Post-Medium Publishing(paulgraham.com)
paulgraham.com
Post-Medium Publishing
http://www.paulgraham.com/publishing.html
59 comments
My book went to press yesterday. The publisher did a whole lot more than just printing it, though. In fact, that might have been their easiest to replace function.
I think publishers will be relevant at least as long as published data is respected more than something I slap up on my website. Seriously, the wikipedia page on me can now be written without getting deleted for non-notability!
I never expected to make any money off this book (my co-author said "Literally, thousands of dollars!" when asked how much he expected to make.) so really, I chose to go through a publisher because editors and layout people have real value, and because a 'real publisher' adds a lot of credibility, which is my primary goal anyhow.
That is an interesting problem: without the publishers, who will function as the givers of credibility, the gatekeepers? Who will wikipedia cite?
edit: This is an example of a business model where the content is created for free and subsidized by it's side effects. I'm after a reputation, which I will then monetize through my regular business activities. I'm happy to essentially give away the time I spent writing this (hopefully useful) book.
In this case, my interests are mostly aligned with my readers; if the book isn't generally considered to be useful, or at least correct, then I don't get the reputation I wanted.
On the other hand, I could have done the same work, and hired editors out of my own money, then put the result on line. I would perhaps have reached more readers, but I would not have the added credibility of going through a gatekeeper of quality. And would I have been able to hire editors of the same quality? the clincher for me is the credibility, though. Until we have a better gatekeeper, I imagine this will keep authors using the biggest-name conventional publishers they can.
I think publishers will be relevant at least as long as published data is respected more than something I slap up on my website. Seriously, the wikipedia page on me can now be written without getting deleted for non-notability!
I never expected to make any money off this book (my co-author said "Literally, thousands of dollars!" when asked how much he expected to make.) so really, I chose to go through a publisher because editors and layout people have real value, and because a 'real publisher' adds a lot of credibility, which is my primary goal anyhow.
That is an interesting problem: without the publishers, who will function as the givers of credibility, the gatekeepers? Who will wikipedia cite?
edit: This is an example of a business model where the content is created for free and subsidized by it's side effects. I'm after a reputation, which I will then monetize through my regular business activities. I'm happy to essentially give away the time I spent writing this (hopefully useful) book.
In this case, my interests are mostly aligned with my readers; if the book isn't generally considered to be useful, or at least correct, then I don't get the reputation I wanted.
On the other hand, I could have done the same work, and hired editors out of my own money, then put the result on line. I would perhaps have reached more readers, but I would not have the added credibility of going through a gatekeeper of quality. And would I have been able to hire editors of the same quality? the clincher for me is the credibility, though. Until we have a better gatekeeper, I imagine this will keep authors using the biggest-name conventional publishers they can.
First, congratulations on your book.
Second, That is an interesting problem: without the publishers, who will function as the givers of credibility, the gatekeepers? Who will wikipedia cite?
This is an excellent question. But already some publishers are more respected than others. O'Reilly is generally well known in the publishing world and everything I have read from any of their author's has been of reasonably high quality. While others are hacks that will publish anything almost anything at all with almost no editing (and if the author is willing to pay, many will publish absolutely anything at all with absolutely no editing.)
Maybe some evolution of publishers will continue primarily as fact-checkers and editors of the information, and then make money through a combination of advertising or convenience aggregating.
Second, That is an interesting problem: without the publishers, who will function as the givers of credibility, the gatekeepers? Who will wikipedia cite?
This is an excellent question. But already some publishers are more respected than others. O'Reilly is generally well known in the publishing world and everything I have read from any of their author's has been of reasonably high quality. While others are hacks that will publish anything almost anything at all with almost no editing (and if the author is willing to pay, many will publish absolutely anything at all with absolutely no editing.)
Maybe some evolution of publishers will continue primarily as fact-checkers and editors of the information, and then make money through a combination of advertising or convenience aggregating.
Thanks. I'm ridiculously excited.
Yes, that's very true, and probably the single largest reason why I went with no-starch press rather than just distributing a pdf or the mediawiki. (well, that and it was no-starch who approached me, not the other way around.) Heck having copies printed probably wouldn't be that expensive, if I printed up a few hundred at a time. (I have access to cheap labor, a machine shop, and ebay. Tell me I couldn't bind a book myself.) They are a tier down from O'Reilly, but worlds above self-publishing, in terms of credibility.
I wonder if you could use the same incentive that we use to pay authors (which is to say, personal credibility and authority) to pay gatekeepers? I mean, there's nothing inherently expensive about doing it, you just need a person with good sense, good ethics, and a reasonable knowledge of the subject matter at hand.
Yes, that's very true, and probably the single largest reason why I went with no-starch press rather than just distributing a pdf or the mediawiki. (well, that and it was no-starch who approached me, not the other way around.) Heck having copies printed probably wouldn't be that expensive, if I printed up a few hundred at a time. (I have access to cheap labor, a machine shop, and ebay. Tell me I couldn't bind a book myself.) They are a tier down from O'Reilly, but worlds above self-publishing, in terms of credibility.
I wonder if you could use the same incentive that we use to pay authors (which is to say, personal credibility and authority) to pay gatekeepers? I mean, there's nothing inherently expensive about doing it, you just need a person with good sense, good ethics, and a reasonable knowledge of the subject matter at hand.
