It’s been a classic case of misappropriation, the cries of “information wants to be free” echoing Stuart Brand’s 1984 speech at the Hackers’ Conference. This single misbegotten touchstone has driven initiatives and perceptions as information has moved online. But, as we all know, it’s an incomplete (and, therefore, incorrect) quote. The actual quote is:

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

Brand sensed a tension between the value of information and the falling costs of distributing it. Because we conflated the value of the information with the expense of finished goods and distribution when print was the best package, finding the value of the information outside of print was going to be a bit of a challenge.

Ultimately, information is valuable, and therefore should cost money.

Nicholas Carr puts it a bit more bluntly in a post entitled, “Information Wants to Be Free My Ass”:

Never before in history have people paid as much for information as they do today.

He’s absolutely right — from the fees you  pay for Internet access to the price of that desktop computer and monitor to the price of that Kindle to the price of your iPhone to the price of the apps to the price of the digital music, we’ve shifted forms of finished goods and distribution, yet the amount most people pay for information has gone up, not down.

Instead of paying for paper, we’re paying for pixels, bandwidth, devices, and customization.

It may be the age of abundance, but that doesn’t mean information is free.

Charging for information is a clear-cut way to know how valuable it is. Mitch Joel talks about this in a recent blog post inspired by the New York Times’ recent announcement of its metered payment approach.

Yet, the landscape has shifted dramatically as to who makes the money. As the chart below from Gizmodo shows, we’re paying more on subscription fees than we might think. The subscription model is clearly thriving. The problem for publishers is that subscriptions to their old packages are losing value and appeal, and the notion of an annual subscription is outmoded.

Some common subscription fees many of us pay each month.

Publishers used to be masters of the subscription model, but now our subscriptions have become cumbersome and clunky. Since we sell annual subscriptions, the trend is to drive prices annual down in the consumer space, almost to suicidal levels. Yet when the Huffington Post went on the Kindle, it charged $1.99 per month — about three times the annual cost of a print subscription to Wired was last year (thanks to Wired‘s overly aggressive pricing practices). The Huffington Post delivers nothing but pixels, and to an expensive device. Yet thousands were happy to pay — after all, $1.99 per month is next to nothing.

And this is ultimately how the “information wants to be expensive/free” dichotomy gets resolved — by letting information find its proper price point in systems that let transactions flow.

Finding that price point means picking the right path to success. More and more often, that path is paved with smaller monthly payments, until-forbid renewals, and term contracts. The old paradigm of annual subscriptions and 4-pre/2-post renewal notices feels creaky and vulnerable.

Subscriptions are thriving all around us, yet we continue with old practices or move slowly to change standard approaches.

I feel like we continue to be trapped in a construct that rests on three key misconceptions:

  • Information wants to be free
  • Individuals won’t pay for subscriptions
  • The subscription model is dead anyhow

How high a priority is the subscription model in your organization’s commercial strategy? Because of this framework or something like it, are we even equipped to detect the subscription’s proper place as a user preferences? I’ve heard stories of publishers actively downplaying or ignoring subscription revenues, dismissing them even though they’re substantial, even growing. It’s probably because they’re blinded by a framework that seems more convincing than the evidence right in front of their noses.

If individual subscriptions aren’t a priority, how can we find the new sweet spot? Will we invest the energy and systems necessary to disrupt our own model? Or is this a possible Achilles’ heel, something that gives the likes of Amazon a distinct business advantage?

Clearly, the subscription model is changing. Instead of annual subscriptions, we’re moving to monthly or even weekly subscriptions. Instead of renewal series, users want to keep paying until they stop. Instead of annual commitments, users are willing to commit for longer periods if the deal is right.

Publishers need to acknowledge these changes in their models.

We might want to reassess the subscription model. After all, there’s plenty of evidence that it still works, and is in fact an increasingly popular way to pay for access to valuable information.

Reblog this post [with Zemanta]
Kent Anderson

Kent Anderson

Kent Anderson is the CEO of RedLink and RedLink Network, a past-President of SSP, and the founder of the Scholarly Kitchen. He has worked as Publisher at AAAS/Science, CEO/Publisher of JBJS, Inc., a publishing executive at the Massachusetts Medical Society, Publishing Director of the New England Journal of Medicine, and Director of Medical Journals at the American Academy of Pediatrics. Opinions on social media or blogs are his own.

View All Posts by Kent Anderson


10 Thoughts on "Information Subscriptions Continue to Evolve and Thrive — Why Are Publishers Slow to Adapt?"

Not sure which markets have abandoned subscriptions, but in the biology world, the shift has been away from individual subscriptions and toward institutional subscriptions. Because most journals appeal to such a limited audience, we’ll never be able to compete with things like the Huffington Post on cost (nor is Amazon’s proposed $9.99 price point ever going to fly for an 800 page specialized laboratory manual).

