Seminal Work Or Sloppy Thinking?
editor.blogspot.com
editor.blogspot.com
- Do Time and The Economist actually switch lengths? It's true I only looked at one week, but I found a clear trend of constant cost per weight of paper used, not just between those two but also for heavier mags like Foreign Policy.
- Laura Bush makes more by (and only by) selling more copies, just like a popular fabric pattern.
- What I meant about the "printout of yesterday's news" was not that events they covered happened the day before, but that it was literally a printout of stories that had appeared the day before on the Times's web site.
- His last point seems a repetition of the one about Laura Bush, but with more uppercase.
- "Does content affect price?" It seems the journalist and PG define "price" differently -- is it the price to the consumer or to the publisher? Either way affects profit, so both seem valid to me.
Hence, I feel the journalist has a valid point. Laura Bush will command higher royalties. So, the price to the publisher is increased (via higher royalties/advances), because Laura Bush provides desirable content. The journalist also states that while the price to the consumer is not higher, the publishers' business model is to sell more copies at a lower profit margin per copy, which seems perfectly valid.
- "Better journalism is slightly cheaper." In some cases, yes. In others, no. Arguing over Time vs. The Economist seems to not answer the broader question.
Is it really true that different authors can have wildly different royalty rates? I thought the range only spanned a few percentage points.
Advances don't really count, since they are paid out of future royalties.
It's simple market economics. Stephen King will sell far more copies which means publishers will make far more money off his books. So he gets a significantly higher cut of the per book profit (aka royalties) because publishers will still end up making more money off his book than they will of a Uwem Akpan book.
Put it this way, if Mr. King's publisher didn't pay him a higher royalty fee don't you think another publisher would be willing to based on the large amount of money at stake? So again we're back to basic economics.
You talk about simple market economics, but the publishing industry seems to be a cartel, and authors are on the whole largely shafted. The music industry is the same way...
Not really true. NYT posts the bulk of their front page material online early in the morning. Usually 3-4AM Eastern. This usually includes editorials as well. I assume it goes live online when the articles are finalized for print. This isn't set in stone of course. So someone sleeping a normal schedule getting their paper at 7 or 8AM is seeing mostly fresh content.
If you go to an actual bookstore (or library) and look at newsstand prices for, eg, Canteen or Dwell or Parabola or Foreign Affairs or New Left Review or Ampersand or 34th Parallel (or god forbid Science + Nature) and so on you'd have a harder time arriving at such a neat relationship.
Now, if you grouped by "content niche" and analyzed each niche separately you might find in some niches (like "news", specifically) a clean relationship like what you proposed.
But look again at what you're claiming here: "price doesn't depend on quality of content".
Here's the evidence you start from:
- Time: lower quality content, ~$5 / issue
- Economist: higher quality content, ~$7 / issue
Which to an outside observer certainly doesn't look like a case of price not depending on quality of content.
To turn the above facts into evidence for your claim you introduce a "price per page" metric, which lets you salvage your point at the expense of introducing a dubious metric.
Leaving aside the dubiousness of the metric, your chosen datapoints don't hold up once you leave the newsstand:
- 1 year of time: ~$20. http://www.amazon.com/TIME-1-year/dp/B00007BK3L/ref=sr_1_1?i...
- 1 year of the economist: ~$127. http://www.amazon.com/The-Economist/dp/B00077B7M6/ref=sr_1_1...
Difference in quality of content may not be a complete explanation for the above differential, but I'd wager a guess it has something to do with it.
And even at the newsstand you can find a wide range of price-per-sheet values (eg: 4c to 20c by my estimates), enough so that you could just as easily, say, have picked "Foreign Affairs" and "Time" and have it come out that higher quality content yields higher per-page prices.
Which is why this looks like a sloppy generalization: you're trying to argue against a statistical relationship (generally "higher-quality content => generally higher prices") by means of anecdote, and not really a carefully-vetted anecdote at that (as evidenced in the subscription pricing).
About the metric:
I wasn't clear on the sense in which I think "price per page" is dubious. From the consumer standpoint it's not irredeemably flawed; $-per-word is better (gets at the same point more accurately) but that'd take actual work to calculate so it's not going to show up in one of these essays.
That said it has some weaknesses, mainly variations on the "Fallacy of Division".
