Crossword content differentiation – Is it a better hamburger or a more gourmet meal?

I will begin to look at some of the pricing-related issues facing the crossword industry by starting at the source of the value chain – authors and crossword content creation.

In the scenario where authors simply supply sell all rights to publishers or to syndicates with in-house editors at the established rates, there is not much scope for the authors to create pricing power unless the publishers/syndicates

  1. Are able to create pricing power for the crosswords themselves and
  2. Are either in a mood to be generous towards the authors or there is significant brand competition for crossword content.

I will cover the issues for the publisher marketed scenarios later on as we follow the value chain. This post will deal with the freelance or self-publish or group-syndication scenario.

The commercial motivation for this approach is, of course, to garner all the revenues from the crosswords (minus costs) rather than be paid a flat rate regardless of the commercial success of the crosswords. The obvious risk is the lack of a guaranteed payment for any crossword or even a guaranteed continued market. So, this appeals to the more entrepreneurial amongst the authors than the “company-people”.

There are two potential markets to address here – (1) sales to newspapers and magazines including online sites and (2) direct sales to end users (solvers). The former is something that at least some of the authors are familiar with and will be covered in this post. The latter market is something most authors don’t seem to have a clue about and I will touch on it in the next post.

As we all know, the pricing ability is based on supply and demand but, as I have mentioned before, it is not a very constructive axiom on its own. If you look at the entire supply of crosswords without differentiation and their consumers as a whole, it is an extremely commoditized product (just about anyone can create a crossword) with very little pricing power. But that is like saying the overall market of cereals or orange juice is commoditized. And yet, we find significant pricing power with cereal and OJ products.

Even those with very little marketing skills will recognize that market segmentation, product positioning and product marketing significantly affect product pricing power. How are crosswords being differentiated at the moment?

Most authors who are likely to read this blog are probably people that have published in channels like the New York Times, LA Times, CrosSynergy, etc., and most of them are likely to have the opinion that they construct “premium”, “high quality”, “gourmet”, “challenging” (or take your pick of adjectives) crosswords unlike the “other” crosswords. There are valid and defensible reasons for this opinion, especially in the narrow echo chambers many authors seem to live in. There is no doubt within most in the industry (including those that turn out crap on a daily basis) that well-constructed crosswords are much more enjoyable to those that are able to appreciate it.

But here is the problem:

Most of the total addressable market for crosswords couldn’t differentiate a “premium” crossword from a “non-premium” crossword even if their life depended on it. And this includes the buy-decision makers at almost every US newspaper, magazine or online site (without an in-house crossword editor) who will buy ready-to-publish crosswords from authors or self- or group-syndicates. This is not really news to most authors I think but other than wringing of hands at the state of affairs, very little is being done to address this problem head-on.

Most entities in the publishing market that buy crosswords look at them as a cost center, not really a revenue center for their publications (other than indirectly), so cost becomes the primary concern rather than quality and branding as long as they don’t get complaints from their audience. If you were in their shoes, you would buy the cheapest branded item available with crosswords that were palatable to the lowest common denominator.

Even if individual authors and small groups were willing to create crosswords to the lowest common denominator, they cannot logistically cater to this market because they cannot get the sales and marketing scale needed to create the volumes that justifies the effort with the low pricing.

This brings us to the title of the post. Most of the publishing market is basically looking for hamburgers while too many in the industry are trying to supply “gourmet meals”. Even if we were able to convince them that they needed to deliver “gourmet meals” to their audience, the best we can do is to supply “gourmet meals” at a “hamburger” price because there is very little pricing flexibility. And that is bad news for pricing power since hamburgers are cheap or even free.

My intent here is not to suggest that the industry should start churning out just “hamburger” crosswords. That would be a tragedy. My motivation is to get the industry participants to start thinking of changing the current environment to one where a reasonable market exists for both hamburgers and gourmet meals and pricing power exists for both rather than face a race to the bottom of cheap mediocrity in the commercial market with a tiny and decreasing niche market for anything else.

There is no silver bullet solution here, of course. On the contrary, the required changes are difficult and slow involving changes in industry mindset in how the product is created and viewed, in adoption of technology and in the structure of the value chain. Some of these changes are being forced on the industry from evolving technology and changing demographics, some for the better, some for the worse, for the current product.

For example, the Internet, which beneficially has made access to a wide choice of crosswords so much easier for so many, has also had a significant effect on the commercial market itself. When solvers are able to find the type of crosswords they prefer at some source on the Internet, they are no longer motivated to demand such a product from their local “sites” who then base their decisions on the lowest cost. In other words, unlike the printed world where distribution, and more importantly, demand was relatively localized, one easily available source for a “gourmet meal” on the Internet can destroy the demand at hundreds of sites for that or similar product.

