Just read a great article at the Neiman Journalism Lab site about Google’s plans to help the content industry. In a nutshell the concept is to utilize Google’s Checkout, their payment system, to enable publishers of news and other premium content to both sell their content as part of subscriptions and/or via micropayments. What caught my interest was the concept of allowing multiple publishers to work together to offer subscriptions or premium content together.
Could Google convince Newscorp and say the New York Times Company to work together to offer a “super subscription” to their publications online and then divvy up the proceeds on a pre agreed basis, much as they do with advertisers and site publishers ?
Maybe.
It would take a lot of work and a lot of convincing and negotiating to get it right. Then , even if you could get these cats and dogs to finally live in harmony , the question would arise as to whether or not Google Checkout has enough users. RIght now they don’t. Which would mean most users would have to sign up for CheckOut. Would people go through the process of signing up for Google Checkout in order to participate in these “SuperPublication Subscriptions” ? .
I dont think they would. In fact, while its a great idea on Google’s part, I think Google Checkout has more to gain than the publishers.
That said, this same approach could be a digital media nirvana to Amazon and its users.
Amazon has pretty much everyone’s credit card. They have a growing user base for Kindle.They already sell digital video downloads and rentals, as well as music. They even sell good old fashion magazine and newspaper subscriptions.
They have the ability to create the path of least resistance for users to purchase and consume digital media.
I thought it was a good idea for media conglomerates to package all their digital assets into subscription offers. Its a far better idea for a marketer like Amazon to package cross company offerings into bigger and better packages.
While their Kindle revenue shares , IMHO, are far too beneficial to Amazon, if they can work out a fairer revenue share for Kindle distribution, things could start to get very interesting.
Across all the digital assets that Amazon sells, the packaging and marketing options are endless.
Like the freemium approach ? ,Package the USA Today, NY Times, Wall Street Journal, Financial Times, Investors Business Daily into a single price subscription for Kindle Delivery. Price it a big discount for the first 3o days, with an automatic expansion to full subscriptions at a price that is a discount to their individual subscriptions. With Free Website Access included.
Want to make the bundle more attractive ? Bundle in a movie download. A book delivered to Kindle. Music. Software.
When they come up with even better ideas, Im sure the Publishers, Movie Distributors, Music Distributors, Software Vendors will be more than happy to give you OEM prices if you commit to minimum quantities.
In fact, it could be even more interesting if Amazon took a page from Google and allowed Marketers to bid on digital content to include in subscriptions, product bundles or one off sales and then market and resell them.
Think of the ecosystem of content sales that could be created if Amazon (or EBay or Google) created a “wholesale” market for content where marketers could bid on 100 annual Wall Street Journal Subscriptions , 100 Downloads of the movie Wall Street, and 100 copies of the book “Random Walk Down Wall Street” to be sold as “Graduation Gifts for Business Majors”
Lame example, but you get the point.
In a world where the marginal cost of delivery of digital content is almost zero, why not throw it out there to be bid on so that great marketers can come up with great marketing and sales programs ?
Why not take those marketing and sales programs and offer them for sale right on Amazon ? They already have a wholesale sales program that leverages their marketing, order processing and physical fulfillment advantage for 3rd parties. Why not create the same type of program specifically for digital media and the same Amazon advantages, as well as their cloud services to let anyone who wants to participate quickly create a digital media store? This could be the ultimate market for digital media.
Its hard to find ways to sell content, particularly content in any one silo, be it news, sports, business, etc. When you start looking at how to package any digital content into products and letting the market help set pricing, things could get very interesting very quickly.
Ebay allowed products to be aggregated and sold by anyone. Google allowed anyone to quickly and easy buy advertising and reach a huge audience. Both based on an auction system. An Amazon Media Market could create a bourse that leveraged the vast amounts of creativity out there to find new ways and models to sell digital media.
It certainly could not make things any worse…
There is much more besides the short time earnings in the news business. Thus said the media companies can’t be exactly expected to participate in such an adwords-like scheme. So neither Amazon neither Google can expect much of a commitment in that area. That probably explains why amazon doesn’t act, because Google is way more prone to such adventurous researches.
However with Google Checkout there is not even a vague chance of success. It is designed for shops. You can’t sell anything in real time thus digital media of any kind is ruled out. Also there are no micro payments related features in there and monthly subscriptions are not there either after 3 years.
