Commentary

Still Paying, Still Playing

The email receipts I receive with astonishing regularity from iTunes are getting stranger by the week. I know that I am not the one in this house ordering tunes like "Seasons of the Abyss" and "Skeletons of Society." You can see this one coming, can't you?

"Honey, why is an otherwise perky, well-adjusted, and generally pampered suburban daughter of mine ordering 'Dead Skin Mark' in iTunes? Is there a Satanic zone of your soul I am not privy to?"

"It is Slayer, Dad. I played them for you before. And stop talking as if you are already writing your column."

This gig is getting more meta every day.

This all connects back to the larger ongoing argument regarding her next phone. My girl has pretty much texted the keypad on her current Verizon/Samsung model to death, and I believe that the SMS overage charges have earned a wing named for her at the Basking Ridge headquarters. She is campaigning for an iPhone, now, but I am not sure I want this one loose in the App Store. It can get expensive in there.

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I know that we spend more time in this space exploring ad-supported free mobile media, but the download model is also opening up new opportunities for the pay model. Recent offerings in the App Store have been coming in at higher prices. QuickOffice already offers a $12.99 mobile spreadsheet app and just announced an upcoming suite for the iPhone. The New York Times just launched its $9.99 crossword puzzle app the other day, and it is excellent.

With the launch of BlackBerry's new "App World" and more robust and pricey downloads coming to the iPhone App Store, I wonder if we are seeing the pay model finally proving out on mobile as a parallel track to the ad-supported model that has gotten so much attention lately.

Back in the day, mobile carriers promised content providers that mobile platforms would correct some of the business model woes they suffered on the free-for-all Web. Mobile was a platform that already had a micro-payment system built in, and its audience was willing to pay for incremental services, even subscribe to them on a month to month basis. While many content providers tried to launch fee-based mobile apps in partnership with the carriers, I see most of them now embracing the ad-supported, free model instead. Is there a place for pay-to-play media here?

In that regard it really is 1999 all over again. As so many content providers tried to make the case for charging online for content most users were getting free elsewhere, only a handful of money-makers emerged. Brands that made or saved people money succeeded in getting people to pony up for content.

The key was not always content, however. It was service. In recent years publishers like Rodale did get users to pay for health-related and coached diet programs because there was an active service component. The publisher was not just blasting out media or unlocking access. It was serving you, with personalized programs, prompts from coaches, and a like-minded community. The same thing holds true for mobile in 2009 that was true online for the past decade: Outside of select proprietary content areas or money-making/saving media, there is mainly room at the edges for some pay content that serves.

Not surprisingly, the new New York Times Crossword Puzzle app that makes a good case for the $10 fee was also one of the few streams of direct-to-consume revenue the publisher ever had online as well. For years, the company has sold subscription services to its puzzle-loving audience at $40 a year. This is not just a matter of leveraging a passion point, although that is important. The crossword product, both online and now on mobile, is remarkably deep. On the mobile app you get the day's newspaper puzzle, access to archives of older puzzles, a repository of your own unfinished puzzles, and access to leaderboards of the fastest solvers. It is a wonderfully full package that speaks directly to the puzzle-solver's taste and interests.

This is what people pay for: consistent delivery of content that directly satisfies a clear need or passion. And it is not easy to do well, which is why so few media companies have persuaded any of us to pay up.

I think it is a mistake for media companie to think that putting the same old content into our pockets or "at our fingertips" is enough to merit a fee. They need to reimagine content as a service. That is a tremendous challenge/opportunity. It means that publishers have to think beyond the media and imagine how people put information to work (or to fun) in their everyday lives.

If a publisher can turn media into a utility, not just more data, then the rest of the argument about pay-to-play models on mobile make more sense. If there is something of value to buy on the mobile platform, then the built-in payment system, the always-there convenience, and the pay-to-play habits of mobile usage make a fee-based model workable for some. Wouldn't it be a wonderful by-product of the mobile media evolution if it forced publishers to revisit and reimagine how and why their product makes our everyday lives better, easier, healthier, or more enjoyable? Content could have functionality. Media would be a service -- not just, well, media.

4 comments about "Still Paying, Still Playing".
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  1. Darren Frye from Music Choice, April 2, 2009 at 4:16 p.m.

    Your daughter has excellent taste in music! I'm 36 and had a very similar conversation with my mom (or...she had it with me) when i was 16...about Slayer specifically. It's just music Mom! Then she left me alone with my Venom, Slayer, and Celtic Frost...uh...records.

  2. Paula Lynn from Who Else Unlimited, April 2, 2009 at 7:45 p.m.

    No if those phones came with very large magnifying glasses or the screens were many times the size they are, I'd be tempted to expand my library. But I swore it would never happen to me.

  3. Chris Lorenzoni from Velti, April 2, 2009 at 7:48 p.m.

    spot on again mr. smith!

  4. Tim Meyer from Pervasive Computing, April 3, 2009 at 3:22 p.m.

    The main reason for the failure of m-commerce in the US is simply greed of the carriers. The business model has been distorted beyond recognition by carriers requiring 50% of retail (charge to phone), making a joke of most value propositions (apart from $9.99 ring-tone subscriptions which rely on churn, but that is another story).

    In comparison, DoCoMo had a 10% charge for m-commerce back in 1999 creating the basis for a huge take-up.

    Apple is positively generous with a 70/30 split and eating the credit card charges. Just goes to show what can be done with a little common sense.

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