The monetization paradox (or why Google is not my friend) (Charles Stross)

http://www.antipope.org/charlie/blog-static/2010/01/the-monetization-paradox-or-wh.html

by jfischer • 17 years ago

92 31 17 years ago

jfischer• 17 years ago

Good discussion on the business models for newspapers and books. He explains why novelists will get squeezed by the ebook distributors (e.g. Amazon). Charles doesn't have a solution. Perhaps novelists should sell their stuff to the distributors and then hire marketers directly. However, in addition to providing marketing, the publishers serve as a (rough) indicator of quality -- someone had to believe in the material enough to put their money behind it. Maybe we need investors instead of publishers.

swombat• 17 years ago

Very good comments - worth reading through those.

I posted one too:

---

Would your 3000 rabid fans be willing to sponsor you at $1/m in exchange for some kind of precious items? Like a personal thank you note and access to all your books in ebook format the minute they're done?

That'd net you $3000/m, which is not a huge amount, but a start. And maybe you can get more than $3000, by asking for a floating donation - i.e. set the minimum to $1/m but let them specify an amount (some people would possibly be willing to donate up to $10 or even rarely $50/m to you if they really are rabid fans?)... or by increasing your fan base... If you can reach new markets and get, say, 10'000 rabid fans instead, or if you can convince people who are not quite rabid fans to sponsor you anyway, you could make a very comfortable revenue from this subscription model.

Ultimately, you are a "business" whose product is a flow of cool new books. The current model suggests that people pay for book that you've already written, but perhaps you need to turn it on its head and ask people to pay for the books that you're going to write. This would basically be a kind of micro-patronage.

stralep• 17 years ago

Would Street Performer Protocol be appropriate in this case?

http://www.schneier.com/paper-street-performer.html

CWuestefeld2• 17 years ago

I read that paper some time back, and it strikes me as a pretty good idea.

In short, a (potential) writer would propose: I'll write this book for a minimum of $X. Interested readers would put into an escrow system whatever that book is worth it to them. If the total escrowed contributions reach $X (presumably by some deadline), the author will write the book and release it for all to read, collecting the escrowed funds. If the kitty doesn't reach $X, or the author doesn't make good, the escrowed funds are returned.

Obviously this generalizes to other media as well.

The only think I don't see this covering well is the speculation on as-yet-unproven writers. Who is going to take a chance on you so you can make your reputation? Maybe that doesn't matter; I think that today, writers, musicians, etc., typically produce their first works on their own to get a publisher interested.

keyist• 17 years ago

There is precedent for what you describe: prog-rock band Marillion did this in 2001: http://marillion.com/band/bio2004.htm (4th paragraph).

"[...] it was the revolutionary concept of asking their fans to pre-order and pay for the recording costs an album some 12 months in advance of its release that hit the headlines in 2001. Astonishingly, over 12,000 of their fans pre-ordered and an additional deal was struck with EMI to market the resulting ‘Anoraknophobia’ album."

Not sure if escrow was involved though.

JulianMorrison2• 17 years ago

it probably works better at the granularity of "chapter" instead of "novel".

sabat• 17 years ago

It reminds me somewhat of the old patronage system. Why did Mozart write so much music? Besides the fact that he was born to do it, he had a family to feed -- he had a patron. The patron paid him to write music (and operas and whatnot).

With the internet, couldn't we all be micro-patrons?

shalmanese• 17 years ago

That sounds like kickstarter: http://www.kickstarter.com/

teej• 17 years ago

This is exactly what they did with the "Designing Obama" book on Kickstartr (http://www.kickstarter.com/projects/simplescott/designing-ob...).

cschwarm• 17 years ago

It's a good idea but it doesn't consider transaction costs. That's the main problem.

Imaging you're a reader with US$ 1000 per year to spend on books: how do spend it if there's a large supply of book offers like these?

cstross• 17 years ago

The situation isn't necessarily as bad as my essay implies. One of the commenters posted this link:

http://www.idealog.com/blog/apples-disruption-of-the-ebook-m...

(Attention-conservation version: The major publishers have done a deal with Apple whereby they'll be selling books on an agency basis rather than the wholesale model that's got them into such trouble with Amazon et al.)

And then there's this:

http://www.theregister.co.uk/2010/01/20/amazon_royality/

(Short attention span version: Amazon is spooked.)

jseliger• 17 years ago

(Short attention span version: Amazon is spooked.)

