How Amazon Underground will affect content pricing and business models

Screen Shot 2015-08-31 at 9.29.05 AMAs interesting as the all-you-can read models from Next Issue, Oyster Books and Scribd are, I believe Amazon just introduced a new model that’s likely to be much more disruptive in the long run. I’m talking about Amazon Underground, where paid apps go to be free.

If you haven’t heard about Underground it’s a collection of paid Android apps that are now available free if you download them directly from Amazon. The initial collection is mostly games but it will undoubtedly grow over time. It’s also important to note that the catalog includes paid apps as well as those with in-app purchases (e.g., additional levels for a game); those in-app options also become free in the Underground world.

App developers get paid for engagement in the Underground model. So if their app gets downloaded but never used they earn nothing. On the other hand, if their app is wildly successful and used extensively, Underground represents a whole new developer revenue stream.

Any app developer will tell you there’s an enormous difference between the number of downloads of a 99-cent app and that same app as a freebie. Amazon gets that and may have cracked the code in leveraging free while also driving revenue.

It all has to do with advertising revenue. You may not see much (any?) advertising in some of these apps today. For example, I haven’t seen a single ad in a casino game and Office app tool I downloaded. That will undoubtedly change in the future. After all, in order to keep investors happy, Amazon’s losses today always need to point to profits and other benefits in the future.

What are those benefits?

First of all, it’s an interesting way to co-opt the Google Play store. Remember, you can only get these Underground apps direct from Amazon, not Google. I’ve got to believe Amazon’s own app store isn’t exactly thriving, so this is a great way to give it a gentle boost.

Second, all those Underground apps you download ultimately pull you deeper and deeper into the Amazon walled garden. This too might not be apparent today but it will become crystal clear when those ads start popping up. And don’t forget that you’re opting into a model where all your app usage is closely tracked. After all, that’s how Amazon determines how much to pay developers. If you’re a privacy freak, Underground is not for you.

Why should publishers care about Amazon Underground? It sounds like an interesting model for game developers but not all that applicable for books, newspapers and magazines, right?

Wrong.

I’ve been talking about advertising in books for quite awhile now and I think Underground represents a viable, incremental business model for this vision. It’s obviously not the best option for some content but I’m convinced enough publishers and authors will embrace it, so much so, in fact, that naysayers will even have to consider it.

Let’s be clear about this though: I’m not suggesting an ad-based model will generate the same amount of per-unit revenue as the paid edition. That’s simply not going to happen. If a publisher is earning $5 per copy sold of an ebook today they might only earn ten or twenty cents (at best) from each download of the Underground version.

So why would any publisher ever agree to this?

It’s all about extending reach. Sure, nobody wants to trade a $5 sale for one netting ten cents. But what about all those readers who aren’t going to buy the book, newspaper or magazine to begin with? You’re netting zero from them today and possibly ten cents from each of them in the future. All that, with no cost of goods, btw.

Here’s another interesting use-case: Underground becomes a better sampling solution. Once the service is loaded with a bunch of ebooks, readers will be able to download the entire catalog without paying a penny. Amazon won’t be on the hook for any payment till pages are read. Consumers who like what they see but get frustrated with all the ads will always have the option to go back and actually pay for the original, ad-free edition. The rest of us will simply deal with the ads and enjoy the free ride.

That sounds like a win-win model for quite a few books, newspapers and magazines.


It’s time to radically improve the content sampling experience

Bulb-305162_640The goal of the content sample is to acquire new customers, right? So why are publishers settling for sample content models that are outdated and largely ineffective?

Look at ebooks, for instance. Publishers mostly rely on retailers for discovery and distribution, just like how they sell the full ebook. To make matters worse, most of these samples are under lock and key inside each retailer’s walled garden. What if you want to send your friend the great sample you just read? Even though publishers should fully embrace and encourage readers to pass samples around it’s next to impossible in today’s model.

Newspapers and magazines aren’t much different. Yes, they tend to offer some number of free articles on their websites. They even offer email campaigns where the links to these articles automatically appear in your inbox every day or month. One of the benefits of the old newspaper and magazine format is the original container though. Even though containers are disappearing over time there’s still a benefit to having the material presented in a curated manner as envisioned by the editor. So why not make samples available in that format as well as the website version? Put it in an app and make it portable, so prospective customers simply download and go. And don’t forget to include the ads; after all, samples can also represent another revenue stream. 

