© 2013, Joseph B. Wikert
In the old days of product development customers didn’t see a new product until it was finished. Everything was polished and the bugs were (mostly) worked out. Sometimes the finished product wasn’t really what the customer had in mind though, which exposed some painful flaws in this model.
Remember when newspaper and magazine publishers said they can’t keep giving their content away for free so they started putting it behind paywalls? Then they got disappointed by the low number of subscribers, reversed course and paywalls began to come down.
It seems like a scene out of Back to the Future as paywalls are now apparently once again in vogue. Over the past week I’ve read multiple accounts of publishers deciding the totally ad-subsidized model just isn’t going to cut it.
Now that I'm in the broader digital content industry and no longer in the book publishing sector I've realized something very important: Amazon isn't killing book publishers. Publishers are killing themselves. Book publishers, or more accurately, their products, are becoming less and less relevant every year.
Let's start with the distinction between information snacking and long form reading: More of my time is now spent snacking, reading short pieces of content. The time I spend snacking has largely shifted from the time I used to read more long form content. My tablet and phone are almost always with me and I find the web as well as services like Flipboard, Zite, Instapaper and Byliner are replacing much of the time I used to spend in books.
I find myself much more attracted to short bursts of content and I doubt I'm alone. Book publishers, on the other hand, are still caught up in making products built for yesterday's container, the 300-page print book. That's fine for the rare storytelling author who can capture your attention for many hours, but let's face it...most authors and their books don't meet that standard.
Publishers are an Inefficient breed, but not in the typical sense. I'm not talking about production or editorial processes. Widespread outsourcing and staff cuts mean publishers are more efficient in these areas than ever before. But what about being efficient from the customer's point of view?
Where does most content consumption happen these days? On the web. Where is the book publisher's content? It's not on the web and it's certainly not exposed to the major search engines. Google is amazingly efficient at enabling content consumption, but the results benefit info snacking, not long-form consumption.
Publishers will shudder at the thought of exposing all their content to the search engines. How about simply taking some baby steps in that direction? Start with the ebook sample. Why are samples always under lock and key via DRM? Publishers need to encourage sample sharing and not lock them down.
How about giving prospective customers even more content than today's samples offer? Instead of 5%, give 10% or 20%. Maybe give that larger chunk only to customers who are willing to provide their contact info on your website. Then you'll have a way to market directly to them. And be sure to expose that additional content to the search engines, btw!
Finally let's talk about something that will give every traditional publisher heartburn: the need to change revenue models. Publishers are tied to yesterday's revenue model in a classic case of The Innovator's Dilemma. I'm talking about the difference between content purchased at today's prices vs. sponsor/ad-based content consumers will pay less, if anything, for.
At some point, even longer form content will be offered via a new model, where the content is fully exposed on the web, searches lead to it, and it's partially or fully subsidized by advertising or sponsorship. That's a model today's publisher is simply not structured for and they simply cannot fathom.
Startups will understand it though, mostly because they'll exploit the opportunity created by incumbents who are desperately trying to protect their outdated model.
Habits are hard to break, especially for book publishers. How else can you explain the industry's insistence on sticking with rigid, tightly synchronized release dates for new publications? It made sense in the old days when print ruled and the big brick-and-mortars dominated retail. But even back then I used to think it was silly to delay a book's release date for months just so we could get a slot in one of those brick-and-mortar promotional campaigns.
Amazon makes this less of an issue and I always appreciated their willingness to allow for drop-in titles, even when those titles required a lot of promotional support. Amazon is able to turn on a dime since they don't have to coordinate a title's roll-out across hundreds of physical stores. Nevertheless, I haven't seen publishers evolve and embrace the new promotional opportunities, and release date options, that are available with ebooks.
Once again, Amazon leads the way. Their recently-launched Kindle First service is brilliant. They're giving customers the opportunity to buy new books on their platform one month before they're available everywhere else. It looks like the big publishers haven't opted into this; perhaps they're finally waking up to the fact that Amazon is eating their lunch.
Kindle First offers the earliest access to these new books and you can buy one each month for $0 with your Amazon Prime membership. That's a free purchase, not a loaner. So Kindle First becomes yet another reason to sign up for Amazon Prime.
Meanwhile, publishers who haven't opted in to Kindle First probably think they're showing Amazon who's boss. Yeah, right. Rather than staying out of the program, publishers should launch something new and exciting of their own.