Comment by ipotpallaptopski -
IIMH(18yearold)O, I was initially only moderately intrigued. However, about 2 hours into writing this response I became extraordinarily inspired. I have hours of work to do before I have to go to the airport at 8 AM, I started this response at 1 AM thinking it would be a few paragraphs, but it turned into an epiphany that has carried me well past 3 AM. Below I have mapped out what I think is an industry changing concept that could affect thousands of lives. I think what Mr Cube Man wrote about above is an obviously innovative and cool concept and a step we should attempt to take, and while it is far from a solution to the pay-for-content crises we’re facing, it light up some bulbs in my head that produced some great ideas. I also think only part of the aforementioned concepts have the potential to work (they will work in a big way), and that you’re totally missing who the biggest beneficiaries of this shift would be. I will explain below, and hopefully some of you will care enough to read and respond! Let me rephrase that, please, please, somebody read and respond because this stuff is very relevant to the business I’m in (the business I passed up a scholarship to Northwestern to throw myself into full time), and some good feedback could help me a ton. Also, I’m sure that some of the stuff I map out has already been thought of by somebody, but hopefully I’ve added at least a small wrinkle. Now to elaborate (the cool stuff is at the bottom)…
(Again, thanks in advance to anyone who reads and/or gives feedback. Big help.)
I, like everyone else alive, am in love with the Amazon system because its so easy, and I fully believe that if there was a super-site that had your credit card info and sold subscriptions to every site on the web it could and would boost the sales of web content subscriptions very significantly. First and most obviously (I’m going to explain some obvious stuff in this paragraph), it would make subscribing more convenient for users, and lessen the potential-for-cold-feet aspect that comes with someone having to take the time to fill out a long form for all the credit card information if they want to buy even a 99 cent subscription. This is a similar concept to how people spent money more freely when credit cards came along, because when you didn’t actually have to take the cash out of your wallet and fork it over (don’t have to fill out all your credit card info every time), it doesn’t feel as much like you are actually having to sacrifice anything to get the desired item (content), whereas if you actually have to fork over the cash or fill out the form, as opposed to swiping a card or pressing a button, theres always a much bigger chance that you decide in the end that it isn’t essential or that you’d be better off spending your money elsewhere. If web content subscriptions had been plugged in to Amazon for the past 5 years, I would have spent significantly more money for content I didn’t really need to buy, because there is already so much free content available that I don’t have enough time in the day to read 5% of the stuff I wish I could (for example, I am a HUGE Cuban fan and an aspiring entrepreneur who passed up a scholarship to Northwestern to do business full time, but today is the first time I’ve read stuff on this blog. Seems silly, but there’s so much out there I never got around to it. Now I am up in them middle of the night posting this instead of working on the zillion hours of work I need to get done, further proving that I don’t need more content in my life, especially content that I feel obliged to read because I paid for it.) Sorry for that tangent, and again, this stuff was obvious, and I don’t know why I took the time to explain that to you intelligent people.
My humble estimate (with no data to back it up) would be that if somehow Google managed to get all web content subscriptions on one platform Amazon-style (not including the packaging and auctioning concepts that I’ll address next), it would raise subscription sales to the already big and visible content providers by as much as 50% in the short term, though ONLY in the short term (I’ll explain further down). On the flip side, the packaging and auctioning concept would probably never work out for those big, relevant and visible content providers. It would take a ton of cooperation, a lot of ego swallowing, and some extra work, all to produce something that may or may not even help their bottom line. Would the packaging of subscriptions raise subscriptions enough that the extra revenue it would bring in would make up for the money lost by having to spend time changing their method of operating, and more importantly the money lost from lowering the cost of their subscription enough to make buying the package worth wile? There is a decent chance that the answer to that would be no, an unless the answer was proven to be a resounding yes I doubt these big and egotastic content providers would even consider taking this risk.