Speaking of containers, why aren’t more publishers doing cross-container sampling? My local newspaper knows my reading habits. I use their mobile app to stay up-to-date with local news while I’m on the road. So why aren’t they using that information to offer me samples of books on those topics I tend to read most often? Book publishers would love this opportunity and I’m sure an affiliate deal could be cut with the newspapers so everyone enjoys a portion of the resulting revenue stream when I purchase an ebook through this sampling model. It’s also a way for the newspaper publisher to add some value and show me they’re really paying attention to my interests.

Next, how about making these cross-container samples bigger and therefore more valuable than the ones I can get elsewhere?  Again, it’s a way of adding value to existing subscriptions or prior purchases.

Lastly, once and for all, publishers, please start encouraging a frictionless sharing model with your samples. Make it super easy for me to email the sample to a friend. All my friends don’t use the same ebook platform I use. So if I’m enthusiastic about a new sample I just read, make it easy for me to share all the popular formats with my friends.  And please, please, please…remove DRM from samples. You want these assets to become a viral sensation, so it’s time to remove all the obstacles that prevent this from happening. 


How content containers can dramatically affect user experience

Library-488678_640I’m a big believer in the notion that content containers are slowly going away in the digital world. Those things we think of in the physical world as books, newspapers and magazines are being redefined digitally. It’s a slow evolution but one that is definitely taking place.

In the years ahead we’ll see more blurred lines here. One format will bleed into others and the edges around them will become less rigid. We’ll also encounter new ways of discovering and consuming content. For example, maybe you won’t have to actually buy an “ebook” to obtain full access to its contents.

The lenses through which we read content are going to change dramatically in the future as well. Wikiwand is a good example of this. It’s described as “Wikipedia Reimagined” and “a beautiful new interface to the world’s knowledge.” In short, it’s a Chrome plug-in that completely changes your Wikipedia experience.

Over the years the Wikipedia has started to look rather dated, almost as quaint as the old print encyclopedias it replaced. Compare a typical Wikipedia page to a more dynamic page from The Guardian or ESPN, for example, and you’ll see what I mean. Both The Guardian and ESPN are rendering the same type of content they presented 10 years ago but with a much more modern user experience. It sounds superficial but sometimes that’s all it takes to make content more engaging. 

Wikiwand is simply rearranging the objects on a Wikipedia page and presenting them in a more attractive and logical manner. I’ve always wondered why the table of contents for a complex Wikipedia page is buried below the introduction. Take a look at the World War II Wikipedia page, for example. You won’t see the outline for that page till you scroll down a bit and once you scroll further it’s no longer on the screen.

Now look at the same page in Wikiwand. The outline for the page is conveniently placed in a panel on the left. And notice that it always remains on the screen no matter how far you scroll down the main page.

Search is another area where Wikiwand offers a superior experience to the original Wikipedia. If you type in a search phrase in Wikipedia you’ll see a dynamic list of potential matches. It’s a user experience that’s been around for quite a few years now.

Type the same search phrase in Wikiwand and that dynamic list of potential matches comes to life. You can hover over any of them and a small pop-up window is displayed featuring a quick summary of that particular page. All of this happens without leaving the original page where your search began.

I’m just scratching the Wikiwand surface. Install the plug-in, try it out and you too will quickly discover this is a much better Wikipedia content experience.

As I’ve said before, we’re stuck in a “print under glass” era where publishers are taking the easy way out by offering quick-and-dirty digital editions that look just like the print format. We spend all our time consuming dumb content on smart devices.

I realize the cost of creating a true “born digital” approach for most content is too expensive and doesn’t offer an attractive ROI. At the same time, I believe innovative approaches like Wikiwand, where the same content is presented in a new and more engaging manner, can inspire new thinking and help publishers take baby steps beyond the print under glass stage where the industry is currently stuck.


Are content curators becoming more important than content creators?

