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Property Rights in Content – Coming Soon to a Computer Near You

By 23 September 2010 No Comment

The Economist recently wrote on the success of the iPad as a vehicle for delivering magazines in digital form. Among the nuggets of information:

In advance, Sports Illustrated had created a “a futuristic-seeming video of a hypothetical issue filled with whizzy graphics and interactive ads,” which turned to be close to the actual iPad-delivered product;

Wired sold 24,000 downloads within a day, at $5 a pop;

Advertisers are willing to pay 10 cents a reader to be on iPad ads, “several times” the going rate for ads on the free web.

However, there is a glitch. Since the iPad has a web browser, it is not entirely clear why a consumer will pay to download what he can get for free through the same device.

Thus, the major point of the article is that the content providers are re-thinking their strategy of making everything available on the open web and hoping that someday they figure out a way to monetize it. Instead, they are coming to the conclusion that they must pull back from the open web, making content available only to those who pony up.

This is sort of a “well, duh!” moment. It is baffling that the content providers ever thought they could support their enterprises by selling eyeballs to advertisers when any original content they produce could instantly be captured by rivals who would then use the same stories to sell eyeballs on their sites, without having made any investment in the original production. A business model of “let’s all free ride on each other” is not a long-term winner.

Hybrid models are possible, of course. One of the interesting things about the digital revolution is the extent to which it puts visual factors at the heart of the magazine experience – Wired was a pioneer of this, wrapping pedestrian content in jazzy graphics, so getting Wired for the content was like the old joke about the kid who was so nerdy that he bought Playboy to read The Playboy Philosophy.

A total visual, interactive package is easier than raw text to protect from appropriation, and the raw text can then serve as a teaser, so there may be a real business model here – free text and premium content in the form of visuals.

Note, though, this is a property-rights based model, because it depends on the ability to protect the high-value visual and interactive content from appropriation.

So it will be interesting to see how the information-should-be-free crowd reacts to this. Will they be satisfied if the basic information is available, or will they insist that the principle be extended to everything else? Since the “information” part of this mantra seems to include entertainment such as music and movies, I expect that the paywalls will be greeted with horror.

But in the absence of protectable property rights, there is no way for professional quality content to be consistently produced, so bring it on.

Images from Economist; Wikipedia.

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