Rupert Murdoch's News Corp. plans to charge fees for its newspaper Web sites. While it is an about-face for Murdoch, who at one point wanted to make his Wall Street Journal on-line a free site, it is a very interesting development, and could lead the industry out of the misery it's been suffering for quite a while.
Newspapers have both toyed with and opposed this approach, concerned that it would turn away readers to other free news sites, or in some cases, arguing that the value of the content continued to be high enough to support enough traffic to maintain it as an ad-driven site. Some companies, like The New York Times has at times charged for past articles, but never for on-line daily access to "All the News that's fit to print!"
The same challenge holds true for News Corp, who owns The New York Post, The Times of London, and the British tabloid The Sun. The company has some experience with this -- the Wall Street Journal Online is one of the most longstanding, successful paid sites around. However, the WSJ serves an affluent and business focused customer base, and an industry where money is freely paid for the best information. Will the same hold true for The Sun? Will the working-class, everyday Brittish reader of The Sun, pay a few quid for the on-line version? The jury is out.
My thought is that it comes down to access and value. Murdoch believes that others will watch and follow suit. If people can't access what they love or are habitually used to for free, and can't get it elsewhere, they will ultimately pay to continue the loyalty rather than give up their habit. So I believe this can work, but pricing will continue to be key. The case can be made that people were willing to pay for it before, and all that has changed (more or less) is the delivery means -- web vs. print. Why should information from a good, well researched or trusted source (even if it is a tabloid) be free? Everything costs something to produce, and the consumer will always be the judge of its cost -- they will vote their loyalty and need, with their wallets.
This could be a way out of the woods for newspapers and potentially magazines. It depends largely on the industry cooperation (dare I say collusion?) to really make this transition successful. The more willingness and "cooperation" among sites to charge, the more the consumer gets the message in concert that a change is afoot and it's not just one maverick News corporation. This transition could take some time as some papers sit on the sidelines and watch (as they've done for much too long)...but it also could happen very quickly. Newspapers need some rapid changes to address revenue. They've done business as usual for too long and many are paying or have already paid dearly for it. This is a relatively and potentially technically easier transition, as most already have web sites and web teams.
Yes, they'll likely get the business model or subscription price or approach wrong here and there, and there will be some pain in the transition. But it will be less painful than what they've been going through because many have been unwilling to experiment with Web subscriptions and other models, and now they're paying for that lack of "R&D". If many move en-masse, with more companies trying out various models, there will be a more rapid coalescence around successful models, and a quicker transition for the industry. So there are lots of good reasons to move together than to wait. One might even ask, "What have they got to lose?"
Some high value, free content sites may benefit from increased traffic that could come at the loss of traffic to others. It could also affect aggregators like Yahoo!, MSN and others, who won't have access to the better content anymore, but they will still serve as referral sites for the papers (as they are for the WSJ where much of their presented content on Yahoo! is actually a teaser, with the core of it still within the walled WSJ garden).
This is a development worth watching... or reading about. The question is whether we'll have to pay to read the details from our favorite sites.
Friday, August 7, 2009
Wednesday, August 5, 2009
Sony poised to drop price on new ebook reader; pressure Kindle
Sony is poised to dropped its prices on its new Sony ebook reader to $199 according to the article on Yahoo Finance. This will certainly spur more sales of ebook readers, breaking the first psychological price barrier (under $200). I think, however that $99 is the key psychological level... Whoever gets there first could dominate the market ... perhaps in time for Christmas!
With songs and content distributed with DRM there were 3 factors: price, ease of use, and security. Initial DRM implementations were fat, slow and overly secure. Apple won this game when it went for a ligher version of digital rights which was secure but easy to use (and also was relatively quickly broken by hackers...no matter), priced songs at $0.99 and provided easy access to them, and with a relatively inexpensive device. I think ebooks could follow the same pattern. Here the 3 factors are: price, ease of use, and distribution.
