In search of sustainable business models

The previous posts made a case that the current trajectory for the crossword industry is in a direction opposite to where we should be going – to keep the art form alive and thriving. Assuming that we manage to reverse course with the constructive suggestions, what kind of  business models will likely be sustainable in the new world? Which ones are unlikely to be sustainable and furthermore may even be destructive?

To start, let us look at how the value chain has evolved over the years (with some simplifications to keep it manageable). To set the base scenario, I will start with the printed media crossword industry value chain (Fig. 1) before technology affected it significantly.

Value chain 1

Fig 1. Value chain in the early years

Note: Green lines indicate flow of money. Red lines indicate flow of content. Blue lines indicate indirect flow of value (brand name, advertising value, etc). Thickness of the lines roughly indicate the relative sizes of the flow within each type.

Authors (A) sold new, unpublished content to newspapers (N) who paid them a tiny fixed amount. The newspapers edited the crosswords to provide additional value to the content and supplied it to the newspaper subscribers (S). The subscribers not only paid for their subscriptions but also became targets for advertisers from which the newspapers got significant revenue. This used to be a fairly robust first publication market for crosswords.

None of the newspapers really needed to do a Return on Investment (ROI) calculation for the crossword feature on its own as the production costs were marginal relative to the whole paper and there was a captive audience for it. As might be noticed, the newspapers were the center of the universe in this world, the vestige of which still remains.

Book publishers (P) bought rights to secondary or archival publications. They printed crossword books and sold them via book stores (B) to crossword book solvers (R). This was a smaller market with each entity in the value chain (P and B) keeping a cut. Newspapers realized additional marginal revenue from the secondary markets.

I will ignore the syndication market for now which is similar except for the same content going to multiple newspapers with the content owned by the syndication rather than the newspapers. The value chain is very similar.

We can judge the business models for each entity in three dimensions – ethical, legal and sustainable. While one can make an argument that perhaps the amount paid to authors was poor and not fair, it was a market determined price where a number of newspaper brands competed for the authors. None of the entities could really be faulted for ethical, legal or sustainability issues in their business models in this value chain.

Then the Internet happened (Fig. 2):

Value chain with the Internet

Fig 2. Value chain with the Internet

The newspapers put most of their content, including crosswords, online for free. Online users (U) could now get the crossword content from any newspaper without any subscription dollars going back to the newspapers, only indirect advertising dollars. The newspapers had to pay the vendors (V) for the software needed for publication which increased the cost. These online costs were offset to a certain extent by the savings in not having to print and deliver newspapers to the online subscriber base. The net effect was that the printed newspaper business shrank in general as more subscribers moved to free online access. The monetary value attributable to the crossword section also shrank with the reduction in the captive subscriber base.

The newspaper industry suffered terribly in this evolution and some even went into bankruptcy. The ones who survived the change are still struggling with their business model to decide between paid, free and advertiser supported online content that maximizes their revenues. The effect on the crossword industry was significant as the number of outlets that paid for original content dwindled over time and the money available for syndicates continued to dry up to support only the cheapest sources.

In the secondary markets, the situation is even more dire. Some of the publishers had produced electronic titles within the bookstore (or the almost extinct software store) channel but most of them never really ventured into the online distribution model directly to end users. This has been a colossal strategic mistake on part of the publishers who have been sitting on electronic rights to the content but doing very little with it.

At the current pace of progress within such publishers, they will most likely get disaggregated from the value chain entirely. So far they have been able to get secondary content rights because they had the marketing/sales channel in printed media that was too expensive (or not worthwhile) for content owners to get into on their own.

But now, technology has made it possible for content owners to directly partner with technology vendors and bypass publishing houses for direct marketing to end users. And this is the fastest growing market segment! Without a clear strategy, experience and marketing investment on the publishers’ part, even a garage software company can do better in pushing the content out to consumers in the electronic markets. With the printed book sales dwindling and content owners likely to become increasingly reluctant to sign away electronic rights if the publishers are doing nothing in this area, they have the least sustainable business model for crosswords. Most, if not all, such publishers may decide to get out of crosswords altogether.

One might argue that this is just a natural evolution and that technology has made publishing houses (for crossword archives) obsolete. After all, unlike new books,  crosswords for secondary publication have already gone through an editorial process and many crossword sources have established branding (e.g., from the newspapers in which they were published). Therefore, the publishers have very little value to add in the electronic distribution of such material. It is a valid point.

On the other hand, there are significant opportunities for the publishing houses to provide first publication content in a direct to consumer paid-crosswords market.

