by Mike Masnick
Fri, Mar 9th 2012 1:57pm
by Leigh Beadon
Thu, Mar 8th 2012 4:09pm
from the media-heavyweights-slug-it-out dept
Over the last couple of weeks, there has been growing buzz about Matter, a startup that is proposing a new business model for long-form science journalism and is raising funds on Kickstarter. Their approach is fairly straightforward: each week, they will produce one piece of ultra-high-quality journalism on a science or tech issue, and sell it for 99 cents on as many platforms as possible. It's less a paywall around a publication, and more an attempt to commoditize articles as discrete, sellable objects.Will it work? The big debate has been between Felix Salmon (who likes the idea, and has been quite sanguine on paid content ever since the moderate success of the New York Times paywall) and Stephen Morse (who called Matter a "scam" and its creators "snake oil salesmen"—though he later said those terms were intentional hyperbole). Yesterday, they took to YouTube to hash it out in person:
There are a lot of good points both for and against Matter. For one thing, they've already doubled their $50,000 funding goal on Kickstarter, which at least demonstrates that people are willing to part with their money for something like this—but Kickstarter backers aren't necessarily representative of the broader consumer crowds they will need to court with the actual product. One of Salmon's key points is that since they are raising funds there, instead of going to venture capitalists, their business goals are less daunting: they just need to build something sustainable, not something that will make millions of dollars. The creators have said they don't plan to pull salaries unless the company is a massive hit. They've put a lot of focus on keeping their costs down, so, overall, their financial goals are very different, and a lot more attainable, than the average startup.
On the other hand, as Morse points out, there is plenty of great content out there for free. He doesn't believe there is truly an untapped demand for this kind of content, so Matter won't be able to compete. Salmon thinks the Kickstarter numbers say otherwise. Either way, the question is the same: can Matter produce content that is so good and so unique that people will want to pay for it?
I'm reminded of News Corp.'s iPad-only product The Daily, which launched last year to a lot of hype but quickly began losing engagement and talent. People were asking the same question: could The Daily manage to include such great content that people will need to read it in order to stay in the loop? Obviously, it couldn't.
Matter is more focused than The Daily and is targeting an entirely different audience with a higher standard of journalism, which gives it a leg up in that regard—but I still doubt its potential for one key reason that isn't getting much attention: the sharing barrier. The problem with putting a price tag on online content is that it actually reduces the appeal of that content, because one of the things people value most about good content is the ability to share and discuss it with their social circle. Exclusivity is a minus, not a plus, with most kinds of content (financial news being an exception, which is why most of the more successful paywalls online are on financial sites). Some people will be willing to pay 99 cents for an article, but a lot of them won't be willing to ask their friends to pay too by posting a link on Facebook, Twitter or their blog. Those who do are sure to get a lot of confused replies asking "wait, I have to pay?" Moreover, with a pay-per-article model instead of a subscription model, readers are going to have to decide each week if they want to keep paying. The mental transaction cost of 99 cents may be extremely low, but it adds up when you multiply it like that. These factors are going to make it very difficult to grow and retain their readership.
If Matter streamlines their costs enough, and their content is good enough, it's entirely possible that they can build a small core group of readers that keeps the one-article-a-week model afloat—but if that's the best possible outcome, is this really the best possible approach? Journalism online needs more than small-scale sustainable models, it needs ways to grow and expand, and that is never going to happen without advertising dollars. As Salmon says, Matter is trying to do "something which has historically been extremely rare, in the world of journalism: selling stories to readers, as opposed to selling readers to advertisers", and that means they are tackling the wrong problem. They still plan to include some advertising in the articles, but they should be putting a lot more focus on that side of the equation. There are companies out there that want to support this kind of content, and Matter's low-cost, VC-free model puts them in the perfect position to experiment with innovative sponsorship models—an approach that would be bolstered by opening up the content instead of locking it down, ultimately creating much bigger opportunities to fund quality journalism and turn a profit.
Tue, Nov 29th 2011 11:33am
from the this-price-is-crazy dept
Unfortunately, we at www.elviscostello.com find ourselves unable to recommend this lovely item to you as the price appears to be either a misprint or a satire.Yeah, I would say that $202.66 is a joke. For that price you get 1 CD, 1 DVD and 1 Vinyl EP
After hitting a brick wall with his label, Costello has decided to take drastic measures to get his point heard. He is suggesting that his fans avoid buying the album and instead buy something he feels is far superior and cheaper to boot:
All our attempts to have this number revised have been fruitless but rather than detain you with tedious arguments about morality, panache and book-keeping - when there are really bigger fish to filet these days - we are taking the following unusual step.That is quite a show of humility. Not only does he suggest Armstrong's album as a better buy for the money, he also gives Armstrong props for making better music. This is a pretty good endorsement and according to Amazon, "Ambassador of Jazz" is already sold out. So people are listening. Perhaps the end goal here is to get the label to admit that it screwed up the pricing and to soon change it. However, if even the artist cannot get the price changed, what hope is there for a consumer boycott?
