Wired has a story up discussing a new program Amazon’s running in its app space, called Amazon Underground.
Here’s the crux of it. Rather than continue to encourage the pay-to-win / pay-or-don’t-play model that’s dominated apps and mobile games, and even desktop and console gaming, for the past five years, Amazon offers developers $0.002 per minute per user that uses an app. Sound familiar? To authors, it should. Kindle Unlimited is currently paying just under $.006 per page read. I get math challenged sometimes too, so let’s break it down a little better. AU is offering two-tenths of a cent per minute a user is on an app; KU is offering (currently) between five-tenths and six-tenths of a cent per page that gets read. A little further; every five hundred minutes of app use pays the developer a buck, and it doesn’t matter how that five hundred minutes adds up. A hundred people for five minutes each, five hundred for a minute each, whatever. Every 500, get a buck.
This is curious because it’s a fundamental shift in the dynamics of what creators and users will see as it continues. Up until now, basically for the last several hundred years, the commercial deal generally was pretty simple. You (the customer) pay a set fee for something (product, service), and receive that thing. The creator (whoever controlled the product or service) received that fee. And that was the end of the transaction. The most alteration we’ve really seen to that basic arrangement was the addition of consumable items, such as bags to go with your vacuum cleaner, or oil changes to go with your car. In fact, we’ve even been seeing, for the past ten years or so, a number of companies that are trying to use DMCA and copyright laws to lock consumers into a no-choice framework when it comes to the consumables and ongoing maintenance for their purchases. Because it’s always better to trick consumers into having to keep paying you so they can continue to use their purchase. Crap like this is why hackers are important.
That’s bad enough, but it’s risen alongside another key shift that’s been occurring. More and more companies are turning to subscriptions as their business model. Microsoft is a good example. Big company, cornerstone of modern personal computing. But they would rather get paid monthly rather than get a few hundred dollars per user every few years. Office is no longer a standalone product; now they want you to pay a fee every month for it. Adobe has been doing the same thing with their graphics products, which were already extremely expensive to begin with. I definitely don’t like subscription software, but example given, let’s move on.
Spotify and similar music services are another good example. Radio was always free-with-ads, and when streaming started becoming a thing those companies found it tricky to convince as many consumers as they’d like to pay a monthly fee for something that was already free (streaming = radio in the eyes of consumers at the time). Now, of course, streaming has managed to differentiate itself by offering far more variety than the corporatist blandness of modern radio; either giving outright selection power to listeners, or at least offering them highly diverse and specialized channels that ensure the listeners of such channels can be dialed down to things that are far more likely to be to their taste. And as people latched on to that, streaming companies have used ads to prop themselves up, and also to act as an encouragement to customers to actually become monthly subscribers to remove those ads.
Which brings us back to AU / KU. Amazon isn’t telling creators (developers for AU, writers for KU) what to list on the services. Amazon doesn’t dictate pricing or genres, doesn’t threaten to cancel things or demand changes to make them more popular. It simply says, “here is what we’re paying for engagement. Getting that engagement is in your best fiscal interests. Have fun.” And that’s it. That’s where the ‘network notes’ end. Amazon doesn’t care what you do (except, obviously, some pretty self-explanatory limitations that involve the usual suspects like death-gore-porn and so forth); just do it and if people log in for it, they’ll pay you. So you can go after whoever you can keep interested.
It’s an intriguing prospect. And one that changes how creators look at what they work on for delivery to consumers. With the existing freemium app model, developers are strongly motivated to create games that are good enough to interest (hook) users, but that also encourage those engaged users to start paying. And we’ve seen what happens. The first level or two of the ‘game’ is free, then the levels and puzzles and challenges quickly get to the point where they’re impossible unless dollars have been paid for whatever virtual widget the developers have coded that makes it possible to advance. Anyone who looks into freemium apps knows already that this entire business model effectively relies on a very small subset of users, referred to as whales for the same reasons Vegas uses the exact same term for its big spenders, who will pay and pay and pay. Most freemium ‘customers’ either don’t pay or will pay only a little. The whale customers will pay a lot, and often. They’re who the developers are encouraged to develop for.
This is a problem for the rest of us because we’re not the target market. In an entertainment economy, what customers want is that which entertains them. Go figure. Whatever form the entertainment is – music, movie, book, show, game, live performance, whatever – the point is for the customer to like it enough to want to engage with it. The point for creators is to create something they can get paid for.
