Can Apple Save the Publishing Industry?
I’ve read the Economist religiously for over 15 years. For many of those years I bought a copy every week at the newsstand, and I’ve subscribed for the past couple of years. A few weeks ago, I let my subscription lapse. The reason is a web service-cum-iPhone application called Instapaper. Dragging their bookmarklet into your browser’s bookmark bar adds a button labeled “Read Later”. Click this button on any webpage, and it is added to your reading list. Sync to the iPhone app, and the article is available for reading on your mobile phone.
This approach has two particularly appealing aspects. First of all, the articles are formatted for easy reading on a small screen. Images, sidebars and the like are stripped off, leaving the raw text in a nice big font. Secondly, the text is stored on Instapaper’s server and downloaded to your phone when you sync. This means that you don’t need a live net connection to access it, nor do you have to put up with MobileSafari’s slow loading times and inadequate caching behavior. The latter is particularly irksome because I don’t always read an article in its entirety in one sitting. With Instapaper, my reading list is accessible at the click of a button, and when I select an item that I was already reading, it pops up immediately in exactly the spot where I left off.
I did a bit of hacking on a very basic Firefox extension called Instabutton that adds a toolbar button (rather than a bookmarklet) with the “Read Later” functionality described above. So now I have a context menu item in Firefox called “Instapaper” that I can select for any link on a webpage. When the Economist comes out on Friday, I go to their website and load up the table of contents of the new issue. With a click, select, click, select, I cruise through the articles picking the ones that catch my eye. The whole process takes a few minutes. The Economist erudite prose sits alongside various other publications and blogs in my Instapaper reading list, meaning that I have access to a broad range of material whenever I have my iPhone with me. Which is always.
With all the morbid commentary about the imminent death of the publishing industry, my first reaction was to see this as further proof that traditional newspapers and magazines are doomed. The few remaining advantages that print has to offer — convenience and portability — are vanishing with the advent of portable reading devices (something I predicted five years ago). Now that I can get my weekly Economist fix in my pocket for free, why would I waste my money on dead trees?
My second reaction was to see this as a huge business opportunity for publishers and for enterprising software developers looking to attach combine an Instapaper-like app with an iTunes-like payment model. This is particularly easy to imagine in the specific case of Apple and the iPhone. Naturally publishers would have to restrict free access to their content in some way, but assuming they do, wouldn’t readers be willing to pay a fee for the great user experience I now enjoy, in the same way they’ve shelled out billions for songs on iTunes thanks to the full service convenience of Apple’s service?
Not according to Clay Shirky they won’t. In a post entitled “Why Small Payments Won’t Save Publishers“, he argues that publishers will not be able to save themselves by charging for their content. (And he helpfully links to a number of articles in the mainstream press that outline ideas very similar to my own, if only to debunk them.) Clay’s post did not convince me that the charging for textual content is a non-starter, however. Quite the contrary, the piece struck me as ideal fodder for a merciless fisking.
As background for his argument, Clay first contends that the term “micropayment” is misplaced in describing a putative paid content system, citing an upper limit for payments that are truly micro that I suppose he extracted from somewhere in the nether regions of his anatomy. Well, who cares? Whether we choose to call them micropayments or floozlebeezies has no material impact on the potential merits of such a system.
His second piece of background is that small payments won’t fly because users don’t want them:
The other key piece of background isn’t about small payments themselves, but about the conversation. Such systems solve no problem the user has, and offer no service we want. As a result, conversations about small payments take place entirely among content providers, never involving us, the people who will ostensibly be funding these transactions.
The implication is that paid content can only succeed if it is actively sought by us, the “users”. Perhaps I’m missing something, but in this context I don’t see any difference between paying for content and paying for anything else. Carmakers charge for cars because they need revenues to pay for capital, labor and to provide value to their shareholders. Car buyers aren’t clamoring to pay for vehicles, in fact I’m quite sure that few indeed would say no to a free SUV or Prius. Publishers have costs and shareholders as well, and it is quite natural that they would like to charge for their wares whether their customers want to pay for them or not.
