Let’s go back to the year 2000 for a few minutes.
The music industry is in turmoil due to an amalgamation of factors:
- The Internet has arrived. Distribution of just about anything that can exist in digital form will change forever. Your big box retailer of compact discs instantly looks like a relic.
- People have found ways to compress audio into a manageable size without sacrificing very much in audio quality. Not only has the distribution piping been laid down, but the packages are light and easy to transport.
- Napster and its brethren come into existence. Decentralized peer-to-peer farmer’s markets crop up everywhere, compounding the nightmare for the music industry.
The music industry does what any industry would do when their precious commodity – in this case music – is suddenly as available as paper towels at your local YMCA restroom. It’s a scary place to find yourself. The natural reaction is to wrap your arms around that content and hold on for dear life. After all, it is your bread and butter.
As a result, the music industry lights a ring of fire around its content and fires on sight at anyone that tries to steal it. All of their energy and focus is spent to somehow contain the damage and retaining the perceived value of their content.
Because content is where all the value lies right? Wrong.
Throughout this siege, another player showed up that virtually hijacked the entire industry based on one very basic tenet: build a best-of-breed experience around these newly found conveniences. Apple doesn’t come from a content-worshipping culture. They build and sell hardware and software. They understood that if they built a great experience around the content, they would win.
And win they did. Who would’ve guessed that a closed ecosystem that spans hardware and software that charges money would beat out tools that let you get at the content for free. While the content owners were fretting about their content, they failed to realize what really mattered in the eyes of their customers: new conveniences, stylish easy-to-use products and reasonable pricing.
It wasn’t about getting stuff for free. The iPod/iTunes ecosystem is testament to the fact that people are willing to pay for a quality experience, even if there are fringe alternatives out there for free. The mistake the content owners made was that they believed their content had value in a vacuum. It doesn’t. Content is part of the experience.
The funny thing is we’re seeing this play out all over again, and it looks like it’s headed towards the same ending. Newspapers, magazine publishers and book publishers are the new music industry; worrying and fretting and battling to protect their content. Meanwhile, Amazon is investing in building a great user experience for people that like to read. The perusal, purchasing and reading of content is what they’re focusing on. Since they don’t have any content to worship (like Apple) they’re just thinking about delivering a great experience. Attract the masses, gain mindshare and then go back to the content owners with a platform.
I suppose it only makes sense that such innovations continue to come from somewhere else. It’s hard to let go of how you value your stuff. Some content creators are trying. The New York Times recently came out with a refresh of their New York Times Reader. It’s an elegant, clean way to read the New York Times content. It’s a better user experience. Still, it’s only the New York Times content. Imagine EMI records coming out with their own flavor of iTunes. Makes sense from a business perspective, nonsensical from a user perspective.
Content owners need to come to a few realizations:
- Nobody cares about carrying over the physical constraints of content into the digital realm. In fact, it’s a nuisance. They want granular control and they want to pick and choose their stuff.
- Consumers are willing to pay for a great user experience and if it’s an incredible user experience, will pay a premium (see Apple).
- Your content is transient (to varying degrees, depending on the content). It may spike in value then dissipate quickly or it may last a few months.
iTunes, Hulu and recently the Kindle (to a smaller extent..so far) are winning these markets by building a new way to interact with and experience content. They all come from cultures where they understand that the meaning of “content ownership” is changing and that people will still spend money if it’s wrapped in a great experience.
When we released Readability a few months ago, the response was astounding. This seemingly innocuous little tool that cleans up Web pages to make it easier for you to read clearly hit a nerve. People hated the reading experience on the Web. They love the content and want the content, but they despise the experience around it. This pain is less about needing a reading device and more about an utterly lousy experience on the Web. Would people pay for that experience? Is there a way to handle advertising in a less obnoxious (read: more effective) way? I think so. The history of technology is littered with good intentions, false starts and great successes that take those false starts and simply wrap them in good design.
Content owners are praying to the wrong God. In this new world, their content is valuable only in the right contextual experiences. While they worship, someone else will build that experience and invite them to sit at the table later.
And reluctantly, they will come. They always do.