These older models that have held for so long, and have come to the fore in recent years, don’t really do that. Viewers/listeners/whatever have been the payoff, not the target. Television and movies are a very good example of this. The customers of a TV network aren’t viewers; it’s the advertisers. All those advertisers want is the biggest possible audience, but it has to be an audience with the specific demographics that advertiser wants. So, as an off-the-cuff example, you see a lot of programs specifically designed to cater to females 12-24 on networks like CW and MTV. We’ve lamented shows that we thought were otherwise good, but had development decisions that had been made we didn’t get. Nearly always, these problems are because the show creators are trying to either tune the audience to fit exactly into the advertiser’s preferences, or simply because the audience they want is simply the broadest possible array of people.
Here’s the trick, and not everyone has probably consciously figured it out. Some have, but not all. Most-Common-Denominator is often just another way of saying ‘disappoint the most people.’ We see it when movie studios insist a film has to come in at a PG-13, because R means teenagers can’t buy tickets. We see it when networks insist core character details have to change because advertisers object to them (as with Constantine, a character that smokes like a chimney as a character point, but was not allowed to ever smoke on last year’s NBC run because the network refused to upset advertisers). We see it when, as with the old GI Joe cartoons from the 80s, we have a war setting with soldiers on both sides, who constantly fight because that’s what soldiers do, but no one ever dies because, you know, kids and stuff.
Not all such limitations are bad. The kid example is a good one; children’s programming probably shouldn’t be excessively graphic compared to adult content. But adults are subjected to this as well, and up until now there’s been few – if any – places to go to for content that caters to their tastes. On the rare occasions something broke through, those neglected subsets of fans always reacted joyfully. It’s not to my personal tastes, but I observed the glee and delight among horror fans when Rob Zombie started producing horror films that didn’t sanitize and gloss over gore. Zombie’s films tend heavily toward the graphic, the extreme, and the abundant depiction of detailed and disturbing violence. I don’t like it, but others do, and they’re his audience.
Netflix has been in the news lately. The ‘industry’ – meaning, mostly, studios and networks; but also the entertainment press – has been remarking more and more about how they don’t like Netflix’s refusal to disclose data on its customers. Netflix doesn’t need to reveal that data, and is right not to, because it’s valuable. The press wants it because they just can’t help themselves; that’s stuff they need to continue fueling chatterbox articles about this and that and the other thing too. Networks and studios want it because it’s metrics they can use to guide what they invest in. I have some amount of sympathy for them, but only a little; they should already know what customers want. Unfortunately, they’ve often been too busy ignoring end-users in their rushing toward the Most-Common-Denominator. Yes there are seven billion people on the planet, but does every movie and show and story and song and game and whatever have to appeal to all of them? Can’t we focus on subsets of the whole, in parallel, and please each one individually?
History lesson. Kids, ask your parents, but here we go. Back in the day, Cable Television was launched on two main selling points to consumers. First, no commercials. Network has commercials; you pay us, so no commercials; that’s what cable said. Obviously they couldn’t help themselves from making it both coming and going, and cable is just crap you pay for that also gets paid by advertisers too. Let’s move on. The other selling point was the concept of sub-demographics. The networks, then and now, want the broadest possible audience. Period. Their every move is toward that goal. Cable promised to cater to specific tastes, which is why the channels were named such obvious things like Food and History and Discovery. The names got slightly more creative, but until the early-to-mid 90s, that’s how it worked.
MTV was Music Television. It was music, on television. When it launched, that was a completely unique thing. No one had ever heard of such a thing. Many ‘in the industry’ thought it was a stupid as hell idea. But by the mid 80s, MTV was part of the national music lexicon, and by the late 80s it was inarguable that MTV’s impact was one of, if not the, most important on American music as a whole. Artists began to cater specifically to MTV, or clash with them. Madonna, as just one example, had several conflicts with them over things she wanted to do with her music or videos that the network wouldn’t show. Sometimes she changed, sometimes she didn’t but agreed to let things air with bleeps or black boxes, and sometimes she just went around MTV and released what she wanted directly to consumers on video.
Of course, MTV doesn’t do music anymore. They should have changed their name about fifteen years ago. The channel is just a teeny-bopper network that wants to be all things teen to teens. They shifted from their original focus because executives wanted greener pastures. It wasn’t enough for them, they couldn’t get promoted or receive bonuses or whatever it was, unless they blew the audience numbers past ‘just’ music. The same with Food, and History, and Discovery, and every other cable network. They all had to be ‘more’ than ‘their’ demographic. The race for MCD was on, and it brought us to a point where, now, nearly all the cable networks are identical to each other. Because they don’t see the point in being all things to just one group; they demand to be all things to all people, which is the impossible dream. In fact, SciFi Channel has started to get news notice because they’re making the ‘daring’ decision to refocus on what they’re supposed to be focused on in the first place; science fiction oriented programming. Sigh, double sigh, oh my God sigh.
