• Print

Content is a Service Business

I’ve been a fan of Trent Reznor‘s music since first hearing Pretty Hate Machine in junior high school, but in the past few years I’ve been increasingly impressed by his attitude and approach to the economics of the modern digital media business. His release of Ghosts I-IV is a case study in how to do exactly what Kevin Kelly outlines in Better than Free : “When copies are free, you need to sell things which cannot be copied.” Notice that even though the Free Download option is right there at the top, the $300 “ultra-deluxe” version is sold out (and was sold out within 24 hours of being released).

On his forum a few days ago, Reznor posted advice to aspiring young musicians eager to make it in the music business, and the advice is just as applicable to writers and other artists working in almost any digital medium and attempting to compete with the vast content available on the Web:

[W]hat you NEED to do is this – give your music away as high-quality DRM-free MP3s. Collect people’s email info in exchange (which means having the infrastructure to do so) and start building your database of potential customers. Then, offer a variety of premium packages for sale and make them limited editions / scarce goods. Base the price and amount available on what you think you can sell. Make the packages special – make them by hand, sign them, make them unique, make them something YOU would want to have as a fan. Make a premium download available that includes high-resolution versions (for sale at a reasonable price) and include the download as something immediately available with any physical purchase. Sell T-shirts. Sell buttons, posters… whatever. [emphasis added]

This is not just about using free digital content to sell physical goods. It’s an acknowledgment that what you’re selling as an artist (or an author, or a publisher for that matter) is not content. What you sell is providing something that the customer/reader/fan wants. That may be entertainment, it may be information, it may be a souvenir of an event or of who they were at a particular moment in their life (Kelly describes something similar as his eight “qualities that can’t be copied”: Immediacy, Personalization, Interpretation, Authenticity, Accessibility, Embodiment, Patronage, and Findability). Note that that list doesn’t include “content.” The thing that most publishers (and authors) spend most of their time fretting about (making it, selling it, distributing it, “protecting” it) isn’t the thing that their customers are actually buying.

Whether they realize it or not, media companies are in the service business, not the content business. Look at iTunes: if people paid for content, then it would follow that better content would cost more money. But every song costs the same. Why would people pay the same price for goods of (often vastly) different quality? Because they’re not paying for the goods they’re paying Apple for the service of providing a selection of convenient options easy to pay for and easy to download.

This is not new to digital content. Why would the price of admission to see a given year’s Razzie Award winner be equivalent to the price of admission to see the year’s Best Picture? Because the price of admission is not for the content. It’s for the privilege of seeing it early, and doing so on a big screen in a social environment — movie patrons pay for the service provided by the theater, not for the movies themselves (here’s a counterpoint on movie pricing). That’s the point that Reznor and Kelly are making: think long and hard about what your customers want, and provide the service of giving that to them.[1]

“But people are still buying content when they buy a book or an album,” the argument goes. Yes, they are. The same way that you’re buying food when you go to a restaurant. You are purchasing calories that your body will convert to energy. But few restaurants (especially those you visit frequently) have ingredients any different from those you can get yourself at the corner store, for much less money. So it can’t be true that your primary goal is to purchase food; you’re purchasing a meal, prepared so you don’t have to, cleaned up so you don’t have to, and done so in a pleasing and convenient atmosphere. You are paying for the preparation of the food and the experience of eating it in the restaurant, not the food itself [2] (beyond the raw cost of the physical ingredients, which in the case of digital content is effectively zero).

This came up during a discussion on Peter Brantley‘s email list recently, in the context of what someone is paying for when they buy one of our Cookbooks (which contain “Recipes” for how to accomplish specific tasks with a particular computer language or technology, often culled and curated from material and techniques previously published in blog posts, mailing lists, or help forums). I asserted that rather than the content itself, people are paying for the preparation of that content, to the extent that it helps them solve their problems more quickly and conveniently. When you think about what we do as a service business, then it makes perfect sense: readers are paying us for the service of finding a bunch of great and interesting stuff, and putting it together in a convenient package. It’s the convenience of not having to find it themself, and the concise package that saves them from having to dig through a bunch of web bookmarks or search results. I didn’t buy “Home Buying for Dummies” last year because I wanted a book on home buying; I bought it because I didn’t want to screw up something really important (buying a house) and was willing to pay someone to spell out all of the stuff I needed to worry about in one place. People don’t buy Jim Cramer‘s books because they want Jim Cramer’s content — they buy his books because they think it will help them get rich, and they think paying him is a great shortcut alternative to acquiring his knowledge (knowledge, not “content”) themselves. These are services, not products.

