Digital subscribers to periodical publications often believe they should get a discount because they're saving the publisher the cost of printing and postage. While that's can be true in some cases, in others the reverse is true. Often publishers makes more money on the print version — even with the cost of printing and mailing — than they do on the digital version.

For example, a large volume magazine that sells for $19.95 for 12 monthly issues might only cost 50 cents / issue to print and mail. Or $6.00 / year.

A digital vendor might offer to convert the publication into their format "for free," but only remit 30 to 40% of the value of the subscription to the publisher.

Do the math. The publisher gets $13.95 in subscription revenue from the print publication, but only $7.98 for the digital edition (and that's at the larger remit!).

The digital edition should cost more, not less! 

That all sounds bad enough, but it gets worse. Publishers often rely on subscription and advertising revenue, but many advertisers don't care much for digital editions, and they often won't count them towards your rate base.

With the digital edition, the publisher is getting less subscription revenue and less (or maybe even no) ad revenue.

What a deal!

40% is better than nothing, so the publisher might still want to sell digital editions, even though they'd rather have subscribers in print.

As I’ve pointed out, digital editions are often a bad deal all around for the publisher, but … it only gets worse.

Subscribers think they're saving the publisher all kinds of money by taking the digital edition, so they're more price sensitive. (Or they feel as if they're getting ripped off.)

Furthermore, some of the digital vendors don't even give the publisher the subscriber's name! (Never accept a deal like that!)

As with many other things, publishers have been deluded when it comes to digital issues.

Which reminds me of this, which is worth your time. A Decade of Delusions: 10 Things We Got Wrong About Publishing in the Digital Age.

On a personal level, I think GDPR is probably a good idea. To some degree, the government should intervene when people’s privacy is being invaded.

This topic has become big news in the U.S. recently with the revelations about Facebook, Cambridge Analytica and all that nonsense. People who can remember things so far back that they’ve fallen off their Facebook feed will recall that our Director of National Intelligence blatantly lied to Congress about the snooping our own government is doing.

On us.

You know, government of the people, by the people, and … forget that … watching the people. And building profiles. To keep you safe.

You might guess that I’m all in favor of rules that stop this sort of snooping. And you’d be right. From that perspective, GDPR might be a good thing.

But as an American, I’m offended by the whole concept.

Didn’t we fight a war to say “That these United Colonies are, and of Right ought to be Free and Independent States”?

On what possible grounds does Europe get to pass a law that imposes obligations on U.S. companies? What the heck kind of craziness is that? What’s next? Does North Korea get to pass a law saying we can’t have electricity at night?

Can we pass a law requiring women on French beaches to cover up? Would France give a damn if we did?

I hope not. I hope they’d laugh at us.

A few years ago, Colorado passed some law about state sales tax, requiring internet businesses to keep track of how much people from Colorado purchased. The accounting department asked me to put together some reports for this, but my question was — and still is — why in the heck do I care what Colorado says? Colorado is a wonderful place, but … we’re not a Colorado company. Why do we care about their laws?

I think American companies should ignore GDPR. Or, if they feel like spending a little extra effort, just for fun, they should pop up a little warning for all the visitors from Europe. Something like “This website is owned by an American company, and we don’t give a crap what Belgium says. Enter at your own risk.”

Of course your lawyers will tell you something else.

I'm not a fan of Facebook, either personally or professionally.

Personally, it's like an addiction to something that makes me sad.

Research allegedly shows that Facebook makes you sad because you compare your mundane, humdrum life to the polished, carefully vetted images of everyone else's exciting, glamorous, adventurous life. I don't think that's it with me. I realize what's going on, and I'm happy that other people are having fun from time to time.

What bothers me is the mob mentality. The groupthink — and even more particularly, the group non-think. I.e., when people who know nothing about an issue pile on with righteous indignation and digitally lynch people who take another view. The medium combines anonymity with personal interaction in a way that make the worst of both.

It pains me to see my relatives and friends act like assholes on Facebook. And it pains me even more when I get drawn in and act like an asshole myself.

