Feb 21
I was reading Tien Tzou's article at TechCrunch this morning and thinking that it was one of the few articles posted on TechCrunch that brought common sense and clarity to the table. It's a good article that makes good points. Though, I don't agree with all of those points.
Some Thoughts… Subscriptions, Donations, Apple, Relationships and Customer Data
Clearly, paid subscriptions are a part of the future of all online media, whether tied to a print version or not. That’s what The Daily is all about and even AOL might one day go down that path (Tim Armstrong admitted as much on CNN). It’s part of the shift to the Subscription Economy that’s happening across not just media, but software, cloud computing, communications, consumer services, entertainment, you name it. In just the past year, as one example, my company, Zuora,has signed over $1 billion in contracted subscription revenue. —a guest post at TechCrunch by Tien Tzuo, founder of Zuora.
I was reading Tien Tzou's article at TechCrunch this morning and thinking that it was one of the few articles posted on TechCrunch that brought common sense and clarity to the table. It's a good article that makes good points. Though, I don't agree with all of those points.
I agree, that Apple isn't trying to kill the publishing industry and that the subscription fee is to high. I think in many ways, Apple was probably trying to be fair. Everyone else pays 30%, why wouldn't publishers. It's one known fee. It's been there since the introduction of the market. Unfortunately, the fee doesn't reflect the reality of current market where publishers make pennies on content in exchange for advertising and customer data. This is also where I disagree with the article. I think we are rapidly approaching, if not currently in, a period where business need to rely LESS on customer data. This, I believe, is the crux of the future of online business. As a individual and as a customer, the benefit of being online is that I don't have to actually provide you my real data. This isn't like a print magazine where I needed to hand over the data so the magazine could get delivered. I can sign-up as Jane Doe and get a digital version of the magazine, publication, any type of content. Consumers are necessarily wary about giving out their personal data, and are flocking to services that allow them the option to opt-out. The irony of the digital world is we've created "trust' vendors. If I give my data to Amazon, Apple, PayPal, or even Google Checkout then I don't have to give my data to you, your advertisers, your 3rd party affiliate relationships that I may consider the scum of the earth or at the very least, unknown parties. This is happening even in the nonprofit world with donation processing services. For many nonprofits the life blood of a donation wasn't the initial donation but the contact data which allowed the nonprofit to contact at will, regardless of how annoying it might be, because one day, one appeal might work. But the new world has more donors and an increase in giving, but nonprofits are still struggling to adjust, because they no longer OWN the relationship; the donor does. And the donor may say, I like this appeal enough to donate, but I don't want to hear from you again; or maybe I'll check out your website again sometime in the future. The crux is while advertising supports numerous business models, its rarely been consumer friendly. It's aggressive. It's invasive. It's arrogant. And like the cocky high schooler, it fills with disgust mixed with an occasional attraction. It maybe pretty, but you've got to constant fend of straying hands, aggressive eyes, get your own drinks, and have planned escape routes if you get caught alone. I use Amazon, Apple, similarly to how I use PayPal, JustGive, or Causes. The first two handle products from a number of vendors and that convenience is indefinable, but the service to allow me to choose if/when I want a relationship with a 3rd party vendor is priceless. Direct access to customers is a commodity; and yeah, maybe some companies that have it possibly don't deserve it (Facebook). But the truth is most customers don't want direct relationship with most vendors; and the world is changing so they don't have to. So the publishing business model, and indeed all advertising based business models need to change with it.
As a donor, I give more now than ever in the past, and I acknowledge that anonymity is part of the reason. I've always believed in giving. I believe its the foundation of social and personal responsibility. But the truth is, I use to limit my giving to random encounters with street urchins and a few select nonprofit organizations. Yes, I was one of those people who hide from door to door solicitors. What can I say, I'm a sucker for a sob story; I hate saying no to a good cause; my income is limited; and its far easier to hide than to say, "No I don't care about those hungry children or the environment."
Being able to use PayPal, Causes, JustGive, Network for Good, and even Amazon Donations has allowed me to be as generous as I want to be, without having to weigh the pesky issue of "Do I want to spend a lifetime on this organization's mailing list?" And trust me, its a pesky issue cause I know how persistent nonprofits can be, even after I've said, "No, no, no…"
This is true with publishers as well. Trust me, I've noticed that my once great magazine now has more ads, less content, and more begging for additional subscriber details or customer survey completions. I could be silly enough to think the money derived from this would benefit content, but really, I know better. I know you're struggling to survive on a business model that's sinking like the Titanic, and my contribution of data to you is like sticking my pinky in the gapping whole left by that damn iceberg. it may keep you alive for an extra minute, but its going to deluge, if not drown, me.
Despite popular opinion, I'm not against ads. I love a good ad and will go out of my way to watch one. I've even been persuaded to purchase a number of products that I didn't need due to them. But despite my fondness for advertising, I hate the advertising industry. I hate my television shows being interrupted. I hate pop-up ads, banner ads, moving ads, link ads, ads with sound and no volume control, ads that flash, ads that use Flash, and ads on my ads—WTF!! I went to watch your d*mn promo for your movie, TV-show, upcoming album and your making me wait 15-30 seconds to watch another ad first. Newsflash! Promos ARE ADS!!!
Deep breath.
The digital world required people we could trust, and trust became a product along with credit card processing and toilet paper. I give me data to PayPal, Apple, Amazon, and a few others so I don't HAVE to give my information to you. I'm sorry. I may think your nonprofit is doing great things; I may think that you have a really good product, but I'll need some romance before departing with my digits.
I don't always mind if they have access to aggregate data—my age, my city, the fact that I like Ivory soap. But my contact data is my new handshake; only offered when I desire or the situation absolutely demands it.
I don't always mind if they have access to aggregate data—my age, my city, the fact that I like Ivory soap. But my contact data is my new handshake; only offered when I desire or the situation absolutely demands it.
So while I'll agree that 30% is too much for Apple to be taking for subscriptions (I recognize dead profit margins when I see them), I also say my customer data is too much for publishers to be demanding. If I wanted you to have it, you'd probably already have it by now. And when I want you to have it, I'll give it to you. So stop telling me I owe you because you took me out for dinner and drinks.
