I had lunch recently at the Elephant Bar in Campbell, CA with Tom Miller who is the executive director at the Society For Information Display. In the few minutes I spent waiting for Tom, the lunch crowd I noticed was a mixed demographic: middle-aged businessmen strategizing, retirees getting together to catch up on family and friends, soccer moms treating themselves to a Friday lunch. Tom and I fit into the first group. He was on the editorial advisory board when I worked at ISD Magazine in the late 90s. Tom is a great source of information on a wide range of technology areas from displays to web ventures he’s come across in his consulting work. After we were shown to a booth with seats so close to the table they resembled coach class on an airplane—Tom’s analogy, the young waitress asked us for drink orders—diet coke for Tom, sparkling water for me.
The last time we got together, he and I spoke about Emagin, a display company that makes an OLED (optical light emitting diode) array built into military near-eye helmet-mounted display applications. I mentioned that the company had turned a profit and we got into a discussion on commercial application of the technology—watching video, video gamers (especially combat games), etc. He brought up the drawback for consumers. Being so near the eye the display can cause motion sickness and dizziness. The problems have been solved for military applications, Emagin’s target market—a $1B-oportunity last year and tripling by 2012 says the McLaughlin Consulting Group. Producing a cost effective consumer offering is yet to happen, though there was buzz last year that Apple and Sony were developing navigation/video sunglasses, apparently overzealous speculation.
The waitress took our order: soup and salad for me and a chicken salad for Tom. From displays we got onto the topic of print publications and their plight as advertising abandons print for on-line; the reality made plain by the Conde Nast’s closure earlier this month of “Gourmet,” “Cookie,” and “Modern Bride” on the advice of McKensey & Company. The “New York Times” reported that the publishing company had lost 8000 ad pages. Assuming a modest ad page rate of $3k to $5k that’s $24M to $30M in lost revenue.
The alternatives to save print magazines we discussed ranged from taking the loss in the print publication and generating revenue elsewhere—in-person conferences—and selling conference proceedings afterwards, selling e-mail lists, fee-based on-line activity such as webinars, marketing surveys, social networking communities. The print edition would serve as outbound communications vehicle that hits subscribers’ desks every month to build readership loyalty.
Tom mentioned an effort at Stanford University being led by government and major publishing companies to improve the efficiency of the business model for print media. On the expense side of the ledger, besides the variable expenditure for paper, there’s the large fixed cost in administrative and editorial labor, postage for distribution, and the printing plant. There has to be enough advertising revenue to cover these outlays. Government incentives can help—postage for example. Revenue has to cover the rest and here too government incentives could help—e.g. tax breaks for running print ads.
The waitress interrupted us with our orders and refreshed our drinks as Tom and I got onto the topic of the free business model of the web. He asked if I had heard of changethis.com. I hadn’t. It’s a site that publishes manifestos. Later in the day, I downloaded "Your Butt’s in the Wrong Seat, A Manifesto for Public Transportation," a 12-page piece by Ryan Barton making a case for using public transit. The model looks very labor intensive Tom said. You submit your manifesto to an editorial evaluation and only those that pass muster gets published (perhaps a staff of volunteers that administer and edit?). The site is owned by 800ceoread.com, which publishes business books, presumably with some success to afford changethiscom, (which could potentially find book authors for its parent).
Tom brought up another site with a free model, AnchorFree.com founded in 2005 by Silicon Valley entrepreneurs, David Gorodyansky and Eugene Malobrodsky. Their goal was to impact user privacy on the Internet by putting users in control of their data while online. Tom described the software you download for free as enabling browsing through a VPN, thus keeping your activity on the web private. With some venture funding the founders are now looking to monetize the site’s 300 million downloads (!) by offering ad space within the VPN. You would think this a no brainer. I suggested monetizing AnchorFree by soliciting donations from users. With that many download, asking for a dollar donation each and getting a 10 percent return would pay the bills for a while.
We finished our meals and the waitress returned to bus the table. All in all the meal had been most enjoyable and informative. Tom picked up the tab—thanks Tom—and we headed out into a bright, warm and humid Santa Clara Autumn afternoon.
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