The recent (and absurd) notion put forward by European publishers to “strengthen copyright protection as a way to lay the groundwork for new ways to generate revenue online” is intimately tied up with this issue of the value of content (and therefore the value of various players in the content value chain, like authors, publishers and the latest bogeyman, aggregators and search engines). Arguing that you need to beef up copyright protection to make sure there are ways to generate revenue online incorrectly assumes that what people are paying for is the copyrighted content itself. People do not care about content, they care about themselves and their problems.

You don’t get an “A” for effort just by spending time and money creating content (and you are not entitled to your business model — you have to earn that money every day by doing something that people find worth paying for — and they decide it’s worth paying for, not you). Content only has value to the extent that someone will pay for it because it accomplishes something they’d rather exchange money for than do themselves — and when was the last time you said “Gee, I really need some content. I could write some of it for myself to read today, but I’d rather pay someone else to do it.” [3] Google and other aggregators haven’t stolen any value from the creators of the content they are aggregating — they have done what intermediaries have always done, which is create new value based on doing for customers what those customers cannot or do not want to do themselves — the service of sorting through all that content to find the thing that solves their problem. (I use “problem” loosely — it may be boredom, loneliness, a tax audit, an idea for a first date,…) Again I’ll return to Kevin Kelly, who elucidated the role of aggregators in relation to content creators far more eloquently than I ever could:

The giant aggregators such as Amazon and Netflix make their living in part by helping the audience find works they love. They bring out the good news of the “long tail” phenomenon, which we all know, connects niche audiences with niche productions. But sadly, the long tail is only good news for the giant aggregators, and larger mid-level aggregators such as publishers, studios, and labels. The “long tail” is only lukewarm news to creators themselves. But since findability can really only happen at the systems level, creators need aggregators. This is why publishers, studios, and labels (PSL) will never disappear. They are not needed for distribution of the copies (the internet machine does that). Rather the PSL are needed for the distribution of the users’ attention back to the works. From an ocean of possibilities the PSL find, nurture and refine the work of creators that they believe fans will connect with. Other intermediates such as critics and reviewers also channel attention. Fans rely on this multi-level apparatus of findability to discover the works of worth out of the zillions produced. There is money to be made (indirectly for the creatives) by finding talent. For many years the paper publication TV Guide made more money than all of the 3 major TV networks it “guided” combined. The magazine guided and pointed viewers to the good stuff on the tube that week. Stuff, it is worth noting, that was free to the viewers. There is little doubt that besides the mega-aggregators, in the world of the free many PDLs will make money selling findability — in addition to the other generative qualities.

I love his metaphor of the internet machine (“a very large device that copies promiscuously and constantly”), and it’s one worth keeping in mind if you think you’re in the business of selling “content,” because you are probably wrong.

Update: Jim Lichtenberg kindly reminded me he gave a presentation [PPT] on the same topic at the 2008 TOC Conference. Worth a read.


1. Many publishers have actually been doing the same thing for years with hardcover, trade, and mass-market editions of the exact same content at different prices.

2. This is why celebrity chefs aren’t particularly worried that doing TV shows and selling cookbooks describing exactly how to make the food they serve in their restaurants will harm business.

3. There are people who do in fact want to pay someone to write content for them as a service. They’re called publishers.

tags: , , , , , , , , ,
  • http://loudpoet.com Guy LeCharles Gonzalez

    Is there a secret cabal dedicated to the devaluation of content, and is Chris Anderson its President or its Killer Robot?!?

    While your underlying point is valid (and one I agree with), your examples prove that CONTENT is a critical piece of the equation: Content + Context = Value.

    A subscription to The Economist is more expensive than its competitors because its content is more highly valued. Restaurant menus vary according to the quality of their food AND the ambience of their space. iTunes started charging different prices for songs earlier this year — 69 cents, 99 cents and $1.29 — as did Napster.

    The service aspect you’re referring to is the context, but without worthwhile content, it’s the proverbial lipstick on a pig.

  • http://toc.oreilly.com Andrew Savikas

    @Guy — I disagree that the Economist is expensive because it’s content is more valued. Most of the actual content in the magazine is freely available online, and there is rarely “news” to be found in product that must be printed on glossy paper and sent via US mail.