Publishers, how about making your ebooks available exclusively on your own site 30 days before you release them everywhere else? This, of course, means you've got to have a robust direct ebook channel established on your website. We know that's not the case for most publishers, but hopefully this is another reminder of why they should make a direct ebook sales channel a priority.
Imagine the volume you could drive if your frontlist was available only on your site for the first month. Who says you have to treat retailers equally? Yes, there will be backlash from the big ebook retailers, but let's face it...those retailers want to carry your bestsellers too, so I doubt they'd give you too much grief.
Speaking of which, this model isn't optimal for all books. Titles from unknown authors on nichey topics aren't likely to benefit from it. But what about your bestsellers? What about the titles from your proven authors, the ones with the platforms?
It's not just that you'll keep 100% of the revenue in these direct sales. This is also about building a direct relationship with your readers and being able to market to them in the future. And yes, most publisher websites are not a consumer destination today. But what happens when that website is the exclusive outlet for the first 30 days of each publication? I think consumers will find a reason to go there.
On a related note, I'd like to make a plea for every publisher to rethink their ebook samples strategy. Why in the world are these also tied to the book's official release date? Publishers, get your samples out there before the book publishes. What is the benefit to holding the samples till the book's release date? Amazon now lets consumers backorder an ebook before it's released, so point your customers there if you have to. But please don't let me read some review or tweet about a book that's coming out next month and then not give me a way to get access to the sample before the book publishes. I guarantee I'll forget about this book and you'll lose the sale.
Also, why are these samples under lock and key, DRM'd like they contain the country's nuclear launch codes? Here's a thought: Why not make those samples completely DRM-free and actually encourage readers to pass them along? Maybe you should consider putting these exclusively on your site before they go to retailers. It's another way to establish that direct relationship with your readers, and if you remove the DRM element it should be extremely easy to implement.
Last week I wrote about how Kindle Singles are likely to influence the future of ebooks. This week I'd like to share some thoughts on another service for short-form content: Byliner. Unlike Singles, where you purchase titles individually, the Byliner service is an all-you-can-read subscription model.
My favorite Byliner feature is the fact that I can follow specific authors. I thoroughly enjoyed Mary Roach's Stiff: The Curious Life of Human Cadavers. I know I need to read her other books but time just doesn't permit right now. Thanks to Byliner I'm able to discover several short-form works by Mary and read one or two of them in a matter of minutes.
This is an important glimpse of the future, btw. I firmly believe that books, magazines, and other print content containers will become far less important in the future. Those vessels were simply a convenient delivery format in the physical world. What we really want though are great stories by authors we love to read. I don't need this content as a "book" or part of a "magazine", regardless of whether it's print or digital. Instead, I'd prefer to pay for a Mary Roach content stream subscription. The same goes for Steve Rushin. Byliner offers all their authors in the same broad subscription but in the not too distant future I'm convinced we'll have access to more granular subscription options too (e.g., by author, by genre, etc.)
What makes Byliner different from simply surfing the web and reading interesting articles you find? It's all about curation. The authors and articles featured in Byliner are among the best. I have yet to find one that didn't fascinate me. Good luck saying that about most online articles you stumble upon.
Then there's the fact that your favorite authors are discovering and recommending content from other authors. What a terrific solution to the discovery issue everyone in publishing complains about. I'm seeing that recommendations by my favorite authors are much more likely to lead to great reads than recommendations from my Facebook friends. Think about that for a moment. Does your social graph really overlap with your reading interests? Mine certainly doesn't.
With Kindle Singles you're making a (small) financial investment in every piece of content. In Byliner's all-you-can-read model there is no such investment or guilt factor. If I don't like a piece I'll just move on to the next one. It still costs the same amount every month, so I'm inclined to explore even more. (Another discovery plus!)
Byliner articles are even shorter than Kindle Singles, or at least that's the case most of the time. I love it that they even give you a reading time estimate with each Byliner article. That's a much better gauge of whether I really have time to read this piece than telling me the number of pages, especially when the ability to increase/decrease font size makes "page" a hard word to define.
Lastly, Byliner has a wonderful iPad app that lets me download and save articles for offline reading. That's a great feature for those times when you're out of wifi range. I know I've always got a great selection of short-form content ready to read, regardless of where I am. Given how short these pieces are though, I wish they had an option to automatically download articles from my favorite authors, topics I always read, etc.
If you haven't given Byliner a test drive you need to do so now. It's both a great content service as well as a leading indicator for how publishing and content consumption is rapidly evolving.