I have tried (a couple times) to take a break, and then to come back with a renewed commitment to avoid those conversations. But … I can't help it. When I see otherwise intelligent people saying mind-numbingly stupid things, I have to step in, and I never feel better as a result.

That isn't Facebook's fault. I should be mature enough to deal with these things without getting upset. But … well, I guess I am blaming Facebook, at least a little, because I have no problem with this sort of issue in real life, with real people. It's only on this artificial, goofy, digital thing — that we've been brainwashed into calling "social" — that this is a problem.

Facebook is not "social" media. It's a place to be anti-social.

In any event, I've learned that it's not for me, so I de-activated my account. I learned today that I’m in good company. Steve Wozniak says that Facebook has brought him “more negatives than positives," so he's leaving as well.

Another thing I don't like about Facebook is that it makes me into a product that's sold to advertisers. Facebook claims to be offering a service. I suppose it is, in the way someone might help you up the stairs to stand on the auction block. And they're not trying to "create community" — except to the extent that they can sell that community.

On the professional side it's a different thing. Facebook is one of the four juggernauts that's trying to gobble up all other companies. Some companies, and some entire industries, are dumb enough to look at Facebook as an opportunity, but sooner or later they realize that Facebook is not their friend, and that they never should have participated.

Their operating assumption is "all your customers become our customers, and all your data becomes our data."

Don't help them!

Given all this you might think I would welcome regulation. At one time I did think that was a good idea. Facebook is too big and has too much power, and anybody with that much power needs to be watched!

I still feel that way, but there's a negative side to regulation.

Some people mistakenly believe that business doesn't like regulation. No. Small business doesn't like regulation. Big business loves it, because it helps them control the market. It creates barriers to entry for competitors.

Big business / big government cooperation is a cancer that leads to corruption and graft.

Facebook would desperately love to be regulated, because that would make it the default social platform. People would feel safe on Facebook, because it would have the government's stamp of approval. Facebook would be like a utility. 

Up-start ventures like Mastodon might have little chance to topple Facebook as things are right now, but if Facebook is regulated, that small chance might turn to no chance. 

I'm not certain what future to hope for with regards to so-called "social media." There are good things to say about the open source model (like Mastodon), where no company is running things or treating users like a product to be sold.

My concern is that even if somebody solves that problem, there's decent evidence that social media is simply bad for you, whether it's Facebook or something else, and whether or not it's making money off your data. From that perspective, I wish it would fade away. But I don't know how that's going to happen, or what's going to replace it. It's probably not going to be dinner and a game with your family, or darts at the local pub — which would be so much more civilized! 

(Hey, maybe with virtual reality technology I'll be able to go to a virtual pub and play virtual darts with my friends in other states!) 

In any event, regulation would cement Facebook's dominance of anti-social media, and that would not be a good thing.

Apple is buying Texture, the digital magazine distributor, says the headline. Okay. But the subhead says, “A message from Apple to big publishers: We like you.”

No, no and no. When will publishers ever learn?

I suppose the message is “we like you” in the sense of “we like you for dinner.” It certainly doesn’t mean “we want you to stay in business.”

The business strategy of Facebook, Apple, Netflix and Google (collectively “FANG,” which is quite appropriate) is “all your customers become our customers.” That’s been the model all along with all the digital publishing platforms, and it’s a bad deal for publishers, who rely on building and monetizing an audience.

Texture fits in perfectly with the FANG strategy. The consumer creates an account with Texture to get access to the publisher’s content. The publisher gets a few pennies and loses the relationship with the customer.

Bad deal.

By the way, I predicted that NextIssue / Texture wouldn’t work.

Sure, sure, I know. They didn’t make the transition to digital soon enough, and that’s a lesson for everybody in publishing!

I am so tired of hearing that kind of “analysis.”

There isn’t one transition facing publishers and publishing. There are several different transitions all going on at the same time, and different parts of the industry face them in very different ways. It’s a big mistake to take a lesson from one part of the industry and try to force it into all aspects of publishing.