Evolving technology and consumer behavior in the always-connected world has completely changed the potential for direct to consumer sale and delivery of crosswords.

So much so that this has the potential to be significantly larger than the current dominant market of newspaper-funded crosswords provided mostly free to its audience.

This is particularly true in the increasing number of hand-held devices capable of becoming points of sale as well as being content consumption devices regardless of where their owners are. Compared to the printed publishing model where the points of sale were limited to visits inside of a bookstore, the potential for (impulse) sales of crosswords to any device at any time wherever people are, is several orders of magnitude larger. Combined with the ability to package the crosswords in many different ways, to customize it to the user and to provide value-added services, this can unlock a significant market for the industry.

The dwindling number of newspapers sponsoring first publication content of their own is an excellent opportunity for publishing houses to step-in and create their own edited-crossword brands. Content is available fairly cheaply at the moment because of the small number of outlets available to the authors. This model already exists to a certain extent in the publisher’s printed book catalogs, so it is not a new idea by any means. However, electronic distribution enables extremely flexible packaging possibilities not feasible in the printed book model to open up new markets.

This opportunity also exists for individual authors who are prolific enough to create enough content to work directly with technology partners for direct to consumer paid markets. Both of the above can co-exist because of the branding differentiation and possibly pricing differentiation as well.

As technology providers, we are extremely excited about the possibilities for innovation in this industry in the new era – in business models, types of services and the nature of crosswords themselves possible without the restrictions of printed media.

A segmented market with sustainable business models in the new era, would look something like the following (Fig. 3):

Value chain in the electronic markets

Fig 3. Value chain in the electronic markets

Authors would have 3 outlets.

  1. Traditional newspapers with electronic distribution in a paid subscription model or monetization via advertising as part of the whole publication delivered electronically in their own channels (e.g., apps). Newspapers would provide their own secondary/archival publications rather than use the publishing houses in the same channels. Technology partners would share in the revenue stream.
  2. Traditional book publishers that would make their own branded first-publication collections available in a paid model (subscription or one-of). Technology partners would share in the revenue stream.
  3. Direct partnership with technology partners to make their self-edited crosswords available in a paid subscription or one-of model with a revenue share.

Branding and pricing differentiation would make the segments co-exist to cater to different target audiences. In a future post, I will cover some marketing techniques for branding and differentiation to increase the pricing power of crosswords in this ideal scenario.

But there is a huge fly in this ointment – the increasing number of parasitic business models amongst software vendors as a standard feature that has ethical, legal as well as long-term sustainability problems. Unfortunately, this environment is destroying the market for paid crosswords as well as gradually destroying the existing business models (on which the parasites depend on!). This prevents the evolution into the healthier scenario above with innovative business models and services until it is likely to be too late to recover from.

It is a bit amusing to see the rationalizations and the mechanisms these vendors implement in a futile attempt to stay legal. As I will describe in the next post, none of them will protect them from a serious copyright infringement lawsuit if it comes to that but I hope it doesn’t have to since the fix is rather simple. The futility of these rationalizations and mechanisms are also evident in the value chain distortion created by the parasites (Fig. 4).

Parasitic business model

Fig. 4. Distortion from the parasitic business model

Even a cursory look at the value chain shows the unsustainable nature of this scenario as the parasites give nothing back of any value to the content producers that they depend on to justify selling their services or apps. In addition, they are also decreasing the audiences for those sites that the crossword feature would have brought in, in the previous value chain. While such parasitic models have existed for a while without serious distortions (as they were relatively small in reach and scope), the situation is entirely the opposite in the mobile world where the aggregation parasitic apps are the norm rather than the exception. The convenience of this service will continue to attract more audiences. The web-scraping has become a standard necessary feature of ANY new app on mobiles or computers because of the audience expectation set up that this is the norm, legal and acceptable.

What is unfortunate is that this parasitic business model of a one-time fee for unlimited content is sustainable only as long as sufficient new users keep buying such an app. There is very little opportunity to up-sell to existing customers in this commoditized software market short on innovation. The costs to fix bugs and keep the software updated with every OS change and to keep pace with competitors keep coming up. Once the new user acquisition starts to taper off – either from saturation or because of too many apps with the same set of free crosswords – the business model falls apart to improve the apps or to keep them updated. This will likely make some, if not all, of the parasites to abandon the market (assuming they have not driven their content sources out of the markets by then in a mutual destruction scenario). It is an opportunistic business model that might even make some good money in the short-term, but good for the industry? Absolutely not.