I wonder if you could use the same incentive that we use to pay authors (which is to say, personal credibility and authority) to pay gatekeepers? I mean, there's nothing inherently expensive about doing it, you just need a person with good sense, good ethics, and a reasonable knowledge of the subject matter at hand.
I somewhat doubt it. There are two problems: 1. Even with authors, you can only get certain types to do that. Many technology books are written by professionals with a day job and they often are more worried about some combination of contributing to the community, improving their resume, getting personal recognition, etc than they are about money. This is not true about professional authors.
2. To be effective, gatekeepers need to already have credibility and authority, so that is probably not the best of motivators for them. Also, someone needs to do the grunt work of fact checking and grammatical editing. Many people consider writing to be fun, but few consider fact checking fun and fewer still consider grammatical editing fun.
I somewhat doubt it. There are two problems: 1. Even with authors, you can only get certain types to do that. Many technology books are written by professionals with a day job and they often are more worried about some combination of contributing to the community, improving their resume, getting personal recognition, etc than they are about money. This is not true about professional authors.
2. To be effective, gatekeepers need to already have credibility and authority, so that is probably not the best of motivators for them. Also, someone needs to do the grunt work of fact checking and grammatical editing. Many people consider writing to be fun, but few consider fact checking fun and fewer still consider grammatical editing fun.
Hm. See, well, at least in the technical publishing arena, this is the case 'cause we already get paid a lot more than all but the most famous authors. Your average writer of non-technical books is probably going to make very little money, and the bar to get a non-technical book published, I think, is higher than a technical book, in terms of writing skill. (a technical book, if technically correct, can
editors and fact-checkers, from what I understand, make less than half what a competent computer janitor makes.
Both these facts would point at people willing to do editing, fact checking and writing for less than what they could get doing other things. (assuming that the attributes needed to be a good editor or author are not a lot more common than the attributes required to be a SysAdmin.)
Now, there is a lot of difference between doing something you like for not very much money, and doing it for free, so you might be correct that people won't do it unless there is at least some money, but I see evidence that people will do it for less money than they could get doing other things.
as for the 'chicken and egg' part of the credibility issue, you are certainly correct if the same gateway/content producer relationship as we have now continues, but there are other models, like the model hacker news and other aggrigators use. If creators 'publish' content themselves to the 'net, then the 'gateways' just link to the content they find credible.
Now, the question is "how does the aggrigator decide what links are worthy?" there are many ways to do this, but I suspect the best may end up being subject matter experts running small aggrigators that cover their own interests.
editors and fact-checkers, from what I understand, make less than half what a competent computer janitor makes.
Both these facts would point at people willing to do editing, fact checking and writing for less than what they could get doing other things. (assuming that the attributes needed to be a good editor or author are not a lot more common than the attributes required to be a SysAdmin.)
Now, there is a lot of difference between doing something you like for not very much money, and doing it for free, so you might be correct that people won't do it unless there is at least some money, but I see evidence that people will do it for less money than they could get doing other things.
as for the 'chicken and egg' part of the credibility issue, you are certainly correct if the same gateway/content producer relationship as we have now continues, but there are other models, like the model hacker news and other aggrigators use. If creators 'publish' content themselves to the 'net, then the 'gateways' just link to the content they find credible.
Now, the question is "how does the aggrigator decide what links are worthy?" there are many ways to do this, but I suspect the best may end up being subject matter experts running small aggrigators that cover their own interests.
There are two major effects going on that are hurting publishers.
1. Consumers don't need companies to move content around for them so much anymore. When companies were in charge of this job you could control them with things like copyright laws. Now you can't.
2. Advertising is being turned upside down. A lot of advertising is/was probably really over inflated anyway, companies paying a lot for ads that don't do much for them. The move online exposed publishers to more competition & easier scrutiny. The online move may have made ads less valuable too. It's complicated and opaque. Advertising always has been that way. When a business model is built on advertising, you have two points of failure: People stop reading, advertisers stop advertising. Either one kills the whole thing.
Since these two things happening at the same time but aren't really related, a lot of people are going to understand things wrong. Lately a lot of journalists that are normally smart when covering politics or wars are covering 'The Fate of Publishing.' They are misreading a lot of things. Their interest was sparked when cheques started bouncing and their articles are an insight into the kind of mistakes smart people with a vested interest are going to make.
1. Consumers don't need companies to move content around for them so much anymore. When companies were in charge of this job you could control them with things like copyright laws. Now you can't.
2. Advertising is being turned upside down. A lot of advertising is/was probably really over inflated anyway, companies paying a lot for ads that don't do much for them. The move online exposed publishers to more competition & easier scrutiny. The online move may have made ads less valuable too. It's complicated and opaque. Advertising always has been that way. When a business model is built on advertising, you have two points of failure: People stop reading, advertisers stop advertising. Either one kills the whole thing.
Since these two things happening at the same time but aren't really related, a lot of people are going to understand things wrong. Lately a lot of journalists that are normally smart when covering politics or wars are covering 'The Fate of Publishing.' They are misreading a lot of things. Their interest was sparked when cheques started bouncing and their articles are an insight into the kind of mistakes smart people with a vested interest are going to make.
"... When a business model is built on advertising, you have two points of failure: People stop reading, advertisers stop advertising. Either one kills the whole thing. ..."
Excellent point.
Excellent point.
To illustrate the last point, a lot of journalists love the explanation that what is happening now is a result of the change in ownership that happened 15-25 years ago away from families. They wanted to increase margins by reducing costs (journalists, etc.). The lower quality has finally caught up with these. For example:
It was a time of “greed is good” in American capitalism, and newspapers were still profitable in those decades. The old family owners were bought out by chains that sought returns of 10 to 15 percent a year, far more than the former owners had ever expected. The new owners’ first priority was to keep the share prices up, so they had to keep the profits high, so they started cutting costs–and the biggest cost in running a newspaper is the journalists.
There are few newspapers in the United States that employ even half as many journalists as they had 15 years ago. Yet news-gathering was and remains a highly labour-intensive business.
In effect, the new owners and managers gutted the content in order to maintain their high profit margins. Now, most of them are out on golf courses, and the newspapers they ran are on the rocks.
The normally insightful Gwynne Dyer: http://www.straight.com/node/246627
I have heard variations of this reasoning a few time in the last month or so.
It was a time of “greed is good” in American capitalism, and newspapers were still profitable in those decades. The old family owners were bought out by chains that sought returns of 10 to 15 percent a year, far more than the former owners had ever expected. The new owners’ first priority was to keep the share prices up, so they had to keep the profits high, so they started cutting costs–and the biggest cost in running a newspaper is the journalists.
There are few newspapers in the United States that employ even half as many journalists as they had 15 years ago. Yet news-gathering was and remains a highly labour-intensive business.
In effect, the new owners and managers gutted the content in order to maintain their high profit margins. Now, most of them are out on golf courses, and the newspapers they ran are on the rocks.
The normally insightful Gwynne Dyer: http://www.straight.com/node/246627
I have heard variations of this reasoning a few time in the last month or so.
"Give music away and make money from concerts and t-shirts."
David Byrne (of Talking Heads fame) has some very interesting remarks on the difficulty of doing this here: http://journal.davidbyrne.com/2009/08/080809-edinburgh-so-ho...
Quote: "In the past, live shows were viewed as loss leaders to sell albums"
The article (like everything on Bryne's blog) is interesting throughout, and well worth reading.
David Byrne (of Talking Heads fame) has some very interesting remarks on the difficulty of doing this here: http://journal.davidbyrne.com/2009/08/080809-edinburgh-so-ho...
Quote: "In the past, live shows were viewed as loss leaders to sell albums"
The article (like everything on Bryne's blog) is interesting throughout, and well worth reading.
I think people misunderstand this recommendation a lot of the time. It doesn't mean that concerts are actually more lucrative then records ever were. That would imply that the record industry of the past 50 years was stupid because concerts and t shirts were always available to them as a way to make money. Concerts are a less good way of making money then records were but records are a worse way of making money relative to the past. This is a trend. Records are getting worse all the time. At some point, it makes sense to switch to the second best thing, concerts.
One thing hasn't changed, this is a popularity business. That means that giving away or subsidising some stuff to sell others is likely to stay part of the game. One major difference between selling concert tickets and selling albums is the margin. A concert can happily use up the whole ticket take or more. Concerts that spend more can be better, so it's not like selling a zero marginal cost product.
Marginal cost considerations are something that needs to be considered by this new concert star crowd. That David Byrne post is elbow deep in that.
One thing hasn't changed, this is a popularity business. That means that giving away or subsidising some stuff to sell others is likely to stay part of the game. One major difference between selling concert tickets and selling albums is the margin. A concert can happily use up the whole ticket take or more. Concerts that spend more can be better, so it's not like selling a zero marginal cost product.
Marginal cost considerations are something that needs to be considered by this new concert star crowd. That David Byrne post is elbow deep in that.
I'm guessing pg isn't that into movies. For me, there's no comparison to the theater experience.
Also, on "content" as undistinguished: http://languagelog.ldc.upenn.edu/nll/?p=1743
Also, on "content" as undistinguished: http://languagelog.ldc.upenn.edu/nll/?p=1743
I'm into movies, and my home setup is way better than a theater.
What about screen size?
My screen is something like an 8-foot diagonal (I use a projector, and a screen that pulls down from the ceiling). Our couch is maybe 6-feet away from the screen. So yeah, it is big enough ;-)
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Definitely. I have not spent a lot of money on my home theater system at all, but the screen and speakers are more than good enough, and I can pause and rewind at will. Also, my couch is much more comfortable than the seats.
I will go to movies with friends as a social event and very occasionally for IMAX, but I never go to regular movies for the movie.
I will go to movies with friends as a social event and very occasionally for IMAX, but I never go to regular movies for the movie.
Except for the thrill of seeing a movie in a large crowd.
A good crowd is worth more than most of the inconveniences of the theater. Inglourious Basterds has to be seen on the silver screen to be really appreciated.
A good crowd is worth more than most of the inconveniences of the theater. Inglourious Basterds has to be seen on the silver screen to be really appreciated.
You know, its funny, one of the only reasons I go to movies is because of the "ads" before movies (Not the crap before the previews, but the previews, which I consider ads). Sure, its crappy advertising, but I see a lot of movie ads I wouldn't otherwise, and have ended up seeing several movies I never would have considered had I not.
Excellent essay -- one comment though:
> Is software a counterexample?
No:
> There have always been people in the business of selling information, (...) People will pay for information they think they can make money from.
Software, it seems to me, is information that people think they can make money from. That's why Microsoft needs Windows on all new PCs (so it's a toll-booth to consumers), and student/home use versions of Office are very cheap -- only businesses will actually pay for it.
It's even more clearly seen in the graphical world -- I have yet to meet a non-professional with a legal copy of PhotoShop or any of the other Adobe flagship products.
> Is software a counterexample?
No:
> There have always been people in the business of selling information, (...) People will pay for information they think they can make money from.
Software, it seems to me, is information that people think they can make money from. That's why Microsoft needs Windows on all new PCs (so it's a toll-booth to consumers), and student/home use versions of Office are very cheap -- only businesses will actually pay for it.
It's even more clearly seen in the graphical world -- I have yet to meet a non-professional with a legal copy of PhotoShop or any of the other Adobe flagship products.
You also get more than just the content (and the medium) when you purchase software:
a) Peace of mind that the software won't harm your computer. There are situations where it does harm your computer, but at least you have someone to blame or try to seek redress from. You can never quite trust an executable file you obtain from someone other than the publisher to the extent that you can a legal copy.
b) Somebody to help you if you have problems with the software.
c) If you are really lucky, people working to make your software better even after you've already paid for it.
These selling points may not be important to a lot of people here, but they do add value for some users, and "media" types of information don't offer them.
a) Peace of mind that the software won't harm your computer. There are situations where it does harm your computer, but at least you have someone to blame or try to seek redress from. You can never quite trust an executable file you obtain from someone other than the publisher to the extent that you can a legal copy.
b) Somebody to help you if you have problems with the software.
c) If you are really lucky, people working to make your software better even after you've already paid for it.
These selling points may not be important to a lot of people here, but they do add value for some users, and "media" types of information don't offer them.
Basically, legal software can be better then pirated.
Software is different, because, except for games, software is not the final good, software is a tool people use for other ends; Quicken or spreadsheets for finances, word or text processors for writing, databases for finding and managing information, many internet sites for communicating one to one or many to many (HN for example), and so on. It is confused with content because it is communicated the same way, the difference is in how it is used.
"Do you, er, want a printout of yesterday's news?"
This line from the article shows a fundamental misunderstanding about the way many people see the newspaper business. Despite the name most good newspapers aren't so much about news (as in what happened) as they are about analysis (why it happened and what it might mean). I don't buy the Financial Times because I want a list of things that have happened the past 24 hours, but because I want to read what smart, knowledgeable people think about a subset of those things. That sort of analysis does not go stale over night. Going further, taking a cursory look across the whole business it seems that the relative health of various publications seems reasonably well correlated to the amount of effort the place in quality analysis as opposed to just writing down things that have happened.
In fact the reason I still buy (paper) newspapers and magazines is that they still seem to be the only people doing good solid analysis.
This line from the article shows a fundamental misunderstanding about the way many people see the newspaper business. Despite the name most good newspapers aren't so much about news (as in what happened) as they are about analysis (why it happened and what it might mean). I don't buy the Financial Times because I want a list of things that have happened the past 24 hours, but because I want to read what smart, knowledgeable people think about a subset of those things. That sort of analysis does not go stale over night. Going further, taking a cursory look across the whole business it seems that the relative health of various publications seems reasonably well correlated to the amount of effort the place in quality analysis as opposed to just writing down things that have happened.
In fact the reason I still buy (paper) newspapers and magazines is that they still seem to be the only people doing good solid analysis.
Anyone can produce "analysis". Watch the cable news sometime--it's 100% "analysis" because only three facts have come out in the last hour, and they have a dozen people on call to give "analysis" of this "breaking news". Analysis is cheap. With more and more people offering this analysis for free, you'd think it'd be easier in the long run to just filter all of this freely available analysis and you'd end up with something just as good as if you paid the Financial Times.
Facts, however, are in short supply. Discovering a surprising fact or two is good journalism. "The CIA has secret prisons in Eastern Europe to imprison suspected terrorists". "The Watergate Hotel break-in was orchestrated by members of Nixon's re-election campaign". But facts like that are hard to get. The only people who'd pay for those facts are the political opponents of whoever they embarrass, which means if both parties are implicated you can cover things up. Also, political opponents will pay just as much for a convincing lie as they will for the truth.
"More data beats a better algorithm" is just as true for journalism. Yes, I'm sure the Financial Times does a good job analyzing the same shallow set of data we can all get for free. I'm sure they do a better job than most other places do. But analysis is what most of the media does. They scrape press releases and the like as hard as they can, never looking for more facts.
At some point, journalism is a public good. But, uniquely among public goods, it cannot be provided by the government because journalism often operates in opposition to the government.
Facts, however, are in short supply. Discovering a surprising fact or two is good journalism. "The CIA has secret prisons in Eastern Europe to imprison suspected terrorists". "The Watergate Hotel break-in was orchestrated by members of Nixon's re-election campaign". But facts like that are hard to get. The only people who'd pay for those facts are the political opponents of whoever they embarrass, which means if both parties are implicated you can cover things up. Also, political opponents will pay just as much for a convincing lie as they will for the truth.
"More data beats a better algorithm" is just as true for journalism. Yes, I'm sure the Financial Times does a good job analyzing the same shallow set of data we can all get for free. I'm sure they do a better job than most other places do. But analysis is what most of the media does. They scrape press releases and the like as hard as they can, never looking for more facts.