The major dubiousness as a consumer metric is it runs the risk of double-counting "quality" when applied to the nonfiction written word: you can have a better article either by better writing or by being longer + more comprehensive. Within the constraints of magazine writing you'll see a narrow band of variation in "writing style", leaving "length/comprehensiveness" as the major source of one article's "better quality content" when compared to some other article. Thus the risk of double-counting: if a 10000-word article A on Edo-period Japan is better than a 2500 word article B on Edo-period Japan mainly b/c of how much more nuanced and detailed it is, you double count when you:
- praise A for the higher quality of its contents (thoroughness/nuance/etc.) when compared to be B
- praise A for also giving you more to read than there is in B
...which won't ruin the metric but is an easy way to overstate a case. SHORT VERSION: "local" content quality (at the word or page level) is heavily dependent on the overall quality of the larger item it's a part of (the article); when you say "this awesome 10 kiloword article has 10000 awesome words in it" you double-count the awesomeness.
This isn't enough to sink PG's thesis but it is a danger to be aware of when naively applying the metric.
What sinks his thesis is that I can throw evidence that "quality of content" does impact the price people are willing to pay; his example of newsstand pricing is more about the extent to which magazine retailers can "tax" retail magazine purchasers than about the underlying economics.
The various and sundry evidence for "quality of content" impacting price:
- subscriptions (which cut out the middleman) clearly have what he deems "better content" priced at a marked premium to inferior content; perhaps "newsstands" are just a pathological retail channel?
- the subscription price also gives nice upper bounds on publication costs; these are pretty tiny (rounding in a way prejudicially to my argument: 50 pages per issue and 50 issues per year of time magazine => .8c/page; given the similar production values of the economist we can safely assume it's similar). I'll say more on this later.
- the consumer price per unit of content varies widely between genres. Look at "Parabola", a new-agey magazine: it's 9.50 / issue at the newsstand, is always 128 pages, and is printed on 5"x8" paper. When you correct for page size you get ~17c per "page" (really: per 8.5x11" paper's worth of printed words). Do you have an explanation for why content-units of "Parabola" sell for higher prices than content-units of the economist other than some difference in the quality of their contents? If time and the economist selling for ~8.x cents per page @ the newsstand is evidence of the market value of their content why is this not evidence for the market value of "Parabola"
I can do this all day: prices per content unit vary much more widely than the narrow range PG's anecdote suggests; this is true @ the subscription price and @ the newsstand price. You'll neither find find consistent cost-per-page to cost-of-product multipliers nor will you find that going super heavypaper + glossy ink (with concomitant jump in cost-per-page) has any obvious impact on cost of product either (cf vogue or seventeen or W).
After awhile occam's razor will suggest: "newsstand" prices aren't good measurements of magazine prices (compared to subscriptions); regardless of where you measure different types of content sell at different prices per unit of content; likeliest explanation is that quality of content has a lot to do with what price something sells at (which is why there aren't any $20 weekly newsmagazines).
Additionally: publishers are already quite close to the post-medium world, in the sense that their costs-of-publication are already quite small vis-a-vis price.
An alternative explanation for the phenomenon PG is observing is something like:
- (a) each type of content will fetch a different price; this price has a lot to do with what the content is
- (b) for a given "type" of content there's a constraint on what is involved in producing an instance in it; eg: there are no 300 or 500 page newsweeklies, but there are 50-100 page newsweeklies
- (c) within each "type" prices will cluster around some central point but higher quality content will fetch higher prices
- (d) within the constraints of the genre there's a strong correlation with longer == better
- (e) together, (b) (c) and (d) make it look roughly like the time + economist situation: 'economist > time but priced < time per content unit'
...but b/c publishing costs are such a small part of the price to consumer (which has more to do firstly with content genre and secondly with relative quality of content within genre) the "length" as such isn't a big factor in setting price; the relationship described in (e) is literally a red herring.
You can differentiate this scenario from pg's by checking across content genres; if prices-to-consumer are hovering within a narrow range per unit price his looks better, but if price per content unit vary widely across genres mine looks better.
Look at paragraph 2:
In fact consumers never really were paying for content, and publishers weren't really selling it either. If the content was what they were selling, why has the price of books or music or movies always depended mostly on the format? Why didn't better content cost more?
and paragraph 4:
Almost every form of publishing has been organized as if the medium was what they were selling, and the content was irrelevant. Book publishers, for example, set prices based on the cost of producing and distributing books. They treat the words printed in the book the same way a textile manufacturer treats the patterns printed on its fabrics.
