"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.
Today is a very big day for me. My new Kindle book "The Future of Content" just went online at Amazon, and is already gaining a lot of traction. You can view a very short video greeting about the book on my GerdTube channel (Youtube:)
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.
This is a good one - loads of information in here, and pretty well recorded. More details and PDF with all slides, here. Enjoy and spread the word. Subscribe to my video RSS feed, here, if you want (download all videos directly to iTunes, watch on your iPod etc).
Just found this
- some good soundbites of my favorite memes - well worth the 3 mins 50 secs;) . The slideshow from my keynote at the International News Media Marketing event, itself, is here.
I just did my 4th edit, and am now offering a really cool, low-cost version (b&w inside) via Lulu and Amazon. The PDF download is priced at $3.99 for a limited time. Take a look - nothing that keeps you from buying multiple copies btw;). If you want the dead-tree version Amazon.com sells it, as well (but I prefer if you bought from Lulu.com). My other Lulu books are here btw (Music 2.0 etc).
I really enjoyed being at the Guardian's Changing Media Summit in London, last week. Not only is the Guardian one of my favorite online news-sources but I also got a chance to talk to Wikipedia's Jimmy Wales, during the event, and I met tons of great and inspiring people - London is always a goldmine for that. So, as promised, below is the slideshare version of my presentation as well as the direct link to the low-resolution PDF download; feel free to download and re-use as you like (under the usual creative commons, attribution / non-commercial license).
Some of the bottom lines from my presentation: 1) in content and media, we are rapidly moving from just selling 'stuff' i.e. copies of content, to selling services and experiences 2) EGOsystems are rapidly becoming ECOsystems; i.e. because we are all (well, most;) connected now we must create and implement mutually beneficial business models that are based on market-making and revenue sharing 3) Trying to enforce control when trust is crucial is a very bad idea, i.e. the quickest path to failure in this new content economy 4) In the content industries, the concept of mostly 'selling copies' is becoming 'toast' - "New Generatives" based on access must urgently be created and delivered 5) The future is in selling -and bundling - access, not (just) copies, and the ecology of selling access is totally different - we must get used to it! 6) The content 2.0 economy will work only in conjunction with a new approach to what telecom companies, ISPs and mobile operators will and can do, going forward. The creation of a new telemedia ecosystem is needed to really solve the key issues that the Internet has made even more urgent to solve 7) All content is shifting to the cloud, and Media As A Service (MaaS) will become a standard, very soon 8) therefore, as I have said many times before, data is the new oil (!!) 9) Value, Reason, Price, Ease of Payment and Packaging are the main success factors in selling content online 10) Most business models in the content industry will be based on a constantly changing mix of 'I pay, you pay, they pay' 11) A message to Murdoch et al: Forcing to Buy is like Forcing to Love!
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 (+).
I am delighted to have been invited to hold a keynote at the International Newsmedia Marketing Association (INMA) prestigious World Congress in New York City, on April 26-28, 2010.
Here is what I will talk about (Tues, April 27, 9am): The Future of News, Publishing, and Media: How to Monetize Content In the Next 3 Years. "The challenge of how to monetize content in a digitally networked and
always-on world is growing more severe by the minute, driven by
constant advances in technology, smarter devices and faster
connectivity, as well as by drastic changes in consumer behavior,
worldwide. Can those analog dollars be converted to a much larger
number of digital quarters and dimes? Where will those next-generation
revenue streams come from, and how can you fast-track them? Can and
should copies be controlled, online, and if not, how do you “compete
with free”? How can “selling access to copies” be turned into real
money, not just page-views and social media buzz? What is the role of
advertising, mobile device makers, the ISPs, telecoms and mobile
network operators, and how will publishers position themselves in this
new “telemedia” ecosystem?" Hope to see you there!
Today, I am delighted to announce a very special event on "The Future of Books & Publishing in a connected World", on March 19th, in London. I have teamed up with Clive Rich (Rich Futures / Olswang) and Dominic Pride (the SoundHorizon) to jointly present a powerful, conclusive and inspiring program (8.30 am to 12 noon), geared towards Senior Executives, strategists and decision makers from all sectors of the book publishing industry, including the creatives, i.e. the authors / writers and their agents and representatives.
The Future of Books will present C-Level publishing executives with the real (and so far unspoken)
learnings from the music industry, a business which has been in transition since the days of Napster 1.0
and the first MP3 players. The speakers will present their views on what book publishers need to
understand, believe and do, to take advantage of this dramatic shift from selling copies of printed books
to selling access to a digital book (or both). Clive, Dominic and me will be making one presentation each, centering around several key questions: 1) what can and should really be learned from the music industry as far as adopting web-native business models is concerned? What really happened during the last decade in digital music, and why, and how could book publishers avoid a very similar situation? Is protection in technology or is it in the business model? 2) What are those 'immediate-future' business models for what we like to call Books 2.0, what exactly are the most likely new revenue streams and how can those real "New Generatives" be nurtured? 3) What needs to change so that a win-win-win future for publishers, authors and consumers can be constructed and realized?