    I pay for the print subscription to the Economist because of the preparation of the content into a convenient package that keeps me well informed on a variety of global issues. I could accomplish the same objective myself by reading other publications, scanning websites, or even reading the Economist online edition. But I don’t want to spend my time doing that myself, so am happy to pay the Economist for the service of doing it for me.

    iTunes may well be able to support tiered pricing, though I think there’s a much bigger spread in quality among poor and exceptional music than can be captured in those three discrete levels — I don’t think the price is about the content (all of which is demonstrably available for free elsewhere — in many cases directly from the artists themselves).

  • http://loudpoet.com Guy LeCharles Gonzalez

    @Andrew: The Economist is not simply aggregating content from a variety of sources, it’s producing quality content and presenting it in a context that that you value enough to pay a premium for. If their content wasn’t more valued than, say, Newsweek’s and Time’s, they’d be in the same floundering boat.

    To go back to the more relevant example of Trent Reznor, I could replicate the same exact level of service he does for my own music, but since I’m NOT a musician, there’s no value to the content I’d be offering and as such, my stellar, innovative service would have no value, either.

    Digital enthusiasts like you put far too much emphasis on the technology and not enough on the content it delivers. It’s like the first dot com bust never happened!

  • http://toc.oreilly.com Andrew Savikas

    I never said the Economist was “simply aggregating”. The Economist pays for high-quality content (in the form of writer salaries) because they (rightly) believe it will help differentiate their packaged version of the-service-of-keeping-me-informed from the myriad other options out there (which include that exact same writing that they offer for free on their own website. They pay for the content to attract my attention (and subscription), and then turn around and resell that attention to advertisers at a markup over what they paid for it.

    But this is not about the Economist, it’s about me (the customer). The Economist is not selling me their content (they already give it me for free, and if they didn’t I could find a reasonable substitute elsewhere for less money), they’re selling me the service of preparing their convenient packaged version of their content, a package which saves me time and money — a service that I gladly pay more than $100/year for.

    My intention is not to say that content doesn’t matter. If you’re a publisher, finding good content matters a great deal. But what you in turn sell to your customers probably isn’t the content, it’s the service of delivering that content (which after all they can often get elsewhere for free, or find a suitable substitute) in a convenient package.

  • http://www.johannesstock.com Johannes Stock

    For me, this sounds like the old media vs. message discussion (or form vs. content, if you want). To offer a worthwhile service, your content has to be good in any kind of way (it’s the customer’s decision). So, what you sell in a service often is a convenient way to get good content. Worthwhile content + convenient service = real value (that comes with a prize).

  • Xanthe

    Andrew. I appreciate this piece! I’m overseeing the blog team for our new Innovation Center at RIT and I consistently tell the team that it’s not about the stories, it’s about the behavior the stories inspire in our readers/potential collaborators. I will use your piece to drive that point home.

    Thanks!

  • http://snarkmarket.com Robin

    Hmm. What about the new Harry Potter book? Is there really some “service” that I’m after there? Don’t I just really, really want to know what happens next at Hogwarts? You could probably contort yourself into calling that some kind of “narrative satisfaction service” — but I think it’s really just the content that I want.

    Now, of course the Harry Potter books also benefited greatly not from a surrounding service, but from a surrounding experience — going to the bookstore at midnight, holding this hefty object in your hands, talking about it with others, and so on.

    And for what it’s worth, I think “experience” is a better word, in general, to sum up all of that other stuff than “service.”

    In your post, you talk about customers as very sort of, you know, rational and value-seeking. I don’t think that’s always — or even mostly — the case. You write –

    “Content only has value to the extent that someone will pay for it because it accomplishes something they’d rather exchange money for than do themselves”

    – and I’m wondering — does that account for Harry Potter? For WALL-E? You could make the argument that the “something” those blobs of content are accomplishing is “entertainment” and, well, for the right price I’d put on a puppet show of my own… but I don’t know. It feels like a stretch.

    So overall, I think this argument for hybrid thinking is right on, but the “service” frame doesn’t seem 100% right to me. I think it’s more about experiences, and I don’t think that’s just a semantic difference. Services are all about utility, & efficiency — rational services for rational consumers with rational objectives. Experiences can be about mystery, surprise, delight.