I see why: I just bought a Kindle because I'm in English grad school: http://jseliger.com/2010/01/18/buying-a-kindle-why-didnt-i-t... and realize that I'd rather have a Kindle than buy another ~$200 worth of Nortons and so forth. Two days of using it shows what the Kindle is missing: iTunes for documents, especially because .pdfs still don't play nicely on the Kindle. The closest substitute I've found is Calibre at http://calibre-ebook.com . It's not good enough or well-thought out enough and probably never will be. I'm tempted to start trying to produce an iTunes replacement, but I'm not good enough too.

This leaves a very wide hole for Apple, even leaving aside the hardware issue.

rbanffy• 17 years ago

Maybe Accelerando could be made into a movie...

Who could direct it?

rubinelli• 17 years ago

The only name that comes to mind is David Cronenberg.

dan_the_welder4• 17 years ago

Wow. Yes.

arethuza• 17 years ago

David Lynch?

dan_the_welder4• 17 years ago

Great read,

However, first he says:

"These days, a lot of newspapers look to cut their overheads by reducing their actual journalist and editor head-count — after all, these folks aren't contributing much to the bottom line .... But in the long term, it's insane: it's the kind of move that cuts one or two percentage points off the bottom line, but pisses off the subscribers."

Which I totally agree with, my local newspaper is just empty calories in that sense.

He then goes on to say

"Given that the crappiest spam blog is as useful to Google as the greatest virtuoso symphony performance or the Nobel prize winning novel, if it generates the same number of advertising click-throughs, they'd do just as well to spend the money on automated spambots."

Which is where I go astray. I am getting annoyed with Google junk results. If I am searching for weird niche tech stuff I get fine results, but if I look for products, general health information, financial info, or any of the things an "average person" looks for I just get crap. Spambot blogs, and the inevitable list of pages that are from heavily SEOd, but useless sites.

That has got to be driving people crazy, and if Google does not figure out how to weed out the useless content they will lose their users to some sort of trusted social networking bookmarking model. Already I see this on Facebook where my friends ask each other for links and sources.

dan_the_welder4• 17 years ago

Also if you look at Google owning web advertising with a critical eye, one question seems to appear to me.

How is it that Google has become essentially the equivalent of a broadcast advertiser in a narrowcast distributed ownership venue like the web.

The answer as I see it is, that we are still accustomed to the old ways and have a tough time trying the new models and tend to leap on the biggest bandwagon out of fear. Fear of missing out on the imaginary gravy train.

JulianMorrison2• 17 years ago

Agreed. I posted saying basically, he was dismissing Google's attachment to good content far too readily - consider YouTube, where they pay royalties per music playback. Might they do something similar for books?

dan_the_welder4• 17 years ago

Sure, crap only wins in the short term and psychologically speaking the last 10 years is nothing in the grand scheme of things.

I have a coat older than Google. I have drill press older than the entire internet. I have books that predate the transistor.

This is all new and we are just barely coming to terms with a giant sea change in every industry and cultural institution.

We need more ideas and techniques to try, old ones, new ones and everything in between.

euroclydon• 17 years ago

"If they're smart, News International's managers might start to roll back the damage of 30 years of complacent lard-assed journalism — hire new investigators, train them to go for the throat and chase the scandals, and start raising hell. A combination of targeted micro-news coverage and turning over rocks to see what's underneath could pay off. The Daily Telegraph started an avalanche running in the UK last year with their series of explosive revelations on the subject of MP's expenses; there hasn't been anything like it in the USA this century, as the insider-culture of the Washington beltway has captured the journalistic corps. When the press cosy up to power, the result is a culture of collusion, and both news and open and accountable government suffer."

We've all lamented the quality or simple lack of investigative journalism these days. I really hope there is a shift back toward news organizations going for quality over regurgitated crap.

robryan2• 17 years ago

Problem is though if your already losing money, increasing your quality is initially going to send you bankrupt even sooner. Turning around your readership numbers I'd imagine would be a slow process over many years.

nfnaaron2• 17 years ago

The article earlier about NYT preparing to charge ("Prepare to charge!") for access got me thinking (again) about the same questions that cstross asked in his post.

I say good luck to NYT in their efforts, but as the OP says, it's a dead business model. I don't care if it works for the NYT or not, and if it does, great. I probably won't subscribe, but that's another tangent.

