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.
As Bradford Cross states in a recommended post that touches on many topics of interest:
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.
13 Thoughts on "Prediction for 2011 — The Individual Rules!"
Great post, Kent. Two implications I’d like to point out for publishers are what I think of as the P Principles: now it’s about Pull, not Push, and Portions, not Products. These are 180-degree shifts that are extremely difficult for publishers to grasp and accommodate — that is, going back to Joe Esposito’s post yesterday, for the Born Again or Becoming Digital publishers (the legacy/existing/established publishers). The Born Digital publishers don’t need to make that 180-degree reorientation, which gives them a huge advantage.
That’s a very nice way of thinking of things, thanks! Legacies are definitely double-edged swords right now, and they seem to be cutting against the owners more and more. The benefits of strong brands are fading as equally strong brands Born Digital emerge (which is the stronger information curation brand now — TIME or Facebook or Twitter?). And broadcast is only a step toward attraction and loyalty.
… Customers want highly polished content, and know that it costs money to make and sustain this …
Look at what a difference Flipboard has made over raw RSS feeds. Look at what a difference iTunes and the iPod made to paid digital music.
Aesthetics and writing and photography and sizzle still make a difference — not for all consumers, but for high-end consumers (who are the most likely to want our content and pay for content). What it takes to accomplish new, valuable aesthetics is different now, however.
The above is distribution infrastructure, not content.
I should have gone with my longer reply, which noted that a lowering of content standards at magazines like TIME and Newsweek and US News has, I think, been part of their relegation, while Sports Illustrated, Wired, and the New Yorker have done better because they’ve made smarter editorial choices and maintained a sizzle to their content offerings.
But that boundary between “content” and “distribution infrastructure” is worth examining. Surely, you’re only publishing pure thought without design or distribution infrastructure, right? You’ve never sweated a print design change for the sake of presenting content more ably? I’m sure 12-point Century Schoolbook double-spaced with 1″ margins is all the design any publication needs, right? And arriving a month late in the mail was OK for content. After all, timeliness isn’t part of content.
Sorry to sound sarcastic, but I think content is a multi-faceted presentation of ideas. It requires design, organization, presentation, relevance, and care. Flipboard brought a new level of design, organization, presentation, and care to the lowly RSS feed, and they’re changing expectations, raising the bar. Other content will look less appealing and be less used if it’s not designed as well. There’s a continuum to content, and it doesn’t stand in isolation. This was one of the points of the post — the “surround” has changed, so user expectations have changed, and now the rigors of relevance, social, and design have new benchmarks. Your content now has to hew to those new standards to work.
Perhaps the key word there is “customers”. Wired Magazine recently made the argument that there are no longer any valid excuses for pirating music. Perhaps we’re just reaching a point where we figure out who our “customers” really are, and differentiate them from the group interested in accessing our content but unwilling to pay for it. For the latter, it may just be a cost of doing business in the digital age, something you factor into your economic models. For the former, we need to start thinking in terms of catering more toward the demographics willing to pay for quality. Mark Cuban suggests this is largely a question of age, and as one gets older, time pressures increase to the point where paying 99 cents for a song is a better deal than spending 30 minutes finding it on BitTorrent and downloading it. So does this predict a cultural shift? Traditionally, pop culture is a youth-driven phenomenon, capitalizing on whatever the kids are into these days. If every music company, every television network, every movie studio out there realizes that those same kids no longer pay for content, will they instead focus their energies on the deep-pocketed old fogies? Will mainstream pop culture shift to be more reflective of 40-year-old tastes rather than teenyboppers? And does this then spur an underground youth culture movement to fulfill the kids’ needs (though presumably one where no one gets paid for their work)? Can you have a Justin Bieber without the big media marketing hype behind it?
I’m having difficulty relating this alleged shift to the customer to scholarly publishing. Contrary to a new willingness to pay for premium content, isn’t the strongest trend exactly counter in wanting everything made available open access?
Open Access doesn’t mean that content isn’t paid for–it’s just a shift in who’s paying. It’s also probably important to differentiate between the very vocal minority of OA advocates and the mainstream of the research community, which is a bit more pragmatic and a bit less idealistic.
This prediction is very much in line with my forecast for 2011, which is that customer and consumer demand will really start to infiltrate all decision-making and have a greater impact on the direction of the industry. Here is an interview in which I discuss what I think will be in-store for 2011 – http://www.youtube.com/watch?v=L4qGCIuKVa4
I agree with George that PDA is a very important consumer-driven trend in academic publishing, and I fear it will be difficult for scholarly publishers to adjust to since they have long been used to selling a set number of copies up front on publication through traditional approval plans and PDA will stretch out this buying cycle in ways potentially harmful to publishers’ cash flow, if not overall sales as well. My own prediction is that this will prove so disruptive that it will hasten the move toward OA in monograph publishing.