Man-814697_640I’m sure most of you bristle at the thought of curators being more valuable than creators. After all, the former have no job without the latter. I agree, but it’s not as if the content creation population is declining. In fact, that number only increases every month, and that’s what’s driving up the value of curation.

Regardless of your preferences and interests there’s simply too much content to read. Whether it’s books, magazines, newspapers, blogs, websites, newsletters, etc., every year it becomes more difficult to keep up. Faced with this steady firehose stream of content, we can all use some help determining which elements are worth reading and which are a waste of time.

Separating the good from the bad is, of course, where curation comes into the mix. My favorite magazine, The Week, shows just how powerful and useful curation can be: Every week their editors sift through the latest news, presenting both sides of every story and saving readers countless hours with their summary coverage. Flipboard is another example of a platform that leverages curation. At first Flipboard curated the content and then they expanded their platform so now anyone can create a Flipboard magazine. Here’s mine, for example.

Despite its success, Flipboard illustrates the fact that curation still has a long way to go in its evolution. I say that because the signal-to-noise ratio of Flipboard and Flipboard magazines is getting worse. Every week I find fewer new, interesting Flipboard stories to read and reflip for others to discover.

So where will this valuable curation and consumption take place in the future? Today it’s spread across the web but I’d rather have it all united in one convenient stream.

The Evernote platform has the potential to move from simple note taking to becoming a more powerful content curation, sharing and consumption service. I’ve stopped using Instapaper because it’s so easy to clip, annotate and save web pages into Evernote. I’m also clipping magazine pages from my Next Issue subscription and pouring those into Evernote. In short, Evernote makes it easy and convenient to curate content from a variety of sources and splice them all together. 

Here’s the thorny question that will probably need to be answered soon: At some point, does a service like Evernote offer an option to buy access to the curation of others? In other words, can I charge you for access to my curated Evernote collections, including all that content I have no right to redistribute?

It’s yet another example of The Innovator’s Dilemma: Traditional publishers will aggressively fight to prevent it while forward-thinking ones find a way to participate in the revenue stream it represents. And this revenue stream, by the way, will be one where the curators are highly valued and, in some cases, become the key brand.


3 content pricing models from the future

Euro-447214_1280The year is 2020 and I’m about to make a digital content purchase. It’s amazing how much the industry has evolved in the past five years. For example, pricing is no longer a one-size-fits-all, take-it-or-leave-it component. I now have multiple pricing models to choose from: 

Social bulk discounts – That digital newspaper subscription I’m considering offers a 50% discount if I can get at least 30 of my social network friends to subscribe as well. Yes, the Groupon model is still alive but with a twist. In order to take advantage of the deal I first need to rally commitments from my friends. If successful, all the participants are also committing to broadcast their purchase via Facebook, Twitter or whatever other social network they opted in with.

Advertising-subsidies – It finally happened and publishing purists are still complaining about it. Meanwhile, the rest of us are thrilled to choose from two different options and price-points when we buy ebooks. Those who prefer the traditional ad-free approach pay full price while others pay less and are presented with ads as they read the book. Even deeper discounts are offered to consumers who agree to share their name and email address with sponsors and advertisers. I’ve completely embraced the ad-subsidized approach and find the same as reading a magazine or newspaper.

Clubs – Ever wonder what happened to the old record and book clubs of yesteryear? They’re back in the digital world. I get to choose from 3 deeply discounted ebooks to open my account and then I commit to paying full price for at least 10 additional ebooks over the next 12 months. If I fall short of that commitment my credit card gets hit with a penalty charge at the end of the term, so better to just buy all the books I want rather than pay a fine with nothing to show for it.

I hope you agree that tomorrow’s pricing models are terrific for consumers. The data and buying commitments ought to be good for publishers and retailers too, right?

You probably quickly surmised that Amazon isn’t a fan of any of these, mostly because they want to own all the data and sell it to publishers. That’s OK though because all the other retailers recognized the benefits and now offer all three models. Publishers are also using them in their direct-to-consumer efforts on their websites. As a result, the retailer playing field has been leveled a bit, benefiting both consumers and publishers.

Rest assured, the future is bright (but the Cubs still haven’t managed to win a World Series).


