E-books and e-publishing - Samuel Vaknin (best historical fiction books of all time .TXT) 📗
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sound were to make their appearance even later. This error in
trend analysis left the field wide open to the likes of
Encarta and Grolier. The Britannica failed to grasp the
irreversible shift from cumbersome print volumes to slender
and freely searchable CD-ROMs. Reference was going digital and
the Britannica’s sales plummeted.
The Britannica was also late to cash on the web revolution -
but, when it did, it became a world leader overnight. Its
unbeatable brand was a decisive factor. A failed experiment
with an annoying subscription model gave way to unrestricted
access to the full contents of the Encyclopaedia and much more
besides: specially commissioned articles, fora, an annotated
internet guide, news in context, downloads and shopping. The
site enjoys healthy traffic and the Britannica’s CD-ROM
interacts synergistically with its contents (through
hyperlinks).
Yet, recently, the Britannica had to fire hundreds of workers
(in its web division) and a return to a pay-for-content model
is contemplated. What went wrong again? Internet advertising
did. The Britannica’s revenue model was based on monetizing
eyeballs, to use a faddish refrain. When the perpetuum mobile
of “advertisers pay for content and users get it free”
crumbled - the Britannica found itself in familiar dire
straits.
Is there a lesson to be learned from this arduous and
convoluted tale? Are works of reference not self-supporting
regardless of the revenue model (subscription, ad-based,
print, CD-ROM)? This might well be the case.
Classic works of reference - from Diderot to the Encarta -
offered a series of advantages to their users:
1. Authority - Works of reference are authored by experts in
their fields and peer-reviewed. This ensures both objectivity
and accuracy.
2. Accessibility - Huge amounts of material were assembled
under one “roof”. This abolished the need to scour numerous
sources of variable quality to obtain the data one needed.
3. Organization - This pile of knowledge was organized in a
convenient and recognizable manner (alphabetically or by
subject)
Moreover, authoring an encyclopaedia was such a daunting and
expensive task that only states, academic institutions, or
well-funded businesses were able to produce them. At any given
period there was a dearth of reliable encyclopaedias, which
exercised a monopoly on the dissemination of knowledge.
Competitors were few and far between. The price of these tomes
was, therefore, always exorbitant but people paid it to secure
education for their children and a fount of knowledge at home.
Hence the long gone phenomenon of “door to door encyclopaedia
salesmen” and instalment plans.
Yet, all these advantages were eroded to fine dust by the
Internet. The web offers a plethora of highly authoritative
information authored and released by the leading names in
every field of human knowledge and endeavour. The Internet,
is, in effect, an encyclopaedia - far more detailed, far more
authoritative, and far more comprehensive that any
encyclopaedia can ever hope to be. The web is also fully
accessible and fully searchable. What it lacks in organization
it compensates in breadth and depth and recently emergent
subject portals (directories such as Yahoo! or The Open
Directory) have become the indices of the Internet. The
aforementioned anticompetition barriers to entry are gone:
web publishing is cheap and immediate. Technologies such as
web communities, chat, and e-mail enable
massive collaborative efforts. And, most important, the bulk
of the Internet is free. Users pay only the communication
costs.
The long-heralded transition from free content to fee-based
information may revive the fortunes of online reference
vendors. But as long as the Internet - with its 2,000,000,000
(!) visible pages (and 5 times as many pages in its databases)
- is free, encyclopaedias have little by way of a competitive
advantage.
Will Content Ever be Profitable
By: Sam Vaknin
THE CURRENT WORRIES
1. Content Suppliers The Ethos of Free ContentContent Suppliers is the underprivileged sector of the
Internet. They all lose money (even sites which offer basic,
standardized goods - books, CDs), with the exception of sites
proffering sex or tourism. No user seems to be grateful for
the effort and resources invested in creating and distributing
content. The recent breakdown of traditional roles (between
publisher and author, record company and singer, etc.) and the
direct access the creative artist is gaining to its paying
public may change this attitude of ingratitude but hitherto
there are scarce signs of that. Moreover, it is either quality
of presentation (which only a publisher can afford) or
ownership and (often shoddy) dissemination of content by the
author. A really qualitative, fully commerce enabled site
costs up to 5,000,000 USD, excluding site maintenance and
customer and visitor services. Despite these heavy outlays,
site designers are constantly criticized for lack of
creativity or for too much creativity. More and more is asked
of content purveyors and creators. They are exploited by
intermediaries, hitchhikers and other parasites. This is all
an offshoot of the ethos of the Internet as a free content
area.
Most of the users like to surf (browse, visit sites) the net
without reason or goal in mind. This makes it difficult to
apply to the web traditional marketing techniques.
What is the meaning of “targeted audiences” or “market shares”
in this context? If a surfer visits sites which deal with
aberrant sex and nuclear physics in the same session - what to
make of it?
Moreover, the public and legislative backlash against the
gathering of surfer’s data by Internet ad agencies and other
web sites - has led to growing ignorance regarding the profile
of Internet users, their demography, habits, preferences and
dislikes.