    As an aside, Andrew, the reason I was motivated to comment at all was that you’re so engaged in the thread here — so there’s an example of exactly what you’re talking about. It’s not just the content of your post that “works” here. It’s the experience — you can call it a service if you like :-) — of the conversation following it.

  • http://toc.oreilly.com Andrew Savikas

    @Robin — Thanks for the comment. In some cases the service is “providing an experience”, though sometimes the service is something else. I think my definition of service is less utilitarian than yours.

  • http://blog.botfu.com Kevin Marshall

    Great post and I think it’s spot on.

    It’s often hard to remind ourselves what people are actually paying for (or willing to pay for) because many times what we think of as the ‘real work’ isn’t directly or obviously tied to what customers are actually buying (in their minds).

    The restaurant examples are perfect…content is VERY much like food, and while it takes a certain skill to grow either…people will only pay a certain amount, and do a certain amount of work, to get the bare min. they need to survive…when there becomes a surplus (like there def. is for content in today’s world) the item becomes a bit of a commodity, and then it becomes more about building an experience or service around the commodity than it does about the commodity itself (but yes, you still need a quality version of the commodity to build the service/experience around).

    Anyway – I think you raise some excellent points that we should all keep in mind as we figure out our ‘new’ business models and just how to add value in the digital age…

  • bowerbird

    i was amused by the amount of hype extended on twitter
    by the o’reilly clan that pointed to this particular blog post.

    if you’re gonna promote a post so much, you might want
    to do some copy-editing on the its/it’s occurrences, so
    people will retain their confidence in you as a publisher.

    as for the piece itself, it’s just another riff that trades on
    semantic confusion, this time over “content” and “service”,
    adding very little to our knowledge about either of them…

    (but hey, it’s better than what andrew used to write here,
    which was usually clearly wrong. so he’s improving a bit.)

    -bowerbird

  • http://anirudhatoffice.blogspot.com/ Anirudh

    I think there are four differnt factors here: Content, Service, Experience and Consumer. Getting content easily without putting in much effort comes under Serivce, whereas what you derive from the content – pleasure, entertainment, thrill comes under Experience. Content, Serivce and Experience – all three matter to the Consumer.

    Experience with the content is not just dependent on the content quality, but also on who is consuming it – the Consumer. Same content will lead to different experiences with different people, no matter what the content quality.

    This is not to say that High quality is not a factor (if the content is Original, Unique, Innovative etc. it has some inherent value). When people buy Jim Cramer’s books they buy it for its unique content (perspective/knowledge), which has not much to do with Service.

    Why would people pay the same price for goods of (often vastly) different quality?
    Well, because this price is fixed by the seller; whereas the quality is perceived by the buyer. If I really need to download my favorite song, I may not mind paying even $5 for it; iTunes charges around $1. In other words, consumers wont mind paying $1 as long as they perceive its value equal to or greater than $1.

  • Luca Fabbri

    Great post, very thought provoking. And many thanks to the O’Reilly clan for hyping it – I had missed it the first time around… ;-)

    The question that comes to my mind is: what’s next for book publishers? Their current service model is centered around a product – the printed book – that has very little similarities with what it will become in the future. To stretch a bit your analogy, we are asking restaurants to become musicians – while there may be some marginal competencies that do transfer, most of their respective businesses are radically different.

  • publishingmojo

    >what’s next for book publishers? . . . we are asking restaurants to become musicians

    For a restaurateur to turn into a musician, he/she needs talent and versatility, but most of all, a willingness to embrace risk. Some restaurateurs possess those qualities, but many don’t.
    The same goes for publishers. In a thread on LinkedIn (http://tinyurl.com/l2gwyu) I wrote about how this might happen in the textbook business:
    “[L]et’s look at educational publishing in the year 2020. The roles once carried out by acquisition editors in publishing houses have been taken over by new, leaner and more specialized businesses, called content aggregators and content validators. . . . Other companies and individuals call themselves content integrators. They select and merge “validated” content into ready-to-use curriculum. Many schools still want ready-to-use lesson plans, assessment tools, etc., so the content integrators bring in pedagogy specialists as needed. Finally, there are user-experience specialists–people who do what publishers’ design and production teams used to do. They make the content attractive, easy to read, and functional on any delivery system used by schools or students, including e-books and mobile phones.”

    Will publishers be able to reinvent themselves as content aggregators, validators, integrators, and user-experience specialists? Some will, but only by embracing risks that many shareholders won’t have the nerve for.

