The Kindle and “barriers to entry”

Will Sullivan threw me off yesterday when he wrote on Poynter’s E-Media Tidbits about how the Kindle “removes the print barriers for entry.” He used “barrier to entry” in a different way than I understood it: That which prevents competitors from entering a market.

Using the term differently doesn’t necessarily harm Sullivan’s argument (although it does make it more ambiguous, because now I don’t know quite what he means), but it reminded me of last week’s On The Media, which I had just been listening to. The publisher of the Dallas Morning News was on, discussing why he hadn’t yet signed up his paper for Kindle distribution.

Answer: Amazon gave them a raw deal, or at least one he didn’t find too pleasing, and I could see why. He said the contract would have allowed Amazon to license Morning News content wherever and whenever they chose, without leaving Dallas the option to intervene. As I’ve said, I’m no expert at business models, but it strikes me as fair for Jim Moroney to be concerned.

This isn’t to say that the Morning News faces a barrier to entry to Kindle distribution. It’s still an option to them. But the more popular Kindle becomes, the more people may have to rely on Kindle distribution to find paying customers — and the more clout Amazon has in weilding its terms. Even then, though, I’m not sure it would be considered a formal “barrier to entry,” but it sure would make things more difficult.

::: Update – May 12 :::

Sullivan notes Henry Blodget’s comments about the increase in Kindle sales, especially after the latest version was released. It’s important here to remember cognitive dissonance, I think. That theory says, in part, that we do a very good job at convincing ourselves that we made the right decision, and will continue to act in ways that justify our decisions. The relevance here is that Kindle owners may not actually enjoy reading on Kindles but instead have to tell themselves they really do. (I’ve heard similar anecdotes of enjoyment to what Sullivan has heard — but then again, is it believable?)

Also: Sullivan says the increase of Kindle says as a percentage of book sales demonstrates that “Kindle users are voracious readers.” Not so. There’s nothing to suggest the percentage of book sales demonstrates a “voracious” bunch, so how could there be anything in the percentage of Kindle readers that suggests it? For all we know, it could be 35 percent of 100 books (Danielle Steele books at that).

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Does the AP know what it’s talking about?

Presenting: A small deconstruction of the Editors Weblog interview with the Associated Press’ Jim Kennedy. The interview (and reporting) left me confused.

“One is to start creating pages of aggregated content based around news stories and topics, which would allow readers to find the most authoritative local sources for the news they are searching for.”

So … these pages are going to be dedicated only to stories of local import — like “Mayor gives a speech”? There aren’t really “authoritative local sources” for anything on a national level — all the papers rely on the AP for their stories. But is it the case that users are having trouble knowing what the standard “local sources” are in their town?

Which leads to the next point:

“Also, he asserted, search engines “point people indiscriminately” towards sources, rather than towards the news’ local paper which should have the most authoritative article. The AP hopes instead to offer more of a guide to a topic, with sources that are more intelligently chosen.”

Again, the article doesn’t answer: Who are the enemies here? There are so few towns with multiple professional news outlets. A newspaper and some TV stations — all of which, I would think, count as “authoritative local sources,” especially considering that most are probably AP subscribers and would be a part of these incoming portals. And what if the most authoritative local source instead sends is stories out on, say, MCT?

So if not these outlets, then perhaps the target is bloggers — ones who grab AP copy from Google or Yahoo, post a link and offer a few comments?

“[The AP aggregation pages] will have URLs so that they can be ‘tweeted’ or linked to on social networking sites but they will not be a destination in themselves: “This is a distribution strategy, not a destination strategy,” Kennedy confirmed.”

This is confusing on so many levels. “They will have URLs.” Well, yeah, they’re Web pages. Should I expect otherwise? “They will not be a destination in themselves.” I understand, I think, that he’s saying that the pages will serve only to feed readers to the “authoritative local sources.” But (a) it still strikes me as contradictory for the AP to say they want to drag traffic currently going elsewhere to their own pages and to say they just want to pass readers along; and (b) does the AP think the same number of readers are going to follow through to the local site as go to the aggregated site? Most readers skim the headlines to begin with, right?

