Though Miffed, Media Companies See Silver Lining In Apple-Adobe Tiff

 

The Apple-Adobe tussle is heating up to bizarre proportions, with Steve Jobs yesterday issuing a public defense for Apple's anti-Flash stance. Call it a blog-heard-round-the-world due to how quickly Jobs' comments spread, much appropriate focus has been placed on Jobs' technical arguments, including this write-up in The Wall Street Journal that quotes my colleague Jeffrey Hammond

But there's another big story behind this Flash fiasco that has successfully remained off the radar of most. It's the answer to this question: How do the media companies -- you know, those people who use Flash to put their premium content online everywhere from Wired.com to hulu.com -- feel about having their primary delivery tool cut off at the knees?

Answer: Media companies hope to complain all the way to the bank.

First, a bit of disclosure. I'm the one who went on record explaining that the lack of Flash is one of the reasons I am not buying an iPad. So I'm clearly not a fan of the anti-Flash rhetoric for selfish reasons: I want my Flash content wherever I am. But I've spent the last few weeks discussing the Apple-Adobe problem with major magazine publishers, newspaper publishers, and TV networks. Their responses are at first obvious, and then surprisingly shrewd.

  • They're miffed that Apple is dictating their development decisions. After some very tough years dealing with decreasing ad revenues and a painfully fragmented audience, media companies don't really have the money to suddenly become HTML5 developers. Even if HTML5 were ready for prime time -- which they all agree it's not -- they have spent the last three years standardizing on Flash because it works, there is an ample supply of Flash developers, and Flash, like Visa, is everywhere they want to be.
  • But they're going to do it anyway. As one major magazine publisher who has spent the last month realigning development priorities told me with a shrug, "we have no choice." Contained in that response is the insidious genius of Apple. By creating its own proprietary world, it can get away with unfairly calling Adobe a purveyor of proprietary solutions. Because Apple has a very attractive customer that no media company wants to live without. 
  • And once they get over the anger, they see a silver lining. Yes, it's a pain, yes it will cost some money and cause some headache because it won't work very well for a while, but the consolation prize they all come around to is this: Apple is handing them a way to justify charging for content. And they like this very, very much. In fact, one publisher came dangerously close to scrapping Flash development altogether (before his internal tech experts talked him out of it) because he realized that in the end, Apple is handing them something the Web never has: a controlled, curated content environment where people pay for content, albeit in the form of software called apps. 

Ever since the Web -- now personified in the minds of media companies as Google -- reduced all content to a free search result, newspaper publishers, magazine publishers, and TV programmers have watched consumer willingness to pay shrink and have stood by as advertisers who used to pay top dollar for handsome placement shrink back from the gritty, isolated online context that Web properties provide. Even when the controlled environment of the Kindle debuted, its lack of color and interactivity meant that there was no hope of wooing many paid customers or interested advertisers. But the iPhone app environment -- and certainly its sexier younger sibling the iPad -- promises to give publishers and programmers a way to both charge for content and satisfy advertisers.

But not if consumers can get the same content for free on the same device. In other words, if we can all watch Hulu.com or read an exciting version of Wired.com on our iPad browser using Flash, then we won't buy the apps and advertisers won't fall in love with reaching us again. 

So despite their grumbles and temporary hysteria, media companies are criticizing Jobs and Apple less and less these days, hoping that this will buy them time to woo customers with splashy paid experiences, which will then reset the expectation that good content is worth paying for. Even on an Android device.