At some point, journalism is a public good. But, uniquely among public goods, it cannot be provided by the government because journalism often operates in opposition to the government.
I'm sure dagw would not agree with your description of cable news as analysis. I think he/she is trying to say that newspaper analysis by respectable papers is worth a lot, and it won't lose it's value overnight. People still value NYT because it is respectable and offers great analysis.
What happens, then, when you can get all of this information and analysis online for free (from those same respectable newspapers and magazines)?
Content still matters for the very simple reason that the lack of decent content means you don't have an audience to sell to advertisers - imagine if the Economist's only rival was a website written by middle school geeks.
It is, effectively, the central overhead to the media industry - as high a quality as cheap as possible to get as many eyes and ears (and fingers, for braille readers) as you can. Online media's winning out because the "cheap as possible" part of that equation is Very Cheap Indeed, without having to sacrifice the slightest bit of quality.
But, yes. It's the quantity of audience that determines profitability, not quality of content. So now we're stuck with the dilemma as to how to make advertising presentation a high-quality content unto itself - a nontrivial balancing act between advertiser and reader expectations.
It is, effectively, the central overhead to the media industry - as high a quality as cheap as possible to get as many eyes and ears (and fingers, for braille readers) as you can. Online media's winning out because the "cheap as possible" part of that equation is Very Cheap Indeed, without having to sacrifice the slightest bit of quality.
But, yes. It's the quantity of audience that determines profitability, not quality of content. So now we're stuck with the dilemma as to how to make advertising presentation a high-quality content unto itself - a nontrivial balancing act between advertiser and reader expectations.
"I never watch movies in theaters anymore. The tipping point for me was the ads they show first"
But some of the DVDs have this annoyance as well.
But some of the DVDs have this annoyance as well.
Not if you use VLC...
One reason I buy my video "content" from iTunes is because it saves me the time of removing the forced previews and endless publisher logos and FBI warnings.
"... What would a content site look like if you started from how to make money? ..." ~ http://ycombinator.com/rfs1.html
If you start from this statement and read the rest of the article I think it's a good start to better understand the parameters of the article. Post-medium publishing is an area I'm working on and I must say reading this article gives me another way to think about the problem.
"... If free copies of your content are available online, then you're competing with publishing's form of distribution, and that's just as bad as being a publisher ..."
Instead of looking how to make money I was looking at "solving a what users want" and still exploring the "and willing to pay for" bit. In this case users want "instructions" to build stuff but the cost of magazine producers is pretty high and the alternatives are primitive. Not making the "instructions" free or at least freeium-ish means a "chicken and the egg problem" ~ http://www.joelonsoftware.com/articles/fog0000000054.html
So I'll have to explore these problems from a couple of different perspectives. Having read the article though I can think of how to get users to pay by letting others create, use or modify as well as access to tools and low-rez "instructions".
One example I can think of post-medium publishing is http://stackoverflow.com but I didn't see the same emphasis on how to make money. Just making SO the place to look for technical programming answers.
I do like the way you identify readers who pg has passed to read the article. It's like looking at the names on papers circulated at post-grad level to see who's read the latest ideas.
If you start from this statement and read the rest of the article I think it's a good start to better understand the parameters of the article. Post-medium publishing is an area I'm working on and I must say reading this article gives me another way to think about the problem.
"... If free copies of your content are available online, then you're competing with publishing's form of distribution, and that's just as bad as being a publisher ..."
Instead of looking how to make money I was looking at "solving a what users want" and still exploring the "and willing to pay for" bit. In this case users want "instructions" to build stuff but the cost of magazine producers is pretty high and the alternatives are primitive. Not making the "instructions" free or at least freeium-ish means a "chicken and the egg problem" ~ http://www.joelonsoftware.com/articles/fog0000000054.html
So I'll have to explore these problems from a couple of different perspectives. Having read the article though I can think of how to get users to pay by letting others create, use or modify as well as access to tools and low-rez "instructions".
One example I can think of post-medium publishing is http://stackoverflow.com but I didn't see the same emphasis on how to make money. Just making SO the place to look for technical programming answers.
I do like the way you identify readers who pg has passed to read the article. It's like looking at the names on papers circulated at post-grad level to see who's read the latest ideas.
Is this pg giving more hints at a possible implementation of RFS 1? (http://ycombinator.com/rfs1.html)
That would imply that no one has approached him with a satisfactory solution. This article seems to indicate that the solution is to simply give content away and figure out a better way to make money off advertising. That's a little more boring than I was hoping for, but sometimes boring ideas work.
I'm going to keep my mind churning on something more creative... just in case.
That would imply that no one has approached him with a satisfactory solution. This article seems to indicate that the solution is to simply give content away and figure out a better way to make money off advertising. That's a little more boring than I was hoping for, but sometimes boring ideas work.
I'm going to keep my mind churning on something more creative... just in case.
Here is what I think he might be getting at:
Advertisement is not a very effective form of marcomm because people tune it out, and if they don't, they don't believe what the ads say anyway.
PR is much more effective. Part of the reason is that if you can make your piece look like a regular article, that in itself makes it more believable. But the other part is that sometimes PR pieces are genuinely useful for the recipient.
If I were in the market for a new x, I think I'd want to read the reviews of xs, even if some of them are paid for by manufacturers of xs.
Fake Steve often makes fun of the Apple "flaks" and the "hacks" that print the "flaks"s output, but I think many people in the market for Apple products actually like reading the gushing stories about Apple.
If PR is the new advertising, then an obvious way to fix the newspapers is to make the relationship with PR companies explicit and charge for it. It's not deceptive if the readers want it and you don't try to hide what you are doing. Charging to make product reviews is one possibility. Offering to write stories about any topic for payment is another, which would make you a direct competitor to PR companies.
There is a balance between making high-quality, independent content and making for-pay content that must be carefully managed, but this is not really all that different from today's print media that range from all-ads newspapers with minimal and very crappy journalistic content, to media with high quality journalistic content and almost no ads.
A company doing this should probably never offer a positive review for cash, and never offer a positive spin on a topic. Only ever offer a review or a story, with payment due regardless of whether the customer likes it or not. In the end, this would be in the interest of the customers anyway, even though they might not believe that at first.
Advertisement is not a very effective form of marcomm because people tune it out, and if they don't, they don't believe what the ads say anyway.
PR is much more effective. Part of the reason is that if you can make your piece look like a regular article, that in itself makes it more believable. But the other part is that sometimes PR pieces are genuinely useful for the recipient.
If I were in the market for a new x, I think I'd want to read the reviews of xs, even if some of them are paid for by manufacturers of xs.
Fake Steve often makes fun of the Apple "flaks" and the "hacks" that print the "flaks"s output, but I think many people in the market for Apple products actually like reading the gushing stories about Apple.
If PR is the new advertising, then an obvious way to fix the newspapers is to make the relationship with PR companies explicit and charge for it. It's not deceptive if the readers want it and you don't try to hide what you are doing. Charging to make product reviews is one possibility. Offering to write stories about any topic for payment is another, which would make you a direct competitor to PR companies.
There is a balance between making high-quality, independent content and making for-pay content that must be carefully managed, but this is not really all that different from today's print media that range from all-ads newspapers with minimal and very crappy journalistic content, to media with high quality journalistic content and almost no ads.
A company doing this should probably never offer a positive review for cash, and never offer a positive spin on a topic. Only ever offer a review or a story, with payment due regardless of whether the customer likes it or not. In the end, this would be in the interest of the customers anyway, even though they might not believe that at first.
Very interesting idea, but not at all what I had in mind.
But people still buy magazines and newspapers all the time. pg, and many others, might not personally find value in that, but enough people do that it's still propping up a rather large industry. Why not sell content to those people?
Making money from advertising is fine, too. I mean, someone out there probably has an idea for advertising that can actually give more value back to the advertisers. But, I don't see any reason not to make money off of as many different revenue streams as possible: make money off the content from people that are willing to pay for it; make money from the people willing to pay for tools which will give them free access to content; make money from people that want to aggregate content (and help them to do it); and make money from people that don't mind seeing an ad once in a while.
Making money from advertising is fine, too. I mean, someone out there probably has an idea for advertising that can actually give more value back to the advertisers. But, I don't see any reason not to make money off of as many different revenue streams as possible: make money off the content from people that are willing to pay for it; make money from the people willing to pay for tools which will give them free access to content; make money from people that want to aggregate content (and help them to do it); and make money from people that don't mind seeing an ad once in a while.
Actually I was thinking this was an indication that someone has approached PG with a promising solution; so now he is giving away his thoughts on the problem but not any suggestions of a solution.
I thought he made his take on making money with information pretty clear: You make money off information others can make money off :) Now just think about types of information with which people can make money. Hint: It ain't just stock tips.
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People pay more for "bootcamps" than they do for "seminars." So even pure information product sellers like stock tip newsletter operators have always known that packaging and format plays as big if not a bigger role than the content itself.
Anyhow - lets look at the key elements that go into successful information / content selling.
1.
Advertising.
Advertising has always been the chief device. Information product sellers like Tony Robbins made their fortunes on top of aggressive advertising!
Google et al have covered this online ad model well. And companies like InMobi are doing well to cover the ad model for the mobile market.
2.
Direct Distribution
What of folks who couldn't advertise? New comic book publishers had a hard time selling their books . Until Phil Seuling came and developed a direct market distribution system in 1970s for comics by connecting specialty shops. And organizing Comic book Conventions.
Amazon - by getting kindle into the hands of millions - has created a direct distribution device for books. iTunes has created a nice marketplace for music.
But I see a huge opportunity over here for someone who can create an entire ecosystem for direct distribution for other types of content. News. Blog posts. Art work.
Anyhow - lets look at the key elements that go into successful information / content selling.
1.
Advertising.
Advertising has always been the chief device. Information product sellers like Tony Robbins made their fortunes on top of aggressive advertising!
Google et al have covered this online ad model well. And companies like InMobi are doing well to cover the ad model for the mobile market.
2.
Direct Distribution
What of folks who couldn't advertise? New comic book publishers had a hard time selling their books . Until Phil Seuling came and developed a direct market distribution system in 1970s for comics by connecting specialty shops. And organizing Comic book Conventions.
Amazon - by getting kindle into the hands of millions - has created a direct distribution device for books. iTunes has created a nice marketplace for music.
But I see a huge opportunity over here for someone who can create an entire ecosystem for direct distribution for other types of content. News. Blog posts. Art work.
I must admit that I thought pg missed the ball on this one (he's usually spot on). He is right, content is something I don't need, but I usually want. Likewise, most things advertised alongside content is stuff I also don't need.
What makes content difficult to sell is that there is a business model around giving it away. This is due to one large reason: the cost of distribution of content on the internet approaches zero.
Now at this point pg may say, "exactly, because you were selling the paper before". No, not exactly, you were selling the content and the cost of distribution (which is a different thing). It's why I can't give away water with advertising on it. The cost of physically distributing it will eat into any profits I make on the advertising.
When you look at it from this position you see that nothing has really changed from the pre-internet days. You simply have the cost of production/distribution of a product versus its selling price + indirect revenue (advertising and such).
What makes content difficult to sell is that there is a business model around giving it away. This is due to one large reason: the cost of distribution of content on the internet approaches zero.
Now at this point pg may say, "exactly, because you were selling the paper before". No, not exactly, you were selling the content and the cost of distribution (which is a different thing). It's why I can't give away water with advertising on it. The cost of physically distributing it will eat into any profits I make on the advertising.
When you look at it from this position you see that nothing has really changed from the pre-internet days. You simply have the cost of production/distribution of a product versus its selling price + indirect revenue (advertising and such).
"... It's why I can't give away water with advertising on it. The cost of physically distributing it will eat into any profits I make on the advertising. ..."
I can think of a lot of plastic bottled drinking water that invalidates this.
I can think of a lot of plastic bottled drinking water that invalidates this.
Really? Who is doing this and making money on it? If there are margins on it, someone is doing it. Otherwise it's a shining billion dollar opportunity.
Of course the other problem is getting it in the channel. People who also sell Pepsi/Coke will probably be discouraged from giving away your product. You could target places like hospitals, parks, events, etc...
In any case, I'd love to see the companies who can do this.
Of course the other problem is getting it in the channel. People who also sell Pepsi/Coke will probably be discouraged from giving away your product. You could target places like hospitals, parks, events, etc...
In any case, I'd love to see the companies who can do this.
http://customwaterworkz.com/
If I wasn't running out of server space faster than I could buy new servers already, I'd have bought a bunch of those for the last opensourceworld tradeshow.
If I wasn't running out of server space faster than I could buy new servers already, I'd have bought a bunch of those for the last opensourceworld tradeshow.
Cool. I guess given that people carry 8-16oz bottles of water makes this feasible (lots of advertising surface area for a small amount of water). Better example, I can't give away dirt with advertising on it. There you probably cross the line between cost of production+distribution versus advertising revenue (note, these examples are heavy on the distribution side to attempnt to mimic the apparently free cost of content generation).
yeah. and the water thing only works if you can target relatively high-value customers. But at $0.50 or so a 'click' if you are at a tradeshow or some other concentration of 'high value' customers, it's probably a better deal than paying as much for adwords.
Adwords itself is an example of how some companies are willing to pay tens of dollars per 'click' for advertising. Branded dirt won't usually work, but it might at a nursery tradeshow.
But yeah, nothing but 'free content' is going to work if you are spamming the masses with your advertising. But, I believe that many content creators are willing to create content to advertise themselves. Especially in the technical world, writing has almost no hope of paying the same as technical work, but people still do it.
I suspect the problem will not be that nobody is willing to write content for free, but that we need a new way of vetting the good, credible content from the bad.
Adwords itself is an example of how some companies are willing to pay tens of dollars per 'click' for advertising. Branded dirt won't usually work, but it might at a nursery tradeshow.
But yeah, nothing but 'free content' is going to work if you are spamming the masses with your advertising. But, I believe that many content creators are willing to create content to advertise themselves. Especially in the technical world, writing has almost no hope of paying the same as technical work, but people still do it.
I suspect the problem will not be that nobody is willing to write content for free, but that we need a new way of vetting the good, credible content from the bad.
I think one interesting dynamic is that publishers have visibility. I am mostly thinking about books. There are book clubs and book reviewers. I wonder how many people buys a book just because it's on Oprah's Book Club. (apparently, a lot, http://en.wikipedia.org/wiki/Oprah_Book_Club). And then my next guess is that there are PR people at the publishers that push reviewers and book clubs to endorse their book.
I think you can draw an analogy with content aggregators like Digg or Reddit. There too many books for the average person to consume so they look to some book club or reviewer to tell them what they should consume. I believe the publishing dynamic may change if a book "content aggregator" received a wide following.
Is there a digg (or reddit!) for books? If not, someone here want to create one? :)
I think you can draw an analogy with content aggregators like Digg or Reddit. There too many books for the average person to consume so they look to some book club or reviewer to tell them what they should consume. I believe the publishing dynamic may change if a book "content aggregator" received a wide following.
Is there a digg (or reddit!) for books? If not, someone here want to create one? :)
I feel it's appropriate to mention our humble news/daily content start-up in a meta-publishing thread. We're recruiting a team of people who enjoy writing for a one-day proof-of-concept effort, and if the experiment works it's angels, YC and beyond. If you are a news addict you'll probably have fun. E-mail is in my profile.
No it's not.
No it isn't. :)
Has your opinion of the Kindle changed, pg? You used to think that in ten years it would be a forgotten curiosity.
It will be. Not because it fails, but because it succeeds. The form factor is too close to existing devices - I think we'll see convergence with more general purpose devices, and the standalone book-reader will die out. (Of course, the Kindle brand might potentially live on.)