What does concern me is how or whether good journalism and writing will survive. I buy and read a few fiction and non-fiction books per year, far more than the average American although probably far less than the average HNer. I assume that ereaders will be made to my liking RSN, at which time I will buy few if any paper books. (I will greatly lament the loss of large and odd format books, much more profoundly than I currently miss vinyl album art.)

I assume that the trend will continue, and production of content in and of itself will be decreasingly lucrative. So trying to rely on selling content, or access to content, is going to get harder. Books will probably last a bit longer; if a news article is paywalled you can probably find a similar article elsewhere for free or cheaper, but in most cases there is no substitute for reading a particular story by a particular author. But in the end, even books won't be enough to make a living.

So what do you do if people won't buy what you're selling (access to)? ... Anything else!

In the case of journalism and books, what you can do is make those things the attraction to something else that people are willing to pay for.

In the case of newspapers, I'm not sure what they would sell besides advertising, but it'll have to be something. Maybe more in depth coverage of the same story (but attracting with mere summaries won't work). Maybe video about the story or related subjects.

Maybe instead of selling advertising for stuff, they'll sell the stuff directly. "Nice car Bob." "Like it? I'm leasing it from the New York Times."

For some authors, they might sell editing services, book design and similar to other authors. 100 years ago miners went broke and died looking for gold, but the hardware stores and outfitters made a good living supplying the miners. If you're an author that other writers like, that could be one way to make a living.

Bottom line is revenue is being siphoned or disappearing, and you'll have to change.

robryan2• 17 years ago

I have been thinking that a subscription model could work if you got enough big name papers to go behind a common pay wall and remove themselves from Google. Really unless there was enough to put a dent in the quality of news you get by using Google's aggregater then it wouldn't work. A simple common system though that gave access to many publications content with a single payment could be the only thing convenient enough to work, I guess the payments could work in a similar vein to cable TV packages.

spot• 17 years ago

if he could write interactive fiction, then he could sell subscriptions to connect to the server and play/read.

DanielBMarkham• 17 years ago

Facts of Life time:

You cannot control who reads your book. Once it's "out there" it's going to be all over hell and back. It might be illegal, it might suck, but there you have it.

So find some things you can control and work with those. You can control who gets to see your book first -- that's a highly honored place. You can control who gets to provide feedback as you write it, or who gets to name the characters, or who gets to appear inside the book.

You can control how interactive the book is -- you could have selected special people role-play some of your characters and provide you with live arguments about what the character "really" would do in a situation like this. You can mix video, games, and 3-D immersion to make the book more of a sensually-rich experience (and harder to copy because it doesn't fit into a neat category). You can even set up an online market to have readers decide which topics/plots they think will make the most money -- and cut them in for a small piece of the action.

Don't weep over the things that are gone. Concentrate on what works, mix in several ideas, and run with it. Some of these ideas are old and hackneyed (multi-media books, for instance) but with the right mix you might just pull it off. Look at how many times 3-D flopped before Cameron picked it up for Avatar. Like Cameron, you have to keep the business model moving or it will easily be overtaken by technology.

It's a great time to be a writer, but probably pretty scary too. We IT guys have been in this constantly-changing business model stuff for some time. Welcome to the party.

cma• 17 years ago

The Artistic Freedom Voucher: Internet Age Alternative to Copyrights

http://www.cepr.net/index.php/publications/reports/the-artis...

brc• 17 years ago

I think the main problem with his post is that he sees his audience as fixed. If, in ebook form, his books are priced lower, but he gets a greater percentage, there's the possibility that it will balance out.

For example, one thing that stops me buying books is what to do with them when you're finished. Some books you want to keep, others you want to dispose. It all takes space, management and unnecessary handling. I fully expect to have an ebook reader one day, and when that happens, I expect to greatly increase the number of books I purchase and read. As it is I re-read many of my books time and again because going and buying new ones is a hassle. And yes, that means through Amazon. You've got to wait for it to arrive, store it, decide whether to keep it etc etc. Ebooks : click, download, read. With bulk disk space, you'll never dispose of a book again.

If I were an established author (but not JK Rowling) I would be depressed. If I were just starting out, I would be excited about the possibility. It's just like the music business all over again. Bands have made online work, Authors will be able to do the same.

The monetization paradox (or why Google is not my friend) (Charles Stross)

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