Now for the good part…
I saw a lot of references to the big and already visible content providers who may or may not take the risk of buying into this, but no mention of the people who are really going to benefit from this! There are so, so, sooo many amazing and intelligent people who provide excellent content all across the web for free and for a fee, and one big problem is that it is very hard to sift through the crap to find those people who truly do have great stuff to offer. This is why aggregate sites are becoming very popular, and why many people don’t even bother going to all kinds of different www’s anymore, and opt to only read things recommended to them on Digg, Facebook, or something of that sort. This increasingly popular means of navigation is really bad news for people who run small subscription based sites, because (for example) people don’t ever post links on their facebook to something that they know their friends don’t subscribe to, making it even harder than it already was (and it was already hard) for small and usually niche-oriented content providers to get noticed. I am a huge basketball fan; it is my passion, my hobby, my profession, and there may be dozens of sites that offer subscriptions to basketball related content that I would totally pay for, but I’d never know because I generally find my content from friends recommendations, aggregate sites, and bloggers such as Henry Abbott of Truehoop.com who links out to dozens of NBA articles daily (none of which you need a subscription for).
Now to actually get to the first actual point. Sorry for the way too long buildup, I realize a lot of the above stuff was already obvious. Please bear with me…
Imagine a site (with all of your credit card info already on tap) that not only had every single subscription on the web listed and organized for you, and allowed anyone to set up an account that enabled them to offer a subscription to their content (for whatever asking price they please for a small sign up fee and a small commission), but most importantly, had a system allowing happy or unhappy subscribers rate, discuss, evaluate, and promote all of the sites that they subscribe too. As I stated before, USA today isn’t going to see their subscriptions double from this, but a blog-in-my-parents-basement type of website with amazing content could go from unnoticed to having a huge demand in just a matter of weeks. Imagine there is a website out there right now that is run by three friends, and has 200 very pleased subscribers, but cant seem to convince enough extra people to subscribe in order for them to quit their day jobs and produce this brilliant content all day. But if these 200 subscribers were able to interact with others in this community to attract a few new subscribers, who in turn gave great feedback and attracted more subscribers, the eventual outcome could be these guys making enough money to start writing full time and shoot to the top of their field. USA today could raise sales 30%, but these 3 dudes just shot up sales 5000% because of they had access to this platform. Most importantly, as I’m going to explain below, many people would be able to go from sales of zero to being able to quit their day jobs to write.
Now to the awesome part and to bring it all home…
While the package deal system probably will never pan out with the big and already visible content providers, smaller sites with less at risk by trying this out could potentially gain a lot from it, particularly if sites with similar niches swallowed their egos and banded together. I am in the high school basketball content business, and outside of Rivals and Scout, there are very few sites that are capable of staying afloat while charging for subscriptions. There are about 4 or 5 popular content providers for Chicago high school basketball, and there is a ton of overlap with the community of people who visit each of our sites, and in the news that we report, as it is a very niche based and devoted community. If one of us tried to charge, everyone would just go to another site to get another version of that same news for free, so all of our sites are completely free except for the very expensive premium content for college coaches. However, if we all teamed up and made our sites a package deal, charging $10 a month to subscribe to all 5 sites, people would be forced to subscribe because outside of the 5 people that run those sites there is no one else well connected enough to do a good job gathering and reporting Chicago HS basketball news. $10 a month is a very small price to pay for access to 5 sites that you visit every day, not to mention that when people are paying they usually subconsciously feel like the content they are getting is “better” or “premium.” I’d estimate our community is made up of about 10,000 people who visit our sites anywhere from once a week to a few times a day (players, parents, fans, fans of particular high schools, fans of colleges recruiting the kids). As of now none of us has the leverage to ask people to pay for our content, but if we all teamed up we would certainly have the leverage. If only 20% of those 10,000 (generally very dedicated) fans bought our very-cheap-for-5-sites $10 a month subscription, that would mean we would EACH bring in about $50,000 a year (I hope I’m doing that math right. Even after writing this whole thing, I never even dreamed the number would be close to that high until 30 seconds ago when I did the math). That is absolutely astounding, because as I said before, without a system like this none of us has the leverage to charge a dime, and that supplemental income of 50k is far more than most of us make in a year as it is (we make our money from holding events such as tournaments and camps, selling premium info to college coaches, and advertising, or doing unrelated jobs). Even if we cut that number to $2 a month, which would feel like paying nothing if your credit card info is