Here are the best snippets from Roger's review (and the rest of it is a good overview, as well!)
By Roger Tagholm
"Access not ownership, relationships not transactions and concerns over who owns the channel to market – these were some of the themes of the second World E-Reading Congress which began in London on Monday. Once again, organizers Terrapin had assembled a powerful line-up of speakers who provided a one-stop take on what is happening in the digital space. From “haptic technology” (from the Greek Haptikos, “pertaining to the sense of touch”) to “lean back” readers, this was also the place to get a jargon update and phrase fix.
The View from a Futurist
Media Futurist Gerd Leonhard kicked things off. He believes the debate will soon be about access, not ownership and said that “for those over 30 it’s very hard to understand this switch. There will be some ownership, but it won’t grow. With music, iTunes sales are flat, but streaming is growing. It will happen with books. A Spotify for books will come. If a student wants 300 books, he’ll buy a three-year subscription”. Small examples of that already exist, but Leonhard means on a mass scale, such as that being contemplated in Brazil “where the government is looking to buy 100 million devices for students so they don’t have to buy the physical books”.
He believes there is more to the future than walled gardens and that “humans need meaning, not just cool technology. In the end, meaning is money. Apple has meaning, even though it is a totally walled garden — an oligopoly, a cult.” During the next three to five years he thinks we will see telemedia convergence. “The telecoms industry will realize that it will have to make deals with ISP operators to sell content — so that if you buy this SIM card, for example, you can get ten books.
“For the consumer, access to content will become much cheaper. We cannot force the consumer to pay the same for digital as physical. Technology owners reads more, so why penalize them? We need to innovate now to keep them.”
Sharing, he maintained, should be “non-negotiable. Sharing does not create economic damage.” Publishers must engage with their customers; attitudes to piracy must be rethought (“piracy happens when motivation meets opportunity”); and publishers must build value around content “because payment works if the context is right — if there is a reason, people will pay.”
Added note: "Duncan Edwards, President and CEO of Hearst Magazines International, took an entirely different view on pricing. “We have discovered that, because of the ease of use, people are prepared to pay as much — or even more — for the digital versions of our magazines.”
Really? Not sure that maybe that have just discovered their own desire to get as much as before, and found some willing fans - rest assured, this won't last. Look at iTunes and the music industry:) People will not continue to buy songs for €1 every time they are interested. Unsustainable, imho:=)
"I am a longtime commentator on how the digital, mobile and social-media revolution has left Publishers reeling and in a state of total change or even disruption. This is a call to action to transform your business to embrace and conquer the digital age. Failure to do so will mean inevitable friction, market confusion and possibly a dysfunctional content ecosystem, when on the other hand you could stand to profit from long term revenue generating opportunities.
It is often said that where attention flows money follows (*Kevin Kelly kk.org), but the question is how, where and when to convert them. Today, digital natives are viewers, users, followers, friends, co-creators, co-producers or crowd-sourced collaborators, all-in-one. Going forward, data is becoming the new oil, and understanding, analysing, predicting and staying ahead of your ‘connected consumers’ is quickly becoming a MUST for your business in 2012 and beyond!
So far, technological content protection measures have not been successful. Instead, future ‘protection’ will need to come from the business models and from social cohesion. Delivering tangible value and inventing new free, freemium, feels-like-free models will be crucially important. Just look at Skype, Spotify, Amazon and the undisputed master of ‘free’ – Google. You need to asses the role ‘free’ will play in your business. How will you monetize your content and which new and innovative revenue generating concepts will transform the commercial prospects of your business? Yes, methods of monetizing content are fragmented, but also much more powerful, immediate and liquid than ever. This industry, this transitional period and the World e-Reading Congress 2012 are all key opportunities to harness your digital footprint and develop strategies that will pay dividends in solid revenue. I look forward to meeting you all at the World e-Reading Congress next May.” Gerd Leonhard, CEO, The Futures Agency – Opening Keynote Speaker 2012.
Of course I would be very happy if you would consider buying the book for yourself (only $3.90, Kindle-only) but beyond that it would be really great if you could help me spread the word via rating and / or 'liking' the book on the Amazon.com page, tweeting about it or just forwarding this mail to some friends that may be interested.
