Just came off the stage at PaidContent 2010, a day-long summit here at The Times Center near Times Square, dedicated to the question of if/how/when people will pay for content. The timing is good -- as I wrote in January, The New York Times is planning to charge for content within a year or so, Hulu is considering a subscription model (not necessarily in place of but, I believe, in addition to its free service), and the eBook pricing dilemmas are causing sleepless nights.
I opened the conference with a brief assertion that fretting over whether people will pay for content is based on a mistaken assumption: that people have ever paid for content in the past. They actually haven't. Instead, people have paid for access to content. But in an analog world, access was gated by physical form factors like vinyl, newsprint, and movie theaters. As a result, the coincidence of form factor and content made us believe that people pay for content.
But people have never paid for content. Even when a daily newspaper was a necessity for the average home, the dime you paid a day (in the 70s) for a newspaper did not cover the print cost, much less the reporting. Instead, it was classified ads and auto dealers who footed most of the bill. And the hours we spent on TV and radio every day through the last half of the last century until the explosion of cable in the 90s, were all free. When cable finally asserted itself, people did not pay per show or even by channel (with the exception of premium movie channels). Instead, they paid for overall access.
It was a surprising weekend for those of us who had naively imagined that after crossing the River iPad, we might actually get some Elysian rest. But, alas, the fates conspired against us and handed us the curious case of Amazon vs. Macmillan. Or Macmillan vs. Amazon?
For those who actually took the weekend off, let me summarize what happened. John Sargeant, the CEO of Macmillan Books, gave Amazon a wee-bit of an ultimatum: switch from a wholesale sell-through model, where Amazon buys digital books at a fixed wholesale rate and then can choose to sell those books at whatever price it deems appropriate (even at a loss, as it does with $9.99 bestsellers), to an agency model, where Amazon agrees to sell at a price set by the publisher in exchange for a 30% agency fee. Sargeant explained to Amazon that if it did not agree to the switch, Macmillan Books would make its eBooks subject to significant "windowing" wherein new books are held back from the digital store for some period, say six months, while hardback books are sold in stores and possibly, digital copies are sold through the iPad at $14.99.
This is more detail than we usually know about a negotiation like this because of what happened next. Sargeant got off of a plane on Friday only to discover that Amazon had responded by pulling all Macmillan books from the Kindle store as well as from Amazon.com. He then decided to make it clear to the industry (and his authors) that this drastic action was Amazon's fault, in a paid advertisement in a special Sunday edition of Publishers Lunch.
Today is the big day: when Comcast announces it has taken a controlling share of NBCU in the latest mega media merger. And though the media have been covering it rapaciously for months now, the obligatory reaction stories are now being posted, analyzing something we should really know by now, namely:
This deal isn't about clamping down on runaway digital video content to save cable's collective hide.
If you're not careful, you may run into people who assert the contrary. Rafat Ali of paidcontent.org, whose opinion I generally value, earlier today titled his remarks "Comcast-NBC Deal Isn't About Digital." By which he means it's not about purely digital content (generation or delivery). While that's true, when he then goes on to say that Comcast's digital moves (thePlatform, Fancast) don't have "the potential to change the game for the cable giant," he is 100% wrong.
Because the future of cable is entirely dependent on digital. The future of all media of any sort is dependent on digital. Ergo so is the deal.
Many innovative start-ups have pioneered mobile social networking in the last few years: BuzzCity, Peperoni, Fring, Nimbuzz, eBuddy, Zyb, Plazes, Loopt, Foursquare and many others demonstrated the potential of the market.
In the last few months, a bunch of announcements clearly showed that the convergence between mobile and social computing is gaining traction and attracting the largest stakeholders:
Many recent innovations in the mobile space are led by new entrants such as Apple or Google. However, let's be fair with telcos. They invest significant amounts of money in R&D and have very creative staff. There has been some skepticism in the industry on selected Orange services such as Pikeo, Djinngo (ex Bubbletop) or Soundtribes where Orange was trying to "reinvent the wheel" without partnering with the right Internet players. However, these services have never been really marketed and does not prevent strategic partnerships to be signed. Orange in particular has many Orange Labs worldwide and is driving innovation.
I saw recently some interesting demos of products and services to be launched by Orange: