The Value of Content

I watched “Page One: Inside The New York Times” on Netflix Sunday.  It’s a documentary that focuses on the NYT as an institution in news reporting in the United States and the world, but also discusses the changing face of media (e.g. blogs, Twitter, etc.) and the ability of just about anyone to put out “unfiltered” news directly to the general public, as in the case of the WikiLeaks debacle from last year.  The documentary is pretty interesting, though I think they “bounced around” a bit more than I would prefer without any good transitions.

One of the recurring themes in the documentary was the battle currently being waged between “Old Media” and “New Media.”  For example, you can go to practically any news blog now for your news as many people do, but practically all of them just re-word and re-post the same information that was originally presented in the NYT.  Thus, the regular consumer of news gets their information for free without every having to visit the NYT website or pick up a paper, and therefore, the NYT never gets any ad revenue or subscriber fees from the reader.

Which leads to the central question of the documentary: how long will this be sustainable?  Or, re-worded, how long can the New York Times, and institutions like it, survive in a “digital world” using their traditional economic models?

I heard a related story on NPR last week talking about Amazon and Apple (but mostly Amazon) and how the European Union is investigating them for antitrust violations with regards to e-book prices on their respective stores.  These two companies essentially dictate to the publisher how much money they will sell their books (typically around $10), while the publishing companies used to be able to charge quite a bit more than that for a hardcover new release (let alone the fact that they set the price, not the distributor).

Now, in the case of the Times, I’m not really sure what the solution is.  They have already taken steps to increase revenue by charging for their website, and I think that’s helping.  At the very least, they’re making an attempt to survive the transition into digital media.  Likely, as tablets broaden their reach to consumers, they will be able to charge for their app, or access to stories, effectively turning tablets into digital NYT readers.  There is certainly money to be had if you produce a good app, and the NYT has a pretty decent one.  It’s unfortunate that a lot of people out there don’t understand where news comes from and that most of these blogs a). don’t actually investigate their own news (they just re-post it from other sources), and b). frequently have some kind of agenda, so it may not be as objective as it should be to be considered capital-J “Journalism.”  There is a value in actual news and people are willing to pay for it: the NYT just needs to figure out how to sustain the same standard of Journalism while operating under realistic expectations of what the public will pay for it.

In the case of book, movie, and music publishers, though, I think they need to adjust their model quickly.  For example, if one considers a new-release book at Barnes and Noble, it’s likely it would cost you $20 or more.  It simply doesn’t make sense to charge $20 for a digital copy (as publishers would love to do).  The same thing goes for movies: I’m not going to spend the Bluray price of a movie for the digital version.

Now, those full prices don’t typically occur for movies and books because of the digital systems that have grown up to deliver the content for you.  For a new movie like Rise of the Planet of the Apes, you’ll spend $22.99 for the Bluray and you’ll spend $14.99 for the digital version, so there’s some premium for the physical copy and some discount for the digital copy.  In video games, this typically isn’t the case, however.  When the newest Call of Duty game came out on PC, it was $60, regardless of whether you got a physical disc in a box or if you downloaded it.  With games, though, there has been something of a “relationship” developed between the publishers of games and the retailers (e.g. Gamestop, Wal-Mart, etc), where the publisher could offer a discount on a digital version, but in order to appease the brick-and-mortar retailer, they keep it the same price so you still may go into their store.

Ultimately, “Old Media” needs to realize that they can’t support the distribution systems that they used for the past few decades.  This is starting to happen with books, where locations like Borders went bankrupt because they couldn’t make the transition to a digital age.  Companies like Gamestop are starting to make the transition, offering a digital streaming service not unlike Netflix Instant.  Companies like Wal-Mart will probably just stop offering games and movies, eventually, but they’ll survive because they sell other things (among other reasons).

But the publishers still have much to worry about.  Their teams of editors, binders, layout people, and so on and so forth.  Teams of people that were needed in order to lay out print for publication or to set up distribution chains for each product.  Or that were needed to design the inside of game manuals.  Or to design the cases that your DVD or Bluray came in.  These are all things that just aren’t (as) necessary in a fully digital world.  You don’t need to worry about distribution when you can just sell it on the internet to everyone.  However, publishers are still trying to charge additional money on the digital side in order to support these folks on the physical side of their product.

Now, my solution to this problem is to increase the cost of the physical media and further decrease the cost of the digital one.  If there’s anything apps on the iPhone or Android have shown developers, it’s that selling your product for $1 means that you’ll sell to additional people, and you’ll make your money back on volume.  I mean, if you could just buy a new release movie for $5, would you do it? Would you even think about the purchase?  Would you care if you only watched it one time?  That’s cheaper than a single ticket to go see the movie in theaters.  If new movies, digitally distributed, without any special features were $5, I think they’d sell more.

But again, publishers should still hang on to their “physical media” production scheme, as there will still be people that want an actual Bluray disc.  And I definitely know that there will be people that want a physical book, rather than an e-reader form.  But wouldn’t more people buy books if they were $5 for a new one, rather than $20?  Sure, pay the premium if you want a nice, hardcover, bound, indestructible copy of a book for your collection, but don’t make people that just want to read the book help finance other people’s need for a physical copy.

There’s a somewhat longstanding psychological “principle” in gaming related to the $100 price point.  Once any gaming console hits $100, then many consumers won’t even think about the price.  It’ll become an impulse buy.  A similar phenomenon happened with the Wii when it released, and it cost $250.  But at that price, it was cheap enough as an impulse buy for many people just to play Wii Sports.

