Wenner Media describes the launch as a “planned progression” that began in May 2010 with Rolling Stone‘s Beatles guide app and continued with a music news iPhone app and the launch of Us Weekly on iPad last May. A digital replica edition of Rolling Stone is already available for Kindle Fire, Nook and Zinio, but the iPad edition is optimized for the tablet and “all of the album and song reviews and music-related articles will include a link to listen to music samples and purchase tracks from iTunes.” (Those are the red buttons in the image at left.) In his AdAge interview two years ago, one of Wenner’s arguments against releasing magazines on iPad was that it was too expensive and didn’t provide enough revenue; the iTunes affiliate partnership helps with that.

The iPad edition of Rolling Stone will not be bundled with the print issue. iPad subscriptions are $1.99 per month or $19.99 per year, while a single issue is $4.99 — the same as the print magazine on the newsstand.

We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

• AOL Voicemail ($5.95 per month)
• A teen service called Red (featuring “a talking head—using the image of an actual employee—that uses software to answer users’ questions”)
• A digital music partnership with Burger King
• A reality show called “Gold Rush”
• Social networking site AIM Pages
• Going free
• The hyperlocal Patch blogs

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Interactive Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

TV photo courtesy of Shutterstock user [Somchai Buddha].

Zombie hand photo courtesy of Shutterstock user [lineartestpilot].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Shutterstock user [Sergio Martinez].

Book photo courtesy of Shutterstock user [TrotzOlga].

Ringtones and apps photo courtesy of Shutterstock user [violetkaipa].

Cash register photo courtesy of Shutterstock user [titelio].

Magazines photo courtesy of Shutterstock user [bernashafo].

Tupac hologram at Coachella, by Twitter user @ThisGoonIsHOT

Rolling Stone’s new social networking hub, #RSFans, aims to be a “two-way conversation” between Rolling Stone editors and Facebook, Twitter and Instagram users.

Readers are supposed to tag Facebook posts and pictures, tweets and Instagram photos with #RSFans. Editors curate the content and feature it on the RSFans page. A Coachella post, for instance, includes Instagram photos and tweets from the California music festival.

Fans are using social media to cover “live events, festivals, particular concerts and new record releases,” says David Kang, Rolling Stone’s recently hired chief digital officer. “Even with our extensive coverage, we can’t replicate that.” So the brand is harnessing that content on its website instead. Some of the fan-curated digital content may also make its way into the print magazine, Kang said: “It’s a logical extension of the two-way conversation.”

Rolling Stone was slow to settle on a digital strategy and the chief digital officer position has seen a lot of turnover — Kang, who was previously at Hearst for under a year, was hired to fill the position that Michael Bloom left after just six months. But the magazine hopes to catch up with an iPad edition this year.

Kang is also overseeing the launch of a series of new Rolling Stone apps, beginning in May. There will be an app that lets users find artists touring near them, a news app, a triva app, and an app called “Song Stories” that explains how certain songs came to be.

Picture credits from #RSFans: Coachella grounds pic by @connortdoyle, Tupac hologram picture by @ThisGoonIsHot

Wenner Media’s digital strategy has been more cautious than those of its competitors. In May 2011, Jann Wenner told AdAge that magazine publishers’ “rush” to the iPad was “premature.” Since then, it has made some moves that suggest it has become more of a believer in the iPad and in the importance of a more aggressive digital strategy. It has offered a Rolling Stone-branded Beatles guide for the tablet, and published Rolling Stones’ current content and complete archives online. It plans to launch digital replicas of Rolling Stone and Us Weekly for the iPad this year.

In Kang’s new position, he will have full P&L responsibility for the digital side of Rolling Stone, Us Weekly and Men’s Journal. Kang had been at Hearst since March 2011; his job there was to develop multiplatform franchises across the company’s brands, including digital apps, mobile sites and e-books–Good Housekeeping and Cosmopolitan e-singles, for instance. He also helped create Hearst’s new branded YouTube channel.

