Content is free. Formats are not
Content may be free, but the format in which we buy it certainly is not. As Apple, Google, Red Hat, and others increasingly demonstrate, consumers and enterprises are happy to pay for "free" when packaged in convenient formats that add value to digital goods.
Over the years, I've paid Morrissey several times for his Bono Drag album: cassette, CD (twice), iTunes, concerts. I'm reading Moby Dick (again), and have bought it in hardback and paperback, not to mention Kindle, formats. The Economist? I pay for the right to read it in magazine format, because I hate the thought of trying to read it online.
All of these (re)purchases strike me that the media world may have problems, but they are mostly of discovering convenient formats in which to deliver content. Formats that suggest, and sometimes demand, payment.
Along came iTunes and it became easier to buy the song for 99 cents than to steal it.
Of course, iTunes wasn't the only "format" pioneered by Apple. Its iPod also made the music portable. The iPhone increased this advantage by meshing digital entertainment with work (phone).
Indeed, the iPhone introduced another winning "format": the App Store. Over 2 billion downloads and 85,000 available applications later, Apple has demonstrated significant value in aggregation of "content" (in this case, applications) in an easy to discover and consume format.
But it's not just Apple that benefits from such format shifts, as SourceForge's Paul Huff comments:
It seems like Red Hat, Apple, Google, and Microsoft...all win because of value added via aggregation/packaging/ease of use, which is why business models like Cloudera['s] and Lucid Imagination['s]...make a lot of sense to me: packaging can add immense value.
And maybe packaging is the wrong word...[It's really about] surrounding something free with something that facilitates the use of the free.
To me, too. Whether software or music, the key is finding the right format to make "abundance" manageable, as I've described before.
Importantly, such formats must facilitate and not inhibit the ease of distribution that digitization enables. This is why DRM worked fine for Apple's iTunes but why its rough equivalent--the pay-wall--may not work nearly as well for newspapers and magazines.
If I'm following a link off Twitter the last thing I want is to have my interest bogged down by a pay-wall. I might, however, be happy to subscribe to a Twitter service that automatically lowers the pay-wall. In other words, a walled garden around The Economist may annoy me, but a metered garden accessed through Twitter, similar to iTunes and music, would not.
It's all about getting the format right.
In software, I've described current business models for open source as a transitory period, the "awkward teenage years" before models mature. I suspect we'll come to see cloud computing as a convenient new format to distribute otherwise free software. Or, as The 451 Group's Matt Aslett suggests, perhaps cloud computing is a natural evolution from open source.
Good content is a necessary precondition to getting paid, but it's not going to be reason we pay anymore. That reason for payment is the format in which the content is delivered.
Perhaps it's always been that way, but the physicality of the delivery mechanisms confused us: we were buying the paper but thought we were buying the news.
Follow me on Twitter @mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
This tends to extend to business as well - the reason Microsoft has a lock on the office app market is because of the proprietary formats (which also explains why they fought ODF so hotly).
Extending this to business reasons, I suspect that the first app suite that can read existing formats and allow semi-seamless transfer to new (and open) formats will be the one to dominate, so long as the prices are reasonable. I'm surprised that Novell/IBM/etc haven't figured this out by now.
Strangely enough, Apple has - its office suite does just that, though it runs only in OSX (Now, if Apple made a Windows version and had a batch-conversion rig to an open document format, they'd knock a leg out from under Microsoft in very short order, and establish themselves as a business player all in one go...)
Along with your recent attempts to re-purpose the word 'platform' this is just nonsensical. Cloud computing is likewise neither a format nor a platform. It's a computing services or software delivery system. SAS - software as a service - note how the term is not 'software as a platform.' Because it wouldn't make any sense. Much like this blog post.
format |?fôr?mat|
noun
the way in which something is arranged or set out : the format of the funeral service.
? the shape, size, and presentation of a book or periodical.
? the medium in which a sound recording is made available : the album is available as a CD as well as on LP and cassette formats.
? Computing a defined structure for the processing, storage, or display of data : a data file in binary format.
Apple was most inventive in creating platform lock-in. DRM locked media from an Apple store that only ran on their player. Pure genius. Evil, but genius just the same. Once you go down that path, how do you ever leave?