  • http://toc.oreilly.com Andrew Savikas

    @Anirudh — I actually don’t think people buy Jim Cramer’s “content”. (Much of it is available for free on his website, his TV show, his radio show, his podcast…). They want to make money investing, and believe he has the knowledge to teach them how to do so. They’re paying him for the service of sharing his knowledge in a format they find convenient and useful.

    @Luca — I’m not saying there’s anything new here for publishers. As my colleague Joe Wikert put it on Twitter, as the adage goes, “we’re selling holes, not drills.” Another way to put it is “what job does this book do for the reader, and what alternatives do they have for getting the same job done.” The recent change is that there are now many more options; but the underlying service (getting a job done for a reader) hasn’t actually changed at all.

  • http://blog.storybird.com Mark Ury

    You’re bang on Andrew: services either a) enhance the content or b) displace the content’s initial value by supplanting it with something wholly new.

    This second point is particularly critical (and increasingly the dominant use-case) when your content becomes marginalized by ubiquitous competition or general noise. Not only does Reznor have to worry that he no longer makes money from recorded music, he also has to worry that people can’t or won’t access him because there’s simply too much market frisson: his voice is simply drowned out.

    In this case, “services thinking” becomes another way of approximating or describing relationships: figuring out ways that you and I can stay engaged so that, at some point, I might be able to sell you something other than what you (or I) initially thought might be the commercial transaction.

    At Storybird, our poster girl for this way of thinking is Amanda Palmer, the lead singer for the Dresden Dolls. Via Twitter parties, flash meetups in her tour cities, and an imagination for other products to sell than recorded music, Palmer is innovating in real time on the artist/fan relationship. A great example is her Twitter-party-turns-into-tshirt that netted her $20K in tshirt sales in 10 hrs, a feat that her recording contract was never able to provide (she netted $0K from an entire year with her label). Mike King has the deets here.

    We’ve started to talk about this phenomena as a shift from product to process where part of what constitutes “the product” is sharing the actual making of it. Seth Godin calls it “tribes” and Fred Wilson thinks of it as “freemium,” but the general point is this: without engagement, you can’t make money. Period. But if you have some sort of relationship, the opportunity exists to a) sell your basic content and b) iterate with your community to new types of content——even if that content is the relationship itself.

    Keep up the great posts.

  • Luca Fabbri

    I think your view of publishing as a service rather than a product industry frames very well the inadequate response of most publishers to the paradigm shift taking place in the industry. From the outside of the industry, it looks like publishers are making drills, not holes. Now some are making cordless drills, but some day two guys in a garage will figure out how to make a laser tool that will better satisfy consumers’ need for holes.

    If you looked at my shelves you’d know immediately what I think of O’Reilly. Hence here is my exhortation to you: don’t focus on the next generation of cordless drills, but rather start figuring out what a laser hole-maker might look like!

  • http://blog.storybird.com Mark Ury

    You’re bang on Andrew: services either a) enhance the content or b) displace the content’s initial value by supplanting it with something wholly new.

    This second point is particularly critical (and increasingly the dominant use-case) when your content becomes marginalized by ubiquitous competition or general noise. Not only does Reznor have to worry that he no longer makes money from recorded music, he also has to worry that people can’t or won’t access him because there’s simply too much market frisson: his voice is simply drowned out.

    In this case, “services thinking” becomes another way of approximating or describing relationships: figuring out ways that you and I can stay engaged so that, at some point, I might be able to sell you something other than what you (or I) initially thought might be the commercial transaction.

    My poster girl for this way of thinking is Amanda Palmer, the lead singer for the Dresden Dolls. Via Twitter parties, flash meetups in her tour cities, and an imagination for other products to sell than recorded music, Palmer is innovating in real time on the artist/fan relationship. A great example is her Twitter-party-turns-into-tshirt that netted her $20K in tshirt sales in 10 hrs, a feat that her recording contract was never able to provide (she netted $0K from an entire year with her label).

    We’ve started to talk about this phenomena as a shift from product to process where part of what constitutes “the product” is sharing the actual making of it. Seth Godin calls it “tribes” and Fred Wilson thinks of it as “freemium,” but the general point is this: without engagement, you can’t make money. Period. But if you have some sort of relationship, the opportunity exists to a) sell your basic content and b) iterate with your community to new types of content or services——even if either is the relationship itself.