As far as the analogy to successful paid content systems like iTunes is concerned, Clay rejects it by claiming that these systems have thrived only because they rely on “closed systems” that give consumers no other choice than to pay for a particular good (ringtones, online avatars or whatever). Regarding iTunes, he states that:
Apple’s ITMS (iTunes Music Store) is perhaps the most interesting example. People are not paying for music on ITMS because we have decided that fee-per-track is the model we prefer, but because there is no market in which commercial alternatives can be explored. Everything from Napster to online radio has been crippled or killed by fiat; small payments survive in the absence of a market for other legal options.
Potentially convincing if it were true, but the evidence suggest that it isn’t. Rhapsody, for example, is an all-you-can-eat music subscription service that has some passionate adherents. In iTunes I can choose from dozens of free online radio stations offering music. If iTunes has succeeded with a pay-per-download model, this isn’t due to lack of competition. It is because listeners consider the product and user experience to be superior to alternatives.
The meat of Clay’s argument comes in the last few paragraphs:
Meanwhile, back in the real world, the media business is being turned upside down by our new freedoms and our new roles. We’re not just readers anymore, or listeners or viewers. We’re not customers and we’re certainly not consumers. We’re users. We don’t consume content, we use it, and mostly what we use it for is to support our conversations with one another, because we’re media outlets now too. When I am talking about some event that just happened, whether it’s an earthquake or a basketball game, whether the conversation is in email or Facebook or Twitter, I want to link to what I’m talking about, and I want my friends to be able to read it easily, and to share it with their friends.
In other words, articles hidden behind a paywall will fail to attract readers because we can’t link to them or share them with our friends. Searchability and linkability are certainly important, and publications that charge for articles currently tend to address this by offering the first few paragraphs of an article for free so that it can be linked to and crawled by search engines. But still, the point is valid. If heaping servings of free content are only a google away, getting people to pay for your content is going to be a daunting challenge.
One thing I don’t like about this line of reasoning is that it implies that all content is basically created equal. Any plan to charge for articles rests on the inherent assumption that that content has a particular appeal that can’t be satisfied elsewhere for free. If that isn’t true, then Clay is absolutely right, and no payment system for textual content will ever make it off the ground. It beggars belief, however, that readers will abandon well-written, well-researched journalism and commentary written by professionals for amateur blog posts rather than pony up cash for the former. The reason print media is now struggling is primarily due to competition from the very same publications’ free websites, not from the amateur blogosphere. Otherwise, why are folks willing to pay for the latest Bruce Springsteen or Madonna album when there is plenty of free amateur music from wannabe rockstars available online?
Successful implementation of a payment system for online articles will be tricky. Proponents will have to get a lot of things right, just as numerous music services came and went until iTunes found the right balance of inobtrusive (and now non-existent) DRM, convenience of purchasing and smooth integration with portable listening devices. It will also require that a critical mass of content comes on board (another point I made a few years back). Publishers will start by dipping their toe into the waters of paid content, but when the proverbial tipping point is reached, and finding quality content for free is no longer trivially easy, they will dive in en masse.
It won’t be easy, and it will take a while to get right. Considering the surprising success of the iPhone as a reading device, coupled with its unique track record of confecting the right user experience and its existing content distribution and payment systems, Apple is a leading contender to be the first to market with a viable offering. Amazon, who is making headway in this market already with the Kindle, is another strong candidate. (Maybe I should mention that I own shares in both these companies, but then I only bought them because I believe them to be so well-situated to take advantage of ongoing shift to paid digital media.)
Rather than being a lost cause, payment for online articles has an air of inevitability. Clay underlines this point himself when he states, quite correctly, that “if small payment systems won’t save existing publishers in their current form, there might not be a way to save existing publishers in their current form.” Can you imagine a world without the well-crafted prose of the Economist or New York Times, without the type of informed journalism that depends on the deployment of trained professionals across the globe? I certainly can’t. And this alone is sufficient reason to believe that, one way or the other, we’ll be paying for much of what we read online at some point in the not so distant future.
« FOSDEM Bound - FOSDEM Slides Now Online »