The position at Wenner Media was “too good of an opportunity to pass up,” Kang told paidContent. He is “an avid hard rock guitar player,” so “having an opportunity to work for an iconic music brand like Rolling Stone is an ‘Almost Famous’ moment for me.”

In his new role, Kang will “focus on a brand-centric model” that serves fans “based on preferences, data and a seamless multiplatform experience with multiple revenue streams.” He also told paidContent he’ll look to strategic partnerships with companies like Spotify, and to deepen relationships with advertisers through multiplatform integrated deals and branded entertainment campaigns.

Wenner says traffic across its three websites has increased sharply over the last year, using comScore (NSDQ: SCOR) figures to illustrate the point: Monthly unique visitors were up 54 percent for the twelve-month period ending in November 2011, compared to the previous year. Combined, the three brands attract 13.2 million unique monthly visitors and and 4.8 million monthly unique mobile visitors.

The Beatles’ book, which came out this summer, represents Rolling Stone’s first foray into apps, though replica versions of the magazine are available on Nook, Fire and Zinio. The Beatles app costs $9.99 — the same as the print version — and is not currently available on Android.

The app contains the same content as the print book and has 122 pages with over 60 photos. However, it was redesigned for the iPad and as such, is not considered a “digital replica.” In addition the app contains 30 second sound samples (via iTunes) for every song and the ability to purchase each song through iTunes.

It also features interviews from Jim James of My Morning Jacket, James Taylor, Stevie Nicks, Liz Phair, Steven Van Zandt, Liam Gallagher, Stephen Malkmus of Pavement, Colin Meloy of the Decemberists, Graham Nash, Bob Weir and others, as well as a guide to the best non-album tracks.

The release of the app on December 1 in the iTunes Store comes after several months of changes on Rolling Stone’s digital side. It also represents a significant embrace of the app economy several months after Jann Wenner, the founder of Rolling Stone and publisher of US Weekly and Men’s Journal told AdAge’s Nat Ives that publishers were “prematurely rushing [to create tablet versions of their titles] and showing little confidence and faith in what they’ve really got, their real asset, which is the magazine itself.”

Still, he was sure to say that he wasn’t trashing tablets, just he didn’t see digital replicas replacing the physical magazine any time soon.

The company’s renewed digital push really began in earnest in the spring of 2010, when Rolling Stone finally took control of its website back from RealNetworks (NSDQ: RNWK) last summer — now it’s finally putting the contents of the entire magazine, along with over 40 years worth of archives, online.

The decision to issue the Beatles book as an app package comes amid a flurry of deals by magazine and newspaper publishers to repurpose print content in e-book form. Earlier today, for example, Hachette Book Group said it was teaming up with Bloomberg BusinessWeek on e-singles drawn from articles that have appeared in the magazine.

The app release also reflects Wenner’s deliberative — some would say tentative and cautious — approach to digital content. Ultimately, since the revenue is still mostly derived from print, digital will provide the incremental boost in terms of attracting paying readers and advertisers. After all, as Wenner has said, what’s rush? Still, given its need to reach younger music fans in addition the baby boomers who grew up with Rolling Stone, the magazine’s digital presence is increasingly crucial to retaining its relevance.

As evidence of its new digital momentum, for October, USmagazine.com’s comScore numbers showed 10,374,000 unique visitors, or about 2 million less than Time Inc. rival People.com. It’s the second highest traffic number in USmagazine.com’s history, up 17 percent versus September, the company said. Also, total pageviews are up 9.1 percent to 214 million.

The “all access” paywall, which debuts today, comes in three flavors: Users can choose a single month pass for $3.95 or an annual all access pass for $2.50 per month/$29.99 per year. A two-year online subscription comes to $1.87 per month/$22.44 per year.

“This is not a case of putting something that existed online behind a paywall, because we

Reports from outlets like the LAT, CNN and the WSJ followed — though some criticized them for getting scooped so thoroughly by TMZ. (Also of note is that TMZ was able to get an official statement from long-time Jackson producer and friend Quincy Jones).

Meanwhile, Rolling Stone and Vibe both managed to get full-page homages to the King of Pop up relatively quickly.