Instapaper’s Marco Arment recently wrote a blog post in which he said, in part,
I bought my first iPad magazine last weekend: one issue of The New Yorker. It was $4.99. Most entire apps (including mine) cost $4.99 or less, once, and this magazine is $4.99 for just one issue. Ignoring what content and apps “should” cost, and despite knowing that this is a very good magazine, this felt expensive.
You can make the case that it shouldn’t “feel expensive,” but this isn’t a new or novel complaint. It’s something that a lot of people think when they look at digital content. Marco also noted,
[Advertising] doesn’t feel as offensive in contexts that have always had it, such as printed newspapers and magazines, or cable TV. But ads shoved into a non-free iPad or web publication feel wrong.
Again, this isn’t something we haven’t heard before. So I was mildly surprised at the vitriol I’ve seen tossed about because of it. People railed about how he clearly doesn’t know anything about magazine economics, and they generally didn’t put it that tactfully.
Certainly, Marco’s posts don’t reflect magazine economics the way they exist for most commercial publications, where advertising can often be upwards of 80% of the revenue. They don’t reflect the production workflow of people who are used to working in InDesign and with weekly/monthly deadlines. They’re not from someone who’s responsible for direct content creation.
And… so what?
When somebody bitches about the price of their dulce de leche triple-shot no whip dry decaf poopaccino at Starbucks, they don’t have to know all the economics that went into that price. What they have to know is whether they can walk next door and get something they like about as much for 50¢ less. If the answer is yes, Starbucks loses a customer. Individually, that’s not a big deal. If the answer is yes for a sufficient number of people, though, Starbucks has a problem.
The only relevant question is whether the feelings Marco describes are some kind of weird edge case, or if they’re shared by a substantial portion of the audience. These are not “this makes me feel happy” feelings, these are “most consumers feel like buying books through Amazon rather than going to Borders” feelings. This is what business analysts call consumer sentiment. If you get on the wrong side of consumer sentiment, you may find yourself in a situation business analysts call bent over with a broom handle.
If too many consumers share Marco’s feelings, you need a different business model. And it’s your job to figure out why the guy next door is selling that poopaccino for less than you are. People who don’t know a damn thing about your business can correctly tell you your model is broken without being able to tell you how to fix it.
The battle between “forcing consumers to accept the business model we’re used to” and “consumers forcing you to change your business model” is still in its early stages, but we do have some data to suggest which side is ahead. The music recording industry, when they were dragged kicking and screaming into the digital age, wanted DRM. They didn’t want high bit rates. They didn’t even want you to be able to unbundle tracks from albums. I think we know how that went. Right now the TV & movie industry are doing their damnedest to keep DRM and bundling alive; raise your hand if you think, over the long term, that’s going to work out for them.
In my experience, the younger someone is the more likely they are to see their computer as their primary entertainment hub, because the more likely they are to have grown up with the Internet. I’ve had discussions like this with a few friends under thirty, and damned if I didn’t hear two beliefs echoed pretty consistently. Electronic delivery should be cheaper than physical, and we shouldn’t have to pay for ads. Sound familiar?
Okay, yes. Maybe they’re all weird edge cases, too. It’s all just anecdotal.
But if they aren’t, then what?