We’ve been witnessing a stepwise transition from print to digital over the past decade. First, content moved, initially as shovelware and then as more ambitious and native experiments in online-first publication, online-only publication, and online-supplemental publication. Then, customers moved online, most voluminously at institutions where site licenses made content feel ubiquitous and free; then at home as broadband became commonplace for most of our customers thanks to bundled coaxial access; and now via mobile devices, a trend that continues to sweep across information industries.
In STM publishing, the money has followed customers to some extent, but has remained somewhat proxied through institutional site licenses and other aggregators. However, this doesn’t seem to be the resting state of the value equation around content — instead, it seems more like a transitional zone, a pause of indecision during which everyone has held their collective breath to see where all this was headed.
One trend is that content is moving in the same direction as the devices we’re using — namely, to the body or, more precisely, to the individual. Just as we used to rely on large-scale technology installations — visiting the library to use the computer, going to the Internet cafe when traveling, using the business center — we’re now entering an age in which freemium content and free curation is more valuable and useful than just raw content access, with mobile access becoming commonplace.
Individuals have become central to their information spheres once again, thanks to demands for social relevance filtering and personalized experiences.
Many experts feel that publishers mangled the move to the Web from a commercial standpoint, succumbing to anti-commercial arguments that ultimately have made paid content on the Web less than viable. Namely, we allowed our customers to shift from the actual consumers of content to proxies and aggregators; bought the argument that advertising could prove sufficient to supplement base revenues from larger purchasers; and failed to build the direct line to the information consumer.
The flaws in this seem clear now. With the rise of trust networks and anchoring communities, and with Facebook beating Google for traffic, what you don’t see is instructive — namely, you don’t see people posting links to aggregator sites or site licensed content. Instead, you see the curation of direct links to content creators and providers. The disintermediation of raw aggregators — who lack social components — is part of the rise of the individual.
The success of search, social, and design seem to indicate that the future of news products need Google-level relevance, Facebook-level social, and Apple-level design.
This level of relevance, social, and design is being driven by the rise of the individual.
A recent report from the Pew Internet & American Life Project finds that customers are more than willing to pay for content, an indication of a big “miss” in our business model assumptions. Music is the most common form of content currently purchased online, with 1/3 of Internet users surveyed saying they’ve purchased music online. This may be because it’s also been given one of the best online purchasing experiences. In addition, 1/3 have purchased software, 21% have paid for apps, and 18% have paid for digital newspaper, magazine, or journal content.
Users also prefer subscription services (23%) compared to getting individual files (16%).
I think 2011 will be a year in which the pursuit of the individual customer not only gains priority for most organizations but begins to pay off. There are simply too many forces driving us back to serving the individual information consumer:
- Cross-platform experiences are increasingly valuable and desirable, but to create those, the relationship has to be with the consumer
- Loyalty is a way of shutting out noise, a form of filtering, and consumers want to choose from just a few sources for their main information
- Customers want highly polished content, and know that it costs money to make and sustain this
- System-sized buyers who have been willing to bear the brunt of the costs are pulling back, leaving a gap in user experiences
- Advertisers are moving online in a concerted way across industries, and they want targeted expenditures based on demographics, purchasing habits, geography, or all of the above
- The economics — price points, margins, conversions, renewals — are much better for subscription services than for advertising
- E-commerce has been figured out, and things like monthly billing and “’til forbid” renewals are commonplace
Citibank estimates that Apple will make as much off selling apps as the entire video advertising market will generate. In another observation, it’s argued that the way the mobile Web is mimicking the installed Web is worth noting — with the freemium model becoming even more common.
All of these point to the individual relationship trumping any other. I believe 2011 will see the Rise of the Individual. The money will move to follow. I think the years of tentative spending and offerings at the border of the individual will begin to end in 2011. We will see content move to the individual again thanks to social mediation, search relevance, and device ubiquity. And once that pattern re-establishes itself, it’s unlikely to change.