    Keep up the great posts.

  • Marco Ferrario

    Publishing has always been “preparation of content”. At the Economist, I think they’re completely aware the way they prepare content is what let you buy it. I’m pretty sure they’re aware they’re selling you “that” service. And this is what has always been called “publishing”.

    The same is for books, when a publisher transforms a manuscript into a book with an attractive cover, intriguing blurb, and so on: he’s building up a service on a content (and the service starts with the choice and the selection of that content).

    The copyright protection turns the sale of a service by a publisher into the illusion to sell a content; just because he owns it (or the right to make profits on it). And from this perspective, there are differences among media (magazines, for examples, have much lower protection on the content they publish, compared to books).

    A clear message in your post is that publishers must now provide consumers with new, unique and different services they’re willing to pay for, around a content consumers love. This is not new: it was true in the traditional publishing as well (less in books).

    The new thing is that many digital contents are free. The illusion cannot exist any more: consumers are aware thy’re willing to pay for services upon contents, not just for contents. This makes the distinction between “service” a “content” much more than a semantic matter: it’s money.

    By the way: that’s why I think Amazon is making money on the kindle device instead on the kindle library. They’ re selling the service, not just the access to a content.

  • http://www.bonnect.com Godfrey Alleyne

    I think that the argument on whether contents has value worth paying for or not misses a bigger point.

    Historically, most media including TV and newspapers made only a relatively small percent of their revenue from end users- content consumers. The bulk has always been from advertising.

    Now that there is essentially unlimited contents, as well as the ability to track consumers across any digital property, the amount of advertising per “content channel” will continue to fall as well as the average price per ad.

    So, in conclusion, there is simply no way for general contents providers to maintain pricing
    power or- the new scarcity- attention.

    Before there was a desert of contents, now there is an ever growing ocean.

    So long to paid media.

  • Dwight Spitz

    TIME. You got it, if you can save people time for things they can get for free but save them the time of getting, people will pay for that. Has WILL any company put the effort in to making this possible. NO they won’t, because they are greedy blind sacks. iTunes, it sucks. Sure you can find new music. I really don’t see how new music, ie music that got recorded when the ipod first got released, i don’t see this as a selling point to anyone but those who were tweens in 2002.

    So if you allow the hunter gatherers to order room service from the confines of their bear skin floored cave, THEN and only then will people pay.

    last point on print media. you can’t beat it’s cultural cache, people get books, magazines, technically, they won’t run out of batteries and you dont need an f ing magnifying glass. so far those who value reading, there will be a market, much smaller obviously, but inelastic.

    until devices and copyright become like paper and pencils, this embarrassment that is our age, will continue like a bunch of two year olds crying over who really owns the plastic shovel in the sandbox, rather than bother to try to understand how to share and collaborate with the overarching context of the sandbox.

  • http://www.tapasntapas.com Nimrod

    There is only one problem with your restaurant metaphor – wherever you get your meal – in the restaurant or at home, the creator of the “content” (vegetables, meat) will get paid for the content he creates – not only for his expenses, but also for the time and effort he gave in. In all your examples, the customer is paying, at least partially, for the content. The TV Guide’s content is not the TV shows – it’s the recommendations and reviews. And the TV shows were never “free” – watching commercial is a real price to pay for “free” TV.

    Setting a zero price for content is a death sentence to a lot of the great music. Some artists can live out of live shows, some (like Reznor) are popular enough to live out of the pay-as-much-as-you-like model (could Reznor make this much money the same way out of “pretty hate machine”?). The counter example I always use is the one of David Berman of The Silver Jews. In 2005 Berman gave an interview to Pitchfork where he specified, in details, his music income. It seems that Berman was making a significant, although partial, living out of music. Now, this is an artist who never (at the time of the interview) promoted his music or performed live. “The Silver Jews”, at the time, were a non-existing entity except of the content they have created. As seeing him live a year later (in the first ever Silver Jews live tour) has proven, Berman was never meant to be on stage – the only strength he has is his songwriting, or, as may put it, his content creating ability. You can say that people like Berman have no place in the new media (Berman actually retired from the music industry earlier this year) – for me, it is a sad world in which my favorite song writer can’t afford to write songs.