If you should really want to buy something special for your loved one at this time of seasonal giving, we can whole-heartedly recommend, "Ambassador Of Jazz" - a cute little imitation suitcase, covered in travel stickers and embossed with the name "Satchmo" but more importantly containing TEN re-mastered albums by one of the most beautiful and loving revolutionaries who ever lived - Louis Armstrong.
The box should be available for under one hundred and fifty American dollars and includes a number of other tricks and treats. Frankly, the music is vastly superior.
We talk a lot about the need for artists to connect with fans as a way to give them a reason to buy. Here, we have an artist connecting with fans and asking them to avoid buying. You would think that this would be counter productive for the artist but this move shows that Costello has the best interests of his fans in mind and will do anything to protect them from unscrupulous business moves. That is certainly a reason to support an artist.
If you really want to support him, Costello gives his fans other options if they really want this album but don't want to pay the current asking price:
If on the other hand you should still want to hear and view the component parts of the above mentioned elaborate hoax, then those items will be available separately at a more affordable price in the New Year, assuming that you have not already obtained them by more unconventional means.
Wed, Nov 9th 2011 10:57pm
from the the-future-is-inevitable dept
In the first interview, Capps was asked if the death of AA game development and the rising costs of AAA game development is good for the gamer.
No, no I don't think so at all. Certainly as a gamer I don't think what's going on is a good thing. Triple-A is as much about marketing these days as it is about production values.Here he lays out some of the concerns over marketing allocation for games. While publishers will release a number of games during the year, the vast majority of the marketing budget is spent on only one or two hits. However, he feels that this is changing in gaming. Capps feels that there is a marketing shift from direct marketing to building a community behind games.
Take a game like BulletStorm, for example. That game was supported and well reviewed but just didn't break out. It wasn't a failure, but it wasn't a success that could fund a series of projects either. That's a game that I think people loved but it's not one that gets the $100 million marketing budget, because that amount of money is only spent on a few sure-fire hits and annualised sequels.
There's a lot of great games out there that don't take off. How many games have you loved that sell less than three million units? There's probably dozens. Those games can't get made in today's games economy. So no, I don't think it's a good thing that the middle-class of games have gone away.
I'm not an expert here, but there is a huge impact from non-commercial marketing these days with things like Facebook and Twitter. If you don't spam people then you can be very useful to your customers. We were not forward-thinking in that area, but we're really driving in this space now and have more than one million Facebook fans.Such a move can certainly help the viability of AA games in the market. Many game developers, specifically in the indie scene, have learned that building a community behind a game increases the word of mouth exposure of the game and the developer. As AAA publishers shift to a community focused marketing strategy, they will be able to focus more on the games themselves.
But other forms of marketing and PR are starting to change things. The focus is changing from shoving TV ads in people's faces to actually building a community.
I don't know if there will be the same amount of TV adverts in five years' time. No one gets fired for buying TV ads, because they make sense, but soon they will start to make less and less sense. I think what could happen is a lot of money can be saved with less TV adverts and that itself, perhaps, could free up more money to take more risks and be more creative.
Moving on to the second interview, Capps feels that pricing restrictions on consoles are also part of the problem of less viable AA games.
I think another thing that's changed is the way people are willing to spend their money. Consoles need to adapt to this. Game revenue has moved to the service model and the microtransactions model. Consoles need to start being comfortable with that. They need to be able to do something where small virtual items can be sold and bought for 20¢ without a long certification process and a price approval process.On the surface, this may seem contridictory to comments Capps made earlier in the year about how $1 games are destroying the games industry. Hopefully, Capps is just seeing the folly of that view point and instead feels as he is expressing now, that console manufacturers need too allow more price flexibility. While they probably don't need to let prices drop to $1, having more available pricing options will only help some games.
Right now we're not even allowed to change the prices of virtual content. We're not even allowed to set the prices. I just don't think this protectionist approach is going to be successful in a world where the price of virtual items changes on a day-today basis.
