Category Archives: Free

And they said it wouldn’t work: Digital subscriptions are a thing now

Farhad Manjoo has some good news for those of us who want this internet experiment to work out: People are paying for stuff .

This paragraph caught my eye:

“Apple users spent $2.7 billion on subscriptions in the App Store in 2016, an increase of 74 percent over 2015. Last week, the music service Spotify announced that its subscriber base increased by two-thirds in the last year, to 50 million from 30 million . Apple Music has signed on 20 million subscribers in about a year and a half. In the final quarter of 2016, Netflix added seven million new subscribers — a number that exceeded its expectations and broke a company record. It now has nearly 94 million subscribers.”

Netflix has nearly 94 million subscribers.

That’s an amazing number. Those aren’t “users.” Those are people who pay for the service.

For years I’ve joined the chorus lamenting the impending doom of creativity, content, and culture. No one will ever pay for anything .

I think back to that moment 10 years ago when I realized that online advertising was a race to the bottom for all but a few massive companies. I was distraught. Really, I was legitimately upset. I was fascinated by the internet’s possibilities, yet it seemed to be built on a pile of sand. I wondered how it would all play out. I wondered if I needed to find a new line of work.

And yet, here we are.

When I consider my own digital subscriptions I’m struck by how easily and naturally they’ve arrived. At a certain point, each one just made sense and just fit in.

I guess I’m not alone.

Want to know what Google is up to? Here you go

GoogleI’ve seen lots of hand-wringing and sweaty prognosticating about Google. What will it do? What does it want? Is that don’t be evil mantra for real?

Funny thing is, Google’s strategy has always been in plain sight. There’s no obfuscation. There’s no misdirection. Heck, this New York Times piece spells it out:

Google has used a similar approach — immense computing power, heaps of data and statistics — to tackle other complex problems. In 2007, for example, it began offering 800-GOOG-411, a free directory assistance service that interprets spoken requests. It allowed Google to collect the voices of millions of people so it could get better at recognizing spoken English. A year later, Google released a search-by-voice system that was as good as those that took other companies years to build.

See what Google did there? It released a free service so it could gather huge amounts of data that could then be used in another product. That’s what Google does. Free leads to data, data leads to another product. Repeat over and over and over and over again.

What we need is a good-better-best approach to digital content

Paramount is out with a new online service that lets customers purchase clips from films. As this New York Times article notes, it’s initially aimed at advertisers and marketers who want to use the clips in campaigns. Consumers will be let in on the action later.

I have a couple thoughts on this:

1. Kudos to Paramount for giving this a shot. It certainly can’t hurt, and we need all the experimentation we can get.

2. I think this is a fantastic opportunity to test good-better-best quality levels. I’ve long thought there’s a way to service different segments of the audience through resolution, features and convenience.

For example, writers, bloggers and others who simply want to reference a clip could grab a lower-resolution version for free (as many already do through YouTube). This boosts awareness and creates branding opportunities for the content provider.

One sidenote: The Times piece suggests folks on the low end — consumers, mostly — may have to pay a low per-clip fee. That’s the wrong move. These aren’t ringtones. Ringtones are a public expression of personality linked to an always-on, always-available device. Embeddable movie clips require placement within media forms, be it a website or a DVD. The all-important personality element is muted. I’m not going to shell out cash if that so-bad-it’s-good movie clip only broadcasts my ironic sense of humor to a limited audience. I need exposure, dammit!

But I digress …

Moving up the scale, companies that want to aggregate clips or make them available as part of another content product could pay a reasonable amount (likely a flat rate for a certain number of clips) and gain access to DVD-quality content. I can see utility here for the education world. A one-stop shop for clips could take a lot of the pain out of the copyright quagmire law-abiding teachers currently face.

On the high end, marketers and advertisers who need full-resolution (1080p, if available) and the absence of co-branding would pay a premium.

What won’t work is an “everyone must pay” declaration. I’m assuming that since this got written up in the Times, and given that a consumer option is part of the longer-term gameplan, Paramount wants this to be more than a back-channel marketers’ tool. Otherwise, why publicize it? This is clearly a public-facing product. As such, it needs to properly service the unique needs of all audience segments.