For example, I just heard that New York Times CEO Mark Thompson said print will be dead in ten years. But of course he didn’t say that at all — because he’s probably a smart guy and knows better.

What he said was that the print edition of the NYT might only last ten years. Okay. That may be. He’d know better than I would.

But remember, the challenges facing newspapers are remarkably different from the challenges facing trade paperbacks, or B2B compliance publications, or magazines, or professional journals, or ….

You get the point.

Publishing is experiencing some very big changes these days, and all those changes can’t be stuffed under a single umbrella (even if it’s emblazoned with the magical word “digital”). Let’s be smart about this and apply the lessons where they belong, and not pay too much attention to people who have simplistic, mono-vision answers.

The issue publishers have to face is not print or digital, or print versus digital, or “the transition away from print,” or anything that simple.

First of all, “digital” is too broad of a term. Does that mean a PDF, a Kindle book, a digital edition of a magazine, a magazine website with articles, a blog, a video, a database, a voice interface like Google Home, a membership site, ….

Second, print is alive and well in some areas, and probably will remain so for a long time. Students (yes, even “digital natives”) prefer print textbooks. Some print magazines are doing fantastically well. And people still buy print books.

And I haven’t even mentioned Facebook, Kahn Academy, the general decline in reading, the hyper-partisanship and personalization (read “echo chamber”) of most of the information we receive, and a host of other things.

The key in the information business is to find the right niche (and, as Lev helpfully points out in his comment, the right product) and that requires transcending a simple “print vs. digital” question.

Oh, and about Time, Inc. I’ve heard a lot of speculation, but one thing should be quite clear. The demise of a weekly news publication after the advent of a 24×7 news cycle is not all that surprising.

FANG — that’s Facebook, Amazon, Netflix and Google — are (is?) performing a huge about face on the internet, and nobody’s doing anything about it. Few people are even noticing.

I always thought the internet was meant to be an open platform that anybody could access and use. It was supposed to democratize things, and for a long time it did. Individuals could start a blog, or a business. Lots of great ideas have improved our collective lives because the cost of entry was so low.

Those days seem to be ending as web traffic — and ad revenue — is increasingly being funneled into walled gardens. Youtube. Facebook. Echo and Google Home. Netflix.

Don’t get me wrong, these are great services. But they’re not open platforms.

If I want to start a website, I don’t need anybody’s permission. I just do it. But if I want to do something on Echo, I have to make a deal with Amazon.

There are some cool things that publishers should be able to do with these new technologies. I mentioned a few in this post: How Alexa and Google Glass will revive print publishing. But … we don’t really want to do those things if we’re beholden to FANG.

The internet may be going through a transition from keyboards and screens to voice. But if that happens, there’s no open platform to access it. There’s only Echo and Google Home. And they are not your friends. Amazon and Google are not trying to provide an open place for innovation and new businesses. They’re building their own businesses and squeezing out the competition.

Just the other day I heard a local radio station announce that you can listen to their station through Echo. That’s a very convenient thing, and since radio is monetized through ads, it probably makes sense for the station. At least it does until Amazon changes the rules and sours the deal. And you know they will. (I am altering the deal. Pray that I don’t alter it further.)

I would love to allow vision-impaired subscribers to hear their subscription content through a device like an Echo. But you know what that would mean. Amazon would take control of the customer relationship. That’s the standard trick that publishers keep falling for. (Don’t do it!!!)

If the internet moves to voice, Google and Amazon will rule the internet.

That is far more significant than any conceivable threat the net neutrality folk are worried about.

We are about to hand the internet over to FANG.

Sure, you’ll still be able to have your website. But that’s not where the people will be.

What’s the solution? I think it’s clear. Either somebody needs to create an open platform to rival Echo and Home, or those services need to be regulated as common carriers.

Recently a colleague on the SIPA listserv asked about some of the simple subscription management plugins that work with WordPress. The question took me back to the days when I was first learning how incredibly complicated circulation systems can get, which also reminded me of the early days of iPad.

