Instapaper, Readability and monetizing other people’s content

Updated: There’s been a minor furore brewing in the digital-content sphere over the past few days involving Readability, an app and web service that allows readers to save content from any website and read it later — without any of the advertising that most sites rely on for revenue. Not surprisingly, this idea doesn’t appeal to a lot of publishers, and John Gruber of Daring Fireball re-ignited the current firestorm of criticism with some comments about how the team behind Readability are “scumbags.” Whatever you think of Readability’s model, however, it is far from the only one providing this kind of service, and there is an argument to be made that its approach is actually better than some others. The bottom line for content creators is that users want to do this, and you need to figure out how to let them.
The latest wave of negative attention for Readability was triggered by AppAdvice, which noticed that when users shared an article that they had saved for later by posting it to Twitter or Facebook from the mobile app, the link included by Readability was to the saved version — the one stripped of all the ads and images and other content — instead of to the original at the publisher’s site. After AppAdvice flagged this issue and before Gruber made his “scumbags” comment, Readability then responded by changing the way it handles links in the mobile app, and admitted that its initial approach wasn’t fair to content creators (the web browser version includes a Readability bar that shows the original article in a frame, and allows users to click and see the stripped-down version).

Is collecting money for publishers a favor, or extortion?

Even after this change, however, the comments made by Gruber seemed to reverberate through the blogosphere, in part because they focused on another controversial aspect of Readability’s model: unlike other services such as Instapaper, which simply charges a standard fee for its service, Readability allows readers to donate money that is held for the creators of the content. Publishers can sign up and collect their share of this revenue (70 percent goes to publishers and Readability keeps 30 percent), but if they don’t sign up or register, then Readability just keeps the money. This model has drawn a lot of criticism from those who argue that it is effectively extortion:
Readability has its defenders, including Anil Dash — who is an advisor to the company, and argued in a blog post that the startup is trying to do what plenty of other services are trying to do: namely, to figure out a way for publishers and content creators to monetize their content in other ways apart from just lathering as many ads and other gimmicks onto their pages as possible. The fact that many users decide to strip out those ads and read articles through Readability or Instapaper, he says, shows that many publishers are actually shooting themselves in the foot by making their websites unreadable in an attempt to generate revenue (Readability’s own defence of its model is here).
The issue over Readability’s model is complicated somewhat by the tangled relationship between it and Instapaper, which was founded by former Tumblr developer Marco Arment. In 2010, the two companies formed a partnership in which Arment created a white-label version of Instapaper that Readability could use inside their iPhone app — but just as it was about to be released, Apple introduced its in-app subscription rules, which would have forced Readability to hand over 30 percent of any revenue they collected. The app was shelved, and Readability then went on to develop its own Instapaper-style app without Arment’s help, which caused some tension between the two — and between supporters of the two companies such as Dash and Gruber.

Readers want to do this — publishers need to figure out how

As Mike Davidson of Newsvine notes in a post on the issue, the bottom line is that services like Instapaper and Readability — and other similar apps such as Read It Later, or even Apple’s Safari browser, which has a “Reader” feature that strips out everything but text — are likely perfectly legal under current copyright laws, because users are saving copies of the content for their personal use (the news-aggregation app Zite got a cease-and-desist letter from some major content companies for a similar feature). Not only that, but Davidson makes a pretty persuasive argument that there is nothing wrong with Readability’s revenue model of keeping money for publishers.

The anger about the financial side of Readability seems to come from the opinion that the company is “keeping publishers’ money” unless they sign up, but I guess I look at it differently: I don’t think it is the publishers’ money. I think it is Readability’s money. Readability invests the time and resources into developing their service and they are the ones who physically get users to pay a subscription fee.

I think Davidson makes a good point — although it’s not one that most publishers are likely going to be that sympathetic to. But why is Readability’s model any worse than Instapaper’s or any other similar ad-stripping service? Marco Arment charges money for his apps and service, which take a publisher’s content and remove all of that advertising just the same way Readability does, and he keeps that revenue. Readability’s approach may feel like extortion to publishers who don’t like the idea of people altering their content or consuming it in other ways — but the reality is that this is happening all the time, whether the media industry likes it or not. It might be the Huffington Post aggregating your stories, or it might be Flipboard or Zite giving people a different way of seeing it, or it might be Instapaper.
At least Readability is trying to help publishers monetize that content in some way, by giving them a revenue share when they register with the service, as Clay Johnson points out. Is that an incentive to sign up? Sure it is. But at a time when content companies are trying everything they can to figure out how to monetize what they produce — whether it’s paywalls or apps or other subscription models — why not take advantage of a service that at least some readers have already shown they want, and are willing to pay for? Either that, or come up with your own version of Readability and compete.
Update: John Gruber has clarified his position in a new post, saying he doesn’t like the fact that Readability says 70 percent of a user’s monthly contribution goes to the content creators, since not all of that money is paid out — because the company only pays publishers who have registered. Gruber says the service should either make it clear not all of the money is paid to content owners, or it should split whatever it has among those who have registered. The way the company is doing it now “is misleading at best, and arguably dishonest,” he says.
Post and thumbnail images courtesy of Flickr users Zert Sonstige and Denise Chan