Magic IO: My Start-Up Company

Tonight I'm announcing my start-up company, Magic IO.  Magic IO is going to be a digital entertainment company but, at least initially, its going to focus on developing beautiful reading experiences for the iPad.

If you've been following along with my blog of late you are probably aware that I've been writing a lot about what I call "app/books" (here and here), which are a combination of iPad application and electronic book.  Without getting too long winded about it, I first started thinking of interactive books in 1987 when I was taking Chemistry and Physics for pre-engineering requirements (I ended up with a Computer degree).  At that time the world was just transitioning from 5 1/4" to 3 1/2" discs, the Internet was unknown to 99% of the World, and CD's had only just came into their own.  I had no idea how interactive books could be created but I felt certain that an interactive book would be a boon to learning the sciences.

Fast-forward 23 years to the beginning of this year when I downloaded and was completely delighted by two very different iPad app/books:  Alice for the iPad and The Elements.  If you are not aware of these books, but you are interested in new media, than download them and check them out. They are both groundbreaking and beautiful at the same time.

The company that I'm creating will first focus on fiction titles for children and young adults.  I'm currently working on a licensing deal for several classic tales illustrated by one of the greatest fantasy artists of the 20th century.  As soon as the deal is inked I'll be happy to share more details about it.  At any rate, Alice for the iPad, and  The Elements set the bar for excellent app/book experiences. They are interactive, enchanting, engrossing, and beautiful.  I hope to do better, but I'll always have Atomic Antelope and Theodor Gray to thank for inspiring me to revisit an old dream.  Of course, I would be remiss if I didn't thank Apple for finally providing a platform on which electronic books  can be created that are truly interactive.

I hope to announced the first title we are developing in about two weeks. I need to get some legal stuff taken care of first including the licensing deal I mentioned as well and papers of incorporation and convincing some talented friends to join me.  I have little in the way of financial resources, but I have my keyboard, personal drive, and access to some serious talent (my friends) and I think that will be more than enough to create products that I can be proud of.

Along with books I hope to also develop some interesting games and I've already been working on a title that will hopefully be fresh and new and engaging enough to win a lot of gamers hearts.  In the mean time stay tuned while I continue to blog about app/books and my experiences creating a new company and developing products for the exciting iOS platform.

App/Books: Name Recognition, Brand and Exclusive Licensing

What's in a name?  Well, in the case of the iPad and app/books just about everything - at least for now.  In order to be successful with an app/book on the iPad you have to have a title with a well known name. Why? Because the familiarity of the title helps convince folks to take a chance and buy the app/book.

That's not to say that only titles with strong name recognition are worth reading. To the contrary!  An excellent example of an iPad app/book that is really excellent and doesn't have any  name recognition (yet) is "Bella The Great". Bella is a truly excellent children's book with illustrations by Jonathan Ashely that are destined to become classics.  But it's really the big names that catch folks attention and that's where iPad app/book entrepreneurs and established production houses are focused.

Good examples of this strategy are titles offered by Oceanhouse Media and ScrollMotion. Both companies, start-ups with a focus on mobile app/books, have secured licensing rights from major copyrighted brands.  In the case of Oceanhouse Media, its Dr. Seuss titles have been big sellers on the iPad, the rights to which they licensed directly from Audrey Geisel, Theodor Seuss Geisels window. ScrollMotion has secured rights to Curious George and Sesame Street's Elmo books.   Major production houses are also playing the brand game to great effect.  In the case of Disney its the corporate brand. In the case of DreamWorks story brands Shrek and "How to Train Your Dragon".  Name recognition with exclusive licensing rights is what I call Brand.

Branded iPad app/books released by these companies have big name recognition and are copyrighted which means they have exclusive rights to create app/books for these titles.  That's a major advantage when it comes to competition; because there isn't any.  In the case of Oceanhouse Media, they have exclusive rights to the Dr. Seuss titles for the iPad - you won't see any other app/book company producing Dr. Seuss app/books for the iPad. The same is true of Disney and DreamWorks and (possibly although I haven't confirmed this) with ScrollMotion.

Securing licensing rights to major brands is not without its challenges, and so a number of independent iPad developers have chosen titles in the public domain with equally powerful name recognition.  Atomic Antelope's runaway hit, "Alice for iPad" is based on the out-of-copyright Alice In Wonderland which has extreme name recognition.  But Atomic Antelope doesn't have exclusive rights to the Alice in Wonderland title and stories, and so there are a number of other app/books based on the same name - all of which pale in quality and delight. Multiple offerings of the same title provide consumers with a choice but it also dilutes the power of name-recognition.   A personal example of this is the Sherlock Holmes title I have been working on. Sherlock Holmes is one of the best know literary characters in history and the name recognition is excellent, but its not exclusive to anyone because the stories are not protected by copyright.  As a result there are a number of Sherlock Homes app/books available today which makes its more difficult to capture consumers attention.

While the iPad offers opportunities for self-publishers who are selling titles with little name recognition, its the the publishers who focus on strong brands that will have the most success.  This is perhaps obvious to anyone in the publishing business (or any other business) but what is interesting is that there is now the beginning of a land-grab for exclusive rights to strongly branded and copyrighted titles. Specifically, big production houses like Disney and DreamWorks are maintaining control of their precious titles while start-ups like Oceanhouse Media and ScrollMotion are securing rights to other titles.    And this, in my opinion, is where the money is and where new companies need to focus their energies.

That said, you can't just waltz in and make a deal with the licensees of major brands unless you have a track record or a very compelling business model.  To establish a track record entrepreneurs are going to have to start with non-copyrighted material and hope that their titles are so good that they can win on an even playing field.  Of course if your objective is to establish creds you may not need a runaway success; a high quality offering in the App Store may be enough to convince a licensee to trust you with their brand.

In the end its the Branded (copyrighted and trademarked) titles with strong name recognition that will make the most money for their publishers. There will always be exceptions, especially early on when app/books are just starting to gain steam, but in the long run its brand that maters and by that I mean good name recognition and exclusive rights.