hello delight

The "Jesus Tablet" as this NYT article puts it could save print media.  The author's case centers on two key points: 1) Ad engagment and 2) Apple fandom.  It hinges on one giant assumption: 1) Everything goes behind the paywall.

A little game theory might help to illustrate why this is a huge gamble with a fairly low probability of success.

Suppose we have only two players in our universe, each with only two feasilbe strategies.  They can paywall their content or they can make it free and subsidize it with advertising.  If they both paywall, they'll split profits and get 2 (units of profit) each.  If one goes free and the other paywalls, the free will take 4 units and leave scraps for the paywaller.  If they both go free, they'll split some amount of profit, call it 1 each.

The Nash equillibrium for this simple scenario is that both players will offer free content.  Doing otherwise will always make one of them worse off.  Per the author's original position, the assumption for these economics to work is that everything is paywalled. 

This is a big problem for the economics of paid content - with or without a divine tablet.

Granted, what I've illustrated is an awfully simple scenario used to evaluate a much more complex system.  But the basic fact is true:  If a player is willing to offer a susbitutable product for a much lower cost, why would a market participant choose the higher priced product?

The old answer is brand.  That's what kept journalists employed and newspapers printing.  In the commoditization era, the differentiator is curation and filtration, I believe.  That's where a more data-competent partner, such as an Oracle, could add real benefit to the Apple Tablet.  An Apple store that just sells me the NYT isn't very interesting in the prescense of near-competitors.