As usual, I agree wholly with pg, but I think he is ignoring a very significant fringe group.
People are willing to pay for good information/entertainment/content on a tip or tip-like basis, especially if the author(s) is a frequent publisher they can maintain a long term relationship of some form with.
The online experiments of NiN is one example. Perhaps a more apropos one is ArsTechnica. They sell advertising and also premium subscriptions. They do reserve some content for the premium subscriptions and they turn on a few extra features of the site, but I suspect the vast majority of their subscribers think of it as a "tip-like" payment rather than thinking that little bit extra is worth the subscription amount.
People are willing to pay for good information/entertainment/content on a tip or tip-like basis, especially if the author(s) is a frequent publisher they can maintain a long term relationship of some form with.
The online experiments of NiN is one example. Perhaps a more apropos one is ArsTechnica. They sell advertising and also premium subscriptions. They do reserve some content for the premium subscriptions and they turn on a few extra features of the site, but I suspect the vast majority of their subscribers think of it as a "tip-like" payment rather than thinking that little bit extra is worth the subscription amount.
In "Reinventing Comics," Scott McCloud talks about how digitized information leads to result that all our content becomes "unpackaged" from their original mediums - a comic, a piece of writing, a pop song, and a movie don't all have to be treated in fundamentally different ways anymore.
I think that in turn, this opens the door to a lot of creative possibilities for mix+match usage of media. It suggests an approach to publishing which is equally unwedded to particular mediums.
I think that in turn, this opens the door to a lot of creative possibilities for mix+match usage of media. It suggests an approach to publishing which is equally unwedded to particular mediums.
I agree with you PG completely. There was another blog post by Albert(USV) http://continuations.com/post/190217323/the-web-and-educatio... about missing scalability solution in education, where content is extremely expensive. It is going to change very soon.
As for "printed yesterday's news".
I regularly spot things (mostly research and interesting facts) on NH which I've read in Computerra about, half year ago.
Publishing as an institution is not going anywhere. Publishers serve many functions. For one they act like a content filter, whereby they screen artists and select only the ones they deem talented enough to throw their weight behind. People generally do not have the time to visit every lounge act or download every yahoo's demo tape online. In this sense publishers are like a brand, and while people's consensus of "the music industry" might not readily distinguish between different labels currently, I bet that's where the music publishing business is headed.
Another institution of publishing is the advertising/exposure angle. Publishers will pay for the tv spots, radio commercials, etc. to get exposure to the artist. They will distribute material to the radio stations, which in turn have a vested interest in playing high quality content and also don't have the time to download every yahoo's song off the internet. In this sense radios are much more aware of the particular branding aspects of music labels.
Finally, another institution of publishing is mentoring and resources. If you sign to a major label, you get access to choirs, instrumentals, singing coaches, song writers, and various other industry veterans. You have high quality sound studios to record, etc.
The main reason the music industry is feeling a tight squeeze is not so much that people don't want to pay for content, it's that people are paying for content differently. The music publishing business' backbone is record sales. The industry was structured around having one or two hit songs on a record being enough to sell a quarter of a million units. With itunes, you can download just the hit songs for a fraction of the cost. All of a sudden your profit margins just went through the floor for a sizable chunk of your customer base.
That doesn't mean the institution of music publishing is going away, it just means they will have to get operationally more efficient if they want to maintain their profit margins.
The music publishing industry would truly feel threatened if online crowd sourcing was a viable alternative to discovering new music talent, but even then I believe their role would still be valuable. Also crowd sourcing on the internet has largely been unsuccessful for discovering new artists, last.fm is basically the billboard top 200 remixed.
Also the bit about publishers selling content and equating that with information is way off. True, people will usually only buy information which makes them money, but music is very different. People will buy it because it makes them happy. Same with buying movies, books, etc. It's a completely different metaphor, and in fact the marketing adige is people will only buy things which make them healthier, happier, or richer.
Also, the bit about publishers selling formats, this is also slightly off base. If anything publishers take advantage of formats due to perceived convenience. CDs cost more then cassette tapes because for one thing the format was developed by the music industry so they had complete control over pricing. For another thing the format had a built in convenience factor which customers simply were willing to pay for. With iTunes controlling the internet distribution channel, publishers are not in control to set the prices like they used to.
Also about books, I agree Kindle will of course be superseded, but is the Kindle itself important or again is it the content? Notice Amazon also releases a Kindle Reader for the iPhone with access to the same content. Do you really think there will be a point where people can no longer be bothered to pay for books? The book industry has largely been unscathed by the digital era and I don't see a reason why that would change any time soon.
Newspapers is a whole other ball game. The industry is changing due in large part to the speed that information spreads. People don't subscribe to papers because all the news they need is online, available instantly. The main audience for newspapers has traditionally been the informed customer, and these people generally are having internet and know where to find information online. That's why your friend doesn't want your New York Times, and why less and less people are subscribing. The newspaper concept though is similar to the content filter of music publishing, in that newspapers are brands which have vested interest in maintaining their integrity. They also have access to a wide network of trusted reporters from all over the world. Again this will be a case of the evolution of a business model, but newspapers as a whole have a much harder struggle due to the evolution of information on the web. Newspapers should be discussed in an entirely different light from music IMO.