purple motes

A free, semi-monthly book magazine recently launched in the DC area. Called Bit o' Lit, the magazine has contained five book excerpts averaging about 5.5 pages each. The magazine is being distributed through 50 newspapers boxes placed across the city. At least the first issue was also hand-distributed outside metro stations. Bit o' Lit states that it places 20,000 copies in circulation.

Bit o' Lit sells books. It introduces readers to books and provides book news, such as author readings. Bit o' Lit offers excerpts from both fiction and non-fiction. Showing perhaps some weakness in understanding of advertising economics, the magazine's website states under the heading "Why Advertise in Bit o' Lit":

Diversity of content and entertaining associated features. Bit o’ Lit always includes a variety of titles of interest men, women, and all age groups.

A magazine that sells books has a formal problem. While books have a certain cultural prestige as a form of communication, book advertisers mostly sell satisfying customers' specific interests and desires through books designed to serve those interests and desires. In other words, books' form is probably only a small part of persons' needs and desires that generate demand for books.

Bit o' Lit charges a book publisher for placing the publisher's content in the magazine. The charge to book publishers is $150 per page included in Bit o' Lit. The value proposition evidently is to promote the book and generate more book sales.

Despite getting payments from content owners, the economics of Bit o' Lit look tenuous. Revenue from book publishers is about $4,125 per magazine issue. The magazine also sells advertising within the magazine. The first two issues have each included two paid advertisements -- a back-cover, four-color advertisement and internal, black-and-white full-page advertisement. According to the Bit o' Lit ad rate sheet, revenue from these two advertisements is $999 and $349, respectively. Bit o' Lit also offers advertising on its website on the following terms:

Full Site for One Month: $9 Cost Per Thousand Impressions (CPM); minimum 5,000 impressions. Sizes are 180 max pixels wide by 500 pixels tall.

The website currently shows only Google ads. Current revenue per semi-monthly magazine issue in total appears to be about $5,500. That revenue is probably much less than Bit o' Lit's costs.

As many publishers and industry analysts are recognizing, selling content is a difficult business. Bit o' Lit is an interesting and courageous new venture. Like most new ventures, it probably will fail. But at least it shows some imaginative thinking in packaging and distributing content and in organizing payment for it.

Tags: advertising, books, content, magazine, marketing

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Radiohead's offering of its new music has two parts. One part, a pay-what-you-will digital download, has the blogsphere abuzz. The second, less noted, part of Radiohead's offering is, for £40, a discbox:

This consists of the new album, In Rainbows, on CD and on 2 x 12 inch heavyweight vinyl records. A second, enhanced CD contains more new songs, along with digital photographs and artwork. The discbox also includes artwork and lyric booklets.
All are encased in a hardback book and slipcase.

Radiohead's discbox illustrates different physical instantiations of music. The availability of digital downloads does not necessarily imply that sellers of music must sell only one standard bitstream. Music fans will embed digital downloads into a wide variety of devices customized in a huge number of ways. Music makers can create additional value by supporting a wide range of representations and uses of their music.

Book publishers have long recognized the importance of different physical presentations of the same book. One important issue was the size of the book. A large size (a quarto or octavo) indicated a weighty, luxury work. A small size that could fit into a pocket or purse (duodecimo) was meant to be taken as light reading.

Book bindings contributed significantly to the value of books. In late-eighteenth century England, books were typically sold unbound. Readers chose whether and how to augment, bind, and personalize the book. Book-binding and related crafts were an important business.

Book purchasers had many choices for binding their books. At the top end, books were bound in goat skin (Morocco binding). Bibliographic information might be inscribed in gilt on the front cover and the spin of the book, the page edges might be cleanly cut and painted with an ornate design, and marbled end-pages might be added. In addition, an elaborately designed bookplate (ex-libris) often was pasted inside the cover of expensively bound books. Other bindings types included (ordered by decreasing cost) full-calf, half-calf, sheep, cloth, cardboard, and paper.

Publishers of cheap novels ("dime novels") in the U.S. in the second half of the nineteenth century used book size, binding style, and illustrations to market the same text to different customer groups. One strategy was to print a series of small-total-page, paperback novels that could be mailed under the relatively cheap rate for periodicals. Another strategy was to use colored covers to make cheap paperbacks stand out on the newsstands where they were sold.[1] In the second half of the nineteenth century, many dime novels were published multiple times:

Over the years, the stories were not changed at all -- they did not become more sensational, or more violent, or less puritanical over the years, as the standard narrative of the dime novel genre would have it. What did change was the format in which they were published, how much they cost, and where they were purchased. [1]

Inability to assert successfully exclusive publication rights increases the important of product design and distribution. In 1892, when Houghton, Mifflin & Company's copyright on The Scarlet Letter expired, Houghton, Mifflin increased the number of editions of The Scarlet Letter to at least eight. A low-cost edition was the paper-bound "Salem Edition," costing 15 cents. At the luxury end of the offerings was a $7.50 large-paper, vellum-bound '"Riverside Edition" illustrated with photogravures of specially made drawings.[2] With the text of The Scarlet Letter in the public domain, publishers created value through book design and distribution.