Consider these two claims:
- CLAIM A: "prices don't depend on quality of content"
- CLAIM B: "prices depend on manufacturing cost" (=> CLAIM A)
...which claim would you imagine the author to be advancing? "CLAIM A" -- that content quality has nothing to do with pricing? -- or "CLAIM B" -- that 'publishers...set prices based on the cost of [manufacturing]'?
If, further, interposed between those paragraphs you saw paragraph 3:
A copy of Time costs $5 for 58 pages, or 8.6 cents a page. The Economist costs $7 for 86 pages, or 8.1 cents a page. Better journalism is actually slightly cheaper.
...which claim does that paragraph do more to support?
If I've misread the essay I think I can be forgiven for assuming pg attempted to argue that price is set based on cost of manufacture (and not just that 'quality of content does not dictate price').
* Yes, Time and The Economist have varied and sometimes opposite volumes. Your point just isn't meaningful.
* This re-rebuttal doesn't address your original point, which wasn't so much about patterns vs books as it was your contention that content is all treated the same. Laura Bush hasn't sold any books yet, but she has the money.
* I'm glad you didn't mean what you said. But you did say it.
* I really ought to avoid uppercase, you're right. But it's not the same point. The first is about inputs, the last about marketing and selling strategies. Quite different.
best,
Howard Weaver editor.blogspot.com
That's more like it. You'll pick up trolling in no time.
Referee says you both have points, were both a bit sloppy in supporting evidence. 10-minute timeout.
I was fooled by trolls the first couple times I encountered them, because I couldn't imagine why anyone would want to waste their time that way. From experience I learned a test for recognizing them: when I kept having to say "No, what I said was..." Now when I find myself about to say that, I just stop participating.
My point with Mr. Weaver was simply that it was remarkable how quickly he'd independently reproduced the defining quality of trolls. It was funnier without all this explanation.
Further, publishers have no real advantage over each other. Once you print 100,000 copies the cost per page does not change. Book publishers and Music companies have the exact same business model. They all rely on constant prices, and a few wild successes to make their money. They don't really know how to pick winners so they front a little money as a gamble just like VC's and hope the got a winner to two. The big name authors can get the publishers to fight each other so you end up with a fairly stable equilibrium across the industry.
PS: There are lot's of special cases, and even if profit is zero, keeping the presses rolling has value etc. But, that's less important than you might think.
We can argue about whose got better content all night long.
However,the value of the content to the consumer is worth more than the words themselves. How does the content improve their lives - look smarter at a cocktail party, transform an otherwise mind-numbing train ride, decide what stock to buy, pick up a girl at a bar, break the ice at the beginning of a cold call with a sales prospect. What is all that worth?
Have publishers charged enough? Has publisher marketing take advantage of this added value to generate more subscriptions? How much more value can be added with the interactivity and immediacy of new technologies and how publishers harvest and use this information to convince consumers to pay more.
By the way, I wonder how many people told Steve Jobs that no one would pay for I-Tunes? I'd bet it was many.
Katherine Warman Kern @comradity
I think you are missing the point. The essay doesn't discuss the value of this content but it's price. These are not the same. Price is somehere between the maximum the buyer is willing to pay, considering his other options & the minimum the seller is willing to sell at, considering his opportunity cost.
In a competitive market, the price usually creeps close to the latter because consumers have more and better options to consider. In a monopolistic one, it creeps closer to the latter for the opposite reason.
The reason the price of content might be zero in the content industry is that A) The opportunity cost for the seller is 0 & B) The market is more competitive.
As a former media planner, it appears that the publishing industry has been focused on generating revenues from advertisers. Period. But more concrete evidence of publishers' lack of marketing best practices is that publishers keep talking about selling content. Tide does not sell laundry soap. They sell superior clean. The value to the consumer can be very high or even priceless. For example, the value of getting the red wine stain out of that expensive tablecloth is very high, the value of being confident the kids look like their mom cares is priceless.
Publishers need to stop taking marketing short cuts (giving away free copies, relying 3rd parties to sell subscriptions, reacting to social marketing, and buying into marketing gurus with silver bullet answers).
It is simply a statement about how they are priced.
Regarding your advice, that is somewhere between wishful thinking and suction cups for the dead.
But we disagree as to why. You say the marketplace is too competitive or monopolistic. I'd say it is because publishers are B2B (business to business) and not B2C (business to consumer).