This review is from: The Future of Content (Kindle Edition)
"I challenge you to expand your brain and read this book. What Gerd Leonhard is always doing is informing the global brain (or the collective brain) in ways that help us all get where we're trying to go. He builds the buildings in front of us.
This collection points toward several compelling answers for content creators. As a writer who is already swimming in the changing currents of "content," I found it intensely informative. Leonhard shores up my courage to continue embracing a digital world without DRM, and ebook prices "for the masses." He makes the all-important concept of curation crystal clear. If you are providing any kind of content in print or on the web, it's relevant. If you want to stay on the front edge of content creation and publishing, it's basic. I'm making this book mandatory reading for my epublishing circles"
ABOUT "THE FUTURE OF CONTENT" Futurist Gerd Leonhard has been writing about the future of content i.e. music, film, TV, books, newspapers, games etc, since 1998. He has published 4 books on this topic, 2 of them on music (The Future of Music, with David Kusek, and Music 2.0). For the past 10 years Leonhard has been deeply involved with many clients in various sectors of the content industry, in something like 17 countries, and it’s been a great experience, he says. “I have learned a lot, I have listened a lot, I have talked even more (most likely:) and I think I have grown to really understand the issues that face the content industries - and the creators, themselves - in the switch from physical to digital media.”
This Kindle book is a highly curated collection of the most important essays and blog posts Leonhard has written on this topic, and even though some of it was written as far back as 2007 - “I believe it still holds water years later. I have tried to only include the pieces that have real teeth. Please note that the original date of each piece is shown here in order to allow for contextual orientation.” Leonhard’s intent to publish this via the amazing Amazon Kindle platform, exclusively, and at a very low price, is to make these ideas and concepts as widely available as possible while still trying to be an example of what digital, paperless distribution can look like, going forward.
Updated: this post now includes Dominic Pride's presentation, embedded below. I also just added the audio version of my presentation (sorry for the rather poor quality), as well as the front-row-shoot with a video of my presentation, below; please note that this is the 'unofficial version', quickly recorded with my Kodak Zi8 - better quality video to follow soon. Clive Rich's presentation is embedded below.
Below is the link to the PDF with my edited presentation from today's Books 2.0 event at Olswang in London. I will add the slideshare embed code and file download options later, today (very slow connection here at the Hilton;), and we will have Clive's and Dominic's slides available as well; videos should follow within a few days, too. This was a really inspiring event, a great and very clued-in audience, beautiful location (Olswang London), and a perfect combination of different view-points by the 3 of us. More comments are available via the Twitter stream and via #books20 hashtag.
Some of the topics I covered included: the toxic assumptions of the music industry and what book publishers could learn from them, the reality of upside-down consumers (digital access first), the ecology of selling access vs selling copies, the Napster-Moment in eBooks - and what to do about (or rather, with) it, the characteristics of 'Reading 2.0', the new definition of books, media as a service and the potentials of 'content in the cloud', the future role of publishers... and much more. 32MB PDF: files.me.com/gleonhard/824xup (Creative Commons non-commercial, attribution licensed, as always)
Here are 4 'scenes' from my upcoming presentation at the Books 2.0 event in London, March 19. I still have a few seats reserved for my tweeps and blog-readers - ping me if you are interested (yes, it's still a free event;). I will publish my slides on this blog, via Slideshare, and via Twitter, sometime in the afternoon of that day. Stay tuned. The Twitter Hashtag is #books20 and the Twitter-Stream is here.
Everyone in the content industry should watch this demo, below, of what the Wired guys are working on - it's fantastic food for thought; exciting stuff. And just gotta love Scott's Matrix-dude-like, gravely voice in beginning;). Well done, guys.
4 'IF' comments: 1) If the publishers can and will provide very addictive, immersive and interactive experiences at LITERALLY no-brainer prices or via bundled services (big 'if' here) 2) If the media companies and 'rights-holders' decide to get rid of all that crippling and legitimate user-insulting DRM and other technical protection models (remember, Protection is in the Business Model) 3) If the advertisers and brands are really going to fast-track their support for these kinds of new platforms 4) If everybody can finally resist the temptation to make this yet another 'walled garden' competition, albeit with prettier flowers....THEN indeed, we just may have something here. I'll be watching (+).