"Compelling ideas expressed at their natural length." That's Amazon's tagline for their popular Kindle Singles program. And while Singles hasn't exactly been a major industry disruptor I believe it lays the foundation for some of the bigger, bolder initiatives Amazon is planning for the future. I also believe it's a model that will become much more common over time.
The formula looks like this:
Judging by the ongoing out-of-stock situations it's safe to say demand for Google's Chromecast device remains strong. One of my local Best Buy stores finally had them in stock so I grabbed one. My one-word review: Meh. I don't regret buying Chromecast but I can't find a killer app for it.
If you're not familiar with Chromecast all you need to know is that it allows you to wirelessly stream content from your computer or mobile device to your TV. It's an indirect method, as the content on your tablet/laptop gets sent to your router and then over to the Chromecast device in your TV. On the surface, that's nice. After all, projecting video from your computer to your living room screen without a bunch of cables is handy. On the other hand, the apps that support Chromecast are limited. Anything in the Chrome browser works but few mobile apps are supported. That means I can stream games from my NHL Gamecenter subscription but I have to do so within the browser, not through the Gamecenter app on my iPad.
I'd love to see Chromecast work with PowerPoint. Most conference rooms have HD TVs but sometimes the right connection dongle isn't handy. It would be great if I could just plug Chromecast into the TV and project the deck wirelessly but that's not an option yet.
YouTube, Hulu and NetFlix all work fine as well, but what's the point? My Samsung LED TV has apps built in to let me watch streaming movies anyway. All I have to do is plug a USB WiFi stick into the TV and I have full web access. Granted, managing it with my TV's remote is a hassle, so Chromecast has that advantage since you control it with your tablet or laptop.
The only use-case I can think of that really lends itself to Chromecast is video-based training. Even though you can obviously do this on one screen or a computer with a second monitor, I see the benefit of having the instructor on a much larger TV, especially if there's a whiteboard or other region to focus on besides the talking head. Learning to code, for example, would really lend itself to the instructor, their source code and whiteboard on your TV and the programming environment on your computer.
I'm also surprised there aren't any great Chromecast hacks yet. If you search for hacks or novel applications you'll be disappointed. Chromecast seems like the type of device that hackers would love to enhance, and you'd think Google would fully support their efforts.
I'll still use my Chromecast, probably a few times a week. I also plan to take it on the road since at some point I'd like to think PowerPoint access will be supported. And since most hotels have complementary WiFi I should be able to watch NHL games at night via my Gamecast subscription on the TV rather than on my smaller computer/tablet screen.
So for $35 Chromecast is a fairly small investment but its limited functionality holds it back from being worth so much more.
TOC is dead but I'm glad to see some elements of it live on. A couple of years ago the TOC team launched the Global Ebook Market Report with Ruediger Wischenbart. Ruediger updated the report once or twice a year and we typically released a major update each October for the Frankfurt Book Fair.
The book fair opens this week and I was delighted to see that Ruediger and his team did yet another thorough update to the report for 2013. You'll find all the various formats of it here.
If you're looking for the latest data on ebook momentum by geographic region you'll find all the details in this update. If you want to read what's happening globally regarding popular formats, piracy and pretty much everything else related to ebooks you'll also find it in this report. The best news though is that the Global Ebook Market Report has always been and continues to be free. No cost, no registration, nada.
Do do yourself a favor, download this report right now and start reading. You won't regret it and you'll quickly become an expert on the global ebook marketplace.
Poll results from USA Today have me scratching my head. According to their numbers, the average American adult who doesn't own a tablet/e-reader reads 11-13 books per year. The range is even higher for owners of tablets/e-readers: 16-21 books per year.
Let's simplify and just say the poll tells us the average American adult reads at least one book per month. Can you honestly say your friends all read a book a month? OK, because you're reading this I know you're in the book publishing industry, so you and your friends are outliers here. Let's talk about the real average American.
Pew released a similar report last year. If you scroll down to the "Book readers" table you'll see numbers in the center column showing mean number of books read. But look at the right column for the median and you'll find a pretty significant drop-off; the median is typically half or less of the mean. And note the table heading says that books are included here if they were "read all or part of the way through." So suddenly all those ebook samples I've downloaded, read two paragraphs of and never went back to, count in my total. Woohoo!
The mean/median difference is largely explained by all those people who read several books every week. So in this case, mean isn't as meaningful as median. But what happens when we exclude all the books that weren't read from cover to cover? How far do the numbers drop then?
As other polls have shown, my friends seem to be more interested in surfing the web and doing something other than reading books on their tablets. So even though they now have an iPad or Android tablet, their book reading habits haven't changed much, certainly not to the degree shown in the USA Today poll.
