April 8, 2009
Variable Pricing Hits Online Music Sales
The Apple iTunes store raised the prices on popular singles yesterday from $0.99 to $1.29. The music industry has lusted over variable pricing as a way to squeeze more money out of new music. Older catalog items may fall to $0.69 per track. In return, consumers get DRM free music. Ars Technica noticed that the price changes at Apple are reflected at other online stores, such as Amazon, though the pricing of individual items are not in lockstep with each other at each store. Will consumers bite, or will they shop around for the cheaper songs at each store. Or will they decide to wait until the buzz on a song is over hoping for a price drop. Sure, it's only 30 cents, but some people go nuts over stuff like this. Then there is the other option, P2P. Yes, it's not legal like the stores, but legal stores haven't exactly killed off that part of the music universe. An MP3 player, even the iPod, doesn't care where the music came from. It should be interesting to see if this move leads to an uptick in consumer interest in online music purchases.
Newspapers Need More Online Imagination to Survive
Google CEO Eric Schmidt addressed a group of newspaper publishers that Google and newspapers are friends as Google and other aggregators drive traffic to their sites. He also told them they could do more with their content, like adding hyperlinks to stories so readers can go to the sources of stories. He's right on that one. Typical stories on court cases, especially appellate court cases never ever give enough identifying information to find an opinion or supporting documents that are the subject of the article. Not all newspapers are that bad, but most are, whether online or in print.
Maybe newspapers need to rethink how they present the news. Most sites simply reproduce the stories that appear in their print editions. Perhaps they can sell an enhanced version with links and additional content while leaving the basic edition free. The New York Times found out the hard way that not enough people were willing to pay for content from commentators, particularly when that content was syndicated out to sites that were free.
The background information in a story may be worth buying for some consumers, and would open up sources that papers rely on for their news. This could be unique audio and video, extended interviews with newsmakers, and other similar content. Perhaps the entertainment sections could partner with media sources to bring exclusive content to papers. A paper could publish one or two tracks from a live show as part of the review, all in conjunction with the bands and their management. This kind of material would only be available to subscribers. Newspapers could provide information, not just the news. Give the people what they want that they are willing enough to pay for it. It's worth thinking about.
April 6, 2009
Sun and IBM Talks Fail
IBM and Sun have broken off talks to merge. Stocks plunge, well, Sun's at least. More from ZDNet.
Coming Soon, the Death of Newspapers, but Not the News
The newspaper industry suffered another shock last week when the New York Times Co. threatened to shut down the Boston Globe if it did not receive $20 million in concessions from unions whose members work for the Globe. The union is taking the threat seriously. So where do we stand on the newspaper front?
Christian Science Monitor, essentially a web only newspaper
- Rockey Mountain News, shut down
- Seattle Post-Intelligencer, web only
- San Francisco Chronicle, under threat to shut down
- Chicago Tribune (publisher of the Los Angeles Times), in bankruptcy proceedings but still publishing
- Chicago Sun-Times, in bankruptcy proceedings but still publishing
This isn't merely a shakeout in the news business, but something really serious. Circulation is plummeting because many people have transitioned to the web and other media outlets for their news. As newspapers give away the content they have cannibalized their print operations, and web ads can't support the bills. In fact, some of the ads are also free on the web. Just go to the Best Buy or Office Depot web site and you can view that sale flyer without having to buy the Sunday paper. Want comics? Just look them up on the web at the respective syndicate's web site. Want personals or classified ads? Just go to Craigslist.
This is not going to change soon unless the papers figure out a way to charge for content online. Whether it's micropayments or another form of subscription remains to be seen. There are a few successful models out there. ESPN offers free content, but locks away the good stuff for subscribers. And they do get subscribers. The problem with newspapers is that they have been giving the news away for so long, they will get resistance for charging. That coupled with competition from free sites may make it difficult for consumers to justify buying something they can still get for free in one form or another. The free side of news would have to dry up considerably before a subscription model can succeed. It's not anything that is going to get solved soon. In the mean time, look for more closures and threats of closure.