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Vin Crosbie Vin Crosbie
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Dorian Benkoil Dorian Benkoil
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Bob Cauthorn Bob Cauthorn
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Ben Compaine Ben Compaine
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Dorian Benkoil senior consultant at Teeming Media. An award-winning journalist and editor, he was a foreign correspondent for AP and Newsweek, and international and managing editor for ABCNews.com. At ABC News he moved to the business side, handling sales integration and business development, before joining Fairchild Publications as General Manager for their Internet division, becoming editorial director for mediabistro.com, then a consultant for Teeming Media in New York. He graduates this year with an MBA from Baruch's Zicklin school of business. Learn more about him at Benkoil.com or his blog - MediaFlect.com.

Robert Cauthorn is a journalist, former vice president of digital media at the San Francisco Chronicle, and was the third recipient of the Newspaper Association of America's prestigious Digital Pioneer Award. He launched one of the first five newspapers web sites in the world and is generally considered to have delivered the first profitable newspaper web site in 1995. Cauthorn has been in the middle of the transition from old media to new and is recognized as frank-talking critic when he believes newspapers stray for their mission. In mid-2004 he became the president of CityTools, LLC a new media startup based in San Francisco.

Ben Compaine has divided his career between the academic world and private business. He was a journalist when manual typewriters were considered state of the art, but also led the conversion of his college newspaper to cold type. He has started and managed weekly newspapers. His dissertation at Temple University in 1977 was about the changing technologies that were going to unsettle the landscape of the staid and low profit newspaper industry. Since then he has focused his research and consulting on examining the forces and trends at work in the information industries. Among his most well-known works (and the name of his blog) is "Who Owns the Media?".

Vin Crosbie has been called "the Practical Futurist" by Folio, the trade journal of the American magazine industry. Editor & Publisher magazine, the trade journal of the American newspaper industry, devoted the Overview chapter of executive research report Digital Delivery of News: A How-to Guide for Publishers to his work. His speech to the National Association of Broadcasters annual conference was one of 24 orations selected by a team of speech professors for publication in the reference book Representative American Speeches 2004-2005. He has keynoted the Seybold Publishing Strategies conference in 2000; co-chaired and co-moderated last year's annual Beyond the Printed Word the digital publishing conference in Vienna; and regularly speaks at most major online news media conferences. He is currently in residence as adjunct professor of visual and interactive communications and senior consultant on executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, and meanwhile is managing partner of the media consulting firm of Digital Deliverance LLC in Greenwich, Connecticut.
About this blog
Two forces have shattered the news media. Technology is the first. Although media technology is undergoing its greatest change since the day in 1440 when Johannes Gutenberg first inked type, for more than ten years now the news industry has mistaken new technologies merely as electronic ways to distribute otherwise printed or analog products. Estrangement is the second. The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news. How we rebuild news media appropriate to the 21st Century from the growing rubble of this industry is the subject of this group weblog.

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June 3, 2010

Is AT&T's new data pricing a bad sign for media's iPad dreams?

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Posted by Ben Compaine

Two pieces of seemingly unrelated news hit the online world about 24 hours apart. However, the first may weigh heavily on the second.

Number one was the announcement yesterday (June 2) from AT&T signaling the end, for now at least, of unlimited wireless broadband. As of June 7 most 3G iPad users and all buyers of iPhones and other AT&T connected smartphones will have to pay for data based on usage. Unless grandfathered, from now on it will all be metered.

According to most reports (the New York Times’ David Pogue among them), most smartphone users should come out ahead by under either of the two plans. AT&T itself calculated that 65% of its subscribers use less than 200 mb of the lower price option (half the cost of the current unlimited plan they have) and altogether 98% use under the 2 gb limit of the higher price plan. But for the newer iPad, optimized for streaming video and more accommodating for watching You Tube, will these parameters stunt their use?

The matters if we probe the implications of the second news item, an AP story under the headline “Publishers see signs the iPad can restore ad money.” It began: “Good news for the news business: Companies are paying newspapers and magazines up to five times as much to place ads in their iPad applications as what similar advertising costs on regular websites.”

The story noted that “early evidence suggests the iPad is at least offering publishers a way to get more money out of advertisers.” Perhaps prophetically, though, author Andrew Vanacore hedged his bets, adding two graphs later: “Still, a lot will need to go right for publishers before the iPad and imitator tablet computers become a significant source of income.”

The seeds of what may not go right comes soon enough. Describing why iPad applications such as USA Today’s can justify higher ad rates than the standard online ad, Vanacore replays this scenario: “A reader can click on Courtyard by Marriott's USA Today ad and then with a flick of a finger scroll through images of the hotels' updated lobby design. Another tap and a high-definition video appears, full of happy hotel guests.”

But wait. With AT&T’s new data limited plans, this simple “tap” will generate perhaps megabytes of “high definition” video. Will tablet users want to eat up precious data usage on a Marriott ad. When the pool was bottomless, well, so what. With the pool is emptying fast, then perhaps not. At least, not as spontaneously.

AT&T’s new data plans are likely to be mimicked by other carriers eventually. Some or all might hold off initially so as to gain a short term competitive advantage. But they know AT&T is right. The spectrum for data is finite and when any commodity is free it get overused. Some mechanism is needed to ration it.

Every decision has consequences. It’s not unusual for some to be unintended. Matt Richtel, in his report describing AT&T’s data plan announcement, closed his piece with this anecdote:

“Mike Lapchick, an AT&T customer in Chicago, said that he tended to use his iPhone mostly for e-mail, and that he would probably see his data bill drop in half to $15.

“But Mr. Lapchick, who is the chief executive of a company that makes software used by Internet retailers to allow consumers to zoom in on product images, has another concern. As unlimited data plans go away, it could prompt cellphone users to watch their intake.”

He may not have realized it, but Lapchick could have been describing every media business that has hope that iPad and its competitors' forthcoming tablets may just have been blindsided by AT&T without being aware of what hit them. At least not yet.

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