Ben Brooks gets close to the heart of the problem with pay walls when he writes Subscription Hell. It’s hard to make money from pay walls.

The only online sites that do well are those like New Zealand’s National Business Review or The Economist. Both serve well-heeled audiences with unique, quality content readers can’t get elsewhere.

Brooks makes two interesting points.

First, differentiation. Brooks is thinking about podcasting, but it applies to all online media. In essence he says there are thousands of undifferentiated podcasts chasing the same audience.

…but will they pay?

The implication that no-one will pay to listen to one of the podcasts when there are dozens of free alternatives. You could say the same about most online media. This, in part, does not apply to pay wall successes like the NBR and The Economist. Their audiences don’t have obvious alternatives.

The other point is subtle. Brooks makes the connection between people paying for apps and buying pay wall subscriptions.

On the surface these are two quite distinct markets. And yet, recently I was thinking about exactly this concept from the opposite point of view. I have a number of subscriptions to pay each month. Some are for apps or online services. Others are for, it’s not the best word to use, but let’s go with it: content.

Pay wall, subscription software: two aspects of the same thing

In my budgeting, I see the two as aspects of the same thing. I allow myself so many dollars a month for subscriptions. It’s a single pool of money to cover things like cloud storage, online music, movie downloads, pay walls, apps and services. What isn’t spent on  apps is available for media. What isn’t spent on online media can be spent on apps.

A decade ago the budget was zero. It’s not zero today. While it isn’t a huge amount of money, it’s about the same as I spend on coffee. It may grow larger in the future.

The issue is, consciously or not, people only budget so much money for subscriptions. I have a limited pool of funds. So does everyone else. The world has a limited pool of funds for subscriptions. On a world scale it is huge and still growing. Even so, there is not enough to go around for everyone who would like to earn money selling pay wall subscriptions or apps. Too many sellers, too few buyers.

And there’s the problem. It’s not hopeless. Services like Press Patron (see the red button at the foot of this page) offer a way out. People can choose to set their own amount to pay. If you go back to my budget approach, if I don’t buy software one month, I can flip a few bucks into someone’s Press Patron.

But it’s difficult. The market for content pay walls or subscription software is not infinite.

Put aside for one moment the recent headlines. Forget about Facebook boss Mark Zuckerberg facing politicians in Washington. And park everything you’ve heard about Cambridge Analytica.

There are problems with the way most media organisations report Facebook. It’s something no-one ever talks about.

The first problem is that media organisations are not disinterested external observers.

Media company

You could argue that Facebook is the world’s most powerful media company. You could make a case that it is more powerful than any other media company in history.

Sure, Facebook insists it is not a media company. But that idea is ridiculous. It publishes material and extracts revenue from advertising. That’s a classic description of how the media world has operated for over a century.

Even if you don’t accept Facebook is a media company, it is not separate from the media industry.

The site can channel huge numbers of readers to, say, an online news site. The fact that it doesn’t do a good job of this is neither here or there.

What’s important is that editors and publishers are wary of making an enemy of someone with that power. This doesn’t have to be conscious or cynical. Unconscious influences are as effective as deliberate kowtowing.

Desperate times

That said, some media organisations and their employees feel so desperate that they may put aside traditional media ethics when it comes to scrutinising the hand that they hope will feed them.

Never mind that Facebook is responsible for the mess those media companies are in.

The second problem with the way the media covers Facebook is that most media organisations see it as a technology company. They usually assign specialist technology writers to cover it. A lot of the time, they relegate coverage to their technology ghetto pages.

While Facebook uses technology, so does everyone else. It’s no more a technology company than, say, the newspaper publisher in your city. Sure, there are apps. But most newspapers also have apps. It uses a customer database. So does almost every other business.

There’s very little that is unique, clever or inherently technical about Facebook. The one thing it has going is a powerful algorithm for connecting people to each other, figuring out their preferences and then packaging them so advertisers can target them with, what the company would claim is, pin-point accuracy. It’s big, but in technical terms it is trivial.

