An Intelligent Paywall

AUTHOR'S NOTE: This post was migrated from a former home. Its contents are all but forgotten, but are kept for posterity's sake.

Today The New York Times finally unveiled their digital subscription plans and set a date for launch. After more than a year of vague assurances and discussions that it would be coming, I had begun to refer to it as the Vaporwall, but I’m glad to say that the time spent perfecting the model seems to have paid off. 

This isn’t the first foray into digital subscriptions for The Times. From 2005 to 2007, TimesSelect offered online access to what The Times considered its most premium content: The Op-Ed section and the archive, among a few other things. The issue was that it put up a complete paywall, offering zero access to non-subscribers. In practice TimesSelect only served to hurt online readership for Times columnists, and in some cases they openly criticized it for that reason. The other issue with TimesSelect was that it attempted to charge for premium digital content that primarily appealed to their analog audience — readers who were likely already print subscribers, or wouldn’t be interested in a digital subscription.

The problem with paywalls for online content that it goes against the basic structure of the web, where hyperlinks allow users to go from page to page. With a complete paywall like that of TimesSelect, a hyperlink would lead to a dead-end. Further, the wall would block search engines from accessing, indexing and making content available to those interested. While I have no definitive figures, it’s easy to speculate that a good portion of web traffic to sites like nytimes.com comes from search engines like Google, so a complete paywall on every piece of content would be devastating to The Times’ online readership, and therefore would hurt online advertising revenues.

To address this issue, The Times has put a lot of thought into how their paywall works. First, it won’t act as a complete wall on all content. Every reader is given a 20 article limit per month for free. This would cover casual readers who don’t read the paper regularly, but may come to the site when prompted by a friend or for another reason. Secondly, links from social media and search engines will not be counted against the limit, with the caveat that a reader may be limited by the number of articles they reach from certain search engines in a given day. This second rule is important because it shows that The Times understands the importance of social media and the web’s basic structure in disseminating news and bringing in readership. Any rule that could block readers linked from Twitter, Facebook and Google would make a significant dent in web traffic.

The most impressive aspect of the digital subscription packages is that The Times appears to have figured out the different demographics that they serve. For one, they haven’t made the same mistake of TimesSelect where they’re charging the wrong audience for another audience’s content. The Times has an entire group of readers who love their coverage, appreciate quality journalism, and would be willing to pay for the most convenient access. In the past, these were the people who received home delivery and read the full paper. They’ve also got the casual reader that I alluded to earlier, who reads a Times article when prompted, but won’t spend much more time on the site than that. Those would have been the people who bought a copy on the corner a few times per month.

For specialized newspapers like The Wall Street Journal and The Financial Times, the majority of their readership is the first group, so a complete paywall does less damage, because more of their audience is willing to pay. For a paper such as The Times, the casual reader makes up the majority of their web traffic, and cutting them off with a complete paywall would mean less advertising revenue.

The metered digital subscription system that The Times will begin to offer this month is the best online model for the print circulation system of yesterday that I have seen. According to Neiman Journalism Lab, the traditional breakdown for newspaper revenues was 80% advertising, 20% circulation. A complete paywall would severely cut down on the potential advertising revenues, and attempt to make up for it with a relatively static income from subscribers. In The Times’ model, the potential for advertising revenue hasn’t been hurt because the majority of their traffic will still get through unhindered. Meanwhile the digital subscriptions will augment that revenue with income that was previously $0. Whether the new breakdown will be an 80/20 split, or skewed a bit more is yet to be determined.

Needless to say, I don’t think anyone at The Times is under the illusion that this model alone is enough to save the news industry. Print advertising revenues are still falling, and online advertising hasn’t made up the deficit. This alone isn’t going to make up for it either. Until online advertising evolves into a more effective system, and can therefore justify a greater cost to advertisers, the news industry is still going to struggle. Fortunately, with an intelligent digital subscription system like this, The Times will have revenue where it had none before. 

The New Networks

AUTHOR'S NOTE: This post was migrated from a former home. Its contents are all but forgotten, but are kept for posterity's sake.

Yesterday Deadline broke the news that Netflix had possibly outbid network giants like HBO and AMC for the rights to a future original series “House of Cards” executive produced by David Fincher and Kevin Spacey. While the deal hasn’t closed, it could represent a major shift, and a compelling new entrant, into the future of the “Network.”

In the old model for original content, major networks financed productions and received the rights to broadcast and further distribute that content across their network of affiliates. For major television networks, the draw is the first broadcast rights, from which they receive millions in advertising revenue per show. Additionally they have the option to license the content for syndication and distribution across other mediums, such as Hulu, Netflix, and iTunes.

For the new generation of content consumers, the latter mediums are playing a bigger and bigger role in our daily lives. If I don’t watch broadcast television, but I do use Netflix and Hulu to watch content on demand, the networks that own this content become middle-men in the process. 

