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Thoughts on the iPad: Cracking the Code to Web Revenue?

In my previous post Thoughts on the iPad: Where Will Your Audience Be Next Year? I noted that current tablet computer trends are painting a picture of a transformed landscape where one’s audience might be interacting with online content in a radically different manner and frequency. Not only does mobile access through a device like the iPad impact navigation & content structure, it has the ability to shift expectation in how web viewers pay for content. There are some very clear signs pointing to this shifting trend and it begs the question, “Has the code to web revenue been cracked?”

Advent of the App Store
One thing is certain Apple’s iTunes App store has changed the landscape before us since its release in mid-2008. With the release of the iPhone 2.0 OS software came the App Store, supplementing the iTunes music store, and soon others were quickly trying to duplicate the wild success of this newly created platform.  Now Apps downloads are on course to  surpass music downloads from the Apple iTunes store by the end of 2010. In roughly 2 years time that is an amazing accomplishment considering the current rate of music sales on iTunes has taken 7 years to reach its current level.  The larger phenomenon of the app craze has even spawned an App convention that is taking place here in San Francisco this week.

While Apple wasn’t the first to create an App platform (Facebooks App platform was released in 2007), they’re the first to tie it to a wildly popular consumer device, the iPad. As previously noted in my first post to this series All Eyes Are On The iPad. Are Yours?, it has been predicted that Apple will ship 12.9 million units this year, with shipments rising to 36.5 million next year and 50.4 million in 2012 and by any means that should be an eye opener. An eye opener because the combination of device sales and App download forecasts might just be indicators of a perfect storm on the horizon that shifts how many people interact with content on the web.

Revenue: Has the Web Found It?
Will the web as we know it be replaced by Apps? I doubt it, but where the web failed to convert user activity into revenue Apps just might be the long sought after holy grail many web entrepreneurs have been waiting for. While Apps have proven to be a potentially lucrative revenue creator not all App stores are created equally. In February 2010 Distimo reported that 75% of Apple Apps and 43% of Android Apps were paid apps and later in August 2010 Pingdom reported similar findings that 70% of Apple Apps and 36% of Android Apps were paid apps.

Interesting findings from the May 2010 AdMob Mobile Metrics report is that on average users of the iOS (Apple) and Android platforms spend at least 79 minutes a day using apps (note: Apple iOS users spend 89 minutes a day) and download 9 apps per month. The user activity is definitely a positive as most web sites are lucky to break the double digits in user activity sessions. The phenomenon of app dowloading has spawned an interesting trend as well… a mild addiction to downloading apps. In passing I’ve talked to several iPad/iPhone users that enjoy downloading apps almost as much as using the apps themselves. Nielsen reports that iPhone users for example download on average 40 apps versus Android users at 25 apps, both of which are an increase over 2009 findings.

Pricing
App pricing best practices seems to be the big mystery at the moment and is something I’m still researching. One interesting piece of data I surfaced concludes that downloads are not linked to price. This was in relation to game apps which might very well carry a different customer expectation to the photography market. While I can’t say much in definitive terms about app pricing I can say that higher prices will only be supported by app content/services that are of high value to users. There have been no shortage of apps commanding upward of $89.99 or more that have found themselves in the iTunes top-revenue/grossing list. Ultimately pricing will have to be tailored to the nature of the app. A photographer may very well want to release a free portfolio app in an effort to draw as many eyes as possible to their work versus charging for an eBook.

Looking into the Crystal Ball?
The web certainly will not be shrinking into oblivion, but content or services being produced to generate revenue may very well be predisposed to the app world.  What apps have going for them, unlike standard web content, is that they come bundled with the expectation they cost money to acquire and use. For the truly creative who frame content of value in an app there is certainly money to be made. On the flip-side of that sentiment with hundreds of thousands of apps in the current marketplace not all apps cost money. Free is not just an attempt to standout, for the savvy developer, it’s part of a calculated strategy. It’s important to note that vast majority of apps are not likely to be profitable, falling into the category of loss-leaders (see my series starting with Assumptions of Free and Taylor Davidson’s great article Free isn’t a problem, it’s an opportunity), but they do offer a unique opportunity to engage & introduce your work and services to others.

