really the situation on the different digital markets. Let’s say on the search market or on the online advertising market that we have dominant players that we have to deal with, and that dictate the rules of these markets. And it is very difficult for an individual publisher to negotiate something with these dominant players, like the search engines or others like Apple or Google and so on. So this is just a situation that poses a real threat to the publishing sector. We are working on that at the political level also, in terms of competition cases, and we hope of course to find an acceptable solution for the long run.

COLODRON: OK, that was very clear also. Thank you, Max. It’s really been an enjoyable conversation, and I really thank you for being with us on Beyond the Book today.

ABENDROTH: Yeah, thank you very much, Victoriano. I appreciated that. Thank you.

COLODRON: And for those in the audience who would like to know more, I would highly recommend you visit the site of the European Magazine Media Association at www.magazinemedia.eu. Beyond the Book is produced by Copyright Clearance Center, CCC, a global rights broker for the world’s most sought-after materials, including millions of books and e-books, journals, newspapers, magazines, images and blogs. RightsDirect is CCC’s European subsidiary. You can learn more at www.rightsdirect.com, and be sure to follow RightsDirect on Twitter. Again, my name is Victoriano Colodron in Madrid, Spain. From all of us at RightsDirect and Copyright Clearance Center, thank you for listening to Beyond the Book.