Technology

Compared to Apple, Microsoft, Google and Amazon, Facebook is not a technology company. You could describe it as a technology-enabled business. Now go and find any global enterprise that isn’t.

The problem with this is that media organisations frame Facebook as a technology story. They categorise it in a technology ghetto. They assign the story to journalists who might be skilled at decrypting an annual report from, say, Apple or interpreting the latest software from Google.

And, let’s be honest here, most of the time they do not give reporters the time or resources needed to unpick the story behind the story. After all most stories about Facebook don’t seem worth much more than the once-over-lightly treatment.

All of this explains why the media, indeed most of the world, was blindsided by revelations about what goes on behind the scenes at Facebook. It’s not so much the company was operating in stealth mode, at least no more than any other large corporation, it’s that there’s not enough outside scrutiny.

Also on:

Facebook News FeedFacebook will drop traditional news stories from the News Feed. Mark Zuckerberg says the goal is to clean up the social network making it a force for good. The move is overdue.

While there are many things wrong with Facebook, matters came to a head when unfriendly forces meddled in both the 2016 US presidential election and the UK Brexit referendum.

As part of the clean-up, Facebook will change the way its News Feed works.

The News Feed is a scrolling list of updates that the Facebook app and website show on the main page. Each News Feed is tailored to the person logged-in to the Facebook account.

News Feed priority

Facebook’s News Feed prioritises items based on the user’s previous activity, their likes and interests. It also serves up news stories from external publisher using similar algorithms to select items Facebook thinks will interest the user.

Zuckerberg says news will downgraded after the change. Instead Facebook will show posts that it considers are more ‘meaningful’. That means Facebook users will see more posts and photos from friends and family members, fewer links to news stories and videos.

Facebook uses the term ‘meaningful’ to mean users will see more items they will interact with. That means writing a response, clicking on links or hitting the ‘like’ button. This is in contrast to the way users tend to passively scroll through news stories and video links.

Users will still get news items in their News Feed. Instead of selecting items based on interests, Facebook will serve up the stories that have more comments or have generated a lot of chatter. This could mean more gossip and sensational stories, fewer hard news items. Although that remains to be seen.

In some ways a positive move

Despite the possibility of poor quality news, giving users material less likely to depress them seems like a positive move. And brave. Zuckerberg admits the change could be hurt Facebook’s business in the short term. Shareholders agree. Facebook shares dropped 4.5 percent after Zuckerberg’s announcement.

If that’s the case, why is Facebook doing this? Zuckerberg and his team have always been aggressive. They run a clear Facebook-first strategy where they only make choices that are good for Facebook shareholders. This move is a long-term play with complex objectives.

Zuckerberg quotes internal company research that shows social networks can often make people feel bad about themselves. There are many reasons for this, one is that other users post carefully edited versions of their news tweaked to make their lives look as exciting or as perfect as possible. Too much Facebook can leave people feeling envious.

Well-being suffering

There’s also respectable academic evidence from elsewhere that users who spend too much time scrolling through their feed without much interaction suffer from negative health and mental health problems.. That’s not good for Facebook. If users wise up to these problems and leave en masse, Zuckerberg’s empire could crumble.

Facebook’s own research says that those who get deeper involved with their News Feed have better than normal personal well-being. Which implies it is the news part of the News Feed, that is the stories from journalists and others, along with the sugar rush diet of snackable video material that depresses users.

While cutting down on the bad feed items and increasing the good ones makes perfect sense, there is a problem. It means people will spend less time on Facebook. That means they will see less advertising which, in turn, will mean less revenue for the social media giant.

We can take it as read that Zuckerberg and his senior officers have workshopped how this will play out. The drop in time spent may not be huge.

It’s possible that having happy engaged readers means the advertising is more effective and that Facebook can increase rates. At this point it is worth mentioning that Facebook’s revenue per ad served has been falling for some time. Arresting that fall is important.