I am not referring to just existing publishers, so suction cups for the dead is not entirely accurate. The competitive opportunity for new entrants as well as to turnaround existing publishers is (now positively rephrased): Be a B2C business, market directly to consumers, immerse yourself in what your consumers think your product is worth and what they will pay for it.
For media, an investment in a B2C model starts to generate revenues sooner than the B2B model. Because, in the media B2B model, the audience has to be built before making dollar one from advertisers, distributors, merchandise licensees, etc. Therefore B2B is the more "wishful thinking" model of the two.
If your answer is as applicable in the 90s as it is now, I would suggest you explain why it is happening now and not then.
Newspapers are in trouble because both consumers and advertisers need them less today then they did before. This is a consequence of the internet and competition. There are also all sorts of other little things. Quality of journalism is part of those little things.
> Calling the NYT "a printout of yesterday's news" is snotty and snarky, to be sure, but it's also inaccurate.
> Graham needs some elementary economics and business instruction.
Like, calling out a multimillionaire technological innovator/investor on being "snotty and snarky", then quipping (snottily and snarkily) that he needs "elementary economics and business instruction" - okay... pot, meet kettle, blackness.
That's irrelevant. Graham could still need economics and business instruction even if the writer here was being snarky.
My biggest beef, though, comes when he claims that publishers don't sell content. Of course they do, and if they didn't, why did he even bring up the price difference between Time and The Economist (is one printed on shinier paper? Probably, but that's not why anyone buys The Economist). Some of the price is obviously determined by the medium, too (just as in music sales), and of course countless other factors, and there's no reason to try to narrow it down to just one. When the method of conveyance disappears, everything will shift around a bit and make everyone uncomfortable (like it's doing now), but eventually settle down not far from where it started. These systems aren't static sets of rules being followed blindly by their executives, they'll adapt to fit their market.
This whole thing seems weird. When did Paul get this faultily academic?
Reality: All of the "analysis", opinion, reviews, and other content is also fairly easily replaced with free alternatives available online.
Howard: Famous, popular authors make LOTS more money than others. Laura Bush got $1.7; by some reports Sarah Palin got $7 million. Graham's contention is just plainly wrong.
Reality: Graham's contention was not that all authors make equal amounts of money, but rather that all books are priced the same, based upon form rather than content. Go to a bookstore. Similarly bound and printed books cost similarly regardless of differences in content.
Howard: The decision to price all movies or CDs about the same is a marketing decision that says absolutely nothing about the relative value of the content.
Reality: The market value of a product is its price.
That's not "reality", that's just your opinion.
I have a subscription to the New York Times, and I can tell you that I read more -- and more diversely -- when I get it in printed format. So, yes, there's a "free" alternative to getting it delivered to my doorstep, but I find enough value in having the paper version that I'm willing pay for it.
And in any case, the author's point was to dispute the notion that a copy of the New York Times is worthless after a day, not to suggest that you couldn't obtain the content online.
2. Everyone knows that big book deals are edge cases. Why is he arguing the outliers.
3. He's answering the flowery anecdotal part of the essay as if it's a serious evidential point? I presume he doesn't ever use anecdotes in his writing? I hope not because all anecdotes by definition can be denied (i.e. what is truth? i.e. incompleteness theorem)
4. He valiantly tries to defend his position to a commentator on his blog who points out that this is about cost to the consumer and eventual failure of a model that treats the content like print on a fabric. He's pointing out the very same thing that PG is pointing out, that this is their strategic plan, and that is doomed. This is the part where the author's retort to PG's piece really crashes and burns.
It hurts so much to see a sloppy reprisal too, which is why I must now attempt to make a sloppy one too.
In my mind this is the bit we need to be conscious of: Content has value, but the distribution method sets the price.
And that is why both slightly miss the point in my mind.
If we look at music (because it's a simple model with many distribution methods which helps create clear comparisons) we have this:
* A ring tone: £4.50 (ringtones-direct.com), midi file of 10 seconds.
* A CD album: £16.49 (HMV), average 10 tracks, £1.65 per track, full CD quality.
* A CD single: £1.99 (Tesco, if you can find singles), average 2 tracks, £1 per track, full CD quality.
* iTunes: £0.79 per track (lossy).
* MP3 .torrent: £0.00 per track (lossy).
* FLAC .torrent: £0.00 per track, full CD quality.
The content has value in all formats, but the highest price is associated to the format in which the distribution is most directly controlled (phones, ring tones, and the DRM scheme on some phones which force the use of a DRM signed audio file), amusingly it's also the lowest quality representation of the content.
