There has been a lot of debate recently on exactly what the future of digital publishing mean – especially now, with the proliferation of handheld devices like the iPad.

This is an interesting question – most publishers have reacted with the most predictable of responses – essentially publishing their print magazine content with some multimedia in an iPad readable format.( I only use the iPad as an example because it happens to be the most ubiquitous device of its type in the market at present).

However, is it really another channel. Or is there another way to leverage the new media. And that is the million dollar question. And in my mind, the question when its tried to be answered – is always looked at from a publisher’s point of view – as to what the publisher would consider a strategic differentiator.

And to this blogger, that is the fundamental problem as to why the new delivery mechanism hasn’t gone beyond the gamut of fragmented “apps” – one each for each print magazine.

Let’s turn the problem on its head – let’s think about what the consumer of the media typically wants. I will use myself (a voracious consumer of political, economic and sports news) as a metaphor.

If as a consumer, I want to read content related to a specific nature – as most actual consumers do – I have a fragmented landscape to deal with – apps for the different magazines I would traditionally read. No different from what my experience is with traditional print media.

Now consider this – I follow Economics and Sports. And the Magazines Publishers’ Guild decides to come up with a content aggregator – that combines content from The Economist, Foreign Affairs Magazine, Mother Jones, NPR, Huffington Post (for good measure), Washington Post and the New York Times in one iPad Magazine format. And charges me a certain amount ($4.99 a month, for the sake of argument). Would I pay for it? That remains to be answered in the general sense of course. But personally, yes, I would pay for it. Which is a lot more in terms of revenues that magazine publishers from their print materials (not to take into account excess print, printing and distribution costs).

Revenues can be distributed per the number of articles accessed from each publisher (if I like reading Nicholas Kristoff more than anyone else, it is only fair the NY Times gets a fair share from my monthly MRC). And value added content ( like podcasts and video of similar to my interest) can be revenue supplanted by advertising (hence NPR).

What do each of the content publishers get? Outsourcing of all digital media publishing costs as a shared cost across each of their content aggregator participants. They reduce fragmentation across their target customer base and ensure uniform (and fair) monetization based on the quality and interest of their content. It lets journalists and analysts be just that. And the competency of digital publishing can be handled by those who do it best – an outsourced entity.

What does it mean for the consumer – the consumer can download targeted “official” apps for specific areas of interest with all the quality associated content spanning multiple publishers. The availability of cross publisher content aggregated in one convenient place is a huge driver for monetization.

Convenience is key. Consumers pay for convenience and value add. Google Reader provides value add. But does it provide convenience. I would argue not. And if there was a poll on the internet about how many people who would be willing to pay for a service like Google Reader, I would suspect strongly, there wouldn’t be many takers.

The key is convenience and value add. And an aggregator that actually allows for the downloading of relavant content for offline perusal is critical for such aggregators to succeed.

The new class of portable digital media devices provide a perfect mechanism to leverage such synergies between publishers that are now competitors. They have an opportunity of consolidating each of their fragmented user bases.

Of course, this requires thinking that goes beyond the usual competitive thinking. The alternative is scary. The democratization of news, analysis and opinions will almost leave no other revenue streams intact in the traditional print arena. Compound that with carbon taxes that sooner or later will be levied will invariably raise prices of magazines that will take it over the acceptable price threshold of consumers used to discounted prices of magazines.

The point I am trying to make is that, in my view, the future of digital media is limited by the traditionalist limited thinking of competitive advantage and customer segmentation. Additionally, the thinking fails to take into account what customers really want from their user experience – a seamless gateway to all information they are interested in.

It also assumes that every single publisher publishes everything a “segmented user” is interested in and fails to capture the value add in synergies – think New Yorker coupled with the weekend New York Times Magazine.

And finally, the traditionalist thinking fails to consider two important macroeconomic and demographic factors. Macroeconomically, publishing, distributing and transporting bulky print media is going to just keep getting expensive. And demographically, the publishing houses are failing to realize the consuming habits of their future customers – the ones who have grown up consuming media on the web (“the websumers”) – agnostic of the source. In ten years, they either will be the source of their revenue or will won’t.

And the answer will depend upon whether the publishing houses keep their traditional thinking of carving the target customers for themselves, or alternatively, think of each customer as a potential for revenue for all. Else recursive cannibalization is the only future.

And as the airline industry teaches us – that has only one direction collectively – downward.