When Apple first got into the subscription business, I was rather shocked at how badly they misunderstood the publishing industry. Their system for managing subscriptions was very primitive and couldn’t accommodate anything like the complexity that a modern subscription management system should.

The way they structured the business seemed an obvious ploy to replace existing publishers by taking away all their customers. I thought the publishing industry would see through it. Of course they didn’t.

At first I thought all the kids at Apple were being dazzlingly arrogant. Did they, for instance, even know what a snow bird is? I got the distinct impression they thought they didn’t need to learn from all those old dinosaurs, stuck in the habits they inherited from the 1950s. Everything’s different now, they thought, and selling a subscription isn’t any more complicated than selling a toaster. And if it is different, it shouldn’t be.

Ha ha. How I laughed at the cool kids. Now I think they were on to something. Although I think it was luck and not genius.

Modern fulfillment systems have been written to accommodate the quirks and foibles of decades of marketing / circulation professionals, who have been trying different versions of offers and payment plans, tinkering with (“optimizing”) everything they can get their hands on. By now these systems have accumulated so many possible options and policies and different ways to do things … it’s more than a little crazy.

Take a simple example. When a gift subscription is up for renewal, we want to be able to renew the donor with one offer, and if he doesn’t renew we might want to renew the recipient with a different offer, and we want to display different things for both of them on the customer service page. If the donor is a subscribing donor, we might want to attach that renewal to his issue. Sometimes we want to send the renewal premium to the donor, and sometimes we want to send it to the recipient. And if the donor and the recipient both pay ….

All these things require options and switches and policies and rules, and if you get one of them wrong, very weird things can happen. And that’s barely scratching the surface on how complicated it can get.

This all raises an important question. What’s the ROI of complexity?

Imagine two systems.

The first allows you to tweak to your heart’s content. You can do installment billing in Bitcoin if you want to, and there’s infinite flexibility in how and when you send your renewal messages, and what they say. Through careful testing you discover that offering two renewal premiums on effort #4 gives you a 5 percent lift. Hoorah!

The second system has one basic template for bills and renewals, let’s you choose between an annual or a monthly subscription, and … that’s about it. It doesn’t do bi-weeklies (except for the skip week at Christmas), and it doesn’t let you have 14 different prices for the same publication.

With that second system you’re not going to be able to do all the testing and tweaking and “optimizing” you’ve been hearing about at the marketing conferences. On the other hand, you don’t need five people monkeying with the system all the time, and you don’t have embarrassing calamities when one of the 7000 switches is set incorrectly.

Now then. Which system is smarter?

Let’s say I have a service on the Fair Labor Standards Act. It covers the whole Act, but the subscribers are always calling and asking the editors questions about chapter 4, which covers whether an employee is exempt or non-exempt.

The service sells for $400. Subscribers and potential subscribers are always telling the editors it’s not worth $400, since they only want chapter 4. They resent having to buy all that other stuff they don’t want.

The editor proposes a new service, which is essentially chapter 4, with a couple enhancements. He proposes a cost of $100.

If you’ve been around publishing for a while, you already know what management is going to say.

“But that would cannibalize the FLSA service. Instead of getting $400, we’d only be getting $100.”

I think that response is wrong-headed. If people only want chapter 4, then sell them chapter 4.

This isn’t the Soviet Union. People have choices, and they want to buy what they want to buy. If you’re not going to provide it for them, somebody else will. Your competition isn’t constrained by wrong-headed concerns about “cannibalization.”

If you take the editor’s suggestion, you may sell so many more copies of the $100 service on chapter 4 that you’ll make more money. Or … it may be that you’ll simply exchange your $400 customers for $100 customers, and it will be a huge loss.

Here’s the ugly truth. It’s going to happen anyway. Your $400 customers won’t renew, and they’ll find somebody who’ll sell them what they want at a lower price.