In addition, we will try and address questions such as:
How can publishers respond to these rapidly emerging scenarios? Will books become "free"
and ubiquitous on all digital networks? If customers continue to pay, will authors and their
publishers get digital pennies instead of pounds?
As reading becomes another part of new retail environments and other services, how will it be
taken to market? And what are the additional services and usages which will form part of the
new value proposition, and ultimately new revenue streams?
Publishers need to act now to ensure that they continue to play a valuable role in fostering
talent, nurturing careers and in providing great content to readers
About the Speakers (apart from myself):
Dominic Pride: Founder and Principal Consultant, The Sound Horizon. Dominic founded The Sound
Horizon in 2009 to serve the growing number of companies wishing to create and maintain digital
strategies, successfully manage innovation and create new service concepts. Key clients for The Sound
Horizon include Nokia Media & Games and City Showcase. Prior to The Sound Horizon, Dominic was
Product Marketing Director for Shazam, where he spearheaded the company’s expansion into branded,
application-based services on iPhone, Android, Blackberry, Windows and Nokia platforms, and helped to
position the company as one of the planet’s prime music discovery brands. At Orange / France Telecom
Group, he drove the international market development of mobile and convergent music services and
played a key role in DRM-free music.
» www.thesoundhorizon.com
» www.twitter.com/thesoundhorizon
Clive Rich: Principal, Rich Futures and Consultant to Olswang. At Olswang, Clive works closely with
the Firm's music and new media practices. Clive has a 25 year history of excellence in the Music
business as a lawyer, Board Director and Strategic Director. At Sony BMG Music UK Clive created and
ran the “Futures Division”, responsible for all Sony BMG’s new and developing business - including its
digital music business, TV programming and brand partnerships. This included developing the business
interests of Syco, SonyBMG's TV joint venture with Simon Cowell. Prior to that he held senior business
affairs positions with BMG, and chaired PPL and the BPI Rights Committee. Through Rich Futures he has
since provided business affairs services to, among others, the Royal Opera House, MySpace, SanDisk and
the UK Government’s Technology Strategy Board. He also assists in the business development of a
number of emerging digital media companies in which he is a shareholder.
» www.richfutures.co.uk
Olswang London is generously hosting this event; registration is free-of-charge but invitation-only, and limited to senior execs from the book publishing business. If you are interested in participating please contact me directly (and soon - space is limited).
Where: Olswang LLP, 90 High Holborn, London, WC1V 6XX (click here for a map)
Below is our 'official' video trailer for this event, with all 3 speakers commenting on what we will talk about.
A conversation with Dominic Pride and myself can be viewed below, as well. More videos are available on our Youtube channel.
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
effected.
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.
Below
is the PDF from the presentation I just did at Midem 2010
in Cannes / France (Sunday January 24, 2010, 5.30 pm). My MidemNet blog
posts are here, and my presentation "Compensation not Control"
from MIDEM 2009 is here. Please click through to the Slideshare
site to download the PDF if desired. The video is now available, here,
as well. Download: Content
2.0 Gerd Leonhard at MidemNet 2010 Public PDF 15MB
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....
If you are in the content business, be sure to read his entire post, and watch his 2009 Web2.0 video, here. There sure is a ton of stuff to chew on. Enjoy.
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.
No longer. Read the book!
Related: my blog-book "The End of Control": download the first 6 chapters here. Also: My Music 2.0 book is available via Lulu, here
Increases brain power for content creators, October 25, 2011
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Dominic Pride: Founder and Principal Consultant, The Sound Horizon. Dominic founded The Sound
Horizon in 2009 to serve the growing number of companies wishing to create and maintain digital
strategies, successfully manage innovation and create new service concepts. Key clients for The Sound
Horizon include Nokia Media & Games and City Showcase. Prior to The Sound Horizon, Dominic was
Product Marketing Director for Shazam, where he spearheaded the company’s expansion into branded,
application-based services on iPhone, Android, Blackberry, Windows and Nokia platforms, and helped to
position the company as one of the planet’s prime music discovery brands. At Orange / France Telecom
Group, he drove the international market development of mobile and convergent music services and
played a key role in DRM-free music. 
Clive Rich: Principal, Rich Futures and Consultant to Olswang. At Olswang, Clive works closely with
the Firm's music and new media practices. Clive has a 25 year history of excellence in the Music
business as a lawyer, Board Director and Strategic Director. At Sony BMG Music UK Clive created and
ran the “Futures Division”, responsible for all Sony BMG’s new and developing business - including its
digital music business, TV programming and brand partnerships. This included developing the business
interests of Syco, SonyBMG's TV joint venture with Simon Cowell. Prior to that he held senior business
affairs positions with BMG, and chaired PPL and the BPI Rights Committee. Through Rich Futures he has
since provided business affairs services to, among others, the Royal Opera House, MySpace, SanDisk and
the UK Government’s Technology Strategy Board. He also assists in the business development of a
number of emerging digital media companies in which he is a shareholder.
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