Peer-to-peer content distribution

Human-668298_1280The smartwatch movement inspired me recently, which is surprising because I haven’t worn a watch since I started carrying a smartphone many years ago. I’m about as far as you can get from being a fashionista and I liken a watch to other obsolete single-use devices like the GPS. I doubt I’ll buy one anytime soon but I believe the device synchronization model used by smartwatches lends itself to content distribution as well.

You’re probably aware of how most smartwatches get paired with your smartphone. Although they don’t have all the capabilities of a smartphone, things like text messages and phone calls can be redirected from your phone to your watch, thanks in large part to Bluetooth technology. Your phone communicates with your watch the same way your phone connects with a wireless headset or desktop Bluetooth speaker, for example.

Let’s fast-forward to the day when we’ve all become peer-to-peer content distributors. Rather than relying on centrally-managed and hosted sites and services that handle everything from reviews to downloads, this peer-to-peer model means we’re doing all that for each other using Bluetooth or some other simple networking protocols. For example, your phone or computer can easily be turned into a wifi server, allowing you to connect multiple devices to it; that's a capability that exists today and I'm suggesting it could be extended for new uses in the future.

The Kindle introduced a whole new level of reading privacy. Once upon a time on a crowded bus you could see the cover of the book being read by the person across the aisle. Now we’re all masking our reading habits with tablets and phones. No, I’m not suggesting we embrace an overly intrusive model that has privacy advocates screaming in the streets. Rather, I believe a peer-to-peer model could be used to improve discovery and consumption at the hyperlocal level.

Think of the hundreds of riders on a commuter train each morning. Maybe they’re traveling from the northern suburbs into Manhattan. Some of them are neighbors. Many of them are businesspeople. All of them probably follow and read some type of news. Instead of just knowing the top global trends on Google, wouldn’t it be interesting to know what news stories your fellow commuters are reading?

The same concept can be applied to passengers on a plane or even homeowners in a neighborhood. Just as NextDoor.com has disrupted Angie’s List and brought communication and recommendations to the local level, I suggest a peer-to-peer model could do the same for content.

The peer-to-peer aspect really shines when you consider how the content gets from my device to yours. That news story I just read on TheGuardian.com still lives in my browser’s cache. If enough of my fellow commuters read the same article, it floats to the top of the popular news list for our little commuter community. You click the link to it in our peer-to-peer content app and the article is pulled from my cache to your device.

In short, we’re distributing content to each other, without having to go up and down, to and from a central server. Wouldn’t this be terrific on a 4-hour flight with no wifi? Each of our devices acts as a mini-server, hosting content for everyone else.

Publishers would freak out over this model, at least initially. They’ll no longer control distribution and it will create holes in their analytics. I’m sure most, if not all, publishers have something buried in their terms and conditions preventing this sort of thing, but those who want to embrace broader distribution and consumption will eventually warm up to it.

Btw, the model isn’t limited to web pages. Think about the benefits this offers the book publishing sector. What if you could see a list of the popular ebooks in your neighborhood or among your fellow commuters? And what if you could pull a sample of one of those popular titles from someone else’s device, again, a particularly useful solution when you’re outside wifi and cellular range? If you decide you like that sample and you end up buying the ebook your peer-to-peer commuter friend gets credit for the sale with an affiliate cut of the resulting transaction.

We place way too much emphasis on the ability to measure global trends. You see it every day on Google, Twitter, etc. While we all care about these global trends, we’re also keenly interested in local and hyper-local trends. This peer-to-peer model addresses that point while also providing some relief for data plan limits and spotty wifi coverage.


One day content will enrich itself

You’ve probably heard me say that we live in a print-under-glass world, one where we’re consuming dumb content on smart devices.­­ It’s true simply because, as Michael Bhaskar of Canelo Publishing stated it at BEA, “publishers treat ebooks as a secondary priority.”

It’s far too easy to quickly convert the print edition to a static e-edition and drive some incremental revenue. Meanwhile, more and more publishers are starting to report flattening ebook sales.