Until now it seemed that the digital distribution business models couldn’t compete with traditional models to fund the same type of original content, and perhaps Netflix is going all-in with a risky bet, but if they’re successful, it could prove that the old broadcast-first model has a viable competitor.

In the new scenario, broadcasting networks become just another medium over which to distribute content, rather than the guardians of content libraries. Netflix isn’t in the business of broadcasting, but they could obviously sell the rights to the highest bidder, making the content available on Netflix first, but also available through a partner that pays to be the first of the “old” networks to broadcast the show. 

The next question is how far they’d be willing to go licensing the content to other mediums. DVDs and Blu-Rays are logical, but would they ever license to Hulu or iTunes? Logically these other digital distribution services could cannibalize the potential for new Netflix subscriptions, so it’s likely that any original content would be considerably delayed or never released on them. Though at current price points, subscribing to both Hulu Plus and Netflix costs under $20 and likely beats any broadcast cable subscription. 

Assuming the deal goes forward, time will tell if Netflix’s venture will be a viable new model for premium original content. As a digital native, I, for one, am hoping for success, if only for the sake of pushing digital distribution and on-demand content forward, and removing the need for broadcast networks as middle-men.

A year ago I wrote a blog post for a college course on Hulu as the new model for the “Network.” As I said back then, Hulu was developed and continues to be controlled by the traditional broadcast networks, so they’re unlikely to become a direct competitor to the old model, but I also wrote that a new player could adopt this new model and become a viable competitor. It appears that Netflix is that competitor.

Android's place on the vertical-integration continuum

AUTHOR'S NOTE: This post was migrated from a former home. Its contents are all but forgotten, but are kept for posterity's sake.

Last week at D:Mobile, Google’s Andy Rubin demoed a prototype Motorola Tablet running Honeycomb, a future version of Android developed with tablet-sized screens in mind. 

Something struck me about what Rubin said towards the end (skip to 7:05 to hear the discussion in question). When Kara Swisher asked whether the device he had was the “perfect expression” of an Android tablet, or if there would be “175 different versions,” he said:

I’ve worked at companies where they generically try to do software — and this is the way Microsoft used to work with Windows — they very generically build the next version of Windows and then expect it to work on all PCs.

In reality, what we do is we pick one of our partners, a semi-conductor partner, an operator, and an OEM, combine them all together and this is the device that all the engineers have on their desk when they come in in the morning. So they all know the specific thing they have to focus on for that day. It makes a much tighter integration of hardware and software. 

If I had to kind of put that on a continuum, I would say that Apple has done a perfect job of being an integrator of hardware and software, they’re vertically integrated. Then Windows throws shrunk-wrapped software out there and lets Acer and Asus and everybody else build PCs out of it.

So we’re sitting somewhere on that continuum closer to an Apple than a Microsoft.

The issue with Rubin’s statement is, while Android developers may be developing on a highly integrated solution, it’s not reflective of the end result, it’s just an ideal. The very nature of the platform, as Rubin stated, is that they want Android to be on as many different devices as possible. They’re not in the business of making one piece of hardware. 

The continuum that Rubin cites is a consumer-facing continuum. To the end-user, it’s the final result that’s either completely vertically integrated, or generic and splintered.

In all likelihood, the Motorola tablet that Rubin demoed will be just one of many different offerings (if it even comes to market). Further, once Google has put its stamp on the tablet version of Android and passed it out to operators, the very same tablet will likely appear in different operators’ retail stores with unrecognizably distinct versions of the OS. In the same way that the Nexus One was the “ideal” for the phone, this “ideal” tablet may only be available from Google, at an unsubsidized price that very few consumers will be interested in paying.

Other merits of Google’s open-platform approach aside, placing it on the scale closer to Apple’s fully integrated products is not reflective of the outcome that consumers will see. 

What does a mute switch mean for the iPad?

AUTHOR'S NOTE: This post was migrated from a former home. Its contents are all but forgotten, but are kept for posterity's sake.

Contrary to popular belief, re-mapping a hardware control is not unheard-of for Apple. For example, F9 through F12 on my MacBook Pro are still Exposé in my muscle memory, but now when I want quick access to my desktop, I often turn down the volume. When iOS 4 came out, it took me at least a week to stop double-clicking the home button and expecting my favorite contacts. One could even argue that the separation of Play/Pause and Select on the Apple remote falls into this category. Needless to say, each of these were minor or secondary for their respective hardware/software pairs. 

When it comes to the orientation lock versus mute switch debate, the change is a bigger deal because: 1) it’s a complete (primary) re-mapping of the hardware controller, 2) this is a hardware controller that’s used quite often, 3) it doesn’t come with any customizable options in Settings.app, and 4) to many, it seems more logical to have the orientation lock than mute switch because muting can be achieved by holding the volume-down button.