Flying below regulatory radar

There’s another angle to the change. Facebook has begun to attract attention from governments and regulators who have many concerns about its power. Acting now may see some of the possible regulatory action before it happens. There’s even a possibility some regulators have had a quite word in Facebook’s ear suggesting this kind of move might be wise.

Facebook’s move looks like a positive step for its two billion or so users. It may even decrease the total amount of unhappiness in the world. Yet that won’t be the case in news organisations and with publishers who depend on Facebook to funnel readers to news websites. They’ll get less traffic than before.

Publishers are understandably angry. In effect those who have used Facebook as a distribution network have been victims of a giant bait and switch con job. Facebook wooed published a decade or so ago with the promise of delivering traffic. The argument for publishers was they may as well fish where the shoals were swimming. Pulling the plug on them is an act of bad faith.

Yet Facebook has steadily dropped the amount of external news material in its News Feed in recent years. The latest move is only a speeded up version of what has already been happening.

Many publishers learned long ago that stories about the colour of a dress or pictures of cute animals were more likely to get Facebook traffic than an in-depth investigation into changes in taxation or other heavy-duty reporting.

The other aspect of Facebook changes is that it will be harder for companies and public relations professionals to get News Feed attention. That will force them to spend more on advertising if they want a Facebook audience.

Facebook is not now and never has been the publisher’s friend. Yet it makes sense to keep customers, literally, happy. In the long term that’s likely to pay dividends. In the meantime, what’s left of the traditional news media will need to find another path out of the internet maze.

Also on:

Sky TV launched legal action in a bid to force ISPs to block access to streaming and video download websites.

As you’d expect, the move didn’t go down well with the industry. At least two ISPs say they will fight Sky in court.

Sky sent notice that it will seek court orders for Spark, Vodafone, 2degrees and Vocus — which trades as Orcon, Slingshot and Flip – to block a list of unspecified sites. The date blocking should start is not specified in the letters.

Spark and Vocus seem ready to resist.

The four ISPs account for more than 90 percent of all online accounts in New Zealand. If Sky gets them to block, picking off the smaller players will be trivial.

Pirate Bay

Sky TV’s letter specifically names the Pirate Bay as a site it wants to be blocked.

The pay TV company says it is targeting illegal pirate sites as they are a threat to local entertainment industries and sporting codes.

The timing is curious. Most of the threat from piracy has subsided. The battle is won.

Once were pirates

It would have made sense for Sky to have moved against these websites in the past. But today piracy is only a shadow of its former self.

Vocus consumer general manager Taryn Hamilton says his company’s stats show visits to The Pirate Bay – a popular file-sharing site – is now at 23 percent of its 2013 peak.

Most of the damage to Sky TV’s business was done a long time ago. Today pirates are no threat. Legitimate online streaming services like Netflix, Hulu and Amazon are what is really killing Sky’s business. They have already killed the pirates.

They offer a similar mix of entertainment programming at a fraction of Sky’s price. Netflix is $15 a month, Sky TV is around $80.

Sport is different

Things are different with sports programming. Sky has the rights to the most popular sporting codes in New Zealand, there are no legitimate alternatives.

While determined customers with VPNs can often shop around overseas for a better deal, it’s often too much trouble for most people. And overseas coverage can be inferior,

Hamilton says the idea of Sky blacklisting sites is dinosaur behaviour and something you might expect to see in North Korea.

It is certainly dinosaur behaviour. The fact that Sky names the faded and diminished Pirate Bay as a public enemy is a sign of how out-of-touch it is with the current scene.

Yet blocking websites isn’t restricted to totalitarian North Korea. A number of countries have laws blocking pirate websites. Often after the kind of litigation Sky plans. Web-blocking regimes don’t always work. There are plenty of workarounds for determined pirates.

Fighting Sky

Hamilton says Vocus will fight Sky in court. His company is not alone. Spark says it also aims to fight the injunction. Last time there was a copyright battle, Spark sided with Sky TV.  InternetNZ says it is seeking legal advice. Vodafone, which has a close relationship with Sky, says it will comply with any court order. At the time of writing, 2degrees has yet to commit.