Double-A games will never come back unless we get rid of this notion of a game being $60 or not released. The console manufacturers need to let this happen. The best way of driving developers to PC is telling them they have no freedom in what prices they can set for virtual items. It would be great to have the level of freedom that, say, Steam gives you.
As game development further moves into the realities brought by the digital age, there will be companies lost as they try to hold onto old business models that may have worked in the past but do not work today or will not work tomorrow. As Capps has shared, marketing and pricing are two aspects that will change the fastest. As gamers rely less and less on television and print media for gaming announcements and move more toward social media for that information, game publishers will need to adapt or they will be left behind. As console manufacturers continue to insist on complete control over game pricing, gamers will move toward platforms that allow for less expensive fare that provides just as much enjoyment. Times change and so do markets. Epic Games seems to be on a path toward success in this new age, how many other developers and publishers will join them?
Mon, Nov 7th 2011 7:31pm
good old games
from the build-it-and-they-will-come dept
I will be sharing the sales numbers on GOG compared to the competition. I think the numbers will speak for themselves, what DRM-free sales of even a triple-A title can achieve. Our values are universal and they don't only apply to older content. They apply to triple-A, day-one releases.I certainly look forward to learning more about what this experience has to show other developers but I am glad he still leaves plenty to glean from this interview. He continues by explaining that publishers have always had the ability to do exactly what GOG is doing, but they refused to do it, citing unreasonable expenses for low returns. In the early days of GOG, they were met with animosity from publishers over the idea of releasing older games. These publishers didn't want to dedicate time and resources to preparing these games to run on modern computers. They figured it was a losing strategy.
This is something that I have observed over the years. Very few PC game companies have released older games for any price. This led to the creation of a number of abandonware and warez websites. These sites have made available a good number of unauthorized games to the public. GOG specifically took notice of this and has actually used those sites to its advantage.
When we sign content for GOG, we contact abandonware websites and make them our affiliates. So they remove the illegal content, and instead they put a GOG banner and they direct sales and traffic to us. Step by step, we are cleaning up the market and we are making the back catalogue segment a visible, and viable, market for the industry.This is a winning strategy. I have been to a number of these sites in the past and have observed that most of the well respected sites have policies in place to remove games that are available through legal channels and even link to that legal content when it is available. Not only does this build confidence in the abandonware site, it also builds a positive attitude toward the publisher that makes these games available.
The idea of releasing older games is a proposition that only recently took hold with most publishers. A lot of it had to do with GOG and Nintendo's Virtual Console. Prior to these two platforms, most of the work done in bringing older games to modern machines was done by the fan community through the use of emulators and cracks. Most of those efforts were either ignored or attacked by the industry. Now that the experiment has been proven a success in most avenues, I would hope that game publishers will see value in bringing their older games back. The gamers want it. The publishers just need to provide it. Not only will this move provide more legal content for the fans of the games, it will also bring in more revenue that did not exist before.
Tue, Sep 20th 2011 4:34am
from the two-for-the-price-of-two! dept
I was going to write up a post analyzing the causes of Mr. Hastings' sadness and how he plans to make things right, but then I saw this:
Frankly, I really don't understand the point of this apology letter. If you're not going to do anything to address the real cause of your (former) subscribers' dissatisfaction, why even bother bringing more attention to the issue? Seems like when you say you're trying to "make things right," it might be a good idea to actually try to make things right, not worse.
by Mike Masnick
Fri, Sep 16th 2011 7:33am
from the surprise dept
"Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers."Perhaps he should have waited until all of his customers got over the shell shock. The company is now admitting that a lot more people than they expected have canceled their accounts. Somewhere in the range of 600,000 customers bailed on Netflix over this, making it just the second time that Netflix has had a net loss in subscribers month-to-month.
While Hastings also tried to spin the price increase into a story about how Netflix was accelerating subscribers' shift to digital, that story is falling flat with partners like Starz bailing out.
It's beginning to look like our original statement about the price increase was the most accurate. It was driven by the ridiculously high fees that Hollywood now wants, because it can't stand the thought that a service provider like Netflix actually should get any value from helping to drive the market forward. Instead, the content is 100% of the value, and they deserve any and all profits (and then some). It's a classic killing of the golden goose -- something that Hollywood always tries to do. At this rate, it might just "succeed" in that once again.
