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Streaming content: Why buy when you can borrow so much more?

Why ownership of streaming content is overrated

I remember when the early music streaming services were being launched and how I knew I’d never join one. I want to own my content, darn it! Now I rarely buy songs but I love listening to Spotify. I’ve evolved. I’m not alone though and I’m convinced the streaming content model will be very successful with ebooks.

I was speaking recently with an industry colleague and he mentioned how DVDs are now more of a hassle than an asset. Think about it. We used to pride ourselves on that shelf full of jewel cases but I think he’s right. How many times do I watch a video/episode/movie again? Almost never. A scene or storyline might come up in conversation where I’d like to show someone a clip on my phone/tablet/computer though. In other words, cloud access to that content (via YouTube, Hulu, a digital locker, etc.) is more useful and valuable to me than the DVD collecting dust in my living room.

Look at the numbers: According to estimates for 2012, 42% more movies will be viewed via streaming than DVD.

Curation counts

What’s next? Books, of course. Services like Safari Books Online are a terrific model to study. (In the spirit of full disclosure I should note that Safari is jointly owned by O’Reilly (my employer) and Pearson.) Then there’s Amazon who has their own Kindle Owners’ Lending Library. I’m not a fan of Amazon’s program, mostly because they don’t offer publishers and authors a pay-for-performance model like Safari does. Amazon’s program also reminds me of the old shovelware days when books came with CDs stuffed with all sorts of junk. Safari’s list, by comparison, feels more curated and well-tuned for their target audience. That’s the key here, btw…focus a streaming content subscription on a vertical topic (e.g., technology, sports, history), not some all-you-can-eat program where only about 5% of the titles appeal to any given subscriber.

Similar to my earlier attitude toward music, many consumers still feel more of an attachment to something they own vs. something they borrow or stream. But if we’re really heading towards an always-connected world why should I care whether I own the EPUB version of a book when I can access it via a streaming service through my device’s browser?

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Comments: 2

  1. That’s interesting, because more than one author has espoused the same sort of streaming solution for books–not because they prefer streaming media to physical or even owned emedia, but because streaming helps solve the piracy problem. However, from a consumer’s viewpoint, it’s a tough sell, because the _perception_ is that selling access (which is what streaming is) is different from selling the actual product–and that’s true in these ways:

    1. Buying access to a product means you may pay more for that product than you would have to otherwise–for example, you can’t buy a “used” version at a lower price, nor can you currently buy access to just individual items. The best example of this is cable TV channel bundling–you can’t buy only the channels you want; you are limited to buying access to the bundle of channels that the cable company makes available.
    2. Buying access to a product means that you can’t lend it to a friend easily (that’s mostly currently true, as far as I know, although there’s no reason it HAS to be true).
    3. Buying access to a product means someone can remove or alter that access without your consent. For example, the company could fail, the government could prevent you from reaching the source, the company could be sold and be shut down, etc.
    4. Your circumstances, or the value of the streaming product may change. For example, if you get laid off and have no income, you lose access to all the content. Alternatively, the company providing the streaming product may not always provide the product you want. But stopping payment means you also lose access to all the prior items that you _did_ want (and perhaps still do).

    With all that said, I’m actually a proponent of the streaming model–I just don’t think it’s been done correctly yet. Rather than a single company buying rights to content from publishers and then selling access rights to individuals, I would like to see the publishers sell both limited and permanent access rights directly to individuals, either directly or through a middleman. That model addresses many of the concerns listed above. Moreover, companies such as Rdio, Spotify, and yes, Safari Books Online (another disclaimer, I also work for O’Reilly Media, which owns part of Safari). I realize that the concept may be a bit nebulous, so here’s how it addresses the concerns.

    1. By being able to buy either limited or permanent access rights to content, consumers can pay only for the access they actually need. For example, I might be able to buy a week’s worth of access to a novel that I’m unlikely to read again, but buy permanent access to a performance of Chopin’s Etudes, which I’m likely to listen to repeatedly over my entire life. Obviously, limited access would cost less than permanent access.
    2. Because consumers are now paying for access to content, publishers can give consumers the right to treat that content in much the same way as if it were actually owned–without the risk of losing control of that content. For example, it would be trivial to allow me to lend my access to a book to a friend for some period of time. Consumers could conceivably also sell their access to products they no longer wished to use, creating an instant “used” market (of access, not of content).
    3. Unfortunately, this model doesn’t completely address the problem of removal of access–the content source can still go out of business, access rights can get lost or corrupted, etc. I suspect this problem will require government intervention over the long term to protect consumer’s rights. Publishers would have to deposit content to some location that would serve as the source if the publisher went out of business or was unable or unwilling to continue to provide access to prior buyers.
    4. By buying access directly to individual content rather than a subscription to some arbitrarry collection of content, you remove the risk of losing access to everything you already paid for if you were laid off (plus, as mentioned earlier, your access may have value, and you could sell it).

    All in all, this seems like a better model in nearly every way.

    • I love your thinking on this. And yes, you’re right that the streaming approach has a direct impact on piracy. Then again, if someone is willing to scan pages of a print book that doesn’t exist in a digital format what’s to prevent them from grabbing all the content from each HTML page and putting it back together into a complete and illegal version of the ebook? I’m sure writing code to do this automatically would be a walk in the park for many programmers.

      That said, I’m intrigued by your suggestion that streaming content vendors explore ways to share those subscriptions. Maybe a share option would come at a higher price and only offer access by one user at a time. Even with those restrictions it might make a lot of sense. Think of it like a corporate site license but on a smaller scale and with the one-at-a-time access limit.

      It’s clear digital content offers many more options than print content. I’m sure there are models none of us have even dreamed of up to now.

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