The next generation is growing up on mobile devices and a multi-tasked digital life with most content consumed on the mobile devices. Gone are the days of leisurely reading of a printed newspaper and the solving of the crossword as a daily routine except for a few. Crosswords fill up idle time, if any, between 24×7 news feeds, Tweets, Facebook alerts and e-mails. This evolution will have significant impact on the crossword content creation. For example, I expect the larger puzzles like the Sunday 21x21s to go the way of the Dodo bird sometime in the future. Long themed puzzles and tight grid fills with long words won’t have the same impact on small screen devices and may not continue to be appreciated and hence valued as much.

This is not to say that this will happen overnight. These kinds of changes take a very long time to occur and are incrementally evolutionary in nature so no need to jump off the nearest bridge in despair for those who are likely to be affected. But changes do happen over time whether people like it or not and often faster than one might anticipate. The real danger at the moment is this:

While the premium crossword industry (and I include all participants in this industry here) has been snoozing over the last decade, it has already fallen behind the curve and will continue to fall further behind unless things change.

The continuing decline of pricing power, increasing market share of mediocrity and parasitic companies dipping into the value chain are some consequences of this.

This shouldn’t be seen as some doom-and-gloom prophecy for the crossword industry. On the contrary, we, especially as technology providers, find the evolution rather exciting compared to a decade ago with significant opportunities for innovation that we have made plans for. But we cannot do this on our own unless we decide to become vertically integrated from creation to delivery as the only viable option.

What can we, as an industry, do right now that has an impact on the current environment to affect pricing power as we evolve and adapt?

One thing that will be common to all participants in the industry is to start looking at the product as a total solution from creation to delivery while the simplicity of the distant past allowed each participant to work in their own silos – authors filled grids and wrote clues, publishers formatted and printed them, solvers solved on the printed paper – and didn’t care much about the problems of the other. That mindset still persists.

Now, it is a lot more complicated. Crosswords are received and solved in multiple formats and devices. Copying and sharing copyrighted content just requires a click or web-scraping software. Instant feedback flows from end users to publishers and authors. It is extremely easy for the target market to switch to another source. Finally, it is the total solution and experience delivered to the end-solver that will be differentiated and valued, especially in digital media, not just how great the fill is in a particular crossword.

In the author community, the focus of this post, and in particular in those that want to target the market themselves, I believe it requires two significant changes in mindset.

  1. Getting to know the target market audience much better and getting out of the echo chamber to target that audience effectively. More on this in my next post.
  2. Getting away from the “Not my problem” syndrome that appears to be endemic. Copyright violations from an app vendor? “Not my problem”. They want my crossword on the Android phone or the iPad? “Not my problem”. Too many are saying my crosswords are too hard? “Not my problem”. More on this in a follow up post.

Next post: Knowing the customer: Bordeaux or Two-Buck Chuck?

Edited 10/24/2010 to clarify based on Rob’s comments

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4 Responses to Crossword content differentiation – Is it a better hamburger or a more gourmet meal?

  1. Harvey Estes says:

    I was struck by your comment that the 21×21 puzzle may be on the way out. A noncrossword editor recently told me that some of her surveys indicated that even a 15×15 puzzle is too much for a lot of people.

    This makes me wonder if there is a market for an even smaller puzzle. And since it is (in my opinion) difficult to make a good 13×13 puzzle unless it is a wide-open themeless, it also makes me wonder if we should look at the possibility of making puzzles with bars instead of black boxes. You can get them to fit into a smaller space. Just a thought (ow … my head …)

  2. Rob Richardson says:

    You wrote:
    Most of the total addressable market for crosswords couldn’t differentiate a “premium” crossword from a “non-premium” crossword even if their life depended on it. And this includes the buy-decision makers at almost every US newspaper, magazine or online site who will buy from authors or self- or group-syndicates.

    I agree with your first sentence, but you should have quit while you were ahead. Unless I’m seriously misreading the second sentence, you’re saying that Will Shortz, Peter Gordon, Rich Norris, et. al. don’t know Shinola from the other stuff? If anything, editors such as these have raised the bar considerably in the 40 years or so I’ve been a solver (and infrequent constructor). Granted, there are some editors, and we all know who they are, who don’t exactly apply the Turing test to their puzzle sources, if you catch my drift, and have probably never created a puzzle on their own. But to tar every editor with that same brush is unwarranted, and frankly, reflects on the perspicacity of the writer.

  3. Guda says:

    Hi Rob, thanks for the comment. I am in complete agreement with you on the role of these in-house Editors in maintaining standards but I was explicitly not considering that market segment in this post as stated at the beginning.

    I am afraid you may have misunderstood the context of this particular post and perhaps I was not clear enough in setting the context.

    This post is about authors selling to newspapers/magazines/sites, so they can self-syndicate to multiple sites (without giving away the copyrights to any) for unlimited upside, NOT about selling the rights to markets with in-house editors (or syndicate editors) for a flat rate where they have no pricing power.

    The buyers/decision-makers in such a market segment are not crossword editors but product managers/editors for the Games or Variety section or for the whole site depending on the size of the publication. I have encountered only two out of around 60 of such people that even solved a crossword let alone have the ability to edit them or judge their quality. Sad but true.

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