One of the simplest explanations for the change is to make the iPad’s hardware controls consistent with the iPhone. Perhaps that’s it, but there are enough arguments against this to indicate something else. 

For one, why not give the user a choice? Add an option in the General settings that allows me to choose between mute and orientation. This isn’t unheard of; we used to have a few options for what a double-click on the iPhone’s home button would trigger. The multitasking tray obviates the option for customization, however users with disabilities (or anyone really) still have the option to specify accessibility options when they triple-click the home button. 

Further, in what situations would a user typically need a mute-button? 1) turning off sound preemptively when you’re reminded (e.g. prompted at a movie theater, or in an auditorium), and 2) hurriedly silencing a disruptive ring or recurring alert. 

But neither of these use-cases are terribly important on an iPad. For one, none of the alerts, to my knowledge, are recurring on the iPad — there’s not even a built-in alarm clock app that can be set, forgotten, and accidentally go off at an undesired time. 

The differences in common usage between the iPad and iPhone may serve as the best argument for keeping the orientation lock. Apple went to great lengths to make the iPad usable from any angle, and encourages developers to do the same with their apps. The orientation is a primary concern for iPad users — users are more likely to be using it while lying on their side, or presenting to others, not wanting slight motions to trigger rotation. Sound is secondary on the iPad for the reasons mentioned above, whereas with an iPhone, orientation is a secondary concern, and sound is primary. 

But how does all of this explain the choice to change the switch’s function? While there seems to be little logic for it now, the future may hold the answer:

Facetime.

I claim no profundity in supposing that Facetime will be a feature in the next iteration of the iPad, but this doesn’t only add new camera hardware to the iPad, it brings new use-cases to the table.

Video calls are the first scenario — at least the first to be built-in — where an alert may arrive and recur on the iPad, causing a disruption for anyone around it. Now, it may be true that if you poll iPhone 4 users, they’ll tell you the number of times they’ve received Facetime calls out of the blue is very low, but there are a few differences between the iPhone and iPad that can explain this.

While Facetime is currently WiFi-only, all iPhone 4’s come with built-in 3G antennas, and it’s reasonable to assume that iPhones spend a majority of their time connected to cell towers, not WiFi networks. The iPad, however, is available in a WiFi-only model, and while I don’t believe any sales breakdowns are public, my insights and observations would lead me to make an educated guess that the WiFi-only models have a majority, if only for their lower price points. Further, the majority of iPad use is likely to happen in areas where WiFi is available and connected: at home, in a business meeting, during a lecture — connected to home WiFi, corporate WiFi, school WiFi. It’s reasonable to assume that even users with WiFi+3G iPads would be connected to the the local wireless network in each of these cases. 

And so it becomes easier to imagine a user in a classroom, or a business meeting with their iPad, when a video call begins to ring – loudly – and there’s an urgent need to silence it. Whereas previously a single incoming mail message or calendar reminder is only disruptive in the most serious of situations, a ringtone becomes a bigger issue.

This changes the need for muting from secondary to primary. At the very least, it brings some alignment between the iPhone and iPad, and adds justification to the idea of making the mappings consistent between the two. 

But why now? Facetime doesn’t exist on current iPads, and without the new cameras, this won’t affect them even when the new generation comes out. All true, unless future versions of Facetime (or another built-in app) offer VoIP calling. But I take the timing and definitive nature of their choice to be indicative of what’s coming and how Apple sees the iPad being used in the future.

Although it seems logical, the full reason may not be as simple as Facetime. I used that example because it is readily available, and Apple has already shown an interest in expanding the platform with the introduction of Facetime for Mac. I certainly can’t say I know what’s planned, just that these changes seem to indicate some future justification that puts the mute switch above an orientation lock.

If Apple waits to switch this mapping until next-generation hardware launches, they’ll have a few choices. They can leave first-generation devices as they are, but this leaves them maintaining a line of products that have different mappings for the same hardware switch, leading to confusion (albeit minor) for users, but also leaving Apple looking a bit less graceful than most people expect them to be. They can make the change for all devices, and have an even larger, more diverse, and more conditioned user-base that needs to adapt then, rather than now. Or they could introduce the option within Settings.app and allow the user to decide what their primary concern is. 

The fact that Apple has chosen to make a definitive choice on this, and make it now, indicates a few things to me: 

1. Apple is worried about making this change later and having an even larger, more diverse user-base that needs to re-learn one of the five hardware controls on their simple device. Given expectations for the iPad sales during the holiday quarter, this is understandable.

2. More importantly, Apple has made the definitive distinction that mute is going to be a more important concern than orientation for iPad users going forward. This is interesting because it implies that they have something in the pipeline that will make it so.