The money quote from Hal Varian’s presentation to the Federal Trade Commission, according to TechCrunch, was this: “newspapers have never made much money from news.”

But for me, the kicker is this data point from slide #3:

Subscriptions account for 3% of revenue on average

Read more…

I’ve been thinking about business models for online content (text and images), given Apple’s introduction of the iPad and Amazon’s infamous battle with Macmillan. I’ve argued that digital subscriptions should be less than their analog counterparts, basing my argument in large part on the fact that traditional print is vastly more expensive than digital distribution.

I’ve been wrong. At least in the short run. Read more…

I wasn’t too concerned about missing the Opening Ceremonies from the Vancouver Winter Olympics, as I figured I could catch it online afterward.  NBC was keen to showcase its cool new Silverlight plug-in by streaming a considerable amount of the Beijing games in 2008.

But when I tried to watch Part 1 of the Opening Ceremonies, up came this message, along with a sign-in screen:

“You have selected a premium video (e.g. live stream or full-event replay).” Read more…

There has been a lot of discussion about the somewhat blatant omission of Flash from Apple’s newly introduced tablet, the iPad. Many of the technorati see the exclusion of Flash as Apple flexing its muscle as a kingmaker. They argue that Apple is using its influence to deprecate a technology it dislikes. While there has been some interesting talk around what this means for standards, web technologies and the future of Flash in particular, people may be missing the point. Apple’s decision to not include Flash on the iPhone OS platform (also used on the iPad) is likely a business decision and not an engineering one.

Those who support the decision argue that the inclusion of Flash would make the limitations of the hardware more obvious; as a CPU hog, Flash would slow down the browsing experience of the iPhone and the iPad and drain battery life. But businesses (Apple included) make engineering trade-offs all the time. Flash’s issues in Safari hardly seem like deal breakers and would be worthwhile trade-off for the value that it brings to a media consumption platform.

I don’t think Apple decided to pick a public fight with Adobe—arguably its most valuable third-party developer—because supporting Flash was too technically challenging. Rather, it likely has to do with Apple’s relationship with the content industry. Flash is verboten on the iPhone OS for the same reason that saving MP3s is verboten. So Apple can placate content owners and maintain the viability of its iTunes business.

If Flash were enabled on the iPhone OS, how long would it take for someone to put a streaming, Flash-based player in front of a new music service? Apple is the leading retailer of music in the United States. Why should it enable competition in a business where it has no peers and on a platform it has no reason to cede?  It simply doesn’t make sense for Apple to undercut its iTunes business and jeopardize its special status among content owners. It’s even possible that Apple’s agreements with rights holders expressly forbid it.

If user experience were the sole consideration, I’m sure Apple would gladly provide a Flash-enabled browser. While Apple may have some valid engineering concerns, they strike me as a convenient cover. Disabling Flash helps Apple control content on the platform by forcing it through iTunes or other approved software. This has to be clear to a firm who’s CEO sits on the board at Disney.

Let me preface this post by reminding folks that IANAL (I am not a lawyer).

Example of White House Flickr Photo

The U.S. government policy on photographs and copyright is pretty straightfoward: photos produced by federal employees as part of their job responsibilities are “not subject to copyright in the United States and there are no U.S. copyright restrictions on reproduction, derivative works, distribution, performance, or display of the work.”

Why, then, is the Obama White House asserting that no one but “news organizations” can use its Flickr photos? Why is it asserting that manipulation is prohibited? Why is it asserting that photos may not be used in “commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House”?

Read more…

For years, I only knew of George Lucas’ 1977 cinematic sci-fi breakthrough as “Star Wars.”  Then I found out that it was part of a trilogy. But wait, Lucas had a plan all along; this tale of an oppressed rag-tag alliance looking to overturn a hierarchical, monopolistic political system (aka “The Empire”) was always meant to be “Star Wars Episode IV: A New Hope.”