Fueled by the music industry's ongoing turmoils and, finally, books going digital at a very rapid pace, there is a lot of debate on how to deal with the fact that many people habitually share i.e. redistribute digital content without any of the upstream users making their own payment. How can you monetize content when the copy is free?
This question is a key issue across the board, whether it's in music, eBooks, news, publishing, TV or movies. The fear is, of course, that once a digital item has been purchased by one person it can be easily forwarded to anyone else if it is in an open format, thus seriously reducing the possibility that someone else will actually pay real $ for it, as well (of course, the same is true for supposedly locked or protected digital content as well - it just takes a bit longer). No more control over distribution = no more money. Right?
Despite the plain fact that DRM has proven disastrous in digital music (and now is pretty much history), technical protection measures are still being investigated as a plausible method of securing payment, especially in the exploding eBook sector. This worries me greatly because technical protection measure are expensive, hinder or prevent mass-scale adoption,
curtail or kill social sharing which defeats user-to-user marketing, often drastically limit fair
use, and are by and large useless when trying to thwart the real pirates i.e. those that have malicious, criminal intentions of stealing content in order to sell it to others.
Not just content - Context! In my view, the thinking that the distribution of content must be controlled to achieve any kind of reasonable payment is fundamentally flawed because of this not-so-futuristic realization: in an open, digitally networked economy (note: I am talking about today, not tomorrow!) content publishers need to offer their goods in a way that no longer centers on distribution being the key factor. It should not (only) be the content that is sold (i.e. the mere 0s and 1s) but the context, the added values, the many others items around the content. Sell what can't be copied.
The irrefutable trend is that the window of opportunity of 'selling copies' (i.e. iTunes, eMusic, Kindle etc) is rapidly closing, at least in most developed countries. The next, and very much already-present opportunity is in selling access and added-value services, and in providing content-related experiences.
Once we embrace that the users -the people formerly known as consumers- can't be reduced to just being 'buyers of copies' we can investigate how they would want to pay for everything else, as well. For example, when buying an eBook users shouldn't merely pay for the authorized distribution i.e. the legitimate copy of the words but they could also gain access to highly curated commentary, known peers and friends that may also read this book, ratings, explanations, slide-shows, images, links, videos, cross-references, direct connections with the author or the publisher and so on. Yes: connect with fans + reasons to buy (as Mike Masnick of Techdirt has succinctly summarized many times before).
In this model, as a legitimate user, I would also get valuable context when I pay. I would get engagement, conversation, relevance, personalization, meaning... i.e. really valuable benefits to me as a person, not just a dumb, anonymous recipient of free zeros and ones. I don't get these benefits just because I get a free copy via email, Rapidshare, BitTorrent or some drop-box on the Net, because it is stripped bare of everything that really matters to me. This is the key to the future of monetizing content, and it will take many different shapes and forms depending on the content, and the culture that surrounds it.
For example, in music, it is very likely that streaming-on-demand (and the temporary buffering i.e. offline playing of those streams) will be 'free' i.e. bundled and packaged by 3rd parties, while the context and those many added values will not. If I want a high-definition version of my favorite opera or that Blue Note Jazz Club concert from last night I can buy a premium package that provides it. If I want to share my personal play-lists, ratings and comments with my Facebook friends, and get access to their content, I can add the 'social network option' to my package. If the price is right, I'll buy (btw: this relates directly to why people buy virtual items - perception of value, and purchase after deep engagement - see my Farmville/Facebook example: they sell 800.000 virtual tractors per day;).