In addition to the unsustainable nature, the scenario has legal issues related to copyrights that I will cover in some detail in the next post which can only end in a lawsuit at some point if not voluntarily corrected. There are also ethical issues primarily arising out of not sharing the revenue from sales with the content producers/owners that they depend on to make the sale. If the app was being sold for how great the app was, they wouldn’t need to include the parasitic scraping!

But wait, one might say. Haven’t some of these parasites provided an avenue for individual authors to sell their crosswords directly? This option didn’t exist before. This may be legal on part of the authors, but it is neither ethical nor sustainable for them. It isn’t really ethical because they are getting the exposure to a market that is based on copyright infringement of their peers. But more importantly, this is not sustainable except for a short-term opportunity to the first-movers.

In our market testing, we estimate the conversion rate of people buying in this scenario of abundant free crosswords delivered with no effort is less than 1%. The so-called “freemium” model in the “freeconomics” isn’t about giving away a life time supply of cheese to sell a cheese grater and offering more cheese for sale or giving away the banking services free to sell a toaster and offering another bank’s services for a fee.

As I have mentioned before, with at least 20-30 crosswords available free every week in the parasitic mode, the target market that has time for solving any more is small. Within that market, people who are willing to pay for crosswords mostly undifferentiated from the free content is another small fraction. While the volumes involved may provide some discernible revenues to the first few authors who get on, it isn’t sustainable if every author wants to get on because of the dilution in that tiny market. Of course, this situation isn’t ethical either because authors of the content this parasitic model depends on don’t necessarily have the rights to place their crosswords for sale in these channels. So one group would be benefiting at the cost of another group of their peers. A rather unfortunate and distasteful situation.

But wait (again), aren’t those crosswords already available free online? How does an app collecting these crosswords and supplying them decrease the market for paid apps crosswords? Perhaps the market doesn’t exist for paid crosswords at all.

The above, while true in theory, shows an utter ignorance of consumer behavior in reality which supports two name brand gas stations within a mile of each other with a difference of $0.40 per gallon (true story in my neighborhood), one grocery store selling the same branded item for twice the price of the grocery store in the next block, the list goes on. People are creatures of habit, lazy when it comes to consumption and willing to pay a premium for convenience. Give them a web site to do price comparison shopping, only a few will use it. Give an app that will do it by taking a picture of the bar code and doing real time search with a single click and almost everyone will use it.

The delivery convenience is the primary reason for people to pay for a parasitic app but it is seriously mispricing the product for that convenience for opportunistic and unsustainable revenue. A more ethical and sustainable business model would charge a premium for that convenience, sharing revenue with the content producers for the content being delivered.

The solution is rather simple. The parasitic apps can voluntarily do the right thing and send people to the conveniently bookmarked crossword sites for the crosswords using the web browser (not some embedded browser that does not allow what the site expects them to do) as it was meant to be consumed than try to pretend that they are being legal with absurd and disingenuous mechanisms. The next post will discuss at least 3 out of 4 conditions that they fail for copyright infringement in any of these attempts. Instead, they can provide the convenience of delivery as a subscription service and revenue share with the content producers. They can innovate on the app features and services rather than on web-scraping to bring value that people will gladly pay for.

The industry participants have a serious individual and collective decision to make if the parasitic models persist. Tolerate, participate and even reward any of these parasitic business models and see the industry decline further. Take a stand to move these vendors towards more ethical and legal business models that are sustainable and see very interesting business models and innovations flourish.

Some of the participants and the parasitic models are on a collision course and only one of them can survive. We will likely see which ones survive early next year.

Next post: Understanding copyrights and infringement

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12 Responses to In search of sustainable business models

  1. T Campbell says:

    Mood: conflicted.

    Guda, I think you’ve got an excellent understanding of the issues facing the crossword market today, and for that reason I’d continue to recommend this series, even though I find it a difficult read in parts.

    But when you start suggesting how to fix things, I just keep shaking my head, because every suggestion you make is rooted in the assumption that industries will follow your directions as a unit. It’s not enough to say “the parasitic apps can voluntarily do the right thing, and the problem will be solved.” If there’s no commercial incentive to take the high road, then the majority of developers will continue to take the low road. And the few who do take the high road will actually be penalized for it in the marketplace, shortening their lifespans and discouraging others from doing the same.

    As for the threat of an actual class-action lawsuit that defeats all these developers and their successors, good luck with that. The RIAA and the MPAA are far more powerful lobbies than any group of crossword-lovers ever will be, and yet piracy and parasitism of movies and music is far more rampant than it is in the puzzling field.

    It seems to me that you’re looking for a rousing, simple solution to justify the intellectual expenditure of reviewing these issues. You can’t have it.