On Netflix, it’s not an accident they keep making headlines with the programming they’re producing. But first, why is Netflix even producing its own shows? Because the old guard in Hollywood, scared of the future, started making it harder and harder for Netflix to reliably have access to content. The point of a streaming network is to, you know, stream content. When studios and producers started telling Netflix “No, we don’t want to license our movies and shows to you, because our network partners, theater partners, disc partners, and everyone else invested in the old way, don’t like what happens if you don’t die”, Netflix fixed the problem by starting to cut the old guard right out of the loop. If Netflix owns the content, no one can tell them they can’t show it.
And, since Netflix is a data driven company that doesn’t let executives futz around playing hunches and indulge in grudges or payoffs to buddies, their shows tend to work. Go fucking figure. House of Cards, now, seems like an obvious hit. The original was on the air in England for over a decade before it crossed the Atlantic to America, and Netflix outbid several other cable networks for the rights. Notice no old networks were interested; too niche I guess. Orange is the New Black would never, in a million years, show in even a heavily altered version on a network, but Netflix read their figures and went with it. Three seasons done, viewers love it. The new Daredevil series is getting rave reviews, and fans are eagerly awaiting the other Marvel series that tie into it. And Marvel is owned by ABC, who’s got two seasons of S.H.I.E.L.D. and a miniseries of Agent Carter under their belt, and they still didn’t want Daredevil. Bloodline, a slowly developing character drama that’s not a family dynamic show, not a murder mystery show; it’s just something interesting. Second season coming, people love the first. Sense8, second season coming. Arrested Development, canceled by a old network; fourth season shows up on Netflix. Longmire, binned by AMC, picked up by Netflix.
So let’s bring it back, again, to AU/KU. These business models remove all barriers between creators and consumers except the one that matters; what consumers want. If you’re a developer who caters to platform jumper fans, then you can do that. If there are enough of those fans to put minutes into your platform jumpers, you can pay your rent and keep the lights on. If you’re a writer who wants to focus on Indian reservation murder mysteries, and enough fans turn pages every month to keep you going, then you can do that too. For big companies, they’ll never be able to help themselves from pursuing the so-called ‘big payoff’ of the content that goes viral, that gets effectively everyone engaged with it. But when you look at the 21st Century model of removing all those layers and barriers and big arrangements of excess people (companies), you’re left with individual creators and their audiences. What doesn’t work for a company, even a small one of only a few dozen folks, can easily work for a single author or developer who only has to support himself.
Put bluntly, I might not sell enough zombie novels – or, in KU, get enough zombie pages turned – to support a staff of six or ten or twenty other people, but I can do it and support myself. And, as I continue to focus on the audience and fans I’ve found, I can carefully add to them. To stick with myself as an example, zombie fans have some crossover with horror fans, and also science fictions fans. There’s not complete cross over, obviously, but some. So if I write non-zombie horror, some of my existing zombie fans will stay with me even as non-zombie fans engage with the non-zombie product. And, accordingly, some of those new fans might cross over to my zombie stuff. As long as I, the creator, pay attention to my audience, I’m rewarded. I can stay focused without being completely niche, but I can still play in “my wheelhouse” and satisfy my core fans. They reward me with purchases; even those that are ‘free’ to them, as with the example of KU. They aren’t paying me, they’re paying Amazon. But if I please them, then Amazon pays me out of that fan’s subscription, and I keep doing what I do.
And the beauty, the synergy, of this model is that it’s not selfish. Creators only get paid if they generate fans. For someone to be a fan, by definition, they have to like the thing. Whatever the thing is, they have to like it. If a creator has enough of them, they get paid enough to matter. And those fans each get something they like. Something they weren’t getting from anywhere else. No matter what everyone else around those fans might think about the thing, the fan likes it. They’re happy to have it. How can this not be a win-win? An actual, true, win-win; and not one of those sarcastic ones that really means one half is getting screwed?
Amazon isn’t the only company doing this. Netflix is too, just behind a veil where the entertainment press can’t dissect it. Google is doing it with Youtube. What cable channels used to be, focused on specific sub-demographics, Youtube is now full of. Food Network stopped doing cooking shows a long time ago (sorry, contest cooking with manufactured drama is not a cooking show); but there are just endless hours of cooking ‘programs’ on Youtube. And, before you shake your head at me, go look; only some of them are shaky-cam with bad lighting, poor microphones, and awkward ‘hosts’. There are more and more people uploading to Youtube, every day, who have the same production values as networks and so-called ‘professional’ tv content producers. The only real difference is you have to click to play, rather than sitting through commercials while waiting to see what they play for you.