In my eye the iPad holds great promise for photographers with the right application. As to how photographers can get the most out of the iPad and take advantage of these trends you’ll want to read my next post on the subject. Stay tuned…

Related Article:
Only 13% of Aduls Pay for Apps - Fast Company (published hours after this post)
Additional thought…

If the app market is such a huge success with so few users, and already generating billions of dollars in revenue, how big will it become when it apps are as ubiquitous among adults as texting and taking pictures?

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Thoughts on the iPad: Where Will Your Audience Be Next Year?

In my previous post All Eyes Are On The iPad. Are Yours? I noted how the iPad was setting the stage for a publishing revolution with its transformational user experience. How have I come to this bold prediction? Three key signs have led me to the belief we’re on the cusp of a publishing revolution in short order.

  1. Tablet computers are currently the next must have device.
  2. Touchscreen interaction / navigation will be spreading to traditional computers
  3. Touchscreen interaction / navigation is defining an entire new branch of user interaction & user experience

Must Have Device
If you haven’t noticed already there are iPad giveaways around every corner. Apple’s iPad has captured the imagination of millions of people by changing how they interact with content on the web. This same fervor hit consumers in the 80’s with the mouse and here in the 2010’s touchscreen technology is making online viewing less abstract and physically more interactive. Apple’s ability to hit it big with the iPad, as with their other successful product launches, inevitably results in competitors releasing cheaper takeoffs. Odds are if you know someone who wants a gadget for Christmas they’ll be asking for an iPad. If an iPad isn’t in the budget you can bet that your local retailer like BestBuy will be selling a variety of competitors to fill the void.

Expect Touchscreen Interaction on Your Computer
Mobile devices are an intuitive place to utilize touchscreen technology. Mobile devices with their small footprint must be compact for portability while walking a fine line to provide an easy to view screen with easy navigation capabilities. Ask a child to view something on a computer and their first reaction invariably will be to point to the screen. This exemplifies the simplest navigation tool available… our fingers. As mobile devices become ubiquitous amongst younger generations such navigation is not only going to become intuitive, but expected.

The difference between a 3.5 inch (9 cm) and a 9.75 inch (24.5 cm) diagonal touchscreen of an iPhone & iPad may seem less than notable, but the increase in real estate to present text, images and video is huge. Everything (navigation cues, graphics, buttons, etc.) becomes easier to identify, touch, and move. Larger screen sizes also create greater opportunity for new and innovative navigation and presentation layers.  This type of content interaction is not likely to be lost on traditional computers with even larger screens, as recently surfaced Apple patent filings of a touchscreen iMac confirm we’ll be seeing more of this style of interaction on future computers.

Evolution of Web Use & Design Standards
In a recent edition of Wired magazine it was prognosticated that the web is dead.

Over the past few years, one of the most important shifts in the digital world has been the move from the wide-open Web to semiclosed platforms that use the Internet for transport but not the browser for display. It’s driven primarily by the rise of the iPhone model of mobile computing, and it’s a world Google can’t crawl, one where HTML doesn’t rule. And it’s the world that consumers are increasingly choosing, not because they’re rejecting the idea of the Web but because these dedicated platforms often just work better or fit better into their lives (the screen comes to them, they don’t have to go to the screen). The fact that it’s easier for companies to make money on these platforms only cements the trend. - The Web Is Dead. Long Live the Internet

How the data is parsed to come to this conclusion is questionable in my book (video is not considered the web? really!? What about YouTube?), but this Wired article in general raises an interesting premise and should make you think twice about how you’re experiencing the web today and how you & your audience might be experiencing it in the future.

The iPad, being the first out of the gate, will have a disproportionate amount of influence on design standards and user experience trends for the touchscreen oriented content. Knowing these standards and understanding how users are interacting with online content is critical whether  that content resides in a web page, app, peer-to-peer site, etc.  The question then raised is how does your web site translate to a touchscreen device like an iPad? In case you were unaware iPadPeek is a great way to see (just be sure you disable Flash on your browser first).  The even bigger question is how will your audience be viewing the content you produce and publish online?