    I’m not saying we’re doomed. I’m saying we need to accept that this conflict will be a long one. As a webcartoonist, I’ve dealt with parasites and outright piracy for a decade, and I’ve seen my colleagues do the same. Sometimes the parasites are not worth paying attention to: their projects are unpopular or unsustainable. Sometimes they are a potential source of promotion: I encourage a degree of sharing of my latest installments, as long as I feel it leads to greater consumption of my collected works.

    And sometimes, they’re worth striking against, though rarely is it worth actually going to court. I’ve found that aggregators can often be frustrated by something as simple as changing file naming systems, though individual entrepreneurs are much better about defending against that sort of thing than large publishers.

    By exempting yourself from the aggregator’s future offerings (if you’re sufficiently popular), you punch a huge hole in their appeal, setting them on a path to irrelevance. Everyone loves shortcuts, except when they don’t work. If I’m told about a (legal) site that presents me with the first minute of every movie playing– but suddenly it’s NOT including the first minute of Warner Brothers films– I get a lot less interested. For that reason, I think crossworders’ best defense against parasites is the rise of individual-driven, regularly-producing, reliable brands like BrendanEmmettQuigley.com, Matt Gaffney’s Crossword Contest and Peter Gordon’s Fireball Crosswords.

    Your own company, if I’m understanding its model correctly, could become another such brand.

    There is hope. But as I said before, there’s an underlying assumption in this series that “if everyone involved would just do as I say, these problems would be solved.” You might even be correct in this, but it’s a moot point. Because not everyone involved is going to.

    Creative business has entered a period of nearly constant opportunity, and nearly constant conflict. I would advise everyone who’s reading this to adjust their expectations accordingly.

  2. Jon says:

    1. Why single out apps when puzzle pointer pages are arguably just as parasitic?

    2. Aren’t most of these apps free? Which ones actually charge for their service? Black Ink, maybe?

  3. Guda says:

    Hi T Campbell, thanks again for the insightful comment. I think your main discomfort is the “naivete” of the “simplistic” solution which you see as an exercise in futility given your experience. I could not agree with you more from a pragmatic perspective of effecting a change.

    I am sure you have realized by now that some of the problems you faced come from mixing up ends with specific (even if pragmatic) means – the ends get lost when people don’t agree with specific means, specific means get vilified by vested interests who don’t like the ends, false narratives get set up to obfuscate the ends via debates on the means, the means and its proponents encounter suspicion and distrust when the ends are not clear, people start fighting for their own favorite means than try to reach the end, etc. The political arena is the most extreme demonstration of this.

    The main purpose of the blog is to justify the ends via (hopefully) a reasoned narrative that can stand on its own regardless of the means. Providing a constructive solution is necessary in such a narrative so that it isn’t perceived as just a hand-wringing exercise or worse. At the same time, it is also necessary to keep the solution simple (even if idealistic) rather than risk the above problems. People, more or less, agreeing on the ends but thinking the solution “too naive” is a good problem to have compared to the ends being lost or obfuscated or seen as futile. It is a balancing act.

    So your point is well-taken on what one can expect from simplistic solutions given human nature. The specific means (of which there are many) are better decided and executed in smaller groups as you have suggested. Having unambiguous ends helps a lot in these matters. What matters to achieving the end are the results (even if incremental) from such means that can be seen as progress towards the ends.

    I am not suggesting I have the perfect solution for this. One tries, learns, errs, rethinks, re-executes….

  4. Guda says:

    Good question, Jon. I have tried to keep it generic as apps and services (except for convenience in places) not just apps so my intent is not to single out apps and services can include sites with puzzle pointers as well.

    Unfortunately, the problem we have arises from a combination of two factors – one, a slippery slope pushing of the boundaries of fair use and two, the incentives set up by commercial interests that can make things snowball very quickly on that slippery slope. A commercial site that provides links in a way that subverts the business model of the source that the links point to can be more damaging than a non-commercial app doing the same to a limited extent and vice versa. In reality, pushing something to its logical extreme can make it absurd and harmful even if it was fine without it.

    I will avoid mentioning any specific sites or products here for fairness. Each of them is different and unless one is willing to do a complete analysis of the site or product, it would not be fair to label any particular product. My intent here is to identify characteristics or behavior that is a problem and let the readers themselves judge/evaluate specific sites or products accordingly.

    Hopefully, the next post will clarify from a copyright perspective what factors generally differentiates fair use from infringement and the slippery slope within the infringement that increases the probability of being “actioned” upon based on the motivations and harm caused. There are no absolute and clear lines here.