As to pricing and making 'buying' irresistible: imagine if a download of a song would cost only $ 0.10 - would anyone
still bother to scour the web to find badly ripped, virus-laced tracks for free? Yes, I know, that price point sounds ridiculous if you used to sell CDs for 20 Euros a pop but the argument
for much cheaper access to digital content that is offered in open
(i.e. copy-able) formats is really quite simple: if you can get 95% of the users to buy at a
much lower price, and make them so happy they will do the marketing for you
(i.e. share links;), instead of getting 5% of the market to buy an
expensive product that they can't really share with anyone (i.e. iTunes
music or Kindle eBooks), then you should be doing just fine. This has been my chief argument for proposing the music flat rate during the past 10+ years, and I think it still holds water (in fact, it seems to be proving itself with the recent developments at Spotify, MOG etc).
And yes: selling at a much lower price but much higher volume only makes sense if
the low-priced (or flat-rated), access-based offerings actually connect directly to a multitude of up-selling possibilities, such as multimedia versions of
eBooks, high-definition versions of radio shows, albums or concerts, in-depth
analysis and audio/video commentary for news etc.
In most content industries, I think the key is to
offer a wipe-out, ueber-attractive way to get started at an
irresistible price-point, and then convert most of those happy users to other
offerings at a much higher price.
Pricing and value: getting the new formulas right. It all comes down to pricing and values - and many decision makers in the incumbent content industry will need to accept who will set those prices i.e. who will be in charge of value perceptions: not them, but the users. Hard stop. Reality check.
If you agree that the sharing of content cannot really be stopped, and that therefore the value of a mere digital copy of content will invariably decline, we must urgently re-think how we address the issue monetizing sharing, and what we can do to create and nurture those new values - the New Generatives - that will replenish those that used to be derived from being able to control distribution.
Added values, all the time. The metrics of the content industries need to shift from getting a copy to rewarding engagement. As an example, let's assume I have just purchased and downloaded a movie in an open file format, and I have a hunch that 50 of my close friends would also enjoy it. I post the movie on my iDisk shared files folder (anyone on .mac can do this) and send the link to everyone. Now, if the only value of the movie is in having received a 'copy without paying', then my friends have received the movie's entire value 'for free'. But if the value of this movie is also in the user / viewer being part of something much larger than mere 0s and 1s, i.e. a conversation or another environment of added values that are available to each individual viewer because they actually purchased access to the movie, then the mere sharing of the file is not going to be very attractive, for the upstream users will not have access to all these other values.
Imagine, then, if a legitimate movie buyer (or more likely, bundled-access-user) would also receive access to a select group of fellow users - and, crucially, representatives of the creators, producers or distributors - that would provide a myriad of additional values such as viewing exclusive, movie-related pictures, slideshows and short clips with the actors, locations or props used in the film, or getting special offers for related products such as books, games, merchandise or even HD versions of the same film, or unlocking new features within the very same file that are otherwise hidden (something that could easily be done within a mobile application, for example)... that is where it starts getting interesting.
Combined with a no-brainer price point, having a constant flow of added values available to legitimate customers would turn file-sharing into a marketing vehicle, i.e. surely I could somehow watch the movie 'for free' but would be barred from all that other cool stuff that I would have access to if I only paid my $2, myself.
The crowd and the cloud: new monetization possibilities not based on Control. Content hosting is moving from my own computer and my hard-drives to the cloud - and indeed, this is very good news for content creators, publishers and rights-holders because if makes it easy to engage and up-sell to the new generatives. In addition, it is reasonable to expect that content files will get larger and larger over the next few years, since many devices are now capable to handle much better resolutions and many users are tiring of bad audio, video and image quality. The age of squashed-sounding MP3s is ending as high-end audio is becoming a reality even in the smallest devices. Assuming those 2 trends (people receiving bigger and better files as well as accessing those files in the cloud rather than storing it on any specific piece of hardware), the key question is what 'sharing' will look like in the near future and what can be done to monetize it rather than try to curtail it.
The answer is in the cloud: I think many people will soon stop sharing the actual media files (since they are getting larger and larger, and therefore more unwieldy) and will share only the links, the bookmarks, the metadata or the tags, if the result is the same, i.e. if the shared content is made fully available to the recipient, without further ado or unwieldy registration procedures, buy-now pitches etc. How could this work?