I also have to believe that if the average American was actually buying at least one book a month we wouldn't see publishers continually downsizing, regardless of whether those books were print or digital.
Finally, what would these numbers look like if we could remove all the editions 50 Shades of Grey? Between that phenomenon, and the fact that most people round up when talking about how many books they read, something tells me these poll results don't reflect reality. I'd rather see how consumers are voting with their wallets, not how smart they're trying to sound to a pollster.
I recently marked the 3-month mark in my new job at Olive Software. It's a terrific place to work, btw, and I couldn't ask for a more interesting opportunity -- we've got a great team, both here in the U.S. as well as in Israel.
I'm still fairly new, of course, but I've been fortunate to learn a lot in a very short period of time. Some of the issues facing our biggest channel, newspapers, are similar to the ones faced in all content industries. Others are a bit more unique to newspapers. I thought I'd take a few minutes to summarize the key challenges I see as well as some of the solutions I believe are required to address them.
For the last several years of my work in the technology book industry I used to say that our customers are getting older...and dying. We weren't catering to the younger audience. That is, of course, also true in the newspaper world. The under-30 crowd grew up with the Internet and largely believes content is and should be freely accessible. Part of the solution here is finding ways to monetize via advertising, which is easier to do in the news world than in the book world. Either way, In both cases though I believe the future leaders will be the ones who figure out how to get the most out of smaller revenue bases. That means the entrenched leaders have even more cutting to do while the startups, who aren't struggling with The Innovator's Dilemma, have plenty of opportunities ahead.
Your local paper probably offers a digital version and it probably looks just like the print edition. That replica version is nice but certainly not the end game in digital news. Related to the demographics item above, replica editions are largely favored by the older crowd and not so much by the younger reader. Most newspapers still rely largely on that older audience to drive the majority of their revenue, so they certainly can't afford to abandon replica. The winners here though will be the ones who figure out they need to offer two digital options: replica and a more dynamic version. The latter needs to have a born digital feel to it, one where 20-somethings don't look at it and say, "that's the product my parents and grandparents read, but it's not for me."
Crowdsourcing isn't the long-term solution here but neither is the newsroom, on-staff writer/editor model. The future leaders in the news content space will leverage something in between. Yes, there will be some staff members but far fewer than ever before. Freelancers will become much more important as the papers continue focusing on reducing their fixed costs. And beware the columnist or other contributor who feels they are the brand. This is true in some cases where the author has established a highly unique style and voice in the market. Those are few and far between though...more rare than previously thought. If you don't believe me, just ask Walt Mossberg and Kara Swisher; they're quickly learning that Dow Jones, at least, feels the AllThingsD brand is much bigger than either of their personal brands.
Speaking of brands, newspapers need to wake up before it's too late and focus on how they can extend their brands. What comes to mind when you think about the world's most popular newspapers? Quality? Trusted source? Politically leaning to the left or right? All of these characteristics have life beyond a print paper or its digital replica. Papers have been so focused trying to save their advertising income and reigniting their subscriber base that they really haven't given enough thought to how they should extend their core brand name before it's value is extinguished forever. These trusted brands need to venture into new channels with their content.
Most papers are struggling to find their identity in the new, digital-first world. Are they focused mostly on local? More on national with a bit of local? What about global coverage? My local paper is going through this problem right now. Their solution seems to be "add more content." I don't think that's the long-term answer. This strikes me as something that's too little, too late. They need to instead focus on extending their brand with new types of products and dominating the market with some unique coverage. Instead they're planning to serve up more syndicated content from USA Today. Again, not exactly an inspired solution for today's challenges.
Like many others in this industry, I'm curious to see what Jeff Bezos does with The Washington Post. As I said earlier, I think you can count on him doing some very innovative things at WaPo. And one thing we know for sure, Bezos always takes the long view on the market, so the industry should brace itself for some very aggressive tactics, even if it means losing a bunch of money in the short term. I liken it to the same impact USA Today had when it launched in the early 1980's, only more cut-throat. :-) Bezos has a long history of making markets more efficient and hastening the demise of the competition. Look for more of that as he disrupts yet another industry.
Despite what some people think, content is not a commodity where the more you have of it the better off you are. In fact, the opposite is often the case; we're all swimming in content and unable to keep up with the constant flow of new articles, books, etc. So why do some publishers still think more is better?
