Publishers – Government to the rescue?
Executives from several major media companies testified before the Federal Trade Commission about the need for fees, taxes or tax credits for content being spread or aggregated across the Internet. The basic problem is that in the rush to get professionally published (i.e., newspapers) content on the Web, these companies decided to start doing it for free, hoping that advertising on the web sites would keep pace with what they were seeing traditionally in the print forms. These publishers have now learned, however, that on-line advertizing is a lot less lucrative – and with the switch from most people getting their news from “traditional” media to “Web 2.0 media”.
So, what is a major media company to do? Implement subscription models like the Wall Street Journal to fuel your success? Create premium member areas like ESPN.com or RushLimbaugh.com? Charge syndication fees to aggregators? Enforce copyright?
How about ask the government to give you tax credits to help defray your costs under the guise that our country needs a “free professional press”?
Within Digital Content Services at Capgemini, we have a pillar around Digital Monetization that helps to address these types of issues. While it’s a pipe dream that the US Government is going to be the ultimate savior here, major media companies need to figure out how best to fit within the new world of Web 2.0 and digital content. It’s no surprise that digital content is seen as less valuable than it’s physical counter-part (we’ve seen this in music, video, games and books). But, I think the biggest mistake an organization can make is to take old process and old ways of doing business and just try to apply the Internet.
When I buy a digital book on my Kindle, it’s just a digital version of something I could buy on paper. They charge me $9.99 instead of $25 – so I’m happy. But, if they were to make the experience better – for example augmenting it with animations, providing extra features, or automatically making updates to non-fiction materials, I’d be willing to pay a more. But, that would take a new mind set and would require a whole new set of digital supply chain processes. So, Amazon would need to figure out which model it wants – one where revnue (and probably costs) are lower or when where revenue (and probably costs) are higher.
Or, perhaps, we can ask the US Government to provide a tax credit for Amazon selling digital books.
is a major K-12 textbook publisher.