“Free” is a key word on the Internet : it used to belong to
the US Government and to a bunch of universities. Users like
information, with emphasis on news and data about new
products. But they do not like to shop on the net - yet. Only
38% of all surfers made a purchase during 1998.
It would seem that users will not pay for content unless it is
unavailable elsewhere or qualitatively rare or made rare. One
way to “rarefy” content is to review and rate it.
2. Quality-rated ContentThere is a long term trend of clutter-breaking website-rating
and critique. It may have a limited influence on the
consumption decisions of some users and on their willingness
to pay for content. Browsers already sport “What’s New” and
“What’s Hot” buttons. Most Search Engines and directories
recommend specific sites. But users are still cautious.
Studies discovered that no user, no matter how heavy, has
consistently re-visited more than 200 sites, a minuscule
number. Some recommendation services often produce random - at
times, wrong - selections for their users. There are also
concerns regarding privacy issues. The backlash against
Amazon’s “readers circles” is an example. Web Critics, who
work today mainly for the printed press, publish their wares
on the net and collaborate with intelligent software which
hyperlinks to web sites, recommends them and refers users to
them. Some web critics (guides) became identified with
specific applications - really, expert systems -which
incorporate their knowledge and experience. Most volunteer-based directories (such as the “Open Directory” and the late
“Go” directory) work this way.
The flip side of the coin of content consumption is investment
in content creation, marketing, distribution and maintenance.
3. The MoneyWhere is the capital needed to finance content likely to come
from?
Again, there are two schools:
According to the first, sites will be financed through
advertising - and so will search engines and other
applications accessed by users.
Certain ASPs (Application Service Providers which rent out
access to application software which resides on their servers)
are considering this model.
The recent collapse in online advertising rates and click-through rates raised serious doubts regarding the validity and
viability of this model. Marketing gurus, such as Seth Godin
went as far as declaring “interruption marketing” (=ads and
banners) dead.
The second approach is simpler and allows for the existence of
non-commercial content.
It proposes to collect negligible sums (cents or fractions of
cents) from every user for every visit (“micropayments”).
These accumulated cents will enable the site-owners to update
and to maintain them and encourage entrepreneurs to develop
new content and invest in it. Certain content aggregators
(especially of digital textbooks) have adopted this model
(Questia, Fathom).
The adherents of the first school point to the 5 million USD
invested in advertising during 1995 and to the 60 million or
so invested during 1996.
Its opponents point exactly at the same numbers : ridiculously
small when contrasted with more conventional advertising
modes. The potential of advertising on the Net is limited to
1.5 billion USD annually in 1998, thundered the pessimists.
The actual figure was double the prediction but still woefully
small and inadequate to support the internet’s content
development. Compare these figures to the sale of Internet
software (4 billion), Internet hardware (3 billion), Internet
access provision (4.2 billion in 1995 alone!).
Even if online advertising were to be restored to its
erstwhile glory days, other bottlenecks remain. Advertising
encourages the consumer to interact and to initiate the
delivery of a product to him. This - the delivery phase - is a
slow and enervating epilogue to the exciting affair of
ordering online. Too many consumers still complain of late
delivery of the wrong or defective products.
The solution may lie in the integration of advertising and
content. The late Pointcast, for instance, integrated
advertising into its news broadcasts, continuously streamed to
the user’s screen, even when inactive (it had an active screen
saver and ticker in a “push technology”). Downloading of
digital music, video and text (e-books) leads to the immediate
gratification of consumers and increases the efficacy of
advertising.
Whatever the case may be, a uniform, agreed upon system of
rating as a basis for charging advertisers, is sorely needed.
There is also the question of what does the advertiser pay
for? The rates of many advertisers (Procter and Gamble, for
instance) are based not on the number of hits or impressions
(=entries, visits to a site). - but on the number of the times
that their advertisement was hit (page views), or clicked
through.
.
Finally, there is the paid subscription model - a flop to
judge by the experience of the meagre number of sites of
venerable and leading newspapers that are on a subscription
basis. Dow Jones (Wall Street Journal) and The Economist. Only
two.
All this is not very promising. But one should never forget
that the Internet is probably the closest thing we have to an
efficient market. As consumers refuse to pay for content,
investment will dry up and content will become scarce (through
closures of web sites). As scarcity sets in, consumer may
reconsider.
Your article deals with the future of the Internet as a
medium. Will it be able to support its content creation and
distribution operations economically?
If the Internet is a budding medium - then we should derive
great benefit from a study of the history of its predecessors.
The Future History of the Internet a Medium
The internet is simply the latest in a series of networks
which revolutionized our lives. A century before the internet,
the telegraph, the railways, the radio and the telephone have
been similarly heralded as “global” and transforming. Every
medium of communications goes through the same evolutionary
cycle:
Anarchy
The Public Phase
At this stage, the medium and the resources attached to it are
very cheap, accessible, under no regulatory constraints. The
public sector steps in : higher education institutions,
religious institutions, government, not for profit
organizations, non governmental organizations (NGOs), trade
unions, etc. Bedevilled by limited financial resources, they
regard the new medium as a cost effective way of disseminating
their messages.
The Internet was not exempt from this phase which ended only a
few years ago. It started with
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