  5. Ethan Friedman says:

    Excellent portrayal of the value chain in this market and corresponds in most respects with my own analysis. In some minor aspects I have quibbles with the portrayal (the secondary book market was until recently much larger than you’ve portrayed relative to the size of the crossword market as a whole; you ignore additional minor sources of revenue in the industry such as merchandising, telephone hint lines, etc.), but overall I think you’ve correctly modeled the monetary and content flow.

    I do have issues with your suggested solutions, such as they are, and with the model of how a new industry might look. The problem is simple: consumers’ willingness-to-pay for electronic content is dramatically lower–at best–than for print content. Witness the difficulty newspapers have having charging for their content. Only the Wall St Journal has successfully done so for the paper as a whole and only the New York Times has successfully done so for puzzle content. If users are not willing in general to pay for the delivery of an entire newspaper I find it difficult to see how they’re going to be willing to pay for the deliver of only part of the content that newspaper has traditionally delivered (e.g., the crossword).

    This has been anecdotally confirmed by me in conversations with several prominent crossword constructors who’ve tried various ways of getting people to pay for their electronic puzzle content with near-zero success.

    As an aside: the NYT is the exception that proves the rule as it were in puzzle content: it has a fanatically loyal base of fans who love that content and are willing to pony up the fee for Premium Crosswords. That their model will have difficulty being replicated by others can be seen, e.g., in the impossibility book publishers have found in profitably selling books of other papers’ puzzle content in any real quantities: The old collections of the Boston Globe crosswords and other papers have all but disappeared from the shelves, leaving only three real lines of puzzle books: the Times, Simon & Schuster puzzle books, and Sterling. Of these, although I’ve not seen S&S’s internal P&Ls for the puzzles, public sales data indicates they hardly sell at a level that would prompt other publishers to keep the line going as they have; crossword puzzles are so central to their corporate identity however that they’re willing to keep it going as in essence a breakeven or money-losing proposition. Sterling is owned by the largest chain of bricks and mortar stores, Barnes & Noble, which gives them different internal cost structures than most publishers. And the Times is the Times.

    So to wrap up what’s become way too long an email:
    (1) I have trouble seeing people ponying up subscription fees for puzzle content, unfortunately.

    (2) parasitic apps are horrific; they’re not fair use by any remote stretch of the term and their business model such as it is is either based on outright copyright infringement or (hardly better) on exploitation of the authors’ naivete with regard to payments, rights, and contracts. As a literary agent, I strongly advise all puzzle constructors to not sign any contracts involving electronic rights in any way without consulting with an attorney or agent first. I’ve already seen a number of contracts out there that are indescribably tilted towards the content distributor, not the author.

  6. Guda says:

    Hi Ethan, thanks for the excellent comments as an industry insider. You raise an excellent point (and skepticism) about the pricing power for crosswords in the digital media. This very issue is at the heart of the motivation for this blog. It is a problem that has to be solved in many different dimensions, there is no silver bullet.

    We can learn a lot from what has happened in other industries. The mindset has to change in the publishing industry. Apple was able to force the latter in the music industry.

    The first lesson is marketing and differentiation of crosswords. Here the lack of pricing power in the newspaper for news online is a good example. No one wants to pay to read the latest about the Ireland banking woes, if most sources including unedited ones provide pretty much the same news for free and they are only a single click/touch apart. But papers that provide differentiated content can thrive (WSJ, The Economist, NYT). A current problem for them is that the total traditional package has too much undifferentiated content (except perhaps The Economist) to push through as a whole and a la carte pricing has logistic problems.

    On the other hand, the pricing power of NYT crosswords comes from the very differentiation that exists. The marketing and branding of crosswords needs to change from the printed book model. It is not sufficient to slap on a newspaper name on it (except NYT). Something I will cover in a future post.

    Traditional publishers seem to fail to make a transition into digital media for three primary reasons:

    - Not understanding that the pricing is lower but has potentially higher volume if the product is packaged differently from the traditional packaging (look at iTunes vs CD model for example). Publishers and many authors still want to push their collections as-is at the printed book pricing even though the distribution costs can be less and margins higher in the digital media. The final price seems to get tied up with their feeling of the “value” of their content and often that becomes personal.

    - The user satisfaction on digital media (and hence their willingness to pay) is a total experience not just the content. This seems to be the most difficult for traditional media participants to understand and that can be their downfall. Again, Apple demonstrated this. What people paid for in digital music is not just the song. They paid for the availability of the song on a device that they coveted, acquired in a convenient form and with logistics that gave them power on what they wanted with them at any time. A corollary of this is that the way to get higher pricing also requires differentiation in the total experience. But most traditional publishing wants to think of everything other than the content (especially technology) in commoditized terms.

