CEO Digest #2

Continuing the series of blogs from Wowio CEO, Brian Altounian

 June 18, 2014  

After a morning meeting earlier this week, I stopped by the Bristol Farms down the street to pick up lunch to eat in the office.  When the cashier rang up my 5 items, she asked me if I wanted to buy a paper bag and I thought “no, that’s silly, I carried them here, I can carry them to the car.”   As I walked out of the store, I thought how crazy it all seems now that for those of us who live in Los Angeles (or any city that has adopted the new plastic bag ban laws) that we have agreed as a society to a MAJOR SHIFT in the simplest process - carrying our groceries out of the store without a bag!   I can only imagine how ridiculous I must have looked carrying a sandwich and salad in one hand, a bottle of water under one arm, a bag of chips in my mouth and holding my napkin, a fork and my car keys in the other hand.  I know – I could have just paid the $0.10 for the bag and not thought twice about it.  

So what does this have to do with WOWIO?  Indulge me a bit longer. 

I grew up working in my father’s grocery store from the time I was 8 years old until I was 23 and I watched families buying multiple baskets of food on payday.  If we charged $0.10 per bag, some of these families would be paying an extra dollar or two just for the “luxury” of having their groceries bagged.  That would have created mayhem for us.  And yet, for the sake of the environment, we pay the fee or we bring our own bags with nary a complaint. 

 In Los Angeles, there has been a movement about the rising costs of parking tickets, led by a group of citizens tired of paying exorbitant fees that don’t seem to “fit the crime” http://www.latimes.com/local/lanow/la-me-ln-parking-activists-cap-fines-20140612-story.html.  In just a few short weeks, this ticket fee reduction is actually being considered by LA’s City Council and the Mayor!  Yet I have not seen one single objection to the plastic bag ban laws.  

If I told you that only your local store (or the Bristol Farms down the street from me) were charging $0.10 for a bag for groceries, I expect that you would most likely choose another store to shop at.  I would even go so far as betting that you would say something like “If MY store charged for bags for my groceries, I would NEVER shop there again.”  Looking at it from the 50,000-foot view, the practice is kind of absurd with one big caveat: proponents claim that the impact on the environment is far more positive than the nuisance or minor inconvenience of paying for a paper bag.  Stores have made it even more convenient by selling you a re-usable bag for $0.99 that you will surely remember to bring with you every time you run out to the store (or stop by between meetings on your way to the office.) So we accept it.  No matter how ridiculous you look carrying your items out of the store.  

When we got our patent approved in December 2010 to put ads in eBooks, we thought that the world would move quickly in our direction and embrace the concept that the publishing industry was changing and there was room for an alternative revenue strategy that would include advertising in some form or fashion.  Surely the print publishing world would finally follow the music, film and television industries in embracing the digital distribution of content and everyone knows that the digital marketplace embraced and promoted ad-supported plays.  So the idea that ads could be inserted into eBooks as a new form of revenue for the publisher and author would naturally be embraced by consumers.  Right? 

In August of 2011, I was interviewed by Bob Garfield for On The Media on NPR Radio.  http://www.onthemedia.org/story/153688-books-no-longer-and-ad-free-zone/ and Bob was almost incredulous when he described the absurdity of the notion that an ad might pop up in the middle of his online book-reading.  I even heard from listeners of that program who told me “if there were ads in the eBook, I can assure you I would never download that book,” and “if given a choice, I would rather pay full price for the book than be ‘inundated with ads’” as if I or ANYONE would actually propose an “assault” of an ad in an obtrusive manner.   The objections were quite venomous. 

In March of 2012, I sat on a panel with other book publishers during the annual SXSW Festival in Austin, Texas, discussing new publishing models.  I shared the stage with executives from The Atavist and Penguin Books, among others and when the floor was opened to discussion, I was actually booed by certain participants when I made the bold statement that the current revenue structure within the publishing industry needs to change and the entire stranglehold that publishers have on the distribution of published content needs to change.  You can imagine the catcalls and hisses I got when I talked about advertising within the eBooks.  Apparently, it was quite the controversial position: http://www.publishersweekly.com/pw/by-topic/digital/conferences/article/51025-sxsw-2012-new-publishing-models-and-the-rise-of-the-referral-economy.html 

But here we are, in 2014, and the publishing industry IS changing.  Those publishers that are evolving and embracing the new digital world, that is, although I honestly can’t identify a single one that fits that description.  The advertising industry is also experiencing a sea-change.  Nobody wants to be ‘assaulted’ by ads in any kind of experience, let alone the solitary activity of reading.  Advertising in our new digital world must go through its own version of “shape-shifting” in order to remain relevant.   We are embarking on a journey that will set the stage for the new frontier in publishing and advertising – the meaning of those terms will be unrecognizable in the near future.  I’ll have more to say about that over the next few weeks and months, but I will say that for now, objections to the idea of “ads-in-eBooks” are getting quieter and are not as aggressive as they used to be.   “I will never download an eBook with ads” looks a lot like “I will never carry my groceries out of the store if they charge me for the bag.”  I know, it’s absurd, right? 

Thanks for reading. 

-Brian