already in there, enabling 40% of that 10,000 person community to buy subscriptions (which could even be a low estimate, as it is a very devoted community), that would be about $20,000 a year for each of us, which could make all the difference in our lifestyles, and give us the funds to travel to more out of town tournaments to do our jobs even better (even if only 2% of our community subscribed at $10 a month, that would be a 5k that we could all really, really use, as what we do is very much so a labor of love). And the best part; if we do our jobs better and don’t have to spend time doing things that we don’t like to do and doesn’t help anyone just so we can pay the bills, which means more high school athletes can be covered (not just D1 recruits, but every potential college recruit, and even kids playing other sports). Not only does this help change young people’s lives (the best part of my job by far) by giving them exposure and helping colleges find them, but if we can cover more kids that means more friends of theirs and parents subscribing, and more money coming in to enable us to hire more and help even more kids. WOW, what a fricken gold mine. This is applicable to almost every niche out there, as it’s pretty clear that if you are involved in a community and really love something, a few dollars a month is very little for access to all of the sites you love, and to enable those content providers to do a much better job. Just take this concept and think about the things you like to read about and apply it. I know it would work for Henry Abbott’s True Hoop network and its hundreds of thousands of readers. Rivals and Scout have somewhat similar systems, where you pay around $10 a month for access to a network of college based recruiting websites, however most people only care about the recruits for their school or in their area, meaning they are only reading about 2% of the content they are paying for, whereas if you are paying for a package in your niche you are probably going to read at least half of the stuff you are paying for, meaning you get a lot more for less. In addition, there you could even pay a few more dollars each month for access to message boards, live chats with the people who run the sites, $1 for video content of full games, and other various levels of premium access, and it would all be a great value because it’s 5 different sites all with unique insight, and it would be easy as hell because your credit card information is already there and all you have to do is click a button. We could also use the auction system for packaging together and selling the premium subscriptions that we already sell to college coaches, and slots in AAU tournaments and player showcases, thus helping us make even more money off of the avenues of revenue we already rely on to pay the bills and making it more affordable for colleges to find recruits and for recruits to get noticed by participating in exposure events. This could change so many lives!
Finally and sadly, I think all of this is short lived anyways, because it is pretty clear to me that there will soon be a day when all content will be free. As long as people are charging something, other people can do the same thing and charge less and less, until eventually everything has to be free. The only way the content industry’s economy will be saved is if someone figures out a way to make money by advertising on the internet. In the meantime, I think the ideas I have summarized above (there is a lot more to it, but I didn’t want to lose reader interest and didn’t want to give away all my ideas :)) could truly change millions of lives and reshape an entire industry.
Thank you so much for taking the time to read this, and please give me feedback.
Also, please don’t read this and steal my ideas without saying thank you. I could’ve kept it to myself and tried to make it happen on my own, but this has the potential to truly help so many individuals that I have no choice but to put it out there and hope that somebody makes this happen! That would do wonders for my Karma, which is what I’m all about as an altruistic individual. Like I said, all I want is a thank you or an executive producer credit, ala Steve Nash on Shaq vs. :).
My email is DanielPoneman@gmail.com
Twitter @hsbball
Facebook Daniel Poneman
Youtube DanPon1
Site Illinoishsbasketball.com
Thanks again and now I’m off to work at 3:45!!!!
Comment by danielponeman -
They should do this and pay the content providers a stipen for their content, but then then Amazon gives them a bonus for number of content views. So if they have a great story that goes big, or a song that is view millions of times. The artist or other content provider gets a lot of money.
Comment by dmgsouth -
I have a very good suggestion on how to save the newspapers and the best way that I can think of for content providers to profit from the internet but only want to dilvuge this info to someone who can well…. make money from my idea (and share this money). 2138544@sprint.blackberry.net
Comment by miredifer -
Kindle is a useful vehicle, but what if Amazon and Google teamed up to distribute applications? Here’s what you get when you go to the Android Market:
“Check out our site for some of the more popular applications and games available in Android Market. For a comprehensive, up-to-date list of the thousands of titles that are available, you will need to view Android Market on a handset.”
So the Android market grows to 50,000 apps. Am I going to search over my G1 from T-Mobile or HTC Hero from Sprint? (said conversely, could you imagine searching 50,000 items in the Amazon store ONLY over your mobile)? Amazon could also very easily distribute Apple AND Palm AND Blackberry versions – buy once, use over multiple devices.
Small number of apps, yes, but not big numbers. This article has even more value when you consider the app store distribution opp.
I am new to your post, Mark, but will not be a stranger.
