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3 posts from August 2014

The next big thing in content subscriptions

Today’s sports fan has a seemingly infinite number of resources for news, commentary and long-form reading. I often use the Bleacher Report for scores, ESPN for short-form articles and Oyster for books. It’s nice having all those options but it can also be very inefficient. Besides having to configure all my favorite team settings in each news service I also have to remember the shortcuts and idiosyncrasies of each of their reader apps.

I’d prefer more of an all-in-one service. I’m talking about something with an all-access pass to every form of content, from tweet streams to up-to-the-minute scores to editorials to full-length books. Think ESPN Insider plus a sports book library; or maybe Oyster’s sports library plus the breadth of short-form content in ESPN Insider.

Amazon recently launched Kindle Unlimited, their all-you-can-read service for ebooks. Traditional publishers have been slow to embrace this model, partly because they fear both cannibalization and Amazon. Regardless of whether Amazon succeeds with Kindle Unlimited (they will), the all-you-can-read model is here to stay. It’s now just a question of how long it will take before it includes all content forms, short and long, and becomes more vertical, topically-focused.

An all-access model for news, short- and long-form content is more likely to succeed if it’s focused on specific content verticals. Sports, business and religion are three segments that immediately come to mind, but there are plenty of others. And even though traditional publishers will still have their fears, there are plenty of younger, less risk-averse publishing brands emerging who will gladly fill the void and reap the benefits. It’s bound to be yet another real world scenario brought to life from the pages of The Innovator’s Dilemma.

A business model I’m sorry we’ll never see

We’re all intimately familiar with the cell phone business model. Buy the phone today at a reduced price that’s subsidized by what’s typically a two-year commitment with that carrier. Other options have emerged in the cell phone arena but this low-price-plus-lock-in model remains extremely popular.

There was a time when I thought we’d see the same model applied to e-readers and tablets. I wasn’t the only one speculating that eventually the Kindle’s price would go to zero for consumers willing to commit to purchasing some minimum level of content over a period of time. One example is this sort of offer: “Get a free Kindle when you agree to purchase at least 15 ebooks over the next two years.” The same model can work with any digital content, of course, not just ebooks. So newspapers, magazines and music could have been used to attract consumers.

That never happened and I’m not optimistic it ever will now. Why? Because Amazon doesn’t need this option to grow their business. Amazon is now so powerful it not only influences but also determines the business models for everyone in the ecosystem including publishers and other retailers.

A few years ago it would have made sense for another retailer to try and gain some momentum with a free device that’s subsidized by a content purchase commitment. Fence-sitting consumers might have been more inclined to acquire a free e-reader or tablet even if it meant committing to future content purchases. The ebook retailer market share numbers we see today might be somewhat different if someone not named Amazon would have tested this model a few years ago.

So why is it too late for another retailer to give it a shot? First of all, it would now come across as a Hail Mary, a futile, last-ditch effort to remain relevant.

Second, I don’t think consumers would respond as well as they might have before Amazon added so many elements to Prime membership. Prime not only means free two-day shipping these days. It’s also an alternative to Netflix and Spotify, for example. And even though Amazon’s video and music catalogs aren’t as broad as Netflix or Spotify, most consumers perceive those services as throw-ins to the free two-day shipping that’s still the heart of Prime.

Third, and perhaps more importantly, I think other retailers now know that any model they offer will quickly be copied and likely squashed by Amazon. That may have always been the case but it feels like there’s no less room for retailers to innovate and compete than ever before. Besides, Amazon is (and should be) more focused on making Prime as broad and irresistible as possible and less interested in the more limited goal of free devices to secure future content purchase commitments. Even though Amazon started with books they’re now making more money from people like me because I’m ordering so many other things. They don’t want to be the next Barnes & Noble when they’re on their way to becoming the next Walmart instead.

Giving readers what they truly crave

Publishers need to take a page out of the retailer playbook. You’ve undoubtedly noticed how good certain online retailers are at suggesting additional products related to the one you’re about to purchase.

Amazon is arguably the king here with their “Frequently Bought Together” and “Customers Who Bought This Item Also Bought” recommendation sections. These elements typically appear just below the product image and above the product details. That’s prime real estate on the Amazon product page so you can bet these elements drive a lot of add-on sales.

You’re probably familiar with content recommendation links and widgets that have sprouted up all over the web the past few years. Taboola is a leader in this space and they specialize in offering links to related content from other publishers. For example, if you’re reading an article on USA Today’s website you’ll see a headline towards the bottom that says “Sponsor Content” followed by links to a handful of related articles from other sources.

I believe this is simply scratching the surface of content recommendation and we’ll see much more sophisticated cross-pollination in the coming months and years. I also believe many of these will be human-curated and implemented via a lightweight post-production model. An example will help illustrate.

One of the most popular books of the past few years is Unbroken, by Laura Hillenbrand. It’s the inspiring story of Louis Zamperini and his journey from juvenile delinquent to Olympic athlete and war hero. It’s a must-read for everyone, btw.

As I read Unbroken a couple of years ago I kept finding myself looking for more details about Zamperini’s life. This led to countless Google searches, YouTube video sessions and other random website visits. Imagine how much more valuable that ebook could be if the best of those other resources were integrated within the ebook. I’m not just talking about an assortment of embedded links. You can get that today in any ebook. I mean integrating the content right there in the ebook, so you never have to leave the ebook reading environment.

Yes, there will be some consumers who prefer a clean reading experience, with nothing but the words the author wrote. For those consumers you simply offer a button to hide the additional elements. But for readers like myself, who walked away from that book looking for more, this additional layer of content is extremely valuable.

Take this a step further and imagine what we can do with a federation of publishers who are willing to share their content with other publishers to create more compelling, valuable products. In my earlier example I suggested curating content that’s out on the open web. Now I’m talking about getting access to paid content and integrating elements of it with other paid content products. The revenue sharing details have to be hammered out but this mashup model will undoubtedly become more widely used in the future.

This doesn’t just apply to ebooks, btw. Every type of content is a candidate for this model. And as publishers get more comfortable with this approach they’ll start to enable curation from outside their organizations. Crowdsourcing is the extreme here, but even opening their content up to a smaller, controlled group of curation experts would be a huge step forward for most publishers.

What I’m describing is part of the DNA of the web itself, of course. We just haven’t seen this approach used in products like ebooks and digital replica editions of print newspapers and magazines. At the end of the day though, readers are looking for more content on the topics that interest them the most. Publishers have an opportunity to give readers what they crave by embracing a model like this where additional layers of dynamic content can be added to the original static product.