I believe part of the problem is due to the fact that many consumers who aren’t already buying ebooks are holding off because they’re satisfied with print and see no significant benefit of switching to e. The Bookseller recently reported that millennials are “least likely to buy ebooks.” We’re talking about a born-digital generation, one that has come to expect rich, immersive experiences in everything digital. It’s no wonder why they haven’t warmed up to today’s ebook experience.

Publishers and authors sometimes balk at the notion of creating anything beyond the static ebook. They question the ROI as well as the time and effort required. That’s a reasonable response, particularly given the various failed experiments with native apps and other digital platforms. Plus, some ebooks are perfect just the way they are; readers don’t want or need them to incorporate extra digital bells and whistles.

But there are plenty of other books and entire genres that would dramatically benefit from a deeper digital experience. Think reference and how-to content. Videos, photo galleries and any one of the various web widgets could add significant value.

So what’s a publisher to do when it’s hard enough just getting the manuscript from the author?

I think it’s reasonable to expect that in the next few years we’ll see content that self-enriches. The application or reading platform will handle the details and little, if any, human curator intervention will be required.

While it’s true that auto-enrichment might never match the quality of human enrichment, the former will be a huge step in the right direction, hopefully priming the pump for more of the latter to eventually take place.  


“What is code?” illustrates rich content potential

The painful reality is that we still live in a print-under-glass world, struggling to produce content that leverages our powerful phones and tablets. I was explaining this to a publisher recently and the phrase “escape velocity” came to mind.

In simple terms, escape velocity is what’s required for an object to break free from another object’s gravitational pull. For example, a rocket being launched from earth or, in this case, a publisher trying to create content that’s more deeply engaging than simply putting the print edition on a digital screen. In the latter case, everything from significant print revenues to industry indifference represent the gravitational pull that needs to be escaped.

The latest example proving we’re still in the print-under-glass era is a terrific Businessweek article called What is code?  The fact that rich and engaging pieces like this draw so much attention and are so few and far between proves we’re still only in the early innings of digital content innovation and evolution.

If you haven’t read the article I highly recommend you take the time and carefully go through it. If you’re not a programmer you’ll learn a lot. But even if you’re a coding master you’ll still learn a thing or two, including how content will eventually take baby steps away from today’s print-under-glass approach.

Here are the most takeaways I got from this Businessweek article: 

  • Measuring visits and reading time – I opened and closed it a few times before finally reading the entire piece. I found it interesting that a pop-up noted how many times I had opened it previously as well as how long I had already spent scanning it. This information may not be valuable for a magazine article but it would be very useful for tutorial content to see how long it takes to learn a subject. It would also be extremely valuable for publishers to discover where readers tend to spend the most time.
  • Dynamic visuals – Be sure to check out the circuitry animation that appears at the start of the second section. If you’re not familiar with the concept of logic gates, take a minute or two to read the callout and watch the animation. And have you ever wondered what happens when you press a key on your keyboard? There’s another animation for this and, as the callout notes, quite a few things happen behind the scenes before the key you pressed appears on your screen. Note that neither of these are “enrichment for enrichment’s sake”. Creating deeply engaging content like this requires a great deal of work, especially when it comes to figuring out exactly what type of dynamic visuals will add to the experience, not interfere with it.
  • Deeper dives, but only if you want them –Note the rounded rectangular numbered items interspersed throughout and how they’re used as pop-up notes. It’s not the best UI element but I love how they quickly provide more depth without taking the reader away from the current paragraph. A key here is to provide this additional depth unobtrusively. The best UI enables a smooth reading flow for readers who don’t care to read these pop-ups while ensuring the additional content is easily accessible for those who want it.
  • Annoying visuals – As good as this Businessweek article is, it would have been even better without the animated blue box character with the black hat and flower. The designer probably felt it added personality or maybe even gave the piece an attitude; in reality, it made the whole experience feel like a 1980’s experiment featuring a Walking Dead version of the Charlie Chaplin PC Jr. character. The lesson here is to focus on functional value rather than gimmicks.

If you read to the end you’ll discover another feature that combines something useful with yet another gimmick, which is unfortunate.

I applaud Businessweek and author Paul Ford for helping show the possibilities of a post-print-under-glass world. Here’s to hoping escape velocity is just around the corner and soon this sort of content will be considered standard, not edgy.


