Citizen Publisher

In March this year Richard Stengel, managing editor of Time magazine, was speaking about the iPad.

For a while many movies were more like filmed plays, until directors really learned to take advantage of the opportunities of the medium. For the iPad “The medium is waiting for its Orson Welles.”

The idea that a new medium needs a new media is not novel. The implication that the new media needs a new genius to define it also follows naturally. However, the implications of new media for the creative industries that are built around them are more difficult to perceive. How are the structures of these industries shaped by disruptive innovations?

Disrupting theater

To see just how disruptive cinema was, consider the plight of acting talent. In the early years of the cinema (1890s–1900s), performers were not even identified in films. In other words, they were not in the “credits” and far from being “billed”. The reason was that stage performers were embarrassed to be in film. Silent film was considered pantomime and since one of actors’ main skills was their voice, they were concerned that appearing in films would ruin their reputations.

Early film was also designed for the working classes, not for intellectuals. With peep shows as the original presentation format, followed by nickelodeons, film was seen as only a step above carnivals and freak shows. Clearly not something that an aspiring actor would want to be associated with.

So here we have a classic disruption: The new medium was of a far lower quality than live theater. Even lower than the Vaudeville and Burlesque shows. It was, as many other disruptions are pronounced, a toy.

However, it had a market–a profitable market. Over time, the product improved and within a few decades completely drained the profits from theater, leaving it to serve only the most demanding customers willing to pay high ticket prices and satisfying only their high brow tastes.

So going from Theater to Cinema involved more than technological or technique innovation. It required business model innovation. Specifically, Cinema technology brought about the “Hollywood” industry, or more specifically, the Star System and the Studio System.

The Star System was a branding technique designed to signal quality to the public. It remains a basic and fundamental innovation: celebrity as product. The Studio System was a production and value chain innovation.

The integrated producer

By the 1930s technological change led to a new value chain: vertical integration, ownership and effective control of distribution and theaters.

During the Golden Age (early 20s to early 60s) eight companies constituted the Hollywood studio system. Of these eight, five were fully integrated conglomerates, combining ownership of a production studio, distribution division, and substantial theater chain, and exclusive contracting with performers and filmmaking personnel.

The studios’ efficient, top-down control over all stages of their product enabled a new and ever-growing level of lavish production and technical sophistication.

Readers may recognize this as the “inter-dependent” business architecture model.

The studio system allowed iteration and innovation and factory-like efficiency in production. This architecture held sway as the technology remained relatively stable and the market for content expanded to cover most of the world’s population.

In the late 60s and 70s, modularity emerged as a more practical alternative and control over production was separated from distribution. (Theater ownership was removed by anti-trust action). The system that emerged gave more power to producers and directors (e.g. Kubrik) and the talent became independent of the studios.

The new Welles

Which brings me back to Orson Welles. Welles’ masterpieces were the product of an industry that allowed innovation to happen. They were the product of an era. An era defined by integrated innovation and inter-dependent value-creating business with common ownership and control.

So when print publishers today think about their future in the era of the iPad, they should consider their value chains and business architectures. Could the new Welles create the new iPad genres to jump off the screen if he worked in a regular publishing firm that outsources practically everything? Or will he emerge from a firm that operates an integrated value chain. A firm like Amazon that owns the device, the publishing system, the retail store and maintains direct relationships with readers?

It’s my opinion that before there is an Orson Welles of iPad there needs to be a Studio System and a Star System for iPad apps. The Star System is nearly there with the current App Store, but it needs discovery and a systematic way of promoting talent. The Studio System has yet to emerge.

This does not bode well for traditional publishing houses aspiring to embrace the iPad. They are not in a position to create these Systems around this new media and hence to nurture the next Orson.

It’s perhaps ironic that Orson Welles’ masterpiece “Citizen Kane” (1941) was the story of a publisher.


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