Netflix has the right idea. With my Netflix subscription I can watch movies on my TV, on my PC, on a mobile device — wherever I want. I have purchased the rights to watch the shows, and I should be able to do that where it’s convenient for me.
Customers to subscription products want the same thing. They don’t want to have to buy one version for their PC, another for their iPad and another for their smartphone. They want to buy once and read anywhere.
Amazon is moving in the right direction with Kindle. If you buy a book on Kindle, you can install the Kindle reader on your PC (or smartphone, or iPad) and read it there. It’s a good idea and a good service.
What Amazon is missing is that this has to include print as well.
People have been saying “print is dead” for a long time, but print is far from dead. People like ink on paper. It’s convenient in ways that an electronic device never will be. And subscribers to a print magazine or newsletter also want to be able to read their issues anywhere. They’re not interested in technological excuses, and they’re certainly not interested in power grabs and jockeying for power between Apple, Amazon and the publishers.
Customers are asking “Why can’t I get my subscription on the iPad / Kindle / Nook?” And so far the answers are pretty dreadful.
Until very recently, Amazon and Apple simply didn’t understand the periodical publishing industry. They seemed to think they could treat magazines the same way they treated music or books, and they thought controlling the customer relationship was important to their business model and to the user experience. But there are signs they’re waking up to the reality of subscription publishing, and that is necessarily going to mean sharing customer data with the publisher.
Apple and Amazon want publishers to think of sales on their platforms as incremental sales — like magazine sales at a newsstand. The publisher doesn’t know who bought the magazine at the airport, why do they have to know who bought the magazine on the iPad?
It’s a flawed analogy.
If I have a print subscription to a magazine, and I forget to bring my print copy with me to the airport, I expect to have to purchase another print copy at the newsstand.
But if I own a print subscription to a magazine, I expect to be able to access the digital version online for free.
Well, actually I don’t, because I know that the publisher incurs costs in converting the magazine for digital delivery. But the average customer does expect this. The customer expects to be able to take his laptop / iPad / smartphone to the airport and read his subscription on the device.
In order to do this, the device needs to authenticate the subscriber, which means it has to have access to the publisher’s subscription database. So when Apple and Amazon try to own the customer relationship, they’re actually undermining the value of their own devices and services.
Right now, publishers are still print-centric because most of the money is in print publishing. This means that publishers create products for print and then “convert” them for digital delivery. When the customers scream for access on their iPads, the publisher has to (1) convert the print-centric format into some weird proprietary format specific to the device, and then (2) pay some sort of fee to the platform.
The customer expects to get this for nothing, because he sees it as his subscription, and he thinks digits are free anyway. “All you have to do is send the files to my device. Easy!”
Of course it’s not that easy, and this is the problem publishers and digital platform owners need to address. Here’s one way to do it.
Products need to be designed for digital in such a way that they can be easily converted to print. That is, digital first, then print-centric features are added later.
This means there has to be a standard digital format. We can’t have ePub and HTML5 and PDF and any other crazy thing that some new reader or tablet comes up with. There has to be one format. I know that’s been the dream of the publishing world for more than a decade, and that it’s not likely to happen. But it has to happen.
Pricing needs to be based on access to the digital product with other delivery options as an extra cost. The pricing structure has to be (1) pay for the content, (2) pay for extra delivery options.
Since Amazon and Apple and Kobo and B&N and everybody else want to take their cut, this might make for some complicated revenue models, but I can imagine a three-fold pricing structure.
• Digital access on the publisher’s website for $X.
• Universal digital access (adding iPad, Kindle, Nook, etc.) for $X +.
• “Read anywhere” access, including print delivery, for $X ++.
Customers get the idea that printing and mailing cost extra. In fact, that’s part of the problem. Customer think they’re saving the publisher money by abandoning print to get digital delivery. In some cases that’s true, but often it’s not. The cost of converting the files to the appropriate digital format and then paying the platform for delivery far overshadows the cost of paper and a stamp.
Nevertheless, it’s an easy sell to ask people to pay for printing and mailing, so do it. Design the price of the product around digital delivery and pass along the additional costs of printing and mailing.
One last thing. Just as this model requires a single standard for digital files, it will also require a standard for customer data on the back end. Apple and the fulfillment houses and Amazon and publisher software vendors are going to need to agree to a standard and stick with it.