Huh? It was a simple step to batch-rip the iTMS-bought tunes into .wav back then (which is a universal format as well nowadays) - iTunes itself could do it for you. (WMP on the other hand had no such facility back then).
Exhibit 1: You ask how do you ever leave? Apple just left. You can't buy DRM'd music from iTunes any more. But you can only buy DRM'd movies. Guess whose fault that is? Not Apple's. They'd probably drop DRM in movies as fast as then did music of given half a chance.
What Apple innovated was an MP3 player that worked, and worked well. Nothing Creative and Rio had could touch the iPod for value and capacity. I remember looking for an MP3 player just months before Apple announced the iPod in Oct. 2001. I could not justify the price for the miniscule capacity of the players. 256 megs? And it's $250? Are they nuts? Then the iPod addrived with 5 gigs for $400. Not cheap, but a game-changer. So they didn't invent the MP3 player (and as was pointed out neither did Creative or Rio). They just invented the first one that average people wanted to use.
& guess what, these formats are generally *patented* as well as copyrighted. less we forget, DRM too is a *format*.
the currency is bandwidth ... cloud computing or grids or whatever will not evolve without proper attribution over the bandwidth being *shared* (peered or otherwise).
PS zyxxy Creative & Rio were hardly the "inventors" as Apple itself admits in prior litigation > Kane Kramer and co-inventor James Campbell patented a digital audio player in 1979 ...
While I understand your point that companies can make money though technologies that ease purchasing and use of content, and thus get people to purchase content through those technologies, they are still purchasing content. Isn't the iTunes store a perfect example of "Format is free. (iTunes software) Content is not. (Song purchases)". Devices are not formats, they are players. My PS3 plays Blu-rays, but Blu-ray is the format, not the PS3, nor any other Blu-ray player.
The only time I might say I am paying for the format is when I using it to get a better copy of my content, like getting a movie on Blu-ray when I already on the DVD. But even then, that is still a separate content purchase, and I have every right to sell the DVD.
If we are really paying for "format" in this digital age, than that is because companies use the formats and limit device capabilities to coerce people into multiple CONTENT purchases.
You are still purchasing content. What if you heard Morrissey on Sirius XM satellite radio? What about a Zune subscription? Pandora subscription? A live concert?
People want the content. OK, so there is a "format surcharge" if you insist, but that's not the main reason for the purchase.
Most teens aren't paying for content. When they do, it's overwhelmingly iTunes, but the fact of the matter is that they usually aren't.
The fact of the matter is, it's not free. The cost of the content has been factored into the service fee.
Also, I'm glad you're happy to pay for the same content multiple times. Personally I find that to be pretty stupid. I have a ton of paperback books at home, I'm not going to repurchase them on a kindle (or whatever) so I can reread them.
I have quite a number of LPs as well as some cassettes. I have copied them all onto MP3 files. And, if I already own content and I cannot copy it into the "format" I want, I have no qualms about going into the torrents and downloading it to put it in whatever type of format I want it to be.
The FACT of the matter here is that all these companies have been taking away your RIGHT to fair use by way of DRM, and you seem to be fine with that for some reason.
I have found that, over the years, a tactic used by children has been working very well for record, movie and book companies. That tactic is "if you repeat it often enough people will start believing it, or just give into it".
People growing up these days are so used to companies trying to get them to repay for everything that are getting used to it, and no one is informing them of their rights (fair use). Of course all these companies are very vocal about preventing copyright infringement while at the same time quashing your rights to fair use of the content you have purchased. Going so far as to prevent you from exercising your right by installing DRM on the media. I would have thought the government would have taken these companies to task by now, but since lobbying is such a big thing in our western world I suppose many pockets are getting lined to prevent that from happening.
The same thing has happened to intrusive ads. People have grown up over the last 20 or so years with ads getting more and more intrusive until now you can put an ad just about anywhere and people don't complain about it any more.
If you like paying for music, movies or written material over and over again, honestly the only word that comes to mind is "sucker"
The only exception I could make for this is perhaps converting your current content. Depending on the price, book stores, music stores or video stores could charge you a small fee (not the full cost of the original content) if you bring in your original media to prove you own it, and they give you a copy on a digital media (whatever media you like, such as a flash drive). This would be a small fee to convert the content to another format.
You might get a fair deal when subscribing to a content provider if they are only charging you a subscription fee, but that still doesn't make the content free.