I'm reminded of this flawed "more is better" logic by my local paper, The Indianapolis Star. The Star has spent the last week or so hyping the fact that their daily edition will start getting larger next month. More local coverage. More state coverage. More sports coverage. More of just about everything. Pretty much every newspaper has been shrinking over the years, so on the surface this might sound like good news. I often joke that Tuesday's and Wednesday's editions of the Star are nothing more than brochures, so you'd think I'd be on board with this move.
While I do believe this strategy might help slow the short-term drop in circulation, it's definitely not a long-term solution. All they're really playing to is the die-hard print newspaper fan, probably in the older demographic and getting older every year. Meanwhile, the younger demographic, most of which have never subscribed to a paper, won't find anything appealing here.
I don't want more content from my local newspaper. I want more better targeted content from them. I want content that fits my particular interests, not just more content in general.
This is why I, like millions and millions of others, tend to spend more time getting my news from sources like Google News, Flipboard, Pulse, Zite, et al, than I do from my local paper. These services let us tailor our content feed, so even though they start with infinitely more content than the local paper, the results are customized to match our needs and interests.
Yes, local papers allow customization like this, but they're starting with a base of content that's a fraction of the size served up via Flipboard, Pulse, etc.
Publishers, rather than trying to wow us with the breadth and depth of your content, please give more thought to the services you're really competing with (e.g., Google, Zite, etc.) and what level of personalization you'll offer your customers.
Imagine Google's search results with no sophisticated algorithm behind them. Rather, when you type in your search phrase and press Enter, Google simply shows you a list of websites where that phrase can be found. No indication of relevance. No ranking mechanism. It's just a list of the sites that contain the phrase. Maybe the list is arranged in chronological order, where the older sites containing your phrase appear first.
Pretty worthless, right? So why do we accept that as our search solution in every major ebook reader app? Open an ebook, search for a phrase and the results merely list each occurrence of it, arranged from page 1 through the end of the book.
You might think a sophisticated search would only be useful for specialty products like textbooks and other reference materials. I disagree. I could see something like this being quite useful in novels, for example. Let's say you forgot who a minor character is and you'd like to quickly learn more about them. Sure, you could do a simple text search and see where the character first appears, but wouldn't you prefer results that provide some context? Maybe it's really the fourth occurrence of that character's name where you'll get the real details on their role in the story. That wouldn't be easy to figure out with today's ebook search capabilities.
And yes, I'm aware of at least two specialty ebook platforms that offer better search results. That's because they have editors who spend hours and hours parsing the content to build this feature manually. I have one word for them: scale. Their solution simply doesn't scale...more on that in a moment.
Now back to the scale problem... The key here is to enable these richer search results without requiring a bunch of manual labor. Book publishers are trying to reduce staff and cut costs, not add more of either. So the only way to deliver this service is through a software solution where the content is analyzed and a rich, context-sensitive index is created.
Does that sound far-fetched to you? I don't think so, In fact, I believe we'll see a service like this very soon. I know I'll get a lot of use out of it and I bet you will too.
The publishing industry has been buzzing lately about Amazon's latest announcement, Kindle MatchBook. MatchBook, which launches in October, offers consumers extremely low-priced ebook version of print books they've already bought (or will buy).
My first reaction to the announcement was, "great for consumers, not so much for publishers and authors." MatchBook is consistent with Amazon's overarching goal of offering the world's lowest prices. So as a reader I'm thrilled about MatchBook, but I have to admit it's yet another reason why I'm kind of happy to no longer be in the book publishing business.
MatchBook will only help erode the perceived value of ebooks. When the original Kindle launched in 2007 Amazon convinced us that ebooks should be $9.99 or less. MatchBook will now cause consumers to look at ebooks as a $2.99 (or less) throw-in or afterthought when you buy the print book. Publishers are already struggling to grow their ebook revenue fast enough to make up for their ongoing print revenue decline. What happens when there's even more downward price pressure like this, even as a bundle?
Publishers have had plenty of opportunities to take more control over their destiny up to now though. What I'm talking about is the need to create direct channels to their customers. Since most don't bother with that, they've simply handed the keys to the kingdom over to Amazon and they have no one to blame but themselves if they're unhappy with a program like MatchBook.
Btw, reports I've read indicate publishers need to opt in to MatchBook. So if a publisher doesn't like the concept, they can sit on the sidelines. But even if they don't participate, there's no stopping the perceived value Amazon is creating around ebooks with this program.
The MatchBox offer doesn't surprise me and neither does a lack of broad publisher participation. What I am surprised about though is that Amazon is actually giving publishers the option to participate in MatchBook.
