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.  


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.


Debunking the discovery problem

Ever since ebooks gained traction the publishing industry has obsessed with what’s typically referred to as “the discovery problem.” The common wisdom is that discovery of the content will lead to fame and fortune.

What's next, now that ebook sales are flattening? Join me at a free webinar on April 28 to see how to drive revenue growth. Click here to register.

I believe digital content’s main challenge is more about efficiency, less about discovery, and my inspiration for this point of view comes from a totally unrelated business: the coffee industry.

A recent Businessweek article noted that single-serve pods (e.g., Keurig) have eliminated coffee’s biggest consumer: the kitchen sink. (Btw, Businessweek apparently doesn’t worry about content discovery as that article can’t be found on their website; it’s only in the print edition but I found a related version of it here.)

It turns out that with Mr. Coffee and other drip systems a great deal of product ends up going to waste. The net result is that as the single-serve devices gain momentum we’re creating a climate where total consumption is lower and excess inventories are leading to lower prices for coffee beans.

In short, the article notes that while Americans still drink a lot of coffee, they do it more efficiently. Each cup in the single-serve model is more expensive but in total we’re consuming and wasting far less coffee now.

What in the world does this have to do with digital content?

I don’t think anyone would argue with the fact that we have an excessive amount digital content today. A great deal of it is being produced but in many cases nobody is reading it. This has led to an overabundance of free and cheap content which is being both professionally published as well as self-published.

Wasted coffee goes down the drain but wasted content simply goes unread. In some cases, hoarders like myself have moved the content from online to local devices, but much of that content is never actually consumed.

Here’s a parallel from yet another completely unrelated industry: service provider recommendations. My wife and I recently cancelled our Angie’s List subscription because we discovered the Nextdoor social network. As you may already know, Angie’s List is battling allegations of fraudulent and deceptive practices and its reviews are typically posted by complete strangers. Meanwhile, Nextdoor offers reviews and advice from people you know or could easily introduce yourself to: your next-door neighbors. I’ve found these local reviews on Nextdoor to be much more reliable. In fact, I’ve hired two service providers in the past week based on Nextdoor recommendations. Best of all, Nextdoor is totally free.

Compared to Angie’s List, Nextdoor feels like a more highly curated and relevant service. Discussions and recommendations come from people you might already know and everyone lives right there in your neighborhood. In fact, many of Nextdoor’s members are going through the same situations you are (e.g., hail storm, wind damage, down trees, etc.)

Nextdoor offers what I refer to as a better “content efficiency” experience than Angie’s List. It’s what I’m looking for and the content is presented when I need it.

Just as nobody walks into a bookstore asking for the latest book from Macmillan, nobody is sitting around saying, “gee, I wish I could discover more content.” What we really need is more efficient delivery of content that’s highly relevant to our specific needs and interests. 

We’ve mostly given up on RSS feeds and let’s face it…Twitter is yet another fire hose that’s next to impossible to effectively manage.

At some point content efficiency will improve. I’ve referred to this before as the need for a “content concierge”, resulting in much better recommendations, tailored content streams and, yes, it will come at a higher price, just like the single-serving coffee pods.

We may end up spending just as much time reading efficiently delivered content but it will be highly targeted and we’ll pay more for the privilege of others (human curators and well-tuned, automated algorithms) helping us find the precious needles in the overwhelming haystacks.


Content, technology and the digital scrapbook of your life

Every year it seems our cell phones take on new roles in our lives. Long ago flip phones merely enabled you to make calls. Today’s smartphones are loaded with sensors to do everything from track your health to tell you about a sale at a local store.

I think it’s time for our phones to do even more and this involves the convergence of content and technology to automatically create the digital story of your life.

Imagine an app that constantly monitors your phone’s location to do the following:

  • Log where you were today and make assumptions about what you did in each location,
  • Gather and organize content relevant to where you’ve been,
  • Build it all into a living, growing record that you can edit and share with others.

Sounds fairly straightforward, right? Now let’s think about the results of this.

One day you went to see the Reds play the Pirates in Pittsburgh at PNC Park. The app logs the event and pulls in the box score along with a couple of noteworthy articles about the game from the Cincinnati and Pittsburgh newspapers. It also saves the weather information (e.g., “partly cloudy, 61 degrees at first pitch with a high of 68 degrees”) and provides interesting factoids about what happened in sports on that same day 5 years ago, 10 years ago, etc.

On another day you attend your child’s college graduation ceremony. The app checks the school’s calendar and determines you were indeed at the ceremony. This information is logged and because the school was kind enough to expose the graduation program to the app, it too has now been digitally preserved in your stream.

By the way, this imaginary app also offers a user network. So it knows that you went with a friend to that baseball game, and your friend is part of the app’s network. This tidbit is also preserved along with all the great pictures you both took at the stadium. No longer do you have to worry about uploading or emailing photos; your app settings were already configured for two-way sharing between you and the friend who accompanied you at the game. The same goes for the graduation ceremony; now all your friends and family who are members of this service all have access to each other’s pictures.