And there you go: all the work of the document language pioneers and the network engineers undone to keep Apple able to laugh at Microsoft and you paying for water by the river.
When the North won the Civil War, Northern intellectuals could not understand why former slaves became sharecroppers and continued to work the land of their former masters. In effect, it was the life they understood.
You forge your own chains, frikker.
Newspapers were purchased for their content. Ads and news. The subscription fee paid for delivery and printing. The ads paid for the content - i.e. news.
The future of news online is advertisers who pay for the content. Which means real news people creating news, not average citizens sending in pictures and reports of things going on.
It's a tough time to be in the news business. But something has to be worked out. Democracy cannot survive without a vigorous free press. Once people figure that out, things will improve. If they don't, then it's going to be 1984 where government controls the distribution of news.
Okay.
By the same token, if you did want to read something on The Economist's site, you don't want to be bogged down by a pay-wall. Implying that since you hate reading it online for free, you certainly would not want to pay for it. Not because of the content. But, because of the format.
Okay.
But, if somehow, you paid a third party to give you access to that content, through that pay-wall, then you're good with that. Same content you did not want to pay The Economist directly. A content whose format you hate so much that you'd rather buy the paper magazine than access it for free online.
Hmm.
There's a common thread throughout this whole article. You seem to like to waste money. You buy both the CD and iTunes versions of the same music when you could have just ripped your CD. You buy, hard-cover, soft-cover, and digital versions of the same book. (You can read the soft-cover on the train!) And, you are willing to pay to read online content to a third-party, who will get their cut, i.e, it would cost you more than if just paid the content's owner directly.
Waste-of-money!
That aside, I am worried about the future of journalism. It is a vital component of democracy. Personally, I think this whole, micro-pay idea is going to be a disaster. For better or for worse, people are used to getting their online news for free. Oh, there will be payers. I just don't think that there will be enough to offset the loss of ad revenue because of the huge drop in visitors to those sites. It may even hasten the downfall of many news organizations.
Your idea of having the right format is correct. *BUT*, it's not the format of the content that matters. But rather, the format of the *advertisement*. THAT is what needs to change.
People have long ago learned to ignore banners. They always click on the "Skip to content" link even before the flash movie finishes loading. They abhor those intrusive, green double-underlined ad-word thingys. 90% of the time, the mini pop-up has nothing at all to do with that ad-word link. (I mean really! If you double-underline the word "PC", you should at least get an ad for a PC, not foot powder!) This is all intrusive and people learn to avoid or block them with plug-ins.
The entire Marketing industry needs to profoundly change the online ad format. It's just not working -- except for Google. But, that's because Google is the modern day Yellow Pages. People on Google respond to ads when they are searching to buy something or some service. Otherwise, they just ignore it like every other web page on the Internet.
- by Thad Boyd October 8, 2009 10:12 AM PDT
- "The Economist? I pay for the right to read it in magazine format"
- Like this Reply to this comment
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- by tinlizziedl October 18, 2009 8:28 PM PDT
- You're paying for the ability to read the magazine anywhere you can carry that magazine. No electricity required.
- Like this
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(24 Comments)Wait, what?
I know the content industries have been pushing for the notion that you're buying a license and not a product when you purchase from them, but I've never seen that logic applied to a magazine subscription.
You're not paying for the right to read The Economist as a magazine; I can go down to the library and do that for free. You're paying for a physical copy of the magazine, to own, without restrictions on personal use, lending, donation, or resale. Your last line, about buying the paper, not the news, seems to indicate that you understand that, but the rest of your phrasing suggests a "paying for licensing" model, not paying for a product.
You can do anything you want with that magazine, so long as you do not place it on a copier and give all your buddies copies of an article.
Personally, this is one reason why I will probably never own a digital book reader thingy. The brewhaha over the Kindle with Amazon wiping out purchased material was criminal, to say the least. I have great difficulty trusting something that I do not have 100% control over. I built my floor to ceiling, wall to wall bookcase, and now that it's full, I'm building another one. Who would you donate or will your Kindle to? I can loan out, trade, or donate hundreds of books in all genres. Most "digital" people can only loan out 1 Kindle or MP3 player. And as Amazon showed, the "owners" of digital media like the kindle actually don't own anything at all.