Digital distribution – doesn’t anyone get it?

This has nothing to do with ebooks directly, but everything to do with the same old problems of creating and distributing non-scarce content.

Jeff Bewkes, CEO of Time Warner, thinks the solution for online television is “asking online users to verify they subscribe to some form of pay TV before they get to watch content on other platforms. Whether consumers pay through their cable company, the telephone company or a satellite provider doesn’t matter. This, Bewkes says, will preserve a robust environment for video by making sure that no matter where it is watched, it continues to benefit from a dual-revenue stream of subscriptions and advertising.”  Check out the rest of the article.

The problem here is that, once again, the distributor is looking to preserve the old ways of making money without a thought to how to provide more value to the customer.

You know why Hulu is great?  They provide easy-to-access, totally free video online.  They show commercials, but not many of them, and they try to make the ones they do show count.  Most of them are a little longer than your typical tv commercial, but usually quirky and just more interesting than your average commercial.  I’ve found myself actually paying attention to commercials on Hulu.

And of course, the big content providers are constantly trying to kill Hulu.  In the end, they probably will, making everyone worse off than before.

So, why won’t this “dual revenue stream” model work?  First of all, it will be impossible to implement with anything resembling the convenience of Hulu.  How do you prevent sharing of accounts?  That is, me and 1,000 of my friends get one cable subscription, and share a user id?  Well, what the cable companies will do is limit the number of computers you can use, or limit the IP addresses, or something like that.  Inevitably, this will prevent legitimate uses of the service.  For example, in my house we have four computers regularly in use – my personal laptop, my work laptop, my wife’s laptop, and the desktop hooked up to the tv.  Can my one cable subscription allow me to watch on any one of those?  If so, how can it prevent me from giving my user id to my neighbor?

What’s really absurd is the underlying assumption that, without subscription fees as well as advertising revenue, quality video content just can not be produced.  Think about all the television shows that only have one of those – HBO series, for example, or anything on regular network television.  Are these shows of substandard quality?

The next revolution in the way we watch video content won’t come from Time Warner, or any of the other big content providers.  They have too much invested in the old ways of doing things, and are terrified to embrace the new.  For the most part they seem afraid to even try to understand the new.

Online video isn’t about convincing people that “if content has value to them, it’s worth paying for”.  That’s utterly irrational.  Online video is all about taking something in infinite supply and using it to increase the value of things that are finite.  Until the content providers realize this, they will always have to crush the Hulus of the world out of existence before they show people that there’s a better way to do things.

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A failure for Amazon is a service for Amazon Kindle owners that lets you aggregate your favorite feeds and have them delivered to your Kindle in a convenient, easy-to-navigate format. You can also have your feeds delivered to your Kindle automatically on a schedule.

While most of the Amazon-related news these days is about the next-generation Kindle that everyone expects to be announced on February 9th, there are still things going on with the old version.

The mere fact that exists and is not a part of Amazon means that Amazon isn’t meeting all the needs and desires of their customers.  That’s okay, and to be expected.  They can’t think of everything.

But the fact that the site owner is now afraid that what he’s done (make the Kindle more valuable by providing additional services for it) is actually against Amazon’s terms of service means that Amazon probably did think of this, and decided they didn’t want people doing it.

This insistence on controlling every word that goes onto your Kindle is the main reason I didn’t buy one, and won’t buy generation two unless it stops.  It means that Amazon hasn’t figured out how to properly monetize the Kindle.  In general, the company is pretty open with how you use their services – they try to help people sell their stuff in the Amazon marketplace, they provide online storage and processing power for people to purchase, as well as numerous other things.  These services are very open because Amazon knows how to charge you.  Each gigabyte of data you send or store using their service has a calculable price.

But the money is much fuzzier with the Kindle, and so it’s much more restricted.  In the long run, this is a mistake.  Basing your business on preventing people from doing what they want with your device will always limit your market.  You may make more money now, but you leave so much potential on the table.

Link: – RSS and Atom Feed Subscriptions For Your Amazon Kindle, via – Cool Websites and Tools (#258)

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