Publishers never had the option to stop Amazon from selling ebooks at a loss for $9.99. (The agency model was supposed to address that, but the DOJ believes Apple's tiny ebook market share has penalized consumers, so the agency model has officially been neutered.) Since Amazon is free to assign whatever price they deem appropriate on an ebook, why can't they do the same for the price on ebooks that are bundled with print books?
Is Jeff Bezos turning soft? I'm stunned that Amazon didn't just march forward and say, "MatchBook lets you buy the ebook version of any print book you've bought from Amazon, all for $2.99 or less." They'd pay the publisher their portion of the full digital list price, which means every bundle sale would be made at a loss.
Here's what I think will happen: Amazon initially gave publishers the option to participate in MatchBook. Most didn't. Amazon moves forward with the MatchBook launch next month and they'll closely monitor the numbers. If the results shows Amazon could open this up to all ebooks without adding significantly to the company's overall quarterly financial loss, they'll announce a much broader version of MatchBook down the road, with our without publisher approval.
I first wrote about Zite a couple of years ago when I did this interview with their CEO, Mark Johnson. If you're not familiar with Zite, it's a news-gathering and reading app that learns what you like and feeds you additional related content. (More on that last point in a moment.) Within a year of that interview Flipboard made it to Android, my preferred platform, and I started using Zite less and less. Why?
The Android version of Zite always felt like an afterthought. The UI was clunky at best and didn't offer the sizzle of Flipboard's UI. Yes, I admit it...I was won over by the shiny object that is Flipboard. I even went to the trouble of creating my own Flipboard magazine.
About a week ago I noticed Zite had an upgrade to their Android app and I thought I'd take another look at it. I'm glad I did.
Zite finally got things right with this latest Android version. It still doesn't have the fit and finish of Flipboard but it's lightyears ahead of the prior version.
More importantly, Zite's key feature that attracted me in the first place still makes it a unique product: Zite does a nice job finding new content I'm interested in. Although Zite's algorithm could easily lead to life in an echo chamber, I've never found that to be the case. I originally configured Zite with my favorite topics and I'm often presented with new articles in those areas from people I never would have discovered without Zite.
So if you haven't explored Zite up to now, or if you were like me and lost interest for a bit, now is the time to revisit this terrific app.
My oldest kids, 26 and 24, don’t subscribe to any print newspapers or magazines and I’ll bet they never will. They also don’t pay for any digital newspaper/magazine subscriptions. There's probably no hope for either of them optining in to one of these anytime soon either.
Most, and in some cases, all of the daily news articles are on the paper’s site anyway, so what exactly are you paying for with a digital subscription? The container?
This recent headline says it all: More Print News Subscribers Plan To Cancel Subs. The age group with the largest likely drop-off? 15-34 year-olds.
Then we have the related news last week that the San Francisco Chronicle is dropping their website paywall. So if that website content can be free, why not make the digital replica edition free as well? Think about how much this would would boost circulation and generate significantly more ad impressions and revenue. Will this result in cannibalization where some print subscribers switch to a free digital replica subscription? Sure, but most of those customers have already left and are getting their news free on the paper’s website or somewhere else. So IMHO there’s little left to lose with a free digital replica strategy.
Ironically, while newspapers are worried about digital cannibalizing print, more and more customers are abandoning print for free access on the paper's website. So why do papers think they can charge for their digital replica editions?
I realize papers make far less on digital ads than print. But as print continues to decline they need a new strategy, and one that should include some radical digital initiatives. Btw, the digital replica edition typically represents a much deeper engagement vs., say, your average web page. So are we undervaluing those digital replica edition impressions? I think so.
The value of these newspaper brands is eroding every year. Let’s face it: Their core customer base is getting older…and dying. So what should they do? For starters, quit thinking it makes sense to charge for digital replica when you're providing free access to to that same content on your website.
As the revenue model shifts so too must the newspaper's expense base. Most newspapers have already gone through major staff reductions, so they’re already on their way to a leaner, meaner model. I figure there will have to be even more adjustments, changing from a high fixed-cost base to more of a variable-cost one (think freelance and crowdsourcing). Nobody wants to hear that, but it’s a reality for survival.
If they don’t take action like this, what does the newspaper market look like in 5-10 years? They’ll still be clinging to the dwindling number of baby boomers who feel compelled to read the print edition. Meanwhile, the vast majority of the population will have moved on, satisfying their new craving with free, ad-supported alternatives.
You can bet Mr. Bezos and his new paper, The Washington Post, will be doing plenty of bold, free content experiments. I hope other papers will do the same.
