What Amazon Should Do With Its Kindle iPad App

James McQuivey

 

This week, the iPad app world is frantically sorting through some recent changes in its environment. Last Monday, Apple quietly altered its app approval policies in a way that will make publishers much happier. Specifically, Apple has relaxed control over whether apps can access content paid for outside of the App Store’s purchase APIs. The company has also allowed publishers to price however they want, both outside and inside of the app.

In the same week, FT.com released a subscription-based HTML5 web app intended for iPad users that bypasses Apple entirely, giving the publisher its own path to market that does not depend on or enrich Apple directly. The coincidence of these two events is not lost on most of us industry observers and is the topic of a Forrester report issued by my colleague Nick Thomas last Friday. In it, Nick explains why the FT’s move is probably the first of many such moves by the most recognized publishers, even with Apple’s newly announced policy reversal.

But while publishers figure out their next steps for their content apps, there’s one app that no one is talking about but I believe everyone should have their eye on. It’s the Amazon Kindle app. This app violates even Apple’s revised policies and will soon face a day of reckoning when Apple's June 30th deadline for compliance comes up. 

I don’t claim to know Amazon's plans, but I will claim to tell Amazon what it should do:

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How Green Does Your Brand Need To Be?

Tracy Stokes

The recent Earth Day celebration brought a slew of often-conflicting reports on consumers’ environmental or green attitudes and behavior, such as “consumers cut spending on green,” “green worth paying more for,” “Americans hate faux green marketers,” and “[Boomers] passionate for green.” Green marketing initiatives were also everywhere, from Jet Blue’s “One Thing That’s Green” pledge to Procter & Gamble’s “My Carbon Footprint” app and Target’s eco-conscious “Refresh Your Nest” home makeover sweepstakes. Faced with this barrage of information and activities, many marketing leaders will be asking themselves what this means for their brand. Should they bide their time until the dust settles, or jump in? What about the risks of green-washing? Do consumers really care about the environment, or is it just something that they think they should care about? In truth, there is no one answer, because green marketing and green consumer behavior is changing rapidly. That being said, the expectation for companies to be more sustainable, from consumers and CEOs alike, is not going anywhere. So marketing leaders need to figure out what level of green engagement is right for their brand and their consumer.     

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Barnes & Noble Upgrades Nook Color Today, Sets A New Bar For eReaders

James McQuivey

That's right, I said eReaders. True, it looks like a tablet, runs like a tablet, and delivers a lot of the value that tablets deliver, but the Nook Color's 1.2 upgrade (which is actually a step up to Android 2.2; don't let the numbers confuse you too much) is really a foreshadowing of the future of eReaders, not the future of tablets.

First, the facts. With the new upgrade that will be gradually pushed out to all existing Nook Color devices for free over the next few weeks (or you can download now at www.nookcolor.com/update), the folks at B&N have added some very useful features: an integrated email client, Flash 10.1 support, a curated Android app store (see sidebar), and an improved user experience through a myriad of tweaks. These upgrades make the Nook Color look more and more like a tablet, with a very attractive $249 price point to boot.

Must the iPad now cower in fear? No, not really. Because even at this price point, the Nook Color remains a smaller, less powerful tablet than the iPad. And as we've seen, the range of competitors coming in after the iPad's territory are coming in at higher prices with more powerful features (for example, last week I dropped $529 for an LG G-Slate from T-Mobile with 3D video camera and 4G data plan). The tablet market is gradually moving into higher-power features, not lower-power experiences.

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Highlights From My Latest Report On Loyalty Marketing

Luca Paderni

We have just published my new report on loyalty marketing: "A New Approach To Brand Loyalty."

From the interviews with more than 50 marketing leaders, we have learned that more than 40% of chief marketing officers (CMOs) admit that their brand loyalty programs underperform or produce erratic results, or they simply do not know how the programs are performing. The survey also shows that for most CMOs, loyalty marketing is often seen as a means to an end, not a strategy, and that their approach, while necessary, has unclear objectives and focuses too much on short-term financial goals.

