Sunday, January 24, 2010

So, No. We Won't Be Paying For Your Content.

Newspaper publishers seem to have a near limitless capacity for misunderstanding their own business model. The latest scheme by the Gray Lady to monetize online news on the backs of its audience will doubtless bear that out, though probably not without unfortunate results.

What made the New York Times and other publishers successful were their audiences. They built those audiences by do committing journalism better than their competitors and attracting more and more of the readers who were desirable advertisers.

One of the most important questions marketers have to ask themselves is this: What business am I in? It’s amazing how many don’t really know.

Are you in the business of selling gourmet food at retail? Or are you selling a romantic evening out?

Are you selling outdoor grills? Or are you selling bragging rights to the shiniest hunk of stainless in the neighborhood?

Are you selling information? Or do market a large audience of qualified consumers to a universe of marketers willing to pay for access to that audience?

Choose carefully.

We’ve discussed previously how the newspaper publishing business was never about journalism. Events of the day and commentary – what we call news – were used to attract an audience for first printed paper, and later for advertiser. In its modern history, the advertising model is what brings you the morning traffic report, the Ten O’Clock News, The Huffington Post, and … yes … your daily New York Times.

Within all living memory news has been free. Basically. Sure, there’s been a charge of a quarter or a buck or whatever for the actual newspaper itself. This made it a prosecutable offense to take all the papers in the stack. It also allowed a little something for the guy who sells the paper outside the train station or the kid who throws it into your rose bushes.

It never came close to covering the expense of gathering, researching, reporting or editing the news. Barely dented printing. The price consumers were willing to pay for the news merely subsidized distribution.

New content is free to the consumer. That’s a dominant narrative with deep roots.

And now the Times, and some others, want that back. What’s missing form the model this time, however, is the actual cost of distribution. The reason digital has produced so much new competition is because what publishers invested in distribution channels, capital equipment and the like – what economists call barriers to entry don’t matter anymore.

And rather than pressing their existing advantages in actual news, the plan is to charge readers for an incremental transaction that’s approaching Free.

Good luck with that.

Image Cred

Saturday, January 16, 2010

Making a Federal Case of the David vs. Goliath Narrative

Long-time friend of Cincinnati Social Media’s old friend Jack Greiner has been all over the saga of the South Butt. If you haven’t been following along, this titanic legal battle pits The North Face, a division of VF Corporation, (NYSE: VFC) a $7 billion maker and importer of branded apparel, and Jimmy Winkelmann, a teenager from Missouri with a Web site.

Goliath v. Winkelmann

I am not making that name up. If you were writing this story you’d kick yourself if you forgot to name the kid Jimmy Winkelmann.

What it boils down to that Jimmy fired up this Web site where he sells hoodies and hats and such with a logo that is an obvious parody of the North Face’s familiar trademark. While I don’t have the benefit of a J.D. (from an accredited institution) I have been around the block enough times to know that trademarks are not like copyrights, that is the owner MUST enforce it or risk losing it. Special permissions need not apply.

So maybe it’s less about the gigantic maker of Wranglers and Lee Jeans and JanSport backpacks wanting to step on a teenager’s entrepreneurial spirit than it’s about preventing an avalanche of parodies of those brands as well.

Maybe the company had no choice but to take some sort of action.


But is a lawsuit all they had in the quiver?


Parody is, in many senses, praise. North Face has managed to sell technical gear to people who never get any closer to Denali than the bunny hill at a state park. North Face knows that. The people who buy the stuff know that. Jimmy Winkelmann obviously knows it, too.

He just figured out how to make it fun.

Granted, many patent and trademark suits end in some sort of settlement anyway, and this one may very well go that route as well. But the geometry of this conflict makes it seem there could have been some interim step before the first public knowledge of the conflict was the VERY-BIG-CORPORATION-OF-AMERICA making, well, a Federal case out of it.

And before the Dominant Narrative in play became David and Goliath.