But the institutional subscription does allow many labs to take advantage of scale and spread the costs of subscribing so each only pays a small portion. It’s a philosophy in-line with what many institutions are doing for expensive research equipment, setting up shared centers for things like imaging, sequencing and such. Instead of each lab buying their own microscope, each contributes to a center that can purchase a wider variety of scopes than the lab could afford on its own.

  • David Crotty
  • Jan 25, 2010, 11:35 AM

Are your institutional subscriptions really site licenses? I was trying to make it clear in this post that I was really focusing on individual subscriptions, but I probably didn’t succeed. Nevertheless, if your focus is on institutions, that’s kind of my point — have you abandoned the individual market, or relegated it to such a degree that it’s continued struggles are part of a self-fulfilling prophecy? Could it be vigorous and sustained if monthly subscriptions existed, or weekly online-only feeds, or different product mixes, or the like?

  • Kent Anderson
  • Jan 25, 2010, 11:40 AM

Yes, site licenses, same principle. Individual subscriptions though are tough, given the ubiquity of site licenses for most of our readers. You would have to, as you note, create a separate product (and then justify to your site licensers why that product was left out of what they were buying).

I do think there’s a lot of potential in remixes and repackaging of material for individual sales though. We’re already doing this with print, and like everyone else, I’m curious to see the storefront Apple sets up this week, as doing it electronically would be easier/cheaper and allow for more experimentation.

  • David Crotty
  • Jan 25, 2010, 11:48 AM

I’ve been struck by how many media outlets have jumped in to pour scorn on the New York Times and their decision to take 12 months to implement their charging system for access. My reading of the NYT is that they are intending to implement something very sophisticated (for them) in the subscription space, and very easy to understand for the user.

In reading about, it seems they are going to explore versioning for the content, to try and maximise the returns, but perhaps more than that, to try and do some complex profiling of the NYT users so that the the equation that determines when and at what level a visitor hits the call to pay, is based on an understanding of what bits of the NYT that that particular visitor values. I value bits of the Tech section. The sports, meh. Lifestyle, doubleMeh, so totting those up on my pages visited is bad way to try to get me to convert, better to add that traffic to the ad numbers the NYT still wants to keep. Tech pages though, count those very carefully and then provide me with an offer to pay for the things that I value. If they get this right (and I think they will want to iterate this a bunch of times) they can start to get very flexible with the pricing and price to me, as my interests change over time. They can also add in pricing for access via devices as well… You only use the web? Meh, You use the web/iphone/tablet(whomevers!) and want what you have read/not read to follow you across the devices, there might be a charge for that. Hal Varian’s paper on versioning is well worth the time, if you can keep up with the maths. There are a number of subscription based models spinning off from his thinking. I wonder if the NYT can do bespoke pricing for each of it’s visitors?

  • David Smith
  • Jan 25, 2010, 11:54 AM

Moving to a subscription model is also tied to understanding that your content changes (or should change) over time. In the past, when content was locked into physical objects, changes were difficult or impossible and certainly unwelcome. We just sold “the book” and that was that. Now that content can easily evolve — even if it just accumulates commentary or links, but still better if it gets enhanced, augmented, improved over time — it becomes a more organic thing. Suddenly a subscription model makes way more sense than a one-time purchase model. — Bill Kasdorf

  • Bill Kasdorf
  • Jan 25, 2010, 5:05 PM

Great point, Bill. Adding value is easier and more natural now, so subscribe and enjoy!

  • Kent Anderson
  • Jan 25, 2010, 5:16 PM

I saw DeepDyve at the SIIA preview meeting yesterday and LOVED it. As you probably know, DeepDyve allows users to “rent” articles (view online only for a fixed period of time). It isn’t a classic subscription (although you can subscribe to DeepDyve, like Netflix, and get so many articles/month and some assorted other term variables).

The smaller consulting resources in the room (like me) just went nuts. It’s the perfect model for our consumption habits. It also tends to convert non-consumers into paying consumers. Not a bad idea at all.

  • ann michael
  • Jan 27, 2010, 8:05 AM

I think the arguments against DeepDyve are as follows:

1) If this is indeed a good way to sell content, why not roll your own rental service through your own journal? Why is a third party middleman necessary? Are readers likely to use a specialized search engine for this type of content, or Google, which will bring them directly to your journal where you can offer them your own rentals?

2) Is the 99 cent price point reflective of the value of the content or is it based on the market for music sales? Why not $!.25? Why not 89 cents?

  • David Crotty
  • Jan 27, 2010, 10:41 AM

An interesting article here, despite the grammar, on subscriptions, passwords and payment methods: Subscriptions are the new black

  • David Crotty
  • Feb 2, 2010, 7:07 PM

Comments are closed.