We could, of course, extend this even further… If you ordered food at that baseball game the information could be logged so you could easily track your diet. In short, any transaction that takes place on your phone could be wired into this app as well. Those transactions that aren’t made with your phone could still be easily integrated: just take pictures of the receipt and the phone does the rest.

The app’s goal is to provide every user with a digital scrapbook of their life. The key is to automate as much of this process as possible. Let your phone and the app figure out what to collect and you can always go in and tweak it later if you want.

There’s also an enormous content opportunity here. I mentioned how the app pulls in content from newspapers but, of course, the feeds could come from anywhere. Ultimately this is a way to redeploy content based on context and preserve it for years and years. After all, one of the reasons you want to gather this information is to remember and relive the events of last week or last year. It’s also an interesting way to build the story of your life, one that can be passed on from one generation to the next. I’d love to have this kind of information about my parents and grandparents, for example.

A variety of business models could be used here including free, advertising/sponsor-based and premium. Ancestry.com and other genealogy services have proven the interest we have in our past. People spend hours and hours sifting through all that historical data, making assumptions about family connections, how people met, etc. An app like this eliminates the guesswork and tells the life story you want to communicate with your friends and future generations.


How digital can be a companion for print

Congratulations, print publishers. You dealt with enormous disruption these past several years and you managed to avoid the same fate as your music industry counterparts. For example, most book publishers still generate 70-80% of their revenue from print. How many music labels can say they generate anywhere near that percentage from CDs?

Is the survival of print a good thing or a bad thing? Rather than worrying about that one, here’s the question we really need to think about: Why do we treat these two formats as mutually exclusive?

Depending on what they’re doing, why do consumers tend to use either print or digital but almost never use print and digital for the same product?

I’ll use myself as an example... Believe it or not, my wife and I still subscribe to our local print newspaper, the Indianapolis Star. Our subscription plan includes a digital version as well as print. When I’m at home I always read print and never bother opening the digital edition; when I’m on the road, of course, I’m limited to a digital-only experience.

Why do I never bother opening the digital edition when I’m home? Because it’s just a digital replica of the print edition I read over breakfast. OK, there might be a few extra bells and whistles in the digital edition but they’re not significant enough to get me to open the app after I’ve read the print edition.

The same is true for books and magazines. Digital simply replaces print, so there’s no reason to use both formats for any given title.

I think it’s time to reimagine digital as a companion to print, not simply a replacement for it.

Today’s digital editions are nothing more than print-under-glass. They’re digital replicas of the print product. As a result, we tend to buy one format or the other, but rarely both.

I used to publish technology books for IT professionals. Many of those books on programming languages and productivity tools had companion websites. The websites offered additional content, sample files and other goodies that didn’t come with the book. These sites also represented a way for the publisher to dynamically extend the original content with additional elements and coverage, some of which might not have been available when the book was originally published.

I’d love to see the industry evolve to the point where each print product has a digital companion, not just a print replacement. The digital companion would extend and enhance the print experience and would be an optional add-on to the print product. Some of these digital companions could be free but the more valuable ones could have a price.

Btw, publishers could offer these companions exclusively on their websites, converting print customers who bought from Amazon and elsewhere into direct customers. Promote them in the print product and bring those customers to your website where you can build a direct relationship, up-sell, cross-sell, etc.

A couple of weeks ago I wrote an article called Why Johnny doesn’t like e-textbooks. Maybe Johnny doesn’t want the print-under-glass digital edition of the textbook, but I’ll bet he’d be interested in a digital companion for the print textbook featuring notes from other students, cheat sheets for test prep, sample quizzes, slide decks from class lectures and better explanations of key topics from other students and teachers.

Textbooks aren’t the only products that could be further monetized with digital companions. Just about any type of content lends itself to digital extension and enhancement. We just need publishers and authors to start thinking of digital as a companion for print, not simply a replacement.


Finding the optimal streaming content value proposition

Have you paid much attention to the various pricing options used in the streaming content space? A recent article on re/code talks about the challenges the music industry faces as it wrestles with free, ad-subsidized streaming services. In short, the article says free is bad and paid is good. I’d add that’s true for everyone but the consumer, of course.

The problem isn’t perhaps so much about making free go away but rather making the paid options much more compelling.

For example, I’m a big fan of Spotify. At first I just used the free, ad-based version and created a bunch of playlists. The ads didn’t seem too intrusive but when I saw the opportunity to try a three-month, 99-cent trial of the paid version I couldn’t resist. For less than a dollar I could eliminate the ads and download as much music as I want to each of my devices.

I use Spotify much more frequently now but the three-month trial is about to end. Am I so hooked on the Spotify Premium that I’m ready to fork over $9.99 per month going forward?

No way.

Even though $9.99 sounds like a bargain that’s still about $120 per year, much more than I’m willing to spend for the service. Spotify would have better luck converting a freeloader like me if they offered something in between. For example, I’d sign up for $2.99/month for an ad-free version with no download capability. And I’d consider signing up for $4.99/month for downloads and no ads. They’ll probably never see another nickel from me as long as the options are limited to free and $9.99 though.

Spotify’s problem is the free version is just too darned good, at least for me.