“Old Media” publishers need to find the “impulse buy” price for their products.  In the case of movies and books, I think $10 is a fair price to charge, but $5 is the “impulse buy” price.  Once publishers start selling their wares down there for a digital form, I think they’ll make their money back on volume, and only then will they survive.

Edit: I read this article from Slate today, discussing Amazon and its tactics that end up hurting brick and mortar bookstores.  I particularly liked this line:

But say you don’t care about local cultural experiences. Say you just care about books. Well, then it’s easy: The lower the price, the more books people will buy, and the more books people buy, the more they’ll read.

Yup.

Jolicloud

This is what the desktop screen and apps look like in Jolicloud.

I’ve mentioned previously that we’ve got a Dell Mini 10 netbook.  To be honest, it doesn’t get as much use as it did a few years ago when we lived in St. Louis and our desktop computer(s) were on a different floor.  Once we moved to Swisher, and now back to St. Louis again, the desktop is only a room away from the living room, so there isn’t much of a need to have a laptop constantly running…let alone the fact that we both have Android smartphones now, where it’s even faster to look something up quickly if it’s needed.

Thus, I get to “play” with the netbook a bit more than I used to.  I find Windows XP to be extremely slow on the system: slow to boot, slow to open programs, slow to do just about anything.  Therefore, I’ve toyed with a few different alternative operating systems.  Because Ubuntu 11.10 appears to have some serious issues with the graphics chip on the netbook, I decided to give Jolicloud a try.

Jolicloud is based on Ubuntu, incidentally, but runs quite a bit differently.  It’s designed to do everything within a browser as much as possible, though it is capable of having stand-alone programs installed as well.  In the desktop screen pictured above, most of those programs are opened within the Chromium web browser.  You can listen to music, edit documents, use maps, check your status updates, and browse the internet just as you can from any other computer.  The benefit here, though, is that the netbook is much more responsive because all it’s effectively doing is loading a web browser.

I guess the main downside is that it really requires an internet connection of some type, so if you aren’t on wifi anywhere, you can’t use the OS (to do anything productive, at least).  But hey, where does that happen anymore, anyway?

I’ve referred to cloud computing in the past.  Like many things, I think it works remarkably well, but you just have to know what you’re getting into before you boot the system.  Know what the strengths and weaknesses are before even trying to go that route.  You can’t expect to run Photoshop using low-powered devices that are designed to only operate within a web browser.  At the same time, though, you can get away with cheaper hardware with remarkably fast boot times and functionality.  So yes, a trade-off.

I’m enjoying it for now, though.  It’s always fun to install a new operating system and see what it can or can’t do.  At the very least, it gets me to use the netbook more often.  Still a good piece of hardware that has a few more years left in it due to software like Jolicloud.

Living In The Cloud

I find myself getting less and less patient with having to move data around between devices.  I want to have access to things where I want them, when I want them.  A lot of this has been building up over recent months, but I think the recent death of my old laptop (it’s GPU died…sad, sad day…) has brought it to a head.

Once the laptop died, I transferred some games to a desktop PC, but one I don’t leave on all the time.  This computer used to be my Linux web server, so this 5+ year old system is hardly up to heavy gaming…but that’s another story.  The new Linux server runs all the time, so it provides what we need for internet use, but there are a few key things it won’t do:  card reader functionality and iTunes.  I only have one device that has an SD card reader in it now, and it’s our netbook (Brooke has a USB card reader…somewhere…).  That, and iTunes is Windows and Mac, exclusive, so I can’t use it under Linux.

This means I’m relegated to using the netbook until I get some replacement parts to help speed up what is currently serving as my Windows machine.  And that netbook only has a 10″ screen, making it less than ideal for any kind of photo editing, or messing with an iTunes library.  Sure, it’s fine in a pinch, but netbooks weren’t really designed for heavy use.  Also, this poor netbook apparently won’t run Picasa: it actually “Blue Screens” Windows XP every time I try.  Because of these shenanigans, I haven’t been able to move pictures from our Nikon DSLR from the SD card up to the interwebs because the Picasa program is how I generally do this.

Which brings me to the point at hand: I love me some cloud computing.  Products like Dropbox (or Ubuntu One) to act as online storage, allowing me to share my files between the netbook, my Linux server, my work computer and my phone on the fly.  Google Music, so I can sync music from the cloud with my phone, and never mess with iTunes again.  Google+, which will automatically upload my photos from my phone to their servers (including Picasa) without me having to do anything.  Google Docs, which is where I’ve been typing countless cover letters and maintaining a spreadsheet of various jobs I’ve applied to, giving me access from anywhere on any device, including my phone.

Case in point: I could have transferred those pictures from the SD card to the netbook, and then in turn to a USB stick, and then to the Windows desktop that’s capable of actually running Picasa (or I could have found the cable to plug the camera directly into the computer…but seriously…who knows where it is…), or I could just transfer those pictures to my Dropbox folder on the netbook, allowing them to “magically appear” on whatever computer I wanted to use.  So much easier, and just as fast.

In short?  I’ve become too lazy for USB sticks and SD cards.  The act of physically connecting one thing to another has become a chore.  I’m in the 21st century and want everything, including my hard drive, to be “wireless.”

I have fully embraced the cloud.

The only thing keeping me from going “all the way” is my iPod Nano.  As our Kia Sportage doesn’t have an auxiliary jack, I can’t plug my phone into the stereo system.  My radio transmitter will only accept iPod-like devices: not my phone.  Thus, in order to listen to 8 GB of music or podcasts in my car, I have to use the iPod, which means I have to use iTunes, which means I have to use a cable to switch things around and update the playlist.

That, or I spend $250+ to get a new car stereo with an auxiliary jack, or $20,000+ on a new car.

I think I’m just spoiled…