“The second aspect is the AP’s mission to “keep up the fight to protect content from misappropriation and protecting it from those who don’t pay.” He clarified that the he was not talking about “small time bloggers who post a link to a story,” rather “people and entities who come along and scrape content systematically and have no intention of licensing it.””

Hm. Well, that kills the blogger theory from a moment ago. So if the AP isn’t targeting bloggers but these big-time scrapers, then, well, who are they talking about? The story doesn’t provide links — did anyone ask him? Maybe I’m not looking hard enough. What sites is he talking about and how much traffic are they dragging away from the “authoritative local sources”?

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Belated reaction to the Freakonomics/newspaper micropayments discussion

After finally getting around to reading the New York Times’ Freakonomics Quorum on micropayments in journalism, (thanks to @ccadelago I was primarily struck by the lack of evidence any of the contributors offered. There were lots of assertions about how people of all stripes* but little to back up how we know what we say about them.

Now, I’m aware of the forum involved. Newspapers and their Web sites have never been places for in-depth academic discussions, and I don’t expect them to create one here. Also, as you may have noticed, I’m no savant when it comes to the right new business models for journalism. And I also want to clarify that, in the abstract, I found many of the reasons the panelists offered compelling.

But I also know humans are prolific at studying ourselves. At least some of them probably are relevant, at least tangentially, to discussions about how to best structure news business models (who’s the target or actual audience? (also here) What do they want? What are they like?). We couldn’t pull out some older research and say, “While not exactly analagous to the situation today, this has these useful similarities (and here’s why).” But no one offered such support, or hedging when it comes to research that contradicted his conclusion.

So I ask this honestly: Is it the case that people are so changed by the Internet that whatever reseach we have on what they want or how they act is made irrelevant? And if so, why?

I ask this knowing full well that there likely is tons of writing about journalism out there that incorporates the kind of research I’m curious about. I’ve even read some of it. I just haven’t found as much as I want yet. So please, point me to what you know. I’m eager to learn more about this.

…or am I just being too hard on everyone involved?

* e.g. Alan Mutter: “Consumers might not like being micro-nickled and nano-dimed for every article, but they would get over it if the content were sufficiently unique and compelling. Remember, this works only if the content is unique and compelling.”

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Some questions about Kachingle

I just finished Steve Outing’s column on Kachingle, which he’s pushing as a better solution for news organizations to make money online. He doesn’t suggest it’s the end-all savior, only that it’s better than micropayments, which has been bandied around a lot lately.

I’ll leave you to read his whole explanation of Kachingle for yourself, but my slimmed down version is:

• You sign up for Kachingle by paying $x a month
• Publishers sign up for Kachingle
• You decide how much of x dollars, if any, you want to go to Kachingle-elibiglbe sites.
• Publishers have to convince you to give them money

I think Kachingle can be successful in that it plays on laziness. My suspicion is people are more likely to pay one fee per month than sign up for multiple different accounts and make different payments.

But Kachingle raises a lot of interesting questions, too.

How will people decide how much to donate? Not in the sense of, “Paypal or money order,” but what calculus will they use to decide, “here’s how much I want to pay for my content each month”? Surely there are similar systems with other products that we might be able to study. Perhaps other industries’ experiences will tell us that most people don’t pay more than the minimum. If so, can we really expect bigger organizations to survive on, say, 100,000 payments of a few cents per month?

How will advertisers react? Will they flock to companies that can prove they have a solid Kachingle following, slowly choking off ad revenue to lesser publishers?

How soon can it be rolled out — and is that fast enough?

Finally, I worry that what I said above about people’s willingness to pay one lump sum over many smaller sums may not be true in this situation. For one, you need a population that reads a lot of online content from Kachingle-affiliated publishers, because I assume readers would not understand why they need to pay one company when they want content from another.

And then, if course, I’m creating an ambiguity for myself in using the word “successful.” Does “successful” mean that Kachingle survives? That The New York Times could make the same money it does now? That the Anyblogger USA will make a little extra income?

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