Other key findings from the report:

  • Marketers are primarily focused on customer acquisition (65%), increased brand awareness (40%), and marketing return on investment (39%), as opposed to initiatives addressing customer loyalty, such as increasing customer retention (31%) and customer lifetime value.
  • The majority of respondents indicate that customer retention (79%) and revenue growth (53%) are the key metrics used by senior management to evaluate loyalty marketing initiatives, as opposed to Net Promoter Score (24%) and customer satisfaction (24%).  
  • Lack of differentiation (91%) and promotional clutter (73%) are seen as the main reasons why loyalty initiatives are often not delivering the goods. For more than half of the respondents, loyalty marketing initiatives are not aligned with the brand they are promoting.
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From Soap To Shoes

Tracy Stokes

I’m often asked how I went from marketing women’s skincare at Neutrogena to Timberland boots for outdoor guys, as they seem to be such different businesses. But for me, they have more in common than you might think. They are both strong global brands, with products you can trust and passionate, involved consumers. My passion is for figuring out what is at the heart of a brand, how consumers connect with it, and how to connect with them — understanding what those consumers have in common and where their needs are different, whether they are in Milan, Minneapolis, or Mumbai or whether they are an outdoor guy or a city woman.

At Forrester, I’m going to delve into these areas: harnessing the consumers’ voice in the marketing process; when you should listen and when you should not; the similarities — how global brands can stay true to what they are, while embracing local consumers' needs; and what this looks like in the virtual age, when global walls separating consumers in different countries have fallen down. What’s the butterfly effect of a marketing program in Shanghai on a consumer in San Francisco? What are the differences — for example, how women consume media differently than men, particularly interactive and social media, and how that affects the media mix. Finally, with so many choices, and so few dollars (or pounds or RMB), how can marketing leaders identify what return they are getting on their spend?

So here’s where I need your help. What are your brand-building challenges? What would you like to learn more about that will help you and your team connect with your consumer?

Why It Matters That 1,914 People “Like” Being Able To Stream The Dark Knight on Facebook

James McQuivey

At first blush, the decision by Warner Bros to rent movies on Facebook seems a little out of place. Sure, people watch a lot of video (mostly YouTube) on Facebook, but they don't go there to watch two hour movies, right? Well, for now they don't, but with some tweaks, they could start doing so very soon.

As my colleague Nick Thomas said yesterday in his blog post about Facebook's potential as a premium content platform, the future of traditional and social media are likely to be intertwined. Most of us, myself included, have been imagining them blending in the living room, where viewers can access Facebook on any number of devices while watching a movie on the TV. But would people be interested in exactly the reverse? When I checked in on Facebook I found the first evidence that the answer is yes.

A screen capture of a the Facebook fan page for The Dark Knight

You see here that within 11 hours of being posted, 1,914 people liked the idea of watching The Dark Knight on Facebook. This is compared to the 1,433 people who have liked the App Edition of Dark Knight that was announced nearly a month ago. (Don't try this at home; for some reason, the post announcing Facebook viewing has since been removed and I can't check for more recent numbers.)

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Apple’s 30% And Google’s 10% Fees Are Too High

James McQuivey

 

The most important outcome of this week’s emerging tussle between Apple and Google is that we are about to have an intense and financially difficult conversation about what a fair price is for delivering customers to developers, publishers, and producers. Economically, this is one of the most critical issues that has to be resolved for the future of electronic content. Very soon, a majority of consumer experiences (that which we used to refer to as the media) will be digital. But not until the people who will develop those experiences have unambiguous, market-clearing rules for how they can expect to profit from those experiences.

The question comes down to this: Is 30% a fair price for Apple to charge? I must be clear about my intentions here. I do not employ the word “fair” the way my children often do. I am not whining about Apple’s right to charge whatever it wants. Apple may do whatever is best for shareholders in the short- and long-run. I argued yesterday that Apple’s recent decision does not serve its shareholders in the long run. Google announced One Pass yesterday – hastily, I might add – in order to signal to Apple and its shareholders that monopoly power rarely lasts forever. But none of that questions the ultimate morality of Apple’s decision or its rights.