Last week we saw the surprising announcement that Jeff Bezos is buying the Washington Post. Bezos, of course, led the disruption in the book publishing industry and everyone is wondering what he'll do to disrupt newspapers.
Some might wonder how he could disrupt an entire industry by only owning one paper. Make no mistake about this. The changes he'll implement at the Post will force plenty of papers to evole or die. More on that in a moment...
First I'd like to review the letter Bezos sent Post employees announcing the purchase. I thought it would be fun to look at it as a word cloud. Word clouds illustrate which terms are used most in a document. I put the Bezos letter through a word cloud tool and got the image you see in the top left of this article (click on it to enlarge).
Other than "Post", two of the more popular words in the letter are "change" and "courage". If you look at the context of these words in the letter they seem pretty harmless. And while I'm not suggesting there's a hidden meaning or that we need to read between the lines, I'm convinced the team at the Post, as well as those at other newspapers, will need to courageously face the change that's about to come.
Yes, the newspaper industry has been going through change for many years now. And rather than injecting himself in the distribution chain like he did to disrupt books, this time Bezos is instead starting with the content and a well-known, highly respected brand to drive change.
So as a former publisher who endured all the Bezos/Amazon disruption on the book world, I thought I'd look through that lens to predict a few of the more significant changes I believe Bezos will bring to newspapers:
Yep, that's one of the things that makes Amazon so special. Sign up for Prime and get free delivery, free access to the Kindle Owner's Lending Library, etc. For every dollar of print advertising a newspaper loses today they're only gaining pennies of digital ad income tomorrow. That causes many of them to be cautious about cannibalizing print income while they're considering digital initiatives. I'm pretty sure that's one of the fundamental concepts in Clay Christensen's The Innovator's Dilemma.
Even though Bezos spent a fortune on the Post, it's really only pocket change to him and I guarantee you he's willing to give up short-term print income for a bigger chunk of future digital income. Wall Street rewards Amazon for their "short-term loss, long-term gain" approach and Bezos has deep enough pockets to apply the same thinking here.
That means digital Post subscriptions will ultimately become free or an element of a broader package (see Amazon Prime). Today's newspapers almost seem to look at e-subscriptions as nothing more than an annoyance they have to offer to play in the digital game. Bezos will fully embrace the digital subscription and bring it to a much, much larger audience.
One way of expanding that audience is to make the Post an integral part of the Kindle Fire user experience. If Bezos doesn't make the digital edition of the Post freely available to everyone immediately, look for it to become free for every Kindle Fire owner. (Like B&N needs yet another disadvantage in the digital content/device space...)
This also lends itself to much more than just a free replica edition on your tablet. The Post could easily become the underlying preferred content pipe for all news delivered on the Fire platform. That would huge, representing impression numbers newspapers could only dream about today.
In order to implement the vision I've described above, I think the Post must offer even broader, deeper national and global coverage. Yes, they already offer some of that today but it will have to grow significantly. And let's not forget about the most important segment: local coverage. I look for Bezos to either build the infrastructure or partner with local news providers to establish a local news element that's second to none. That's the only way Fire owners will warm up to the services I'm describing; just putting the Post as it exists today on every Fire doesn't really move the needle. These content extensions are a must.
Lastly, why limit this to short-form newspaper articles? We're starting to see more papers extend their brands into longer content as both new original works as well as compilations of articles from the past. Bezos knows ebooks, so it's a no-brainer that he'll get the Post team focused on extending their brand to address these other opportunities. And it certainly won't hurt when those titles get most favored nation status for their prominent placement and treatment on Amazon.
I remember when USA Today launched in the early 1980's. Back then the industry largely scoffed at the notion of a full color paper and how it dumbed-down the news. It turns out the nation was hungry for that dumbed-down content and a star was born.
I think Bezos has an opportunity to create an even more disruptive force with the Post than USA Today was more than 30 years ago. And instead of being a book publisher who was forced to deal with the changes Amazon dictated, I'm now excited about the opportunity to help newspapers learn from what Bezos does with the Post, do some disrupting of our own, and keep these papers from future irrelevance. In order to do so, however, we need newspaper leaders who aren't afraid of disrupting their own existing business and accepting short-term losses for longer-term gains.
What happens when the all-you-can-read content subscription model gains momentum? I'm talking about services like Next Issue, where I pay $15/month for access to 90+ magazines. If my experience is any indication I think we'll see some very interesting trends develop from this model.