    If we look into a different media – the book – assuming that in a few years books will become all digital, if we set the price of the content to zero, book writers will simply have to find a different employment to make money from. What kind of “Extra content” (besides filling the book with characters drinking Coke and paying with MasterCard) can a book writer create? True, people will still write as a hobby. But when time is scarce, hobbies are the first to be thrown out of the windows – that’s why so many blogs have been last updated in 2007.

    Instead of using this new era, in which content can be created and distributed easily then ever, to cut off many of the unnecessary middle men, making sure that the artist will get more money for the content (while getting a cheaper price), we are actually raising the bar for the media industry – it’s not enough that you write good books or good songs, you must have something “extra” to give – sadly, not everyone has that extra something.

  • http://toc.oreilly.com Andrew Savikas

    @nimrod — You’re absolutely right that a producer is paid for their time and effort. And why would you pay that producer for using their time and effort to create something you could create yourself? Because presumably you’d prefer not to use your own time and effort, and would instead like to exchange money for their time and effort. That’s a service.

    We have been “setting the price of content” at zero for more than a decade: here’s a list of O’Reilly books available completely for free. These books have sold millions of dollars over their lifetimes in print, in downloadable digital form, and as part of a curated subscription library in Safari Books Online.

    Why pay for something available for free? Because it’s more convenient. The “free” options often require payment in something far scarcer than money for many: their time. As Peter Drucker put it in “Managing for Reslts”:

    “In the activities market, people do not buy to own but to do — in other words, they make no distinction between goods and services. The only distinction they can make is between time they have and time they do not have. The discretionary time market will therefore be both fast growing and rewarding and also competitive and difficult.”

  • http://www.tapasntapas.com Nimrod

    Andrew

    I don’t really know who you refer to as “the producer”- are those the artists who create music and books? are those the middlemen?

    Anyway, In none of those examples the content is something I will able to create myself. I wouldn’t be able to create Books to read or Music to listen to, and even if I would buy the same ingredients, I would not always be able to create the same meal a good chef would cook.

    When it comes to electronic media, none of the online stores give a better service then the file sharing network (sometimes, due to DRM, even worse). Therefore, if we are going to pay for anything, it should be the content itself – since the artist is the one that deserves our money.

    Regarding the O’Reilly books – you seem to make a very specific choice regarding which books you are publishing for free – I would guess that those are the books for which the sale income is low enough to allow you to release it for free. There is nothing wrong with an artist giving his content for free – this can work very well for many artist for various reasons, but the fact that today’s technology do not allow the artist to control the distribution of the content he creates, doesn’t mean that this content has no value anymore – it just means that we have found a way to avoid paying what this content is worth.

  • http://toc.oreilly.com Andrew Savikas

    @nimrod — one of my main arguments was that no one says “I want a book, but I don’t want to or can’t write one myself”; people seek entertainment, information, enlightenment, education, belonging, and a whole host of other things that matter much more to them than “content.” Content presented in a convenient package may be a great way to satisfy that need, but the decision of whether it has value is their decision, not the content creator’s.

    It’s a reasonable guess you’re making about our open books program, but it’s an incorrect one. The decision is often driven by the authors themselves who understand the value of open content, recognize that obscurity is a far greater threat than piracy, and know that making their content available for free will most likely increase the sales of their books (which it usually does).

  • JulesLt

    I bought the first Silver Jews album when it came out, and I still buy a reasonable amount of records today – and in the last batch I bought, two of them were vinyl records, with a CD of the same tracks in the same package (in fact, one of them actually had a sleeve printed for the CD inside a sealed and letter-pressed envelope).

    This is entirely the sort of ‘fan package’ that small or cult acts can get away with. Thankfully it wasn’t $300, but it was infinitely more expensive that free, and about 4 times the emusic price.

    However – I think that sales of physical editions are just a stop-gap, appealing to those of us with nostalgia or who at least grew up with physical records. When I think of my iPhone, I cannot think of a single App where I would buy a boxed version at higher cost, simply because – unlike desktop software – it has always been pure digital content.

    Also, I do think there is something suspect about a model where, effectively, a small number of people are expected to subsidise the larger audience, whether that is by buying premium editions, or paying large amounts to see them play live, while the vast majority of people receive the thing they actually want – music to play on their iPod – without contributing to it’s production.

    Of course, such things will balance out, simply because they have to – the production of ‘content’ will adjust to match income, and people will not notice what they are missing, just as we do not notice, say, a lack of music hall songwriters or playwrights.