The Walled Garden Strategy Loses Another One – FT.com

1 10 2007

The Long Tail seems to be adding more converts. Now it’s the Financial Times.

Yesterday they announced:

“Newspapers have until now chosen between offering their content free, or charging on a subscription or “pay-per-view” basis. But Ien Cheng, publisher of FT.com, said the site would pioneer a new approach from mid-October. Articles and data will be free to users up to a total of 30 views a month. They will then be asked to subscribe for access to more material.

The change would allow bloggers and news aggregators to link to material previously available only to subscribers, Mr Cheng said, adding: “The figure of 30 is not random. We have studied carefully how people come to the site. We have always believed that the journalism we produce is worth something to our core users.

This new model allows us to keep to that principle while making sure that our material is also made freer to the web universe.”

Closed vs Open

The tug-of-war between the walled-garden and open-plain strategies is a fundamental tension in many markets. For instance…
Credit Cards

First, there was BankAmericard when it was exclusive to Bank of America. Then along comes Master Charge (later known as Mastercard) developed by smaller banks to compete with BOA and everyone could compete.

Personal Computers

Apple rolled out the Macintosh and Microsoft countered with Windows and ran away with the desktop computing market.

It’s The Network

Hosanagar Wharton a professor of operations and information management believes that the open-plain approach makes the most sense in the long run. By restricting the ability to develop applications, you ultimately limit the utility of your own product or service for consumers and thus its value.

Google has taken an open approach with its Google Maps service. It provides a mechanism by which other outfits can integrate or “mash up” its maps into their web pages. That has encouraged other companies to use the service.

YouTube, which Google bought last year is another. With YouTube, anybody can upload any content and offer it. The customers are the broadcasters of openly available content.

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