This challenge isn’t limited to the music world though. My wife and I share a Premium subscription to Next Issue, the all-you-can-read digital magazine service. We pay $14.99/month for unlimited access to more than 140 magazines. At first it seemed like a great deal but I’m opening the app less frequently every month and $180/year is starting to feel quite expensive. The other challenge here is that with the right combination of bookmarks, alerts, newsletter subscriptions and RSS feeds, it’s possible to gain free access to most of the content I’m paying for via Next Issue. As a result, our Next Issue subscription is likely to end soon.

Let’s compare that to Oyster, the all-you-can-read ebook service. Once again, my wife and I share a $9.95 subscription and we couldn’t be happier. I’d probably be willing to pay even more than that and I figure the price will go up before too long because Oyster’s business model isn’t sustainable at $9.95/month. But there’s no legal free alternative to this ebook content, so Oyster has much more leverage than Next Issue when it comes to the threat of “free” cannibalizing “paid.”

If you’re thinking of jumping into the streaming content marketplace, be sure to study the results of comparable existing products and make sure your free option isn’t so good that most consumers will never consider upgrading.


Data-driven content recommendation

Which is better at assessing your content interests: a display ad on a random website or the app you spend hours reading magazines in each month? If my recent experience is any indication, the display ad is the winner, hands down.

I recently went on audible.com to explore audio books and picked one I thought I might be interested in. I was curious to experience the purchase process but I stopped before clicking “buy.” Later that same day three different websites featured banner ads from Audible with the cover of the book I almost purchased. The digital breadcrumbs I left behind on my audio book experiment probably still exist somewhere deep inside my browser’s cache.

Compare that to the fact that I regularly read sports magazines in my Next Issue subscription. So why doesn’t the Next Issue app use that information to recommend other sports content to me, right inside the app?

The answer is pretty simple: Online advertising services leverage data but content apps don’t. It’s amazing that in 2015 so few publishers and content distributors are utilizing the valuable data they gather every day.

The opportunity here isn’t just to get me to read more related content in the app I’m already in. Yes, that will increase engagement and serve as a win-win for publishers and readers. The real upside is around discovery and affiliate income.

Once Next Issue wakes up and starts recommending more sports content from its other magazines they should also recommend books in the same category. I’m not keeping a close eye on the newest ebooks about baseball and hockey, but Next Issue knows I read a lot of articles about both, so why not use that information to give me a heads-up about books I’m likely to be interested in?

This would be a terrific opportunity for book publishers to create an affiliate program within the e-zine app. Book and magazine publishers aren’t direct competitors, so why not work together to provide reading recommendations?

This is a two-way concept, btw; ebook publishers should be willing to serve up recommendations to relevant magazine content as well. An affiliate cut of any new revenue generated from these recommendations would be passed along to the recommending app/publisher.

First we need the app vendors to recognize and tap into the valuable data that’s right under their noses. Then we need to tear down the walls that exist between publishers so that data can be used to improve discovery and generate additional revenue streams. It will be interesting to see who figures this out and builds a truly data-driven content recommendation service.


Customers as curators: Going beyond simple reviews

My magazine reading is almost exclusively limited to what’s offered in my Next Issue subscription. If you’re not familiar with Next Issue, it’s an all-you-can-read e-zine service featuring more than 140 titles. Sports Illustrated, BusinessWeek and Wired are just a few of the magazines I read in my $14.99/month subscription.

I recently received an interesting email from Next Issue and it got me thinking about how customers are evolving into content curators. Every customer won’t do this, but a significant enough number will and it will lead to new forms of content discovery and consumption.

The email I got from Next Issue can be seen here. You’ll notice that a Next Issue employee shares a link to her favorite stories on the outdoors in that email. I’m not exactly the outdoorsy type but even I was intrigued enough to click and read the recommendations. Why?

I’ve gotten so numb to all the automated, algorithmic recommendations in emails and on websites (e.g., “those who bought x also bought y”) that I was curious to learn more. It just goes to show that human curation can still trump computerized curation.

Then there’s the passion factor. Recommendations from an actual person have a more genuine feel than the sanitized, generic messages we’re so used to seeing. Whatever your hobbies and interests are, you can probably create a more credible, click-worthy reading list than even the most sophisticated computer algorithm.

And let’s face it: We are a lazy society, so we want others to vet articles, books, blogs, etc., before we waste our precious time on them. If Next Issue sends me a recommended reading list, even if it’s based on my reading habits, it feels empty, void of any soul. But if that same list comes from an actual person, even an employee of the company, it has more credibility.

This all means that a publisher’s most enthusiastic readers can potentially become on of its most influential sales and marketing resources. It’s an opportunity for those readers to share their passion with others while also helping the publisher increase engagement.

This is the next evolutionary step for product reviews written by customers like you and me. Rather than having reviews sit passively on a website, waiting for prospective customers to arrive, they can be spun into active narratives, encouraging deeper engagement from existing readers/subscribers.

It’s all about the personal curation though, and having a name and face accompany the message. It’s also an opportunity for a publisher’s biggest fans to take on a new role, but only for those publishers who are willing to give up some of their precious content curation control.