The availability of ebook readers is obviously critical which is why I believe the $99 barrier is key. At that price, I believe consumers will be much more willing to try it out. Secondly, there's got to be enough interesting content to buy on it. Here's the opportunity for publishers of all kinds. Yes, it's a little serving of which comes first the chicken or the egg, but it's time to begin to see that the devices are coming and the market will follow, so start getting your content ready now. Most eBooks are around $10. I'm not convinced this is the right or even final price. In fact, I think it's a starting point. Part of it is a carry over of paper-based publishing pricing to the digital world, just as we saw with digital music -- publishers trying to get as high a price as possible (if I recall correctly originally some music publishers started at $4.99 or $3.99 per song). I think we'll ultimately see lower, tiered pricing, but that could be a while, just as it was for music.
Sony's support of the open ePub standard format potentially gives it an initial advantage, as more people can more easily publish to it. From a publisher's perspective format won't matter as much as distribution -- the broader the better. Initially, publishers will likely choose whichever format and on-line or other 'venues' give it both the lowest production cost and the best distribution. Once production costs are reduced, by more automated production processes (and the technology for that is just emerging now), distribution will reign alone.
Like the initial iPods, these devices have to be connected to a computer. Wireless access should be part of the devices, which will stimulate more sales and opportunities for serial and episodic works, and enable impulse buying.
Ultimately, a key ingredient in the success of these devices will be which ever gives the reader (the human, not the device) the best experience of reading. I think there's still lots of room for experimentation here -- on both the device side, and on the content side. Yes, it should be easy on the eyes and easy to read, navigate etc. but it could also do more in terms of layout and images. There's room for growth there in both the devices and the ebook format standards.
This is a positive development in the market for both the consumers and the publishers. Now let's see how Amazon and the Kindle responds.
References:
NY Times article here: http://www.nytimes.com/2009/08/05/technology/personaltech/05sony.html
With songs and content distributed with DRM there were 3 factors: price, ease of use, and security. Initial DRM implementations were fat, slow and overly secure. Apple won this game when it went for a ligher version of digital rights which was secure but easy to use (and also was relatively quickly broken by hackers...no matter), priced songs at $0.99 and provided easy access to them, and with a relatively inexpensive device. I think ebooks could follow the same pattern. Here the 3 factors are: price, ease of use, and distribution.
The availability of ebook readers is obviously critical which is why I believe the $99 barrier is key. At that price, I believe consumers will be much more willing to try it out. Secondly, there's got to be enough interesting content to buy on it. Here's the opportunity for publishers of all kinds. Yes, it's a little serving of which comes first the chicken or the egg, but it's time to begin to see that the devices are coming and the market will follow, so start getting your content ready now. Most eBooks are around $10. I'm not convinced this is the right or even final price. In fact, I think it's a starting point. Part of it is a carry over of paper-based publishing pricing to the digital world, just as we saw with digital music -- publishers trying to get as high a price as possible (if I recall correctly originally some music publishers started at $4.99 or $3.99 per song). I think we'll ultimately see lower, tiered pricing, but that could be a while, just as it was for music.
Sony's support of the open ePub standard format potentially gives it an initial advantage, as more people can more easily publish to it. From a publisher's perspective format won't matter as much as distribution -- the broader the better. Initially, publishers will likely choose whichever format and on-line or other 'venues' give it both the lowest production cost and the best distribution. Once production costs are reduced, by more automated production processes (and the technology for that is just emerging now), distribution will reign alone.
Like the initial iPods, these devices have to be connected to a computer. Wireless access should be part of the devices, which will stimulate more sales and opportunities for serial and episodic works, and enable impulse buying.
Ultimately, a key ingredient in the success of these devices will be which ever gives the reader (the human, not the device) the best experience of reading. I think there's still lots of room for experimentation here -- on both the device side, and on the content side. Yes, it should be easy on the eyes and easy to read, navigate etc. but it could also do more in terms of layout and images. There's room for growth there in both the devices and the ebook format standards.
This is a positive development in the market for both the consumers and the publishers. Now let's see how Amazon and the Kindle responds.
References:
NY Times article here: http://www.nytimes.com/2009/08/05/technology/personaltech/05sony.html
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