Comment by kermit64113 -
Mr. Cuban Good evening, I’m a recent UT Arlington grad, UT Arlington badly needs a football team. What are your thoughts?(I see an opportunity )
Comment by tryluck -
this payment consolidation must happen, but will it be the amazons and googles? john malone seems to want in on the action….
http://bit.ly/oZkMv
thoughts on how the dynamics might play out?
Comment by markoanderson -
Pingback: Flip or Flop? « Blathnaid Healy’s Blog
Gee wiz Mark, the idea of work without pay went out of style with slavery! The gov’t is right. You have been drinking too much wall street cool aid. Workers should be paid for the contribution they make toward the success of the company. If an intern contributes to our success, you pay them accordingly!! I will concede that their are times when companies invite “guests” to observe and learn, but this is truly different.
The rationalization of free interships is immoral.
You also should mention that is is class discriminating. In most cases only rich kids can afford to take free internships, and gain yet another favor and advantage.
John
Comment by ponchojuan -
America is the greatest country in the history of the world.
Americans are the luckiest people ever to live on this planet.
American government seems intent on doing nearly everything wrong.
Our constitution guarantees us life, liberty and the pursuit of happiness.
There’s a lot of unhappiness in this great land of ours.
Lawyers are ruining our country.
Politicians are stealing our prosperity.
Common sense has gone missing.
There are too many laws too many lawyers and too many lawmakers.
We have too many people in our jails.
It is my contention that I have a plan that can change and save the world.
Don’t need money don’t need powerful friends.
Nobody has to lose anything that they have now.
Help me contribute to the advancement of humanity.
Just need to get the word out.
A solid plan for America that voters will believe in
is close as a friend with a big pile of dough.
Comment by goatis -
Sorry….one last thought. Netflix is successful because it is a subscription service that is customizable enough that it feels a la carte to the end user. If my point #3 above is executed right, it would create the same sort of user experience.
Comment by sirdonic -
Pingback: Mediavorous » Blog Archive » Links for September 2nd through September 11th
5. Fund raising kids going door to door selling magazines (or anybody else who’s an associate vendor) could take the order, then give you a Kindle purchase code. Poof…instant access to all your magazines, no waiting 3 months for it to get in the mailing queue. And if your check bounces, Amazon can shut it right back off of course.
Comment by sirdonic -
I can think of three ways this could work nicely for Amazon and Kindle:
1. Waiting rooms. A bundled subscription set of dozens of magazines and a set of Kindles ready to be read by whomever is waiting. Magazines and newspapers would update automatically overnight to the latest issues of course.
2. On Airplane Kindle rentals, again fully loaded with ALL the latest issues, including local newspapers for everywhere that airline travels. The same Kindle could be rented out several times a day.
3. 30 Day free (or low cost introductory) all you can eat passes to browse a huge variety of media outlets. And then buy a package of a set size, 5,10,20 etc, which you can change to your heart’s content once a month, swapping titles in and out. No more year long subscriptions to something that no longer interests you. Also no more 2 month lags before you get your first issue or until your cancellation takes effect.
Time Warner Publishing should love opton #3…just think of it like the billions of AOL free trial CDs they sent out over the years, now without any of the physical expense.
There are some magazines though that people read as much for the ads as the articles (ie Bridal/fashion/electronics. So a full color Kindle would be needed down the road for these, which could be subsidized by the ads and sold for much less in their bundles.
OH..and I just thought of one more:
4) Archived content. Why settle for one issue when you can take 5 years’ worth of Architectural Digest on your holiday if that’s your thing.
Comment by sirdonic -
Are you SURE you weren’t in my class earlier this week when my Media in the Digital Age professor, John V. Pavlik, discussed this with us in earnest? Just the fact that more than one person is thinking of the relatively same thing at the same time is a testament to its validity.
Comment by deleteriousdee -
Becasue I run a blog network I would love to see all newspapers go behind a paid subscription wall. Much more search engine traffic would come our way.
If a deal gets close, look for a smart player to drop out right at the last second so they can still go free and be king.