I use the word “fair” to refer to a state of economic efficiency. A fair price is one that maximizes not just individual revenue, but total revenue across all players. Such revenue maximization cannot be achieved without simultaneously satisfying the largest possible number of consumers with the greatest possible amount of innovation.

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Apple's Policy Harms Subscription Providers Today, Apple Tomorrow

James McQuivey

 

Yesterday Apple announced its intention to tighten its hold on the payment for and the delivery of content through its successful iTunes platform. (I’ll leave off the I-told-you-so; oops, too late.) Apple will require that all content experiences that can be paid for in an Apple app must be purchasable inside the app, with Apple collecting its 30% fee. The app can no longer direct you to a browser or some other means for completing a transaction. Crucially, the in-app purchase offer must be extended at the same price as the same offer made elsewhere. Though the announcement of the subscription model was the triggering event, the policy extends to all paid content.

I do not believe this is where Apple will stop – I personally expect them to eventually deny the delivery of content paid for outside of the app without some kind of convenience charge. But my personal expectations are irrelevant here, because what Apple has done already is sufficient to make providers of content aggressively invest in alternative means to reach the market.

Subscription content services are the lifeblood of the content economy. A full 63% of the money consumers spend on content of all types comes through a renewable subscription (I’ll be publishing this data from a survey of 4,000 US online adults as part of a bigger analysis next month, hang tight). Most of that subscription revenue goes to pay-TV providers, but 17% of it goes to newspaper and magazine publishers, including their online or app content experiences.

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Apple Clamps Down On Paid Content Delivered To iPhones And iPads

James McQuivey

Today The New York Times is reporting that Apple is changing its policy for allowing apps to deliver content that was paid for somewhere other than in the app where Apple would get a cut. This came to light when Sony was forced to explain why its iPhone and iPad apps were not being released as promised. This is important to illustrate clearly because this is not just about Sony. In fact, it is expected that Apple will apply this same policy to existing apps over the coming months. The most obvious target is Amazon.com's Kindle store, but we have no reason to believe it will stop with eBook retailers; instead, this policy should also affect magazines, newspapers, even videos and games. 

This represents a shift for Apple. Going back to the iPod days, Apple only sold music because it helped sell iPods. When Apple added the iPhone app store, it allowed Amazon to add a Kindle app because it would only make iPhones more valuable to potential buyers. The same held true for the iPad. But now that the company has built such a powerful ecosystem of devices, content, and consumers, it appears Apple is eager to ensure it can collect any and all tolls along its proprietary highways. I note this with some irony because it was just three weeks ago that I praised Apple's surprising openness in a report explaining the iPad's rapid growth:

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We Are About To Enter The Era Of Experience

James McQuivey

There are rare moments in technology when everything changes. When the entire framework defining how we interact with machines (and consequently, each other) shifts perceptibly. That happened when the TV was invented, it happened when the computer mouse was made available commercially. These kinds of changes forever alter our economics, our social life, and our individual experiences.

It's now about to happen again. Only this time, the shift that is coming is on such a large scale that not only will it change things dramatically, it will usher in a new era in human economics (and therefore, everything else). 

We call the new era the Era of Experience. I'm working furiously to complete a report detailing all the specifics so you'll understand what this era entails and, importantly, what you can do to anticipate this era rather than follow it. 

In fact, at our Customer Experience Forum in New York City during the last two days in June, I gave an exclusive preview to the 600+ attendees of what the Era of Experience was. In my speech, I gave a live demo of the PrimeSense technology that the people at Xbox built on to create the Kinect for Xbox 360 platform. This platform incorporates a full-body gesture control interface, voice control, and face recognition. It's as if all the science fiction we've been reading for decades was really just a how-to manual for Kinect. Oh, and this future-defining platform costs all of $149.99 at Amazon.

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