Imagine you have purchased an ebook for 10 Euros and you want to share it with your wife so that she can read it to you while you drive, or with your son because he really should know about this great book. With a good, old-fashioned printed, dead-tree book, this is certainly not an issue, so why should it be such a problem for the electronic version? Why not create and deploy many extra values around this book (such as video, audio, images, slideshows, dictionaries etc), make the file a lot larger, and then still allow a buyer to share the book via a simple link or bookmark that provides all recipients with the basic, 'words-only' version of the book but withholds the added values until they purchase it for a very low and attractive price, themselves? Once those added values become a significant part of the user experience most users will not want to miss them - protection will be in the business model, not the software!
The perfect testing scenario may unfold soon, exemplified by Apple's new iPad. Extending the concept mentioned above, rather than blocking my wife from sharing an eBook it would be much more reasonable if I could still read the book, 'for free', but all else would not be available without a micro-transaction on my end, i.e. I would not have instant access to videos, links, ratings... i.e. that valuable context. This would clearly drive me to purchase a 'copy' myself - if indeed I like the book enough - sounds like a fair deal to me.
Engagement, interactivity, conversation and a constant stream of added values that can be produced at very low cost is what will give content owners 'protection' from rampant free-loading - not DRM, region-coding or HADOPI laws.
Sharism and Money. When thinking about digital music (my original, futurist starting point), imagine an unlimited music service at a feels-like-free price, supported by advertising, brand sponsorships, ISPs / Telecoms and mobile operators. A service that allows me to stream or download the music, and enjoy it online or offline (pretty soon, a rather pointless distinction, anyway). A service that is basically cloud-based but that allows me to make temporary sub-clouds on my personal device so that I can always get to what I like the most, much like the gMail offline reader, mobile RSS readers, the Instapaper iPhone app etc. While I may be inclined to share some of the music files with my friends, I would be highly unlikely to publish the complete access details to my personal cloud via, say, Twitter - I would risk watering down my profile and messing up my entire personalization efforts. Avoiding profile and account 'pollution' can be a major driver of payment adoption, I think.
Similarly, in books: let's assume, as a publisher, you'd
allow people to log-in and get digital access to 10s of 1000s of books,
at a low price (such as O'Reilly's Safari Books already does, for all those hardcore programmers and geeks around the world) - what
would keep people from just sharing the log-in details and only pay for one
account but have 2000 people getting everything for free? The answer:
once I am really involved with a platform I like, and use every day, I am not very likely to
share the account details with everyone, because I don't want my
profile to be polluted, and my own experience to be negatively
This is similar to having your family members use your eBay
account for bidding on stuff they want to buy: not a good idea, since it will
be your rating (which is the real currency of eBay) that will be
negatively effected if your 15 year old son does not live up to the
buyer's expectation on his last transaction. The same is true for
Amazon: share your log-in details with your 12 year old daughter and
you will make a mess out of your recommendations - she may love SuBo
(Susan Boyle) but you don't want to keep seeing pitches for stuff she may want,
for the next 9 months.
The bottom line: content sharing isn't the real problem: high price points, outmoded toll-booth strategies, broken relationships and processes, low values, bad technology and service, and lack of conversation and engagement are.
Here is my message to publishers and content owners: lower the prices to the point of unanimous excitement, use open standards that work for everyone, everywhere; bundle and package as attractively as you can (then: repeat). Remove all reasons that your users may have to avoid the toll-booth, and thereby side-step the conversion to 'paid'. The lower the hurdle for legitimate usage and paid engagement, the less you will have to worry about 'competing with free free'.
And do it now so you don't have to win people back from routing around you.
Fellow mobilist and DotOpen Founder Rudy de Waele has drummed up some great predictions, bottom-lines and other assorted wisdoms from 20+ really great people (including myself...for some odd reason; in any case I am really delighted to be asked to contribute - thanks Rudy!), asking us to provide input on out top 5 mobile trends for the next decade.