How curation automation is going to disrupt content consumption

The best content curators have extensive topic knowledge and a knack for reader interests and preferences. That sounds like something only a living, breathing human can do, right? While that’s largely the case today, I believe technology will drive the biggest advancements in content curation tomorrow.

Narrative Science is a terrific example. I met Kris Hammond of Narrative Science a few years ago when he spoke at a Tools of Change conference I helped produce. If you’re not familiar with them, Narrative Science is one of those companies that develop tools to automate story writing.

You may have read a computer-generated article or two this week and never even realized it. Think you can tell the difference between human- and auto-generated content? Stick around and take the quiz at the end of this article… 

Data is at the heart of the stories generated by Narrative Science but what exactly is “data”? In the current model, data typically consists of numbers, tables and other highly structured information. For example, the narrative summary of last night’s baseball game could be auto-generated using nothing more than the game’s box score, the data from the event.

As platforms like Narrative Science’s evolve, so will the definition of data. 

Last week I wrote an article about why all-you-can-read subscriptions need curation. We’re drowning in a sea of content and we need better tools to help us uncover and consume the must-read content. There’s a big difference between what you and I consider must-read though and that’s where the curation element comes into play.

A number of industry pundits criticized my thinking and pointed out the high cost of this sort of curation. I agree. Curation today almost always requires human intervention. But what happens when that’s no longer the case?

What happens when an application is able to rewrite and summarize the sea of daily content that’s most important to you? What happens when this tool, which knows your interests, your job responsibilities, etc., is able to deliver a fully-automated Cliffs Notes version of everything you need to read that day?

I think that will be a game-changer and will become an extremely important, real world application for artificial intelligence. Will it put writers out of business? No, not necessarily. After all, most of the original content still has to be written by someone. But it will help amplify the content that needs to be read, enabling it to rise above all the noise that surrounds it. 

Still think this is nothing more than sci-fi and wishful thinking? Take this short quiz and see if you can figure out whether each of these excerpts were human-generated or computer-generated.


Why all-you-can-read subscriptions need curation

The initial promise is compelling, especially for voracious readers. For $10-$15/month consumers get access to more content than they could possibly read in a month. That ultimately creates a bigger problem than the subscription platforms probably realize.

For more than a year now I’ve been a subscriber to both Oyster, for books, and Next Issue, for magazines. Both have slightly altered my reading habits but neither are serving their content in an optimal manner.

For Next Issue, it’s as though the U.S. Post Office backs up a truck and dumps 100+ magazines every month. Sure, there are many I enjoy and a few that I used to value enough to buy individually in the print days. Compare that large, unreadable stack to one thin magazine, The Week. If I had to choose between the 100+ Next Issue magazines and The Week, the latter wins every time.

What makes The Week so unique? Their editors are curating and quoting content from many other magazines, covering both sides of all the major issues. IOW, when I read The Week I feel as if I just read the Cliff’s Notes of all the top newspapers and magazines…and I can accomplish this in less than an hour.

The Week is efficient and Next Issue is bloated. When I finish reading an issue of The Week I feel like I got a thorough global debriefing in record time. When I close the Next Issue app I feel like I wasted much of the abundant content in magazines I never opened let alone read.

The Week has obviously invested in an editorial team to create this unique and valuable experience. The all-you-can-read services like Next Issue are simply throwing more content at you in its original container, hoping you’ll see the value. It’s like comparing a fine restaurant to The Golden Corral. I’ll overindulge on junk food from time to time but I certainly don’t want to do it every day at every meal.

I should point out that I still like my Next Issue subscription and find it valuable. But it could be so much better. Next Issue could offer a curated option like The Week and charge a premium for that model. In fact, I could see cheaper and pricier subscription models built off the Next Issue foundation. You like sports? Pay $5/month and get access to the curated, The Week-like version, of all the top sports stories every month. You want a curated version of everything? You’ll need to pay more than the $15/month Next Issue charges for their current premium option.

There will always be room for simple, all-you-can-read models like Oyster and Next Issue. But these platforms can attract even more subscribers and offer a variety of models by also embracing a curation model like The Week.