Columnists

Wayne MacPhail
Counting on stupid

| June 10, 2009
This is a story of two ideas: one's a drunk, flatulent grandad at a wedding, the other a zombie and both are counting on stupid customers for success.

First up, the Kindle DX.

Like the grandad, it's malodorous, inappropriate and needs to be put to bed.

When it was announced, Amazon's new big-screen e-book reader, the Kindle DX, was heralded as the saviour of newspapers. The larger screen real estate was seen as perfect for magazines, newspapers and textbooks. But, when it was launched there was a collective gulp at the price, just south of $500 US. That's a pretty pricey saviour, especially since that's before the cost of the magazines, newspapers and textbooks that are supposed to find a new home on the device.

But, I don't think the pricetag is going to be the Kindle DX's biggest problem. It's going to be the Digital Rights Management (DRM) that will hobble it.

Let's play out a few scenarios to see why. This scenario imagines the Kindle DX is available in Canada, which it isn't now, but that's only a matter of time and a carrier deal, probably with Rogers.

It's Sunday morning. You, your wife and your daughter have just polished off a leisurely brunch and are belatedly diving into the Saturday Globe and Mail. You fire up your Kindle DX and start reading the Style section. Your wife wants Focus and Books. But, wait, you're the one with the Kindle DX. To read another section of the newspaper you've purchased for your family she'll need a DX too. Your daughter wants the Sports section and she has a DX. But wait. If she wants to read that section on her DX, she'll have to have her own subscription to the Globe and Mail even though you've already paid for a subscription.

The next day your daughter heads back to university. She's just finished a course that required her to buy an expensive textbook on her DX. She wants to make some of that money back by reselling the used textbook to a friend. But wait, she can't because the DRM associated with the textbook makes that impossible. She can't lend, give away or resell the text even though she paid good money to own it.

You see the problem. The rights and conveniences we've come to expect as consumers of physical media get eroded when DRM, which only benefits publishers, is injected like a virus into our property. The only way publishers can get away with that is if consumers don't catch on. No consumer that knows any better wants DRM. We should be able to share, resell or lend our e-books, e-magazines and e-papers. So, in a society of informed consumers, the Kindle DX should fail.

I've been following the sad course of e-book readers for over a decade now and it's always the same story, a technology with great potential ruined by retrograde rights management.

Second bad idea, newspapers charging for online content.

Remarkably, this notion, which I though was dead and buried, turns out to be a zombie. All sorts of papers including the Globe and Mail, are now revisiting the idea, and the stinking corpse of a notion is lumbering across the land once more. This makes no sense. Neither did the recent and secret Newspaper Association of America meeting where variations on this idea were kicked around behind closed doors by newspaper executives who have no appreciation of history nor its lessons.

Many newspapers tentatively and half-heartedly nosed online with paid services. They failed, then most papers started offering content for free. Newspapers like the New York Times tried charging for not just their online content, but their best, exclusive content. They hid it away inside walled gardens and charged admission. But, there were two problems.

There wasn't a made rush to the ticket window. Second, and worse, no bloggers pointed to the content since their readers couldn't get to it without anteing up. That killed the papers' Google ranking or "Google Juice." Most papers who set up ill-considered "registration sites" knocked down the walls. Now they may be going up again.

In other words, newspapers are expecting consumers to suddenly pay for online content they used to get for free (and can often get elsewhere) without increasing the value of that content.

I'm not sure what business school the folks at newspapers and publishers attended but these are expectations that fly in the face of consumer behaviour. In both these cases, DRMed books and publications and paid-for online content, success will depend on an uninformed consumer willing to be duped into giving up rights or paying for what used to be free.

And in both cases the businesses have the expectation that a changed future will support unchanged business models. And, they're trying to dupe consumers into supporting tired models as well.

If you've read this far, you won't be fooled. Pass it on.