    - Finally, I might seem to have a conflict of interest on this but if you extend the second point above, the content has become very entwined with technology and it is becoming increasingly difficult to separate the two in delivery and marketing. Most traditional publishers are still very behind the curve when it comes to technology and that creates paralysis rather than adoption.

    Of course, it is a chicken-and-egg problem where the lack of a large market for crosswords discourages fast adoption to the new paradigms. Without fast adoption, the pricing power and the total market remains small.

    A serious concern is that parasitic models will dictate the market pricing (which is a race to the bottom) in such a situation than strategic marketing from the content producers.

    I agree with you that infringement and exploitation of naivete dominates the current environment, for crosswords in particular. Combine that with the widespread plagiarizing in software that would not be tolerated in crossword content (and illegal with patent protections), and we have incentives only for the opportunists and for the unethical where innovation is stifled.

    But we can only blame the “inmates” for this!

  7. D_Blackwell says:

    This fixation on ‘parasitic apps’, though not without merit, is, at the moment, a waste of time. Fundamental issues need to be addressed (with success). There are more free, high quality puzzles available every week than the average solver can possibly do. There are numerous websites, two of my own included, that provide links to a slew crossword pages. Anyone can set up their own bookmark folder, open the whole lot in tabs, and get a month’s worth of crosswords in a couple of minutes. Banning references and links isn’t going to happen. Worrying about apps does nothing for you.

    Providers can supply crosswords in ‘non-user-friendly formats’ to thwart access from some devices and not others. I wouldn’t recommend it though. People will, rightly, move on.

    Crosswords are a micro-niche market, and there is no reason that I am aware of to think that there is going to be a significant uptick in my lifetime. As a practical matter crosswords have almost no value. Unless the De Beers of crosswords is created to fix the market and end the glut of first quality puzzles, I don’t know how the supply and demand issues will be dealt with.

    I have done the NYT crossword, off and on, for many years; back to the Weng era. In the time that they have been available online, I have never renewed my subscription. I always let it lapse, and after a time, for various reasons, I pick it up again for another year. In the interim periods, I just don’t miss it that much. The supply of really good crosswords continues to increase. When my current NYT subscription lapses, I’ll go back to doing the free ones. Several are just as good as the NYT. With few exceptions, it is a hobby at every level, and there is simply no reason to pay for crosswords. It is what it is, and I don’t see that changing. There are many interesting avocations that have little money-making potential.

    I remain fully unimpressed with this series of articles, as well as the defense to nearly every comment made to all of them, and am still waiting to see the point. It all feels like a setup, a development of your own platform to sell, what? Distribution control (big fish – little pond) seems the basis of these articles. Following the money isn’t showing me anything at all yet.

  8. Guda says:

    D_Blackwell, your comment is a very good example of the disconnect that exists between people who create/publish the content who expect to be paid for them and people who wish to avail of them without having to pay. This is at the crux of the problem and this is not unique to crosswords.

    Distribution control as I explained in my previous post existed naturally in the publishing business because of the inherent limitations of the printed media. That is precisely what justified the business models to create crossword content and make it available in different segments (a combination of free and paid). Internet and parasitic behavior together destroyed those natural controls and so the previous business models are no longer sustainable because paid segments have been subverted by the free segments (for both legal and illegal reasons). That is all the point is and it will be obvious to anyone other than people who like the “free lunch” to continue forever or to benefit personally from it.

    If you are correct, there will be a continuous supply of high quality crosswords available free for a long time (and the authors will continue to get paid somehow or most of them will turn it into an unpaid hobby). If I am correct in my assessment, the sources of these high quality crosswords are going to disappear one at a time or go behind a pay wall. Time will tell.

    Your view as a consumer of this product is an excellent example of the challenge facing the publishing industry on how (and why) to keep paying the crossword authors for content that people like you consider as “first quality” but “have almost no value” to justify paying. So thanks for illustrating that problem.

    As to your continuing insinuations that all this is some plot to sell something, I can certainly understand the urge to paint the messenger for not liking the message (“there ain’t no free lunch”) :-)

    PS (added later): I should also add that putting references/links to web pages carrying crosswords to send people to those websites is perfectly fine. This is why web sites pay and carry crosswords – to attract and potentially retain visitors that can be monetized via advertising/upsells/etc (not everyone necessarily, it works on a fractional conversion like junk mail). This practice is different from services or apps that use the web sites as file repositories so they can (or enable the user to) grab the content files and optionally render them without sending the users to the sites at all. Why should the web site pay for the crosswords if most people who would have come for the crosswords don’t need to come anymore? The “free lunch” people never seem to answer that question.

