Pick your POV carefully
Paul Graham, whose writing I always enjoy, just posted a new piece about publishing and, to a degree, the structure of markets for content. I want to zoom in on one point:
What about iTunes? Doesn’t that show people will pay for content? Well, not really. iTunes is more of a tollbooth than a store. Apple controls the default path onto the iPod. They offer a convenient list of songs, and whenever you choose one they ding your credit card for a small amount, just below the threshold of attention. Basically, iTunes makes money by taxing people, not selling them stuff. You can only do that if you own the channel, and even then you don’t make much from it, because a toll has to be ignorable to work. Once a toll becomes painful, people start to find ways around it, and that’s pretty easy with digital content.
I think this is a cheat—aren’t all stores just tollbooths, then? You never buy goods at cost. There’s a markup, a tax, associated with the aggregation, the curation, the experience. This is as true for a grocery store as it is for iTunes and the App Store. And you can see Graham’s anti-iTunes argument sort of fuzz out as the paragraph proceeds: It starts very specific, then breaks down into a restatement of that old information-wants-to-be-free digital determinism.
But that’s not the point I want to make. Rather, it’s that almost all of this discussion—not just Graham’s, but the broader conversation it’s part of—tends to operate from one of two extreme points of view: either that of the consumer (who wants convenience and economy) or that of the company (which wants big profits, or at least a business model). I find myself wanting—sort of desperately wanting—to hear from a different group: the creators.
And, this is as much of a surprise to me as anybody else, but finding myself more and more in that position—the position of somebody who wants to make content, and make money from that content—I see the Kindle Store and the App Store and I say: thank you.
Now listen, I understand all of the problems. I just got into another round of the iPhone: Is It Evil? conversation last night. (Our conclusion, same as always: yes, a little bit.) But if it’s not yet what we want it to be, at least it moves us in the right direction. In iTunes and the App Store, an individual creator can make something and offer it to the world for a small sum, and people will actually take her up on it. I wish that wasn’t so revolutionary… but it is!
Trust me, I get the argument for free. I love Kevin Kelly’s strategies for selling stuff in the age of command-D. Ransom model, hello?
But at the same time, I don’t want to give up on selling stuff quite yet. I don’t think the central lesson of the App Store is that people will suffer a tax if it’s small enough. Rather, I think it’s that people are happy to pay for things if it’s easy enough. And that’s especially true when those things aren’t the products of Super Amalgamated Content LLC, but rather of Indie Content Haus, or better yet, of your friend Matt.
If that’s true, then Paul Graham’s argument about iTunes leads us in the wrong direction. Digital determinism says it’s a tax, a toll booth, a tortured construct that denies the essential nature of digital content. Pragmatism says—without denying that there’s room for improvement—that it’s a joy, a gift, an opportunity engine.
Now, a question you could ask is this: Why isn’t iTunes proper—the music and video part—more like the App Store? The former is open to indies, but still dominated by big corporate media. The latter is open to big corporations, but dominated (so far) by indies. What’s different? How might you splice some of the App Store’s indie vigor into iTunes proper?
I think one strategy—which doesn’t really answer my question above—is to start thinking hard about how to blur the lines between software and content, and get some “content experience apps” (I promise never to type that again) into the App Store. (Paul Graham ends up saying something similar.) For whatever reason, as a market, it’s working for creators. So maybe it’s simply where creators—of many kinds—ought to go.
This is one of those posts I sort of had the impulse to write and then just typed straight through, so it doesn’t exactly have laser-focus. Still interested to hear what you think, though.
I wrote a post on Short Schrift last summer titled “That App Is A Book” that proposed something like a content experience application. So yeah — I’m totally down with that.
As for your observation that “people are happy to pay for things if it’s easy enough” — cf. “It Feels A Little Like Free” — likewise, right there. Tolls are a total pain. Can you imagine if a toll — a real toll, like getting on a bus, or crossing a highway — were as easy as buying a CD from iTunes?
So let me spin Graham on this one. Graham says, dismissively: “iTunes is more of a tollbooth than a store.” Sloan/Carmody say, affirmatively: “iTunes is the future of tolls!”
And tolls work; always have. For one thing, they’re fair (unless collected at the point of a gun) and relate specifically to what the traveler wants: to move from A to C.
I had a few other nits to pick with Graham, too. You can see them at http://editor.blogspot.com/2009/09/seminal-work-or-sloppy-thinking.html
It’s true that Paul Graham’s observations aren’t especially original, so much so that even some publishers, like Andrew Savikas at O’Reilly, have already been making them for a while. And the piece smacks a little bit of a “The less I know about an industry from the inside, the easier it is for me to see their problems” type of logic. (That is, he doesn’t know the business, and some personal anecdotes as a content user/consumer don’t make him an expert.) The real value of the piece is that he’s getting people talking about it, because of who he is. I offer two thoughts, two ways forward, both from publishing people who are at least superficially trying to preserve something though it could just as easily be said, we’re listening and learning. One, from the aforementioned Savikas, is content as service, http://toc.oreilly.com/2009/07/content-is-a-service-business.html and the other from me, on content as community: http://www.publishersweekly.com/article/CA6673022.html
People search through the iTunes stores 30 second clips for fun. If you want to quickly listen to a wide range of music, iTunes is probably the best way to do it; Youtube just doesn’t have the depth to compete. Then, add the fact that you can quickly download an album without monkeying around on rapidshare and it ends up right on your iPod.
Is this a tax? It looks like it is just a better product ( Amazon is often cheaper, but people still like iTunes).
So much of the economic analysis of digital sales seems to overlook the simple and traditional answers. What ever happened to Occam’s Razor?
I agree that Paul Graham’s analysis is just to rationalize I-Tunes (with paid songs) success competing against Peer 2 Peer (free) in the context of the “Noone pays for Content” argument.
Someone is analyzing why I-Tunes succeeded and is probably learning what they could improve to charge even more. And they are considering the implications for news. I suspect at least one of these shrewd marketers is Murdoch. Perhaps that’s assuming a competitor is smarter than he is. But I’d rather do that than assume his ultimate solution is to collude with competitors to put up a paywall.
Katherine Warman Kern
@comradity
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I have written about the creators’ perspective in a few places. Here’s my take:
From the perspective of creators who want to make a living off of their craft, almost nothing, from a practical perspective, is going to change. A tiny fraction of musicians make the vast majority of the money in the music industry; this was true from the beginning of recorded music and will remain true tomorrow. A larger group will be able to make a decent living, a much larger group will be able to make a mediocre living, and the vast majority will not be able to make any living at all just by creating.
From the perspective of people who just love to create and have no expectation of making a living off of it, however, things are already a lot better than they used to be. They can put the fruit of their labor up in a public place and even if only a dozen people ever see it, odds are it’s 12 more than would have seen it in the pre-internet age. And public exposure means more people have the chance to suddenly become popular enough to make a living off of creating than did in the past, since it used to be you had to put in a great deal of energy just to get published or get a gig or some equivalent.
I agree with you that the creator’s perspective does get largely ignored. But I don’t think the Kindle Store or iTunes really does anyone any favors; it’s still only going to be a tiny minority of people that will make money on their creations.
[…] Some overlap with what Snarkmarket’s said about the future of e-book readers, among, other places, here and here. […]
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