Of course, in a multi-part saga, if the good guys get their way initially, the Empire is always going to have to Strike Back to make it a good story. When I read Groundswell co-author Josh Bernoff’s The Splinternet Means the End of the Web’s Golden Age, that’s what immediately came to mind.

We’ve been declaring an end to media monopolies for a while now, thanks to networked communities who no longer require institutional intermediaries to share, collaborate or take collective action.  This ability to produce and consume media for almost free threatened the very economic model that media moguls had taken to the bank for over a century. As I made my own transition from corporate media journalist to independent content creator, I took advantage of new, inexpensive tools that we saw as the great democratizer of production.

Apple was part of this rebellion, helping us to crash through the barriers to entry with the digital weaponry of firewire, USB, Final Cut Pro, iDVD — this filmmaker’s “secret plans to the Death Star,” so to speak.  As digital content proliferated, The Empire writhed in agony, from The New York Times to Conde Nast to NBC, desperately in search of new business models.  Now, with renewed focus on pay walls and walled gardens, Bernoff sees Apple’s new iPad as the turning point as we leave the Web’s hopeful first age of universality and openness:

…[M]ore and more of the interesting stuff on the Web is hidden behind a login and password. Take Facebook for example. Not only do its applications not work anywhere else, Google can’t see most of it. And News Corp. and the New York Times are talking about putting more and more content behind a login…Each new device has its own ad networks, format, and technology. Each new social site has its login and many hide content from search engines. Read more…

Amazon made an announcement last week about the Kindle e-reader and changes to their royalty scheme for authors that may have caught your eye. I will do a quick recap:

Amazon announced it is providing authors and publishers with a “70% royalty option” for books sold on the Kindle. The new royalty regimen seems to be squarely aimed at keeping Amazon as the’ top of mind’ publisher for e-books, especially in light of the enormous number of new readers that were unveiled at the recent Consumer Electronics Show (CES) and the breathlessly awaited arrival of an Apple tablet device. The new percentage of 70%, from the current royalty of 35% per title, comes with a number of restrictions. These include:

• The actual price of the book must fall between $2.99 and $9.99 and be at least 20% below the lowest price of a physical edition of the same book.
• It has to sell for the same price, or less, as it does with competing booksellers.
• It has to be available everywhere the author or publisher has intellectual property rights.

According to Amazon’s announcement, “the 70 percent royalty option is for in-copyright works and is unavailable for works published before 1923 (a.k.a. public domain books). At launch, the 70 percent royalty option will only be available for books sold in the United States.” To see the entire announcement, go here.

My take: The royalties question is very important to authors, obviously, as that’s how they eat.  Amazon’s announcement has a sobering effect on competitors and publishing houses, as many authors may opt to move their works to direct publishing by Amazon, foregoing the services (and fees) associated with working with a publishing house.

Read more…

Last week, we cancelled our cable TV service.  In one fell swoop, we went from 60 to 0.  No more DVR, HBO in HD, nor movies-on-demand.  Also gone: the extraneous 700 other channels that I never looked at.  For the first time since I was a college student, I wasn’t tethered to a coaxial connection.

I told Comcast, no hard feelings.  We kept their broadband and voice services.  I said, we needed more “breathing room” so I could work on my book (presently entitled Trust Me: How to Tell Stories in a Credibility-Starved World).

I was being truthful.  That said, that I’m also saving $1000 a year.  I’m ingesting content specific to my interests (streaming Hulu and Netflix through my Playstation 3).  And I’m putting the savings to media that matters most to me: public radio (KUOW, KEXP), the Seattle Times Sunday paper, and a dead-tree subscription to the Wall Street Journal.

Image from zeropaid.com

Thanks to three recent articles in that same Wall Street Journal, I now also believe there’s a higher purpose to this decentralization of my media choices.  Because once again, large institutions with a vested interest in maintaining their power aren’t too pleased that people like me are making such choices.

Read more…