This effort produced a very nice slideshow that really packs a punch, see below. It includes some serious nuggets of wisdom from people such as Howard Rheingold, Douglas Rushkoff, Marshall Kirkpatrick, Gerd Leonhard,
Timo Arnall, Carlo Longino, Katrin Verclas, Atau Tanaka, Alan Moore,
Marek Pawloski, Ajit Jaokar, Nicolas Nova, Inma Martinez, Tony Fish,
Jonathan MacDonald, Willem Boijens, Carlos Domingo, Russ McGuire, Raimo
van der Klein, Michael Breidenbruecker, Robert Rice, Steve O’Hear, Ted
Morgan, Martin Duval, Andreas Constantinou, Fabien Girardin, Matthäus
Krzykowski, Rich Wong, Andy Abramson, Ilja Laurs, David Wood, Stefan
Constantinescu, Henri Moissinac, Kevin C. Tofel, Enrique C. Ortiz,
Felix Petersen, Tom Hume...
Here is my stuff, excerpted (from slide #9)
1. Mobile advertising will surpass the decidedly outmoded Web1.0 & computer-centric advertising - and ads will become content, almost entirely. Advertisers will, within 2-5 years, massively convert to mobile, location-aware, targeted, opt-ed-in, social and user-distributed 'ads'; from 1% of their their budgets to at least 1/3 of their total advertising budget. Advertising becomes 'ContVertising' - and Google's revenues will be 10x of what they are today, in 5 years, driven by mobile, and by video.
2. Tablet devices will become the way many of us will 'read' magazines, books, newspapers and even 'attend' live concerts, conferences and events. The much-speculated Apple iPad will kick this off but every major device maker will copy their new tablet within 18 months. In addition, tablets will kick off the era of mobile augmented reality. This will be a huge boon to the content industries, worldwide - but only if they can drop their mad content protection schemes, and slash the prices in return for a much larger user base.
3. Many makers of simple smart phones - probably starting with Nokia- will make their devices available for free - but will take a small cut (similar to the current credit-cards) from all transactions that are done through the devices, e.g. banking, small purchases, on-demand content etc. Mobile phones become wallets, banks and ATMs.
4. Quite a few mobile phones will not run on any particular networks, i.e. without [I mean unlocked] SIM cards. The likes of Google (Nexus), and maybe Skype, LG or Amazon will offer mobile phones that [may eventually] will work only on Wifi / WiMax, LTE or mashed-access networks, and will offer more or less free calls. This will finally wake up the mobile network operators, and force them to really move up the food-chain - into content and the provision of 'experiences'
5. Content will be bundled into mobile service contracts, starting with music, i.e. once your mobile phone / computer is online, much of the use of the content (downloaded or streamed) will be included. Bundles and flat-rates - many of them Advertising 2.0-supported - will become the primary way of consuming, and interacting with content. First music, then books, new and magazines, then film & TV.
I think that most of us working in the content industries can learn a lot from this post, no matter if it's about books, magazines, news, music, film or software. I will therefore summarize his most important bottom lines, below, and provide some comments and context where needed.
"Recent releases of O'Reilly ebooks as iPhone applications have even outsold the same books in print" Comment: in my view, this trend will happen with most business books, and text books, in the next 2-3 years (beyond the iPhone, of course, i.e. for all kinds of mobile devices)
"Most people thinking about ebooks are focused on creating an electronic
recreation of print books, complete with downloadable files and devices
that look and feel like books. This is a bit like pointing a camera at
a stage play and concluding that was the essence of filmmaking" Comment: this is a crucial point - publishers and distributors urgently need to let go of the idea of merely recreating offline sales models online.
"Everything is always in sync because your library is in the cloud; an ebook cloud works the same way the web itself works. It provides ubiquitous access and shared experience" Comment: amen. indeed.
"Some of the characteristics of the print publishing market:
Barriers to entry are low. Especially with the advent of desktop publishing, almost anyone can produce a book, a magazine, a newsletter.
Niches abound. Over 50,000 books are published each year in the U.S. alone. A major bookselling chain such as Borders keeps literally hundreds of thousands of unique titles in inventory. And despite major industry consolidation,and focus on a small number of bestsellers, there are still thousands of publishers, ranging in size from those who publish only a single book to those who publish thousands. What's more, there are about 3500 general circulation magazines and tens of thousands of newsletters and other limited circulation publications.