Comment by sportstechnow -
I like the idea, I just think you’re pushing the wrong product. Nobody wants to buy the NY Times AND USA Today AND This AND That etc. If I want to read the Times I’ll go to their website. As with any bundle, the attraction to the customer is that they get multiple items they want, along with a few extra things they didn’t really want but could be interesting. However now that news and music are so easily accessible online, customers don’t have to settle for “fringe” items that come with a bundled product. They can pick and choose exactly what they want. If there is a price discount that does factor into the decision, too.
Now if I were a Kindle user, things may be different:
Pro: Having a variety of newspapers on my Kindle would be cool. I could read them when I’m bored.
Cons: It’s kind of a novelty that might wear off. One of the reasons online news took off is because you don’t have to read through the entire paper for the story. Everything is segmented and accessible, so you can read what you like, when you like. And I am personally not going to read 5 different newspapers.
I feel the people who would want to read a newspaper on Kindle are the same people who still want to read newspapers. Not exactly a huge market. And if you own a Kindle, you’re somewhat tech-literate and are comfortable with going to the Internet for news that I can pick and choose myself.
So thats why I think news bundles might not be a good idea.
But what about other media: video, music, games. Bundle a single news subscription with free iTunes downloads, a book download, and a movie or game? Not even necessarily for the Kindle. There is a wealth of consumer preference data, so it wouldn’t be difficult to see what customers of the NYTimes prefer in terms of music, movies, video games, books, whatever else you can think of. Set up entire “entertainment bundles”. Work with iTunes, work with non-media online sellers. Perhaps a housewife wants to buy new sheets. How about scented candles and relaxing music downloads as well? From the perspective of Amazon, iTunes, and other online resellers it could be a great way to increase transactions. Risky? Yes but worth looking into.
P.S. @darryl3 : Major media networks pulling their online content collectively is a terrible idea, both in economic theory and in practice. It would be akin to music labels refusing to embrace the Internet. The news will still get out there, one way or another. At least this way networks have some control over its distribution, even if they have to give it away for “free”.
Comment by loucons -
Pingback: Digital Content Markets Set on Fire : Neal Harmon
What’s most suprising is major newspapers and magazines still provide online content. What would happen if WSJ, Newsweek, New York Times, et al. shut down their web presence? People would have to actually purchase the content. Major publications should return to the “old model” until they figure out how to make a good profit and eliminate aggregators. Once publications end web content they should vigorously sue anyone who uses articles without permission. And charge a fee for those whom permission is granted. Or perhaps they should change their delivery mode from web based to an email type service.
Comment by darryl3 -
“Package the USA Today, NY Times, Wall Street Journal, Financial Times, Investors Business Daily into a single price subscription for Kindle Delivery.”
Because the total number of people who currently subscribe to each of these is so large? And they’d be happy to pay for a bundle that saves money?
Doesn’t seem likely that population is very large.
Because people want more sources for mostly the same info?
People pick and chose their favorite info sources. Info sources then morph themselves (sometimes subtly, sometimes not) to service the consumers they already have and hopefully attract more new consumers like them than they lose each month.
More people are dropping these old media info sources. Their value propositions are worth less than ever before. Subscriber counts are shrinking for many reasons.
Personally, I doubt bundling, pricing and delivery options will turn the game back in the favor of old media info sources any more than “free linux” actually evolved the branch of Computer Science known as operating systems.
What you propose Mark may cause a ripple, but not reverse the tide (imo).
———-
“Its hard to find ways to sell content, particularly content in any one silo, be it news, sports, business, etc.”
Actually, it’s more difficult to bring value in multiple info genres – because you please fewer and fewer people. Case in point the “Evening News” on the old fashioned “broadcast networks.” Case in point, who still watches 20 minutes into “Local News” after prime time to see tomorrow’s weather? Some. But weather.com answers my need on demand. And a google widget brings “always on” weather info. Sorry local news. Have fun with your never ending parade of local crime stories.
“When you start looking at how to package any digital content into products and letting the market help set pricing, things could get very interesting very quickly.”
Close. Your phrase “letting the market” should be one clause sooner in your sentence. 🙂
Then you’d be just a few steps from a game changer.
Comment by danphx64 -
now think what could happen to the world if Amazon and Apple were to get together….another idea…a concept like pay-per-view content where book companies (or re-sellers of that content) could provide information (the book) for a specified amount of time and than it expires. If a person doesn’t get enough out of it, they could get the content again for a reduced price, and if they really liked it…buy it at some discounted rate…
Comment by mkratz01 -