by Mike Masnick
Wed, Aug 24th 2011 11:00pm
from the that-market-ain't-free dept
A crucial problem is disconnection between the free market and required government regulation. Prices for many older medicines are low until the drugs are in short supply; then prices soar. But these higher prices do little to encourage more supply, because it can be difficult and expensive to overcome the technical and regulatory hurdles. And if supplies return to normal, prices plunge.Left out of this paragraph, but equally important, are patents, which clearly hinder such competition as well. We've discussed in the past how the FDA can often get in the way of medical innovation. Even if it means well (and I'm sure it does), putting in place systems that make it too costly to create real competition does the exact opposite of its intended purpose.
by Mike Masnick
Wed, Jul 13th 2011 11:51am
Killing The Golden Goose: Is Hollywood To Blame For Netflix's Poorly Thought Out Massive Price Hike?
from the what-blockbuster-and-walmart-couldn't-kill... dept
Exactly none of that played out the way people expected. Netflix continued to grow, and successfully expanded into video streaming, rather than just DVD rentals, with a very convenient flat-rate program. Walmart gave up on its Netflix-like business in 2005, and actually handed over the keys to Netflix, to let it run Walmart's online movie rental business. Amazon realized it couldn't really compete with DVD rentals and never brought that business to the US. Blockbuster tried over and over again to compete, but never got much traction, went bankrupt, and eventually was bought by Dish Network earlier this year.
Meanwhile, Netflix has continued to thrive, and plenty of people have pointed to its online streaming, which represents a giant chunk of US internet traffic, as an example of how if you provide a convenient, user-friendly and well-priced offering, you can compete with unauthorized file sharing. With Netflix, the company seems to realize that it's that convenience and access that people are paying for, rather than the content itself.
But, of course, as with so many things involving technology and services that make content more valuable, the copyright holders get jealous and start complaining that they're not making enough. With Netflix's growing power, the studios have been on the warpath to cripple Netflix in protest of the current pricing scheme. In some ways, they really hate some of Netflix's early deals, which allowed the company to offer such a convenient and reasonably priced offering. Pretty much all of the later online streaming movie offerings are, instead, forced to play by the big studios' rules, which makes most of those services totally undesirable.
This has also resulted in some fights with studios directly, and some studios even pulling movies from Netflix.
Given all that, it's hardly a surprise that Netflix decided it needed to raise its prices around 60% for many users. AS you've probably heard, they've basically separated the physical DVD rentals and the online streaming, which used to be included with most accounts. Now you have to pay for each separately, so to get what people had before, their bills are going up quite a bit.
The result of this announcement has been all over the internet (including Netflix's blog and Facebook page), and it would be safe to say that everyone hates the new pricing with a passion. It's incredibly aggressive on the pricing front, but it's not difficult to see why Netflix did this. First, the competitive playing field looks a lot clearer today than it did a few years ago. When companies have no real competition, they jack up prices massively.
Second, however, I'd bet that Netflix is currently in a battle to control its destiny behind closed doors with Hollywood. The studios are demanding lots more cash than in the past, and Netflix seems to think that jacking up prices quite a lot is one way to get the necessary revenue. But Hollywood, of course, couldn't care much less if Netflix survives. They still think that their endorsed crappy online services, with their DRM and massive limitations, is legitimate competition.
So while some are blaming Netflix for the giant price hike, I think it makes more sense to look at the studios and their unwillingness to fully embrace Netflix, always worrying that it would "take away" from their existing business lines.
by Mike Masnick
Mon, Apr 25th 2011 12:13pm
from the do-they-have-a-kindle-version? dept
Amazingly, when I reloaded the page the next day, both priced had gone UP! Each was now nearly $2.8 million. And whereas previously the prices were $400,000 apart, they were now within $5,000 of each other. Now I was intrigued, and I started to follow the page incessantly. By the end of the day the higher priced copy had gone up again. This time to $3,536,675.57. And now a pattern was emerging.In other words, by basing the price on a specific multiple of each other's price, they created something of an infinite loop of automated pricing. Of course, since it only seemed to check once a day, the loop didn't spiral totally out of control (well, depending on your opinion of the value of a book on flies). Apparently, the escalation in price went on for another week and a half or so before someone finally noticed... but not before the book got all the way up to $23,698,655.93:
On the day we discovered the million dollar prices, the copy offered by bordeebook was1.270589 times the price of the copy offered by profnath. And now the bordeebook copy was 1.270589 times profnath again. So clearly at least one of the sellers was setting their price algorithmically in response to changes in the otherís price. I continued to watch carefully and the full pattern emerged.
Once a day profnath set their price to be 0.9983 times bordeebook's price. The prices would remain close for several hours, until bordeebook "noticed" profnath's change and elevated their price to 1.270589 times profnath's higher price. The pattern continued perfectly for the next week.