So do business models. Books are sold "by the piece." They are also available for free in the library, though in limited circulation. Magazines and newspapers may be had for free (perhaps subsidized by advertising or membership), for a single-copy newsstand price, or for a recurring subscription fee. Prices range from a few dollars to hundreds or even thousands of dollars for specialized newsletters.
No one "owns" the market, or needs to. A bestselling book might sell a million copies or so. The largest circulation magazine in the country, the AARP's membership magazine, has a circulation of about 7 million, Reader's Digest about 5 million. No one else comes close. It's possible to have a successful book selling only a few thousand copies, a newsletter a few hundred, and a four color magazine a few tens of thousands.
The same technology is available to everyone...
There is a rich ecology of mutually successful players.
Authors sell to publishers. Publishers screen material, edit and
produce it to add value, develop a marketing campaign, and build a
network of distribution relationships to get the book to the ultimate
consumer. Publishers may sell books directly to the consumer, through
major retailers, and through wholesalers to smaller retailers whom they
don't serve directly....
I just read this very interesting piece in PaidContent.org (one of my favorite sites): "Steve Haber, president of Sony’s Digital Reading Business Division... at the MediaBistro eBook Summit... decried the emphasis on the $9.99 price point for e-books. “The $9.99 price point is not a money-maker,” he said. “Certain bestsellers are sold at that price for retail, competitive reasons. But you need to have a range. You could go from $10 to $20 even to $100 for an e-book. There’s no sweet spot and it’s certainly not $9.99. When you walk into a bookstore and there are a range of prices. It should be the same for an e-book store.” Haber went on to defend the use of DRM, which he doesn’t see going away for awhile. “You need an orderly process to sell books and DRM makes that possible, mainly because it allows content creators and distributors to make money from that content"
Ouch. Have you not learned anything from happened in digital music during the past 10 years - where have you been hiding?Let me summarize it for you:
DRM is a total - and much discussed - nuisance and significant deterrent to legal consumer behavior, and it does ZERO to prevent sharing of copyrighted content online. DRM just turns users that have legal, fair and honest intentions into guinea pigs for digital rights protection schemes thought up by people who still have their emails printed for them. Wake up: protection is in the business model - not in technology. I may even concede that DRM may work in some (but increasingly rare) cases, but for books and for music...? No chance. Imho, you have to be kidding if you think these kinds of remote-controlled-rights schemes will make you any money in the future. In my opinion, anyone that still talks about DRM being a chief part of their eBook strategy should consider taking a longer vacation, and do some serious reading and thinking (sure... you could start with my own new book "Friction is Fiction" -ask me for the free PDF if needed; )
Face it: the price point for digital books has to be lower - much lower - than the price point for a real i.e. dead-tree, printed, shipped, physical book. Just because you can't seem to figure out how to reduce your costs across the board, start to add significant value in new areas and still turn a profit, that does not mean consumers will massively adopt eBook-reading at those price points (Kindle etc) or even above (as seems to be suggested above).
This looks like a very lame rerun of the classic and most disturbing mistakes of the music industry: the incumbent market leaders really thought they could actually increase their margin as well as their ability to control the usage (!) when selling music online, i.e. have much lower distribution and marketing costs, keep the artists down to the same old, tiny percentage, and - yes ! - increase the prices on a per-track basis.
Ask yourself this simple question: what would have happened if a download had been priced at $0.20 or even 10 cents per track (or even, yes, a flat-rate), instead of $1 - would anyone still have bothered to try and download it for free, somewhere else? Could the value of those active, engaged and happy buyers be captured, and then be extended to other things you can sell them? Clearly, the answer is YES.
This is my message to the eBook industry and the publishers: do not head into the ill-fated direction of wanting to sell digital content for the same price as the physical content (or even above...ouch) - it is a pipe-dream!
Instead, make eBooks drastically cheaper, offer unique bundles and compilations, add new values all the time (cross-media anyone?), invent new packages (think mobile), and stop focusing on just selling UNITS. Flip the pricing logic before it flips you: lower prices, infinitely more engaged and legal users, and new Generatives on top!