Will traditional web sites hold up? Will apps be the dominant channel of online publishing? Will mobile viewing overtake traditional computer viewing? I have a notion of how things will play out in the future and it centers on a maturing model of revenue generation, but details to this thought will have to wait for the next post in this series Thoughts on the iPad: Cracking the Code to Web Revenue? Stay tuned…

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Adobe Photoshop Express: ToU Update Now More Confusing

Last week I discussed the Adobe Photoshop Express terms of use (ToU) and how the wording was nothing short of a rights grab (see Adobe Photoshop Express & The Mindless Photo Rights Grab). By weeks end John Nack posted an update, regarding the ToU, that “the Photoshop Express team has made some changes”.

Reading the paraphrased revisions on John’s blog post alleviated what concerns I had, but when I read the revised ToU I was left scratching my head wondering what the hell I just read.

First John’s post linked to the General ToU which I think has edits, but they’re not marked so I can’t be sure what they are. Text as seen at the top of the General ToU:

Last Updated on April 3, 2008.

Changes are not marked in red. Please read entire document. Please also note that these revised Terms will apply to all of Your Content as of the Effective Date.

If you do not agree with these revised Terms, please remove Your Content from the Service by the Effective Date.

What people need to certainly reread is the Adobe Photoshop Express Additional Terms of Use which has (2) two edits. On this page I get the edit about advertisements in Section 10, but I’m left confused by the most important edit to Section 8.

8. Use of Your Content.

  1. Adobe does not claim ownership of Your Content. However, with respect to Your Content that you submit or make available for inclusion on publicly accessible areas of the Services, and unless otherwise specifically agreed in any Additional Terms that might accompany individual services (such as Photoshop.com/Express), you grant Adobe a worldwide, royalty-free, nonexclusive, perpetual, irrevocable, and fully sublicensable license to use, distribute, reproduce, modify, adapt, publish, translate, publicly perform and publicly display such Content (in whole or in part) and to incorporate such Content into other Materials or works in any format or medium now known or later developed.

I’ve reread this at least ten times and each time and the edit in red makes about as much sense as when I read it the first time. Didn’t I just read this in the “Additional Terms of Use”? Why is the Additional ToU referring to the Additional ToU? Is this not circular loop? I still don’t see how this matches up to the paraphrased note from the Photoshop Express team as noted on John Nack’s blog.

  • Adobe’s Rights – Adobe has retained only those limited rights that allow us to operate the service and to enable you to do all the things the service offers. If you decide to terminate your Photoshop Express account, Adobe’s rights also will be terminated. We don’t claim ownership of your content and won’t sell your images.
  • Shared Content – We clearly state the rights you’re granting other users when you choose to publicly share Your Content.

Although the edit in red still confuses the hell out of me one element of my confusion was addressed, but only after some detective work. What isn’t in the edited license is (6) striked out words that were in the previous version of the ToU “derive revenue or other remuneration from”. Previously in the context of…

…you grant Adobe a worldwide, royalty-free, nonexclusive, perpetual, irrevocable, and fully sublicensable license to use, distribute, derive revenue or other remuneration from, reproduce, modify, adapt, publish, translate, publicly perform and publicly display such Content…

With these words out of the ToU I can see how the claims in John Nack’s post “We don’t claim ownership of your content and won’t sell your images.” are valid.

Perhaps this all makes sense to a lawyer, but the edit to the ToU was hardly an easy thing to figure out and to be honest I’m still not 100% on what the edit now means. At least the “distribute, derive revenue or other remuneration from” text has been removed.

Once again this goes to show…
1. Terms of Use are hardly readable to the common user.
2. The photo community rallying for their rights can instigate change.
Now if only Adobe could make these edits a little more clear so they’re as easy to understand as the paraphrased text in John Nack’s blog post.

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Adobe Photoshop Express & The Mindless Photo Rights Grab

This past week Adobe launched beta of Photoshop Express, a little over 1 year since Adobe announced its intention to put Photoshop online (see Photoshop In A Software As A Service (SaaS) Model?). Unfortunately for Adobe what proved to be most noteworthy about this new application is not its functionality, but the rights grab they’re making for each image that is processed in the online application.

Adobe makes available a very short and general Terms of Use document for Adobe Photoshop Express users to review. What new Express users see initially during the registration process is only the higher level Adobe.com Terms of Use. Surprisingly Adobe buries their Photoshop Express Terms of Use in a link from their general Terms of Use document concealing the following information:

8. Use of Your Content
a. Adobe does not claim ownership of Your Content. However, with respect to Your Content that you submit or make available for inclusion on publicly accessible areas of the Services, you grant Adobe a worldwide, royalty-free, nonexclusive, perpetual, irrevocable, and fully sublicensable license to use, distribute, derive revenue or other remuneration from, reproduce, modify, adapt, publish, translate, publicly perform and publicly display such Content (in whole or in part) and to incorporate such Content into other Materials or works in any format or medium now known or later developed.

For myself a few questions came to mind immediately after reading this.
1. “What the hell is Adobe thinking?”
2. “Are corporate lawyers really this out to lunch?”
3. “Why wasn’t greater thought put into supporting the rights of their users and managing the trust behind the Adobe brand?”
4. “Why would Adobe bury the meat of the Terms of Use as they’ve done?”

For the sake of full disclosure I have worked with creative agencies that have done work for Adobe in the past. It’s been a over 18 months since I last worked on anything Adobe related, but one thing is well known about Adobe… they take their brand very serious. By “brand” I mean the corporate perspective of what Adobe stands for and the reputation that they project. From a “brand” perspective this rights grab dramatically undermines the foundation in which their brand had been built upon namely “trust” and “empowering the creative professional”.

I’d like to think that Adobe’s lawyers made a mistake, but knowing how corporate lawyers work every clause of a contract is meticulously reviewed and approved. Nothing a corporate legal team does is an accident. Someone defined, reviewed and approved the terms with a lot of thought. What is certain is that effort was not brought in line with those that manage Adobe’s brand and products. With out a doubt Adobe’s staff was likely under the gun to produce and to give credit where credit is due… to turn out a product like this in a little over a year is an impressive feat. I have the greatest respect for Adobe to accomplish this, but with out hesitation I can say that Adobe really dropped the ball with their Terms of Use. In this day and age as an amateur or professional creative it is nearly impossible to not use Adobe software on a project. To this point an implicit bond and trust has been in place between Creatives and Adobe. If you can’t trust Adobe then who can you trust?

To quote Adobe from their Acquisition of Macromedia FAQ:

“What is Adobe’s mission?
Our mission is to revolutionize how the world engages with ideas and information. By acquiring Macromedia, we are strengthening this mission by making it easier for customers to create, manage, and deliver their ideas and engage with information of all types — in print, on the web, in video, and across mobile devices. We believe in enabling powerful, effective, and meaningful digital experiences across multiple operating systems in the broad span of diverse industries we serve.”

Adobe consistently walks a fine line on many issues facing their customers and partners, but in this instance they have egregiously treaded on their customers rights. To give Adobe credit they’ve recognized their mistake and are trying to make right as noted in John Nack’s blog post A note about PS Express terms of use. None the less once treaded on users undoubtedly will be and should be sensitive to this point and should rightfully keep a close eye even on Adobe.

I hope that Adobe is able to avoid making this mistake twice and given their leading role in this industry perhaps to re-establish their trust and leadership they could take it upon themselves to spearhead defining thoughtful standards and Terms of Use that are respectful of the rights of Creatives; standards and terms that other companies might then adopt as the norm rather than the exception.

Now to watch how quickly Adobe moves to revise and correct their Terms of Use. How fast they move surely will be a sign of how serious they’re taking the issue.

Kudos to fellow JMG-Galleries blog reader Ben Bailey for raising my awareness to this development.

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