strategy – BooksAhead: Mitch Ratcliffe’s Notes on Digital Reading

AT&T’s designs on wireless devices: Wrong avenue for e-books

A couple years ago, Ed Whitacre, then the CEO of AT&T, told an audience that he resented Web companies’ use of “his pipes” for “free,” ignoring completely the fact that every company connected to the Web is paying for the privilege. He simply wanted a larger cut, a piece of every transaction flowing over “his pipes.” Now, his successor at AT&T is taking a shot at e-book reader development, according to BusinessWeek.

Let me preface the following by reiterating my long involvement in telecommunications and with AT&T. I have spoken at AT&T Bell Labs and appeared in a “vision video” about the AT&T service that was designed the support the General Magic device. I’ve seen AT&T go through three cycles of decline and recovery, interviewing a series of its CEOs along the way. We are now at the tail end of its latest recovery, though the company has yet to earn a market cap approaching the amount of money—more than $200 billion—Whitacre spent to cobble together many of the former Babies Bell into the “New AT&T.” The company has also consistently underperformed compared to its industry and the wider market since Whitacre’s tenure began.

AT&T should stay out of the e-book reader business.

AT&T was a consumer hardware company in the early 20th Century*. For the most part, however, it has only succeeded in delivering enterprise technology and services or creating technologies which it failed to commercialize as effectively as upstart competitors (like the transistor and the fundamental elements of the hard drive). But hundreds of thousands of smart people have worked there over the years, and it has done some things very well at certain times. I thought, for example, that it’s support of General Magic’s Telescript agent-based application technology was potentially visionary. Instead of adapting Telescript to the emerging public Internet and its standards, which would have trumped

Businessweek’s More-for-your-money strategy

Businessweek is experimenting, trying to make itself of more use to readers. Businessweek is trying a variation on something new, the idea of giving subscribers more for their money while continuing to provide content for free online. It’s a variation on an idea that Josh Young and I have been talking about for a while.

You have to feel for magazine publishers these days. With few exceptions, like The Economist and specialty interest publications, they are seeing declining subscriber numbers along with the decrease in ad revenue due to the recession.

Businessweek made a good start, offering subscribers earlier access to print articles online and some “user-generated” news and social features. This will tax the staff very little, unless they choose to dive into the Businessweek community site and really talk to readers about the news. The degree of investment in relationships with readers remains to be seen. But there are a couple simple things they could do right now that would be relatively easy and cheap, involving e-book technology:

Provide print subscribers a free PDF, Kindle or ePub version of the magazine when it goes to the printer, typically two days before the issue is released.
Build tracking into its site and collect readers’ discussions, bundling them up into quarterly e-books (in the reader’s preferred format) delivered by email to subscribers, so they get a memorialized record of their participation in the community. The really active users will love this—generate a fake Businessweek cover with their avatar’s picture to make a personal package of the e-book.
Finally, take at least one full page, if not more, and turn it over to the community. Make them the authors of opinions and articles that reach print—then there is a reason to pick up the print copy.