    There is one school of thought that says, it is not my problem but the publisher’s problem. Another school of thought says that because it is the Internet, anything put out on the Internet is fair game for them to do whatever they want with the content. Both schools of thought don’t have a clue about copyrights or Terms of Use or ethical behavior.

    Would it kill the people who want crosswords free to go to the sites and get them than use third-party tools that create ethical and legal problems by circumventing that need to even go there by scraping the site? Is that too much to ask to keep the crosswords free? It is just a couple of clicks more at most… Sheesh!

  9. D_Blackwell says:

    “If I am correct in my assessment, the sources of these high quality crosswords are going to disappear one at a time or go behind a pay wall.”

    The former seems far more likely to me; ironically, at a time when we have the tools to make crosswords better than ever. Pay walls will likely cause the market to shrivel.
    …………………………………….

    “. . .consider as “first quality” but “have almost no value” to justify paying. So thanks for illustrating that problem. . .”

    The problem is hardly unique to crosswords. I don’t know that it needs illustrating.
    …………………………………….

    I think that your concerns regarding copyright are valid. It is a huge problem with all intellectual property. I do think it a specific legal issue, largely separate from the broader issue of ‘ethics’, which you will have a difficult time defining and enforcing for other people.
    …………………………………….

    “. . .I can certainly understand the urge to paint the messenger for not liking the message. . .”

    I don’t have a ‘side’. I have an interest in the subject as a whole. Perhaps I am just slow to understanding both message and motivation here. I believe in the adage: ‘Ask every question, question every answer.’ That commonly makes me unpopular even with people whose side I am very definitely on. Questioning, often mistakenly interpreted as dissent, is unwelcome almost everywhere.

    I probably shouldn’t have posted here to start with and this will be my last one, but I’ll drop in every by and by as an interested observer.

  10. Guda says:

    D_Blackwell, if “questioning” was unwelcome here, you (like the others) would hardly have been given the ability to post follow-up comments without any moderation controls. :-)

    On the contrary, I am hoping someone will make a reasoned case against the thesis or the reasoning here, because the situation, if my assessment is correct, is a rather bleak one for the industry, so there is nothing to celebrate about for being correct.

    Two reasonable people can definitely disagree on a number of things. The narrative here makes certain assumptions. Particular assumptions can be questioned or disagreed with (hopefully with some rationale or practical experience than dogmatic, or ideological reasons). Further, to be constructive, alternative assumptions can be proposed.

    There can be agreement about the assumptions, but two people may disagree on the conclusions. In such a case, there is likely a flaw in the use of logic in constructing the argument including the possibility that the assumptions are not sufficient to make conclusions even if the assumptions themselves are correct.

    It is extremely useful to identify such things to further a discussion or debate as many people have done in their comments on this blog. Illumination and perhaps consensus comes with such discussion/debate.

    If you have an opinion that the amount of free crosswords available will continue as we have now despite the lack of any distribution controls (and despite the verifiable observation that parasites significantly contribute to it especially in the mobile world), then I would love to see your assumptions of how and why you see the value chain working from the publishing side as a rationale for it. How do those crosswords magically appear for your consumption each day and what makes it possible and why is it sustainable in that fashion?

    Questioning takes many forms and not all of them are necessarily reasonable. Questioning the motivations of a person to disagree with a view is one of the weaker forms of debate (although the norm in political discourse) and a form of logical fallacy (a proponent could have a lot of personal motivations for a thesis and still be correct in that thesis, they are not mutually exclusive). You can expect to be challenged on such forms of debate even if you are welcome to voice your disagreements with the assumptions or conclusions.

    I hope you can see the distinction between the two and so feel free to voice your opinion or questions at any time. Skepticism, alternate viewpoints, illumination of flaws in logic or in assumptions are all extremely useful contributions and two reasonable people can certainly disagree on the substance of any discussion.

  11. SR says:

    “Parasites?” That’s called a “service” model.

    Have you seen check cashing places? They provide a service that banks don’t. If a blind person buys a book, and pays me to read the book for that person, why should I pay my income to the book publisher? As long as I don’t one person’s book and read it to others, what I provide them is a service.

    The app providers give a service that newspaper vendors don’t. The users are willing to pay for the service. Crossword apps access the freely available (or some that require login, which the users provide) crossword and convert them into a format that the user sees fit. I don’t understand why this model is wrong? For example, if I print the crossword from the website, then should the printer company pay the newspaper website? Most web browsers allow me to save the contents of the website locally (archiving) and access even without connecting to the internet. Should the browser manufacturer pay the newspapers for this service?