Finally, here is something that wasn't touched on at Paid Content but that is crucial: If you think that the traditional deals with the authors will carry over into the eBook environment you are deeply mistaken. Witness what happened with Random House's eBook initiative, here.The authors (and their agents!) will need to be brought in as PARTNERS not minor players, as they have been in the past. Accept, adapt and move forward.
I have been very busy compiling my best essays, blog posts and other writings from the past 3 years, and have finally uploaded the most recent version to Lulu (my favorite print-on-demand book store). The new book is now called 'Friction is Fiction' and is available in 3 versions: 1) 158 pages, 6x9 inches / U.S. trade format, full-color, for $60.40, here (yes, it's quite pricey because of the cost of printing 4-color, on-demand) 2) the same dead-tree version, but in black & white only, for $19.98, here (much cheaper but a lot less cool;) 3) as a PDF, for a token price of $7.50, here.
I would be delighted if you would consider buying whatever works best for you - what better Christmas present could you possibly think of! Please note that this book will be updated every 3 months, to include my latest writings. If you want to share the book page please just send people to www.frictionisfiction.com - thanks.
As to giving away the free PDF, here is the deal: you can contact me anytime (via email, Facebook or Twitter) to request a free copy of the PDF if you just don't want to (or can't) spend the $7.50, and I will send you the download link. In return, what I ask from you is to pay me with attention, i.e. to write a review on Lulu, a blog-post, or a tweet about my book, with a link (all 3 is best;). Deal?
As to the title: I used to simply call this compilation 'The Best of Media Futurist' but while looking through all those posts - and spending a lot more time revising them - I found an important thread that goes through almost all of it and which therefore has become the new title: Friction is Fiction. So what does that mean? It means that if you are currently basing your success on maintaining or even constructing hurdles, difficulties or other bottlenecks somewhere in the system - i.e. if there is something that impedes the flow of information, or a transaction or purchase so that a higher price point or some other form of control over the can be obtained - then you are very likely to face diminishing revenues in the next few years. Building obstacles for users (fka consumers) used to work just fine but... no longer. Building walls is the fastest road to suicide in the digital economy.
The web has been utterly ruthless about finding these glaring points of friction, such as paying for eMail (remember that?), paying a ton of money for long-distance phone calls (remember those pre-skype days?), or consumers not having any access to travel booking systems, flight information or seating. These hurdles are being removed, one-by-one, and those 'people formerly known as consumers' are getting more powerful every single day. Banking on friction to increase your revenues has become like throwing matches into the river and asking it to stop - it's useless.
Friction was, of course, the main money-maker in the media, entertainment and content business, for a long time: certain CDs were only available in certain stores at certain times in certain countries, DVDs with those movies you really wanted were only available in certain countries and within certain 'windows', books had to be printed and shipped, and ring-tones could only be purchased from your operator. Basically, at every turn the consumer encountered have-to's and must's which essentially allowed a substantial level of control by the media and content companies - and thus, higher prices. In many cases, the more friction the higher the price you could ask for.
It was a pleasure and a privilege to be invited to the Telco2.0 Executive Brainstorm event in London, today, and to address a roomful of telecom & media executives that were - as it says in the conference tagline - looking for a way to 'reduce the friction in the digital economy'. After having to listen to some rather bizarre and, sadly, rather 'retro' justifications about why those pesky Internet users and Digital Natives (i.e. our kids) really do need to be threatened with disconnection from the Net if they don't comply with the rules of yesterday's game, delivered with great pathos by the usual lobbyists from UKMusic and Universal Music Group executives (see the list of panelists below), I tried to get down to the bottom line of what the workable alternatives to their Control & Enforcement paradigms could be.
Funny thing is, that in the subsequent vote most people in the audience seemed to actually agree that disconnection and punishment are not going to change anything and are not a suitable path to new revenues... I always wonder why there seems to be strong consensus if people vote (or talk) individually, but if you hear them 'in public' everyone always delivers the good old party line of wanting more control and protection. Why is that? Whose bread we eat whose song we sing... is that it?
I will post a summary here, shortly. In the meantime, here is the slideshow (download the PDF via slideshare). A