As the control over the distribution fades the price plummets until we reach bittorrents and the people doing the distribution where the price is zero, although clearly value is still there as it wouldn't be downloaded otherwise.
What neither argument made was the distinction that the price is set by the format and distribution and not by the content. The content has value, that is undeniable, but value != price and that is what so many find hard to resolve.
The NYT is widely distributed and tends to have a lower price than the Economist, which is still widely distributed but less so and has a higher price. Specialist journals distributed as part of memberships to societys have a very high price.
When I look at price, it's not the # of words that determines the price, it's nearly always the format and distribution method. The more control that can be exerted by the content owners, the higher they are able to set the price.
Disclaimer: I always write these things feeling agog at what I've read... I have not researched things specifically and have not published any papers to back up these assertions. Take them with a pinch of meh.
Anyway, thoughts should be up for critique no matter how respected the person is who offers them so I'm glad someone jumped to the critique when others (myself included) didn't.
For example, neither writer seems to have tackled the role of advertising revenue and other intangibles in assessing the value of content.
There are comparatively few ads in an edition of The Economist, which might explain why a subscription is so much greater than that of Time. And that should be factored into any newsstand-price-per-page analysis.
And some weekly trade publications, delivered by mail at no small cost, are monetarily free to the readers because subscribers pay with other currency -- information about themselves, their companies, and their spending plans.
I would also point out that the popularity of a fabric pattern or the life story of Sarah Palin are related more to taste and fad than to the value of any elusive wisdom, such as that derived from The New York Times or The Economist.
Mr. Graham is correct in noting a demarcation between conveyance and content, but as Mr. Weaver points out, it's not all that simple to proceed from there.
In any event, I've really enjoyed reading both sides of this, and I am impressed by the overall quality of the comments.
I'm no fancy big-city journalist, just a simple country kill-floor worker in a JBS Swift slaughter house. I've developed a tolerance for organic discord.
Yet I'm annoyed by the messy thinking that dribbles helplessly throughout this supposed rebuttal.
More than that, I'm irritated by the obvious purpose behind a loud 'rebuttal' of obviously poor quality that finishes by saying I agree and I thought it first.
It was written because the author felt compelled to write something that he and others could point to as a "rebuttal," a response. It doesn't matter if the rebuttal is good or bad, true or untrue (bad and untrue, as it happens); what matters is, now it's "been rebutted."
Let me grab my skinning knife. Unpronounceable Journalism Wunderkind, let's you and me sit down and talk:
Graham's contention is that there aren't magazines that routinely cost significantly more per page than the average for their format. If that is false, then you've rebutted him. It's not sufficient to note that the length of those magazines shows some variation.
Empirically, it seems that Graham's premise is sound. Magazines all seem to have similar price per page. The next place where you can rebut him is by answering the question: Why? It's either because the content of all magazines is equally valuable, or because the content is irrelevant to the price of the magazine. Does the price vary, at least, with the format? Well, of course. Large, glossy magazines cost more per page. But not more than other large, glossy magazines.
Not rebutted - and no attempt was made.
Graham says that publishers get rich by selling lots of books, not by charging more for better or more popular books. You say, "nuh-uh, Sarah Palin made lots of money."
Uh. I'm not sure your training in journalism has equipped you to realize it, but that's not a rebuttal. That's not anything.
Not rebutted - no attempt was made.
'The NYT in paper is yesterday's news.' Why, how dare he! Well, I never! It's 'snotty and snarky.' Ah, and it's "inaccurate." Because -- and this, see, is where you give your reason and perform your debunking and unbunking and generally get the bunk out -- because you're pretty sure that there's stuff in there someone hasn't read yet. Never mind that the NYT itself published those stories online.
Yesterday.
Finally, the question. "Why has the price mostly depended on the format, not the content? Why didn't better content cost more?" (Italics mine). You say, loudly, that better content is more profitable -- because of volume.
Then you have the nerve to conclude by saying that you had all of the ideas that Graham had, and you just have no respect for his sloppy thinking and reasoning.
You didn't refute, or even address, a single point made in the essay. The "sloppy thinking and errors" were entirely your own. But now, you've "addressed" it. Back-pats all around, face has been saved, as long as we overlook the fact that your piece is drivel.
( Perhaps I'm wrong here. I often am. Certainly, you have domain knowledge that could have contributed greatly to this discussion; I'd read any substantive contributions with pleasure. )