Should the four ISPs co-ordinate their defence, maybe with help from InternetNZ and other interested parties, life could be difficult for Sky, which is already in long-term decline as it continues to fail to adjust to new technology.

Lawyers are obvious winners here. Litigation is likely to be expensive. One problem is there is no precedent in New Zealand for this kind of complaint, the Copyright Act stems from a time before video streaming was practical. Until now most service providers have walked away from pitched battles.

Kodi victory

Around the time Sky sent letters to the ISPs, the company won an interim injunction against Fibre TV which sells the Kodi set-top box. Fibre TV sells the set-top box along with software designed to make piracy easy. The decision was made in the Christchurch District Court and Sky was awarded costs.

It is possible that the Kodi victory spurred Sky TV’s renewed interest in attacking the ISPs. Possible, but unlikely. Fibre TV was small and unable to put up much of a fight. The case against Fibre TV was a slam dunk and there’s not much public sympathy for the company.

On the other hand, the attack on ISPs looks set to be a public relations disaster for Sky. The move is unpopular with consumers.

Criticism of Sky TV

As you’d expect Sky TV has come in for a lot of criticism over its move – not just from the ISPs who are in the firing line.

It is fair to say Sky is struggling to defend an outmoded business model. Yet it is equally understandable that the company wants to protect the value of the rights it has purchased in good faith from movie or TV studios and sporting codes.

It is possible that Sky is acting against ISPs on behalf of rights holders. In the past, the big US-based media companies have attempted similar actions. They or the sporting codes could be bankrolling Sky’s litigation or even pressuring Sky to act as their proxy.

All these protagonists seem out of touch with what’s happening on the ground. Netflix has shown how to make software piracy redundant. It charges what consumers consider a fair price for a decent selection of programming. That becomes a compelling alternative to navigating the dark side of the internet.

Sky needs to find a way to cut its prices to Netflix-like levels. From outside, that looks hard because it appears bundling channels lets Sky subsidise some content by overcharging for other content. If so, it is an unsustainable business model. Moreover, the problem has nothing to do with Orcon customers being able to see the Pirate Bay.

Also on:

For several years now, the trend among geeks has been to abandon the RSS format. RSS, or Really Simple Syndication, is a way to queue up and serve content from the internet.

Source: The Case for RSS — MacSparky

Geeks might not like RSS, but it’s an essential tool if you monitor news or need to stay up to date with developments in a subject area.

An RSS feed is a way of listing online material. There’s a feed for this site if you’re interested. It sends out a short headline and an extract for each new post. That way you can stay up to date with everything published here without needing to constantly revisit the site to check for updates.

Separate feeds

Some big sites break up their news rivers into separate feeds. At the New York Times or The Guardian you can choose to read the technology news feed. At ZDNet you can pick subject feeds or selected a feed for an individual journalist.

Sometimes you can also roll your own niche feeds from big sites by using a search term to get a list of all stories including a certain key word.

The beauty of RSS is that it is comprehensive. It misses nothing. If you go offline for a week you can pick up where you left off and catch up immediately.

RSS is comprehensive

The alternatives are social media sites like Twitter or Facebook. They are nothing like as comprehensive or as easy to manage. Tweets go flying past in a blur on Twitter.

All the main social media sites manage your feed. They decide what you see. This means you can miss important posts as they get pushed out of sight. That doesn’t happen with RSS.

In his story David Sparks says you need to be on Twitter all the time to catch news. Make that: you need to be on Twitter all the time AND staying more alert than most people can manage.

Universal feed

The other great thing about RSS is the format is so universal. It can be as simple as raw text. You can read it on your phone, tablet, computer or anywhere at any time. You can suck it out and place it on your own web site, for instance.

There are RSS readers built into browsers, mail clients like Outlook and other standard software. Or at least there were. I haven’t checked again lately. Feedly is one of the most popular readers. This is both a website and a series of free apps. You can pay a little extra to extra features such as an ability to search feeds, tools for integrating feeds into your workflows and so on.