henry sztul

There are a few ways online content is paid for today.

Advertising. Subscription. Pay per download or use.

There are others forms of monetization making inroads but these are the big three at this time.

Many content owners are still struggling with their digital efforts & strategy. And as a result we (all of us) are still at the early days of figuring all of this out.

Consider:

1 - Books. Yes, the Kindle is amazing. Many of my friends that own the Kindle tell me that that Amazon’s Kindle library of content isn’t great yet. So first they try to buy content thru Amazon. But if the content isn’t there they get a pirated version online somewhere and send to the Kindle as a PDF. I’m told it’s super simple to do.

The NYT has a piece about book piracy today. Many authors are concerned about finding their published works on Scribd and other places. Then you have Cory Doctorow who makes his works free online at the same time as the published book. Cory has this classic line in the article:

“I really feel like my problem isn’t piracy,” Mr. Doctorow said. “It’s obscurity.”

I love that line.

2 - Television. I wish Hulu and others would completely open up. Right now there are three big problems with Hulu in my opinion. First, the library of content is getting wider (thanks to new content deals like ABC) but less deep. It’s well known that many shows don’t make it to Hulu until a full week after the broadcast. Second, many shows are taken down quickly as well. Third, Hulu limits 3rd party distribution.  We don’t have a storage or techical problem. We have a fear problem. But as my friend Jamie Siminoff points out, Hulu should be able to monetize better than old fashioned tv.

3 - Banner ads. Saul Hansell has a story in the NYT today about new super-sized ads that are actually 468 pixels wide for “premium” content sites. Oy. The most interesting thing about the story is the comments where most people say that they don’t care about these super-sized ads.

Why don’t they care? Because they use Ad-blocker extension on Firefox and they don’t see any of those ads. That’s a problem isn’t it.

4 - Music. We still don’t have music right yet. For example, we don’t have an easy way for me to pay for my own radio station. Yes, Apple dropping DRM was a big step forward. But I’m finding more and more soundtracks online are only sold as full album instead of a la carte. Even on iTunes. Haven’t we moved beyond this by now?

Plus, music labels are still suing startups into oblivion that are trying to save the labels not hurt them. There are a few well known killer music discovery startups that I’ve been dying to invest in — but won’t at this time. I worry that the day I invest is the day they will get a lawsuit. Even if they don’t have a case — they will sue.

I know of a startup that has a contract with all of the major labels. They include minimum payments and even warrants (don’t get me started on the latter). The contract is up for renewal and now a few of the labels are trying to shake down this startup. It’s just gross.

Here’s the thing that all of these have in common. They try to do something that is artificial with the web. You can’t be half way open. Content owners can’t set the bozo bit on us. We want to pay for content. Please make it easier.

Howard Stringer is right. Content isn’t king. The consumer is king.

continuations:

I believe that the financial and economic crisis is accelerating the change from the industrial to the information society.  The magnitude of the change is likely to be on par with or greater than the transition from agricultural to industrial society (I am intentionally saying “society” instead of “economy” because the change affects all parts of how we live).  This is scary if you are stuck in the old and exciting if you are helping invent the new.

Take the automotive industry.  There is a distinct sense that huge companies such as GM are dinosaurs that have seized to be effective.  Even Toyota is struggling.  But it is hard to see what the future structure of the industry might be despite tantalizing glimpses, such as the emergence of new innovative car and transportation companies in the US and abroad.  This is scary if you are working at GM and exciting if you are at BetterPlace.

Or consider education.  The existing system is definitely breaking down.  For instance, the cost of degrees has been rising rapidly, far outpacing inflation.  But the value of many traditional degrees has started to decline in a world that has a global labor market for those disciplines (e.g., engineering).  At the same time though, it is easier than ever to learn something entirely on your own using resources such as Open Courseware or mentors in communities on the net.  This is scary if you are in college (or preparing for college, or paying for college, or worse yet in debt following college or a graduated degree) and exciting if you have found your passion and have the economic freedom to pursue it.

Journalism provides another great example.  The Tribune Company has filed for bancruptcy.  Even the New York Times has been retrenching. If you are a journalist at one of these traditional companies you are likely to be scared.  That might also be true if you are simply a consumer of these papers and don’t feel at home on the web; or even if you are web savvy, but are concerned about the missing economics to support investigative reporting.  But if you are right now building something new such as the Huffington Post or a news reader/aggregation service you are excited.

For those of us lucky enough to fall in the excited category, it is important to recognize that right now and probably for quite some time there are far more people for whom the transition is genuinely scary and we should not be dismissive of that.  That is especially true since nobody really knows where this is going.