    What I do see as the problem is the “redistribution” of the copyrighted material. For example, some crossword app makers download the crossword from the newspaper website, convert it into a format of their choice, and serve the users of the app from their website. This completely removes the newspaper publisher to even see a hit. This could be considered as a willful reproduction of copyrighted material. However, if a crossword app directly accesses the crossword from the newspaper website (even when it requires the password, as given by the user), these apps merely provide a service to the user and the user pays for the service. The apps can cache the available crosswords to the local device (which the web browsers do). But, if the owner removes the crossword from the site and the user has not cached the crossword when it was available earlier, there should not be any illegal methods to obtain the crossword — aka. from the crossword app’s website.

    In short, any app that access the content directly from the newspaper website, without the app maker redistributing the crossword from their website, is essentially providing a service to the user. The user is willing to pay for the service, which is quite legal.

  12. Guda says:

    SR, thanks for the thoughtful comments.

    “Providing a service otherwise unavailable” is not sufficient characterization to say something is legal and we will also need to differentiate between being legal for the consumer and being legal for the service provider.

    Not all services are legal even if the buyer of the service benefits exclusively from it. As an extreme example, I could be using an illegal service that steals from a store because it is a service that the store does not provide (“free stuff”). Clearly, there is more to it than saying it is a service. People pay if there is a benefit to them. Whether that is a legal service depends on how the service provider makes the service available.

    For example, in the case of check cashing companies, they are getting paid for taking on the credit risk of cashing a check immediately (or the equivalent of advancing a loan against it). This has nothing to do with (ab)use of any bank features, i.e, they are not transferring that credit risk to the bank and have no effect on the bank. If they indeed found a way to pass on that credit risk to the bank abusing some terms of service of a bank, then the check cashing companies would not be considered legal, even though from the consumer’s perspective, there is absolutely no difference between the two scenarios. It is a “service” that they want to pay for. They are not personally doing anything illegal by using the service in either scenario if they are unaware of what the service is doing. This is different from whether the service itself is legal depending on how they provide the service.

    You touch on a very important point on “fair use” as it relates to copyright laws but not Terms of Service which may pose additional constraints. If I went to a web site to access its content, I am bound (implicitly or explicitly) by the Terms of Service of the web site. I get the rights to access content on the site (paid or not) under that ToS and for copyrightable content that I access, have the rights for “fair use” of that content as allowed by copyright laws. This may include some but not all forms of transformation of content. On this, there is very little controversy. Your examples of personal use fall under this.

    The case for aggregators tries to dance around the issue of who is the entity that is accessing the site and agreeing to the Terms of Service of the site. The aggregators want to be that entity for justifying the “service” part for which they may want to be paid but want to point to the user for justifying the legality of the “service”. This may work in the court of Internet opinion (as most people here are consumers who stand to benefit from such services) but may not work in real courts.

    If the service provider is the entity accessing the content from the source while using the service, then there are certain things they can do and some things they cannot. If the user of the service is the entity accessing the content from the source while using the service, there are certain things the aggregators can do and certain things that they cannot. You have identified some of the activities they cannot do. What you will find with many aggregation apps is that they do some things that they cannot do if they are to be considered the entity accessing the content and do some things they cannot do if the user is to be considering the entity accessing the content. This straddling may be fine for rationalization within the community that is benefiting from it but not necessarily for legal liability.

    Parasite is not a legal term nor is it synonymous with aggregation. It is the description for a service (legal or not) that works against the business models of the sources that it depends on with the potential to kill the source because of it. If that happens, does it matter if it is legal or not? Doesn’t everyone suffer?

    As illustrated in the latest post on NYT vs Pulse, technology makes parasitic behavior easy to do in the digital domain and benefits the consumer at the expense of the publisher. This doesn’t mean it is good for the industry. Consumers and parasites typically make it a “problem of the publisher” or accuse them of being greedy in preventing it. This is extremely short-sighted and counter-productive. Either that publishing source disappears hurting everyone or they are forced to put controls that make valid consumption of content difficult. Neither of those options are good for the consumer. The other option left for the publisher is to go after the offending parasites with whatever blunt legal instruments they have, whether it is related to the business model conflict or not as the means to an end.

    How to reconcile that conflict without requiring everyone to take the high road voluntarily is the biggest dilemma facing the publishing industry and that includes the crossword industry as well. Meanwhile, opportunistic business models thrive, crossword content producers suffer, consumers of the content enjoy a bounty of content in a scenario that is not sustainable beyond the short-term.