The car business destroyed the horse and cart business for obvious reasons. You could analyze it in terms of running costs, maintenance costs, limitations of use and so on. You could claim that the auto industry had a better business model that made the horse and cart obsolete. But the essence of it was that the “transport customer” preferred the automobile to the horse and cart and that was it.

You can spend time analyzing why Microsoft’s Encarta destroyed the business model of Encyclopedia Brittanica. You could analyze the channels to market and the business model. But for simplicity, take the user position and you will quickly conclude that Encarta was better at providing reference information to “information seekers”. The same information seekers ditched Encarta for Wikipedia just a decade later.

In such situations, you could say “it’s about value for money” but you’d be heading in the wrong direction. There is more to it than cost. Apple demonstrated that wonderfully with its App Store, which proved that if you made apps relatively cheap and easy to pay for, people would buy them, in preference to a similar capability that comes for free on the Internet.

The iPad will not save Magazines and Newspapers

The recent attempt by News International to charge for its UK titles (The Times and The Sunday Times) in addition to it’s charging model for The Wall Street Journal, which has been established for a long timebut doesn’t work well, is laughable. She ain’t gonna fly Wilbur. There are 10 reasons why. So let’s list them:

1. Old style reporting is dead. Most news readers don’t care who wrote the article. They are looking for the facts and nothing more. In this respect they are not and will never be loyal to a single journalist or newspaper.
2. The barriers to competition are on the floor. The newspapers first lost out to radio and television which brought the news faster, but they had a symbiotic life with those alternative media. Not so with the Internet. The Internet means that news competitors enter the market every day and they are (or can be) global competitors. These competitors draw business away from old media.
3. Advertising revenues are leaking away onto the Internet. A traditional income source for newspapers and magazines (print ads) has been in decline for years. The Internet started bleedin it away energetically in the past decade, and mobile advertising will bleed it away even more. The revenue bleed just gets worse and worse with time.
4. Blogging. The secondary purpose, or perhaps nowadays the primary purpose, of newspapers and magazines is to deliver analysis. Sadly bloggers do this just as effectively (even better in some cases) and anyone can become a blogger. No real barriers to entry there. So the primary purpose of the medium is blown.
5. An electronic property is a far more versatile medium. When I say electronic property  I mean web site or smartphone app or iPad app or even PC app. Paper is constraining as it permits only photos and words. Electronic properties have video, sound, words and photos and also immediate links to other electronic properties. For the customer, they are more versatile by far – which means better.
6. The new aggregation is not a magazine or even a web site. People read aggregations; collections of published items. Newspapers and magazines are aggregations, pure and simple. A blog is not an aggregation in that sense, although there are sites, like the Drudge Report that are very effective aggregations added on top of a blog. The electronic reader reads electronic aggregations (e.g. like Google News). The new killer aggregations are the iPad Apps that aggregate RSS streams from news sources. Early Edition and Pulse News are examples. These are yet other competitors for ewspapers and magazines.
7. The branding is wrong. What is your main source of news? My main source is Google News. Others might prefer Yahoo News or CNN or the BBC. None of these are newspapers. Google and Yahoo make better aggregation brands than CNN or the BBC. They are poor brands for an aggregation, because they appear TV centric, but they have proved more powerful than any newspaper brand. Newspaper brands are really poor as electronic brands.
8. The unique contexts for reading paper media have vanished. The iPad was seen by some publishers as a big opportunity. It’s the opposite. It’s a wholly new channel to market which is going to damage the newspapers and magazines even further. The iPad is the mobile viewing device that the laptop never was. The only context I can think of where you cannot read an iPad and you can read paper is when an airplane takes off and lands. The iPad will proliferate for this and many other reasons, further damaging the newspapers business.
9. The old publishing business model is too expensive. There used to be some logic in the location, the buildings occupied, the corporate structure and organization, the subcontracting of work and so on in the classic publishing model. The numbers no longer add up. And the old media companies that try to change by buying up new electronic properties and routes to market are then forced to “eat their own children.” They rarely have the courage to do this, so they kill the new geese before they get to lay any golden eggs.
10. It just gets worse and worse. The current situation might be tenable ifld media was looking at a stable situation where the cost differentials between the paper publishing world and the electronic world remained stable. But they don’t. The cost of electronic publishing just keeps on falling every year by a considerable percentage (30% at least, possibly more).

Enough said.