Unimaginative marketing is more of a threat to the music business than is illegal music sharing.

[1] Erickson, Paul (1999) "Help or Hindrance? The History of the Book and Electronic Media," pp. 2-3.

[2] Winship, Michael (2001) "Hawthorne and the 'Scribbling Women': Publishing the Scarlet Letter in the Nineteenth-Century United States," Studies in American Fiction, v. 29, pp. 8-9.

Tags: bindings, books, content, music

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Content is glamorous. Stars, drama, action, romance, suspense. But if you want to understand how Internet video distribution will evolve, you've gotta get your nose into dull facts and the dismal science.

Video content has little relevance to aggregate patterns of video consumption. Growth in discretionary (leisure) time is closely correlated with time spent watching television. From 1925 to 1995 in the U.S., discretionary time increased by 15 hours per week. Over the same period, television watching time increased from 0 to 16 hours per week.[1] Television viewing time has expanded to fill growth in leisure time.

Television watching generates common patterns of human behavior irrespective of video content choices. Compare the US to the USSR in the mid-1980s:

In the mid-1980s television programming and broadcasting in the USSR was state-owned, state-controlled, and highly centralized. Households had little opportunity to choose between programs: 68% of households received two or fewer program channels. In contrast, television in the US in the mid-1980s was privately owned and commercially driven, and television offered viewers many programming choices; 88% of households received five or more over-the-air television signals, while cable systems, with median capacity of over 30 channels, passed 76% of households.

Despite these and other sharp contrasts between the US and the USSR, the television set, the way television was watched, and time spent watching television were remarkably similar. In both the US and the USSR the average viewer sat on a couch and watched a rectangular colored screen about two meters away. In the US in 1985 television viewing times for employed men and women were 14.6 and 12.1 hours per week respectively. In Pskov, USSR in 1986, television viewing times for employed men and women were 14.5 and 10.7 hours per week respectively.[2]

The sensory form of video, much more than its content, shapes the physical characteristics of viewing and the amount of viewing time.

Channel repertoire data also indicate common behavior across different content circumstances. In Beijing, China, in 2002, households received on average 37 channels of television. Viewers watched for more than ten minutes per week on average 13.5 channels. Viewers similarly watched per day (among days that included television viewing) on average 4.5 channels.[3] For comparison, in the U.S. in 2005, households received on average 96.4 channels, and watched on average 15.4 channels per week.[4] In Mexico in 2000, viewers watched per day (among days that included television viewing) on average 4.4 channels. Whether in China, the U.S., or Mexico, viewers behave similarly in the extent to which they switch channels on the television.

Video content probably has little relevance to substitution between traditional television viewing time and viewing video available through computer screens. Television sets are ubiquitous and part of the architecture of many homes (the "TV room"). Sitting inertly, killing time in front of the television, is a deeply ingrained habit for many adults. More video choices or better quality video is unlikely to greatly affect video watching. Talk of a schism between content creation and content aggregation and distribution seems to me to miss the main point. Video content creators compete among themselves for viewers with common behavioral routines. Common behavioral routines themselves are out of the scope of persons' boundedly rational behavioral optimization.

Changing common behavioral routines is more an issue of social change than product design. Joost describes itself thus:

Joost™ is a new way of watching TV on the internet, which uses new and established technologies to provide the best of both the internet and TV worlds. We're in the process of making it as TV-like as we can, with programmes, channels and adverts. You can also see some things that we think will enhance the TV experience: searching for programmes and channels, for example, as well as social features like chat.

To the extent Joost is like TV, how will it motivate persons to get off the couch in front of the television? Is searching for programs and channels valued experience? Recently the web has been abuzz with Joost's deal with Viacom. Why will users watch Viacom's content on Joost rather than on television?

A vague report on recent research findings, which I cannot track to the source, indicates that user-generated content is "more popular" on YouTube than professionally funded content. But what makes YouTube different from television is users generating content, not the user-generated content. What makes YouTube different is users sharing content, not the content that users share. It's about what people are doing, not what specifically they are watching.

Internet video provides a much better platform than television for creating advertising value through serving dynamic, relevant ads. As Martin Geddes insightfully observed on the value of television content:

So whilst the remote lets you adapt the primary content to your personal tastes, you’re stuck with whatever irrelevant junk they choose to insert in the ad breaks. So there’s a large and growing opportunity to fix the broken ad business. And that’s why TiVo is screwed. They fixed the wrong problem. The issue isn’t getting people to see the right programs. It’s getting them to see the right ads. They screwed up so big, they even gave you a feature to skip the ads. On their epitaph is will say “TiVo. Forgot where the money came from”.

Inferior content with high-value advertising will make superior content with low-value advertising not worth producing.

* * *
[1] See Galbi, Douglas (2001), "Some Economics of Personal Activity and Implications for the Digital Economy," Section I.

[2] Ibid.

[3] Yuan, Elaine J. and James G. Webster (2006), "Channel Repertoires: Using Peoplemeter Data in Beijing," Journal of Broadcasting and Electronic Media 50 (3) p. 532.

[4] Report based on Nielsen Media Reporting data.

Tags: advertising, content, distribution, valuing potatoes, video

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