The psychology of paywalls [Quote]

“Paywalls are psychological as much as navigational, and it’s a lot easier to put them up than to take them down. Once web users get it in their head that your site is “closed” to them, if you ever change your mind and want them to come back, it’s extremely difficult to get that word out.”Scott Rosenberg, former managing editor of Salon.com

An exclusive search engine deal for newspapers can’t be far off

Reports suggest Microsoft is courting European publishers for some sort of Bing-based news thing. Meanwhile, Rupert Murdoch continues to shake his fist at Google. Cory Doctorow connects the potential dots at Boing Boing:

So here’s what I think it going on. Murdoch has no intention of shutting down search-engine traffic to his sites, but he’s still having lurid fantasies inspired by the momentary insanity that caused Google to pay him for the exclusive right to index MySpace (thus momentarily rendering MySpace a visionary business-move instead of a ten-minutes-behind-the-curve cash-dump).

So what he’s hoping is that a second-tier search engine like Bing or Ask (or, better yet, some search tool you’ve never heard of that just got $50MM in venture capital) will give him half a year’s operating budget in exchange for a competitive advantage over Google.

Toss in the growing idea that Twitter, Facebook and other recommendation-based results are now more important than Google traffic and we’ve got a very interesting set of signals.

Want to encourage piracy? Netflix and the movie studios show you how!

Looks like Netflix and the movie studios are about to make piracy more enticing. Good move, guys. From TechCrunch:

Here’s what this will do: It may drive sales of DVDs a bit short term. But soon, online movie piracy will pick up to new heights. If the movie studios have nightmares about piracy now, their reality will be truly terrifying with this plan in place …

… with this new 30-day window in place, the masses would be driven online to search for more illegal content — and more importantly, it would begin to fuel a piracy ecosystem for Hollywood content. There would be more people downloading, but also more people sharing. That’s the key.

Take a look through any torrent site (looking is legal) and you’ll see that most of the activity occurs around new releases. And that’s happening under the current system where new releases are available for purchase or rental. Remove rental from the equation (you know, the lower priced, easier, less restrictive option) and suddenly pirates go from fringe-dwelling copyright violators to service providers. I’m guessing that’s not what the studios are shooting for.

“User” and “Customer” are Different Animals In the Freemium World

The New York Times’ recent piece on Evernote inadvertently cracked open an important question in the “freemium” discussion: What’s the difference between a user and a customer?

The language attached to freemium business models requires specificity because these businesses associate expectations with distinct user groups. With freemium, there’s a vast canyon between free access (users) and pay access (customers); they are not synonymous. That’s why the following clarifications are necessary:

User — A visitor who accesses a site, product or platform, but does not pay. Example: I use Dropbox, but I don’t pay for the top-tier services (yet …)

Customer — A converted user who now pays for premium access or services. Example: As my storage needs increase and I become more reliant on Dropbox, I’ll likely convert into a paying customer.

I realize this entire post teeters on nitpicky semantics, but heated debates require clear boundaries.

Sidenote: I highly recommend the Times’ Evernote story. It’s a great representation of the opportunities and obstacles that come with freemium models, and it has actual numbers.

The Wall Street Journal is Not a Newspaper

Rupert Murdoch continues to bang the drum for pay walls:

“Quality journalism is not cheap,” Mr Murdoch said, noting that the success of The Wall Street Journal’s online subscription offering has convinced him that consumers will pay for news online that differentiates itself from the mass of information available free on the web. “A newspaper that gives away its content is simply cannibalising its ability to produce good reporting.”

There’s a fine distinction within this excerpt: The Wall Street Journal is not a newspaper. It’s a provider of targeted information that its audience uses to guide financial decisions. The value proposition is driven by the actions and outcomes the information facilitates. General news rarely offers this type of value, which means the commonalities between the WSJ and newspapers are limited to bits, print, ink and distribution.

That’s not to say the WSJ doesn’t provide a lesson for general news publishers. The key is to provide tangible, actionable value for the audience via content. That’s what WSJ subscribers are buying (or configuring …)