Zagat’s Second Try
In a previous blog post, “The Internet is Dead,” I mention how the tendency nowadays was for the center of interactive media to move to a post-HTML environment. As far back as 1997, Wired Magazine foresaw the future of the WWW and even went as far as suggest that it was time to “kiss your browser goodbye.” The argument then was that “push” technologies such as PointCast and Microsoft’s Active Desktop would create a “radical future of media beyond the Web.” Has that moment arrived? The semi closed platforms that use the Internet only for transport is according to Wired, “the world that consumers are increasingly choosing. The screen comes to them; they don’t have to go to the screen.” In addition, will it mean a second chance for those companies who “missed the boat” the first time when the shift to online content was irreversible?
We mentioned in the previous blog entry the grave mistake that newspapers had made when they started launching their digital editions in the late 1990’s. Realizing that there was an increasing number of news sites that offered their content free and that readers were reluctant to pay to read online, they stopped charging in the hopes that they would attract a wider audience, and the advertising revenue would increase accordingly. This error, now referred to as the “original sin,” was catastrophic for the media. Pint subscriptions began to fall: it was no longer necessary to buy the newspaper if you could get it free online. Advertisers also moved with the readers and advertising moved to online ads, which charged much lower prices. Such is the case of The Huffington Post, Salon.com and The Daily Beast, whose contributors offer their content for little or no money. The problem is that Zagat, who used to be the ultimate authority in all things restaurant never made up its mind to give its content free and that was also a mistake. Soon, Zagat who used to be the last word in restaurant appreciation was taken over by sites such as Yelp, which made its debut in 2004and draws much more traffic. An article in the New York Times Business Section reports that while online traffic comparisons are never exact, Zagat.com had 570,000 unique domestic Web visitors in September, according to the Nielsen Company, versus 9.4 million for Yelp. The Zagats say they actually have more than 1.2 million unique users worldwide. Yelp where the untrained reader provided the restaurant reviews.
The New York Times article believes that Zagat missed the opportunity to successfully transition to the internet. Zagat refused to give its content free, so confident they were on the quality of their product and reputation. Now in the next transition, to mobile applications, Zagat is trying to avoid the same mistake. Whereas Zagat.com has met resistance from desktop computer users when it comes time to put down the money, mobile customers have shown more willingness to pay for apps. And since the digital world has turned in a new direction where more consumers that use smart phones and other mobile devices are willing to pay for content and services through apps. Zagat is trying to prove that it’s worth paying $9.99 a year for its smartphone app, even while Yelp and other competitors are offering their apps free.
On the other hand, the Zagat app has a crucial advantage: users can download all of the guides into their phones. Therefore, when the AT&T signal fritzes out, their iPhones can still offer advice when they’re hungry and standing on a street corner.
In any case, with the displacement of the internet where everybody can access or own a computer to a more exclusive and enclosed platform as the mobile apps, the story seems like the characters in that children’s book written by Dr Seuss’ about the Sneeches. Now that everybody has a star, the Sneeches have to take theirs off so that they can distinguish themselves from the others. Now that everybody can get the information for free that they want, is time to move the ballgