@ pC2011: The New Digital Storefront – Or New Balkanization?

The unveiling of iPad 2 has publishers both excited and vexed about the possibilities and hurdles involved with creating a “digital storefront.” But it’s not just about Apple (NSDQ: AAPL) these days, despite the flood of attention its devices have gotten, but sorting it all out and getting to what Morgan Guenther, president & CEO, Next Issue Media, called a “single unified path” is the ultimate goal — for some publishers at least.

Speaking at the paidContent 2011 conference, Guenther addressed the difficulties in dealing not just with the Google (NSDQ: GOOG) Android and Apple platforms, but the fact that publishers have to choose between offering one or a mix of formats for their content. “Some will want their digital content produced for Adobe (NSDQ: ADBE), some will just want html5,” he said. “The balkanization makes it difficult and challenging as publishers try to reach consumers.”

But in Ongo CEO Alex Kazim‘s view, the mess of choices is actually a good thing. That is to say, the situation for publishers might be worse if there were a seamless, single option at this point. “Balkanization is a good thing,” Kazim told panel moderator James L. McQuivey, VP, Principal Analyst at Forrester. “I can buy my music on iTunes, listen on Pandora, Spotify. If iTunes had been created by the music industry instead of Apple, they wouldn’t have sold individual songs. They would only sell albums. In news, it’s going to be ad based models, subscription based models. Ultimately, that will benefit consumers, and publishers in turn.”

Both Next Issue and Ongo have faced doubters about their models — the former is the magazine and newspaper JV charged with creating a single storefront for digital sales and subscriptions, while the latter aggregates online news. In Ongo’s case, even though it launched barely a month ago, Kazim is constantly asked how many subscribers the company has under its belt. In the case of Next Issue, it has taken some hits for moving too slowly.

“The media industry is a glass house,” said Guenther. “Next Issue was formed 15 months ago and when I got here less than a year ago, there was a lot of focus on research on technology and consumer habits. There was not a lot of execution before I got here. The idea I had was to meld Silicon Valley.. we’re not going to be a system integrator and we were going to develop a product. There were no product people when I got here. I constantly hear, ‘You’re late, Apple owns the market.’ These are still early days.”