Thursday, January 7, 2016

Penny for my thoughts

I’ve been writing this blog since August 2010 every week. You’re reading #287. At an average length of 750 words that’s 215,250 words. 83,389 people have read one post or another with a monthly average of about 1,000 views. Other than a handful of folks I email and a generic cross posting on Facebook and Twitter I have not done anything to generate readership. Self-promoting and marketing the blog hasn’t been its core purpose, exploring and discussing things that catch my interest has been the focus. The advertising income from Google the blog has generated in five years comes to less than $150. It’s not what you’d call the most lucrative gig out there. It’s not just that words are cheap – all content is.

Today’s digital economy has spawned an entire generation who have no expectation to pay for content. Those who grew up conditioned to pay for newspapers, books, movies and music may have adapted to internet based solutions, and they are the most likely to pay for content delivered a different way. I’ve read a daily newspaper since I was a pre-teen. Today I read two and receive both electronically – and I pay $40 a month combined for the privilege. Sure I could get the same information in other ways for free, but I find value in the layout and in the newspaper way and therefore I’m willing to pay for it rather than having to learn another way.



Journalism has been fretting about the digital era for nearly twenty years – some have adapted well, some haven’t. Big brands like The Wall Street Journal, and The New York Times are able to charge for premium content. Paywalls for online content are nominal compared to the income that print continues to generate for most newspapers who then opt to give the information away for free.

People who recognize that its ordinary to buy music – those who once bought LPs, cassettes, etc. have adapted to iTunes, Amazon and other digital solutions. Technology changed music – and the economic model moved from profit coming from sales of music to live concert tours being the revenue source. Sure there’s a few bucks to be made on the per-song download, but after Apple and others take their piece of the pie there’s very little left for artists.

The movie industry is going through a similar transformation that the music industry did. Four years ago, for example, no nominees for the Golden Globes came from a ‘streaming’ service (such as Hulu, Netflix, Amazon) – and in 2016 a quarter of all television nominees come from one of those three services – nearly double the nominations for the cable industry. More people are streaming than ever before.

There’s been much written and even more hyperventilating about the devaluing of content and intellectual property. What is the best way to value content?

Apple raised the price of the iPhone and iPad in Germany to start 2016 and includes a 5 to 7 euro ($5.50 to $7.70) per device fee “in a deal designed to benefit musicians, producers and other content producers.”

Apple Insider continues: “Money gained by the levies will be meted out to creative professionals. The new levy is based on a 1965 German law granting consumers the right to make personal copies of sounds, images and text in exchange for a small fee applied to the purchase price of a new device.”

It’s an interesting assumption: if you buy a device like an iPad it is assumed that you’re going to use it to consume content. So the government collects a fee from the device maker to pass back to artists. It’s not clear how that allocation occurs and who makes that determination. It’s also not clear why providers aren’t paying royalties and residuals. 

A pure libertarian solution is to let the marketplace decide. Ultimately that makes sense philosophically: if people value something they’ll pay for it. If not, they won’t. Practically it’s a little less workable and as a content creator and protector, my perspective is skewed.

The population has been trained that there is a cost to access the information – paying a fee per month for a certain amount of data, or even unlimited – is part of life like paying for fuel, food, etc. There may be a time in the future where access to the Internet isn’t valued – like music or movies or news today – and Google and some local governments are working on providing free universal access. (The BBC has an entire section on the Cost of Free.) For now most people pay to get online.

What if content producers benefited from the content they generate? A third party (could be an existing entity, could be an industry designed group, preferably not government) can identify how much traffic a particular site has – how much data moves – whether it’s a blog, a movie, whatever. Consumers pay to access the Internet – what if an additional 1% went to content creators on a pro-rata basis of usage? So a tiny blog like Craig’s Corner that only generates 1,000 views a month may have a  pro-rata portion that is nominal compared to CNN or others (or even the Google ads I get now). Consumers spend (according to IBISWorld globally $532 billion to get to the information superhighway They do so because there’s something worth seeing when they get there. Shouldn’t there be some compensation for that that breaks away the advertising model?

This solution may be absurd and impractical. But it begins to recognize that content has value and should be paid for. There’ve been 2,120 views of Craig’s Corner in Germany. 4% of my views come from iPhone or iPads.  That’s 85 views in Germany on an Apple product. I better start seeing how to get my share of that fee. I’m sure it will be about a penny…

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