And you can replace cooking with just about anything you might like more, or instead of. Like guns, tons of gun ‘shows’ on Youtube. Crafts from dollmaking to painting to digital design, all over it. Want to learn how to create a webpage, take your pick; videos everywhere that walk you visually and auditorily through the steps from start to finish. Game walkthroughs, or just want to watch someone (who could be better than you, or simply someone who’s very entertaining) play it so you don’t have to actually play yourself? Youtube is full of them; in fact, Google has subdivided Youtube gaming off into its own section. And Amazon has owned Twitch for a while now. There’s big money in gaming streaming; actually, just in gaming in general. All things gaming. Even, of all things if you’ve somehow not heard about it yet, board gaming.
Wil Wheaton started TableTop on Youtube, lost his Google funding (they had a program for the first two TableTop seasons that paid for the show’s production), and he went to Kickstarter and generated several million dollars directly from fans. Yes, people not only enjoyed a 35-45 minute show every other week where they watched celebrities play board games; they actually ponied up a collective seven figure amount that funded the show for a third season of, yes, more board game playing. And if you mention Wheaton, it’s not fair to not mention Felicia Day. Look her up if you’re not already familiar. She, literally, would not have a career if she hadn’t launched herself with her own web series on Youtube. Now she gets so-called ‘real’ work in Hollywood, where before she couldn’t get the time of day; and she built her career herself using Youtube to connect directly to her fanbase. Where Hollywood didn’t see it, Day did; and it turns out there are actually more than enough people out there who are Day fans to support her.
I could keep giving examples, but you’ve got your own “I wonder if” to check out. So go look. I’ll bet just about anything short of outright death or porn is available on Youtube. And probably there’s more than just a little of it. Remember, no matter how esoteric and obscure your tastes are, there are others out there who share some or all of them. The internet connects these people; and not personally. It can connect all you Goat Herding enthusiasts through content that caters to Goat Herders everywhere. Videos, tunes, books, games, whatever. If you’re a Goat Herder, there’s stuff out there for you. You don’t have to talk to the other Goat Herders if you don’t want to; you can just watch and listen and read and play the same things they do.
When you don’t have to go big, you can get a pretty big payoff. Collect enough little people and you can get paid. These moves by the data companies – Amazon, Google, Netflix – are illustrating this business model. They’re not guessing when they make these moves; they’ve got data that indicates it’ll payoff. And, in Amazon’s case, when they move to encourage small creators to supply such content. Amazon isn’t running out with requests for “a zombie western” or “a space high school dramedy” or a “time traveling political thriller”; but when the payment is for anything that customers like, you’re going to get all of that and more. The only people creators have to convince these days are the ones who matter; the fans.
Here’s my last example on why this sort of change is important. This is a good one, and, surprisingly, one that a lot of people have managed to not know about or keep forgetting. Everyone now knows Harry Potter is a huge success. Hundreds of millions of people, worldwide, love the story of the Boy who Lived. Most people have heard a little blurb here and there, maybe, about how J.K. Rowling had to keep waiting before she finally got published. Here’s the part I’m talking about. She had managed to convince an old-school agent to represent her, but Philosopher’s Stone kept getting turned down by actual publishers. Bloomsbury, who finally did ‘take a chance’, did so because they did the one thing that apparently none of the other publishers had bothered to do. The Chairman of Bloomsbury, who wasn’t too chuffed (read, he wasn’t going to pick it up) with the book, decided to actually check with the target audience. He gave the first chapter to his eight-year-old daughter. She read it and immediately wanted the rest of the story. He was the only one who actually ran the content by an actual fan. If he hadn’t let a real kid read the kid’s book, we might never have had Harry Potter.
It’s important because it happens all the time in the old school of content generation. Executives make decisions, not fans. CEOs and Directors of Development and Advertisers pick what they want to see on the air, on the disc, on the channel. They rarely, if ever, bother to actually check with what the target audience might want to see. The fans should be the first stop on the “what do we do next” train of thought. The question shouldn’t be “what do we do next.” Instead, the question’s supposed to be “what do the fans want.”
This is the kind of thing we’re talking about when we talk about how things are changing. Because they are changing. Old guards the world over are quaking. A select few are smart enough to move, to change with the times; but most are digging in their heels and resisting. As if that’s ever truly worked.