I've been a Next Issue subscriber for several months now. When I started I still had a handful of active print subscriptions. Over the past few months though I've started letting every one of those lapse. Some of these magazines are in Next Issue, but, more importantly, a couple are not. IOW, I'm starting to let the service dictate which magazines I read, regardless of whether they're part of the all-you-can-read subscription. Why?
First of all, $15/month isn't exactly cheap. If I had the time (and interest) to read all the 90+ magazines I'd feel I'm getting a deal. But since I only care about 6-8 of them it's not that much of a bargain for me. That's $180/year for about seven magazines, or roughly $25 each. I could subscribe to several of those in print for much less than $25/year. The psychological impact is important here as every month I'm wondering if I'm getting my money's worth from Next Issue. Just as some people binge at the all-you-can-eat buffet, I find I'm trying to binge at the all-you-can-read magazine trough.
Next, there are only so many hours in a day. At first I seemed to balance my Next Issue reading time with my non-Next Issue magazine reading time. Now that a few more magazines I like have been added to Next Issue though, all of my magazine reading time is now dedicated to Next Issue.
It's gotten to the point where I don't really even care about a magazine if it's not part of this subscription service. So for me, Next Issue itself has become more powerful than the magazine brands Next Issue carries. Just as Comcast has long determined which TV networks I can watch, Next Issue is now dictating which magazines I read.
If I'm a typical consumer that means Next Issue has some pretty powerful leverage with the magazines that aren't yet part of their program. After all, those magazines can get some portion of that $15/month from me if they join Next Issue, or they can get 100% of nothing from me if they stay on the sidelines.
A service like Next Issue has the potential to become the primary pipe for magazine content consumption. It's not exclusive, of course, but I haven't found any other service like it. It's certainly caused a dramatic shift in my magazine subscription and reading patterns.
Everyone is gaga over Chromecast, the new device from Google that connects your mobile device to your TV. I agree that it's cool but I think today's excitement is overlooking tomorrow's possibilities.
Yes, Chromecast lets you wirelessly stream video from your phone or tablet onto your TV. By doing so, it also turns your mobile device into your TV's remote control. The most interesting aspect of Chromecast though, IMHO, is the fact that it opens the door for more interctive, engaging activities on the bigger screen.
Today we generally sit back and watch as our TV entertains us through network broadcasts, movies, DVR playbacks and services like Netflix. But it's definitely a lean-back model. Our smaller devices are where more of the lean-forward activities take place, such as browsing the web, reading articles and creating content. There's been talk for years now about a hybrid model on the big screen, where both lean-forward and lean-back activities will take place but we haven't seen that materialize yet.
Take a look at this side-by-side feature comparison of Google's Chromecast to Apple's Airplay. What's the most important line on that comparison table? Some would argue the battle is won by whoever supports the most third-party apps (e.g., Netflix, Hulu, etc.) If that's true, Apple has the advantage.
I think that's short-term thinking. To me, the long-term winner is determined by the "third-party API" element. As you can see, both of these services support third-party APIs. The difference is that Apple's is all about their closed ecosystem, so forget about using Android devices, for example. Google's, on the other hand, supports all popular platforms, including Apple devices. Apple still has a phenomenal platform and they sell a lot of devices. But at $35 Google Chromecast is pretty much irresistible.
So what happens when developers see huge sales of Chromecast devices? They become more interested in writing apps for the platform. In fact, they start coming up with apps that leverage the platform in ways Google probably never imagined, and that's where the real game-changing ideas are hatched.
Here are the critical questions you need to ask: How can your content be enhanced on the big screen? What features, services and elements could be added to your products that don't make sense on the smaller screen?
Chromecast is red hot and currently on backorder. I'm not convinced it, or Google's platform, is predestined to be the ultimate winner. Someone could easily come along with an even better mousetrap.
What Chromecast is teaching us though, is that we need to put aside all our biases and open our minds to imagining (and inventing!) all the new ways content will be consumed in the future.
That seems like a contradiction, doesn't it? After all, newspapers are the ones that have been disrupted the past several years. True, but Matt Sokoloff recently wrote a very interesting article suggesting that newspapers are about to disrupt local TV. Yeah, I laughed too when I first considered it. But do yourself a favor and read Sokoloff's piece. It's one of the insightful pieces on the newspaper that I've read.
He paints a picture of local TV being fat and happy while the newspapers are desperate for survival. And, true to The Innovator's Dilemma, which Sokoloff references in the article, the TV industry is likely to be caught completely off-guard by an unexpected competitor.
The disrupted becomes the disruptor. How cool is that?