Feeding the Digital Omnivores

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How our addiction to content changes the way we pay for it

We’re all essentially content addicts, but the “digital omnivores,” among us are in a category of their own. They are the not-so-few of us that own a laptop, smartphone, and tablet —the paraphernalia to consume more content than we ever have before. In just two years, this demographic jumped from 10% to a staggering 37% of the U.S. population. Three years ago, some of us dismissed the iPad as just being a big iPhone, and now over 1/3 of the U.S. owns a tablet. 

We are consuming our content in all shapes and sizes now. While some have cited the decline in PC sales as evidence that smartphones and tablets are replacing our personal computers, when it comes to content consumption there is no indication that we are using our PCs any less than before.

Source: 2014 U.S. Digital Future in Focus

What is really happening is that smartphones and tablets are doing two things: 1). replacing idle times with digital consumption; and 2). replacing physical forms of content with digital forms.

“Idle” time is the spare time you have throughout day. The morning commute or the wait at the doctor’s office are two examples —only now you are never just waiting, you are fiddling with your phone. The physical forms are essentially the paper forms: newspapers, magazines, books, etcetera. Now, instead of reading the morning paper, you are flipping through a news app. The book you were reading before you went to bed is now on your e-reader. Smartphones and tablets are not replacing PCs, they are replacing the physical mediums.

The combination of these two factors nearly doubles content consumption for digital omnivores, exceeding the point where the economics of paying to own content make less sense. If I plan on eating a lot, I should opt for a buffet instead of al la Carte.

As the number of digital omnivores grows, subscription models will become viable in many more content verticals than before. Hulu and Netflix were obvious evolutions as we were already watching several hours of television a week. Spotify and Deezer also made sense for music. However, within this overall trend there may be opportunities in other verticals as well. While most of us consume much more video and music than we do books, could we have reached a tipping point where subscription-based e-book services like Oyster and Scribd make sense now too?

While subscription seems to be where the market is going, it is certainly not without shortcomings. For one, the power users who consume exorbitant levels of content will always be subsidized by the casual users. This doesn’t seem like so much of a problem, until we realize that the majority of our user base consists of digital omnivores —the insatiable content addicts. In the long run, providers may need to consider additional subsidies, such as ads or premium features. Or alternatively, they may need to enforce throttling and set limits. Audible.com, for example, is marketed as a subscription service, but only grants users one “credit” redeemable for one audiobook a month.

Where else can subscription models work? On March 19th, Skillshare followed Lynda.com, introducing subscription to educational content—should Udemy do the same? Gamefly applied subscription to console games, but could it work for mobile games as well? It may not work for all verticals, but clearly there are huge opportunities sprouting in some. It is only a matter of time before giants like Amazon, Apple, or Google will follow suit.

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