Let people buy what they want, at a fair price, and don’t try to force them into bundles. That’s what cable companies do, and the only reason they’ve been able to get away with it is they have people trapped. As other options become available, people drop that bundled mess and buy what they want.

We live in a time of consumer choice. You can’t force people to buy your bundle if they don’t want it. Go ahead and cannibalize. Break up those bundles, if that’s what people want, because they’ll get it one way or another, and if you’re not offering it, you’ll be left behind.

Having said all that, it’s worth mentioning that subscriber calls to editors are not the only or even the best way to get feedback from the market on a new product. What matters is what people think when they get out their wallets, not what they say on the phone (when it doesn’t cost them anything). So be sure to test your ideas in the real world — the one with credit cards and checks and that sort of thing.

Sorry publishers. Nothing you do will matter when the hegemons disintermediate us.

Sorry for the $5 word, but it works in this situation. Thomas Chaffee, Chief Executive Officer at ePublishing, used it in his presentation at BIMS last week, and it's exactly the right word.

Chaffee reviewed a lot of the ways our data gets moved around and shared. By "our" data, I mean our own personal information, but I also mean company assets — our subscriber data.

If you have ads on your site, or if you allow social shares or logins, or any number of other things, then you're letting the hegemons know exactly who your customers are. (Sometimes you might be sharing your data without even knowing it. There are some WordPress plugins that send data back to the mother ship.)

"So what?" you ask. "They already know who everybody is."

True, but here's why it matters.

You make money by monetizing an audience. What's going to happen if the hegemons do it better and cut you out? (If they "disintermediate" you.)

They've already indexed all your intellectual property. They already know your audience. In fact, they know your audience better than you do.

What stops them from running all your articles through an artificial intelligence routine that can write the article better — e.g., more finely focused to specific people and interests — than you could ever do?

Computers are already writing news stories. It won't be long before they can write whatever you produce. And they'll be able to make thousands of different versions of each story for every preference, bias and special need. They can tailor the story to your audience in a way you could never hope to. 

You already know that search results vary by person. My results are customized to me, and your search results are customized to you. Once the hegemon has its own version of your intellectual property, customized specifically to a particular audience, they can steer your audience to their version of the story through search results, news feeds, and so on.

In that environment, what happens to publishers? 

Yes, it sounds dreadful and very discouraging from the publisher's point of view. But there may yet be two rays of sunshine in this growing gloom.

First, the computers might take a while before they're able to do this. I might even be able to retire.

Second, personality can be a benefit, so focusing on the relationship between the author and the reader might delay the AIpocalypse. That is, until AI can have a better personality than we can. 

Good publishers spend a lot of time and money to hire intelligent, professional editors, writers, proof readers, fact checkers, graphic designers, user interface experts, etc. etc., and we strive to make a fantastic product that’s clearly a sharp step above the nonsense people blurp out on blogs and tweets and Facebook posts.

Then we call this fantastic stuff “content.”

“Content” is a lame word. In my mind it conjures up the polyester stuffing in a cheap pillow. That’s the “contents” of the pillow.

You might ask, “What’s the content of that box?”

A: “Oh, just some junk from the garage.”

“Content,” in short, is not an inspiring word. It brings to mind the uninteresting stuff that fills something else.

A lot of stuff out there is “content.” It’s the blather of the masses. It’s the dreck from which, occasionally, something surfaces to get 15 minutes of fame on Twitter.

That’s not your business. You’re not in a contest against images of somebody’s rear end. You’re doing more compelling, interesting things.

So here’s a challenge. For the next week, every time you’re tempted to say or write “content” as a description of the professional, excellent material you produce, say “intellectual property” instead.

There are two very cool things about intellectual property. First, it’s intellectual. Second, it’s property.

It’s not stuffing. It’s not the junk in a box. It’s intelligent and meaningful and worth your time.

It’s also valuable. It’s somebody’s property (yours), which means other people don’t have a right to it without compensation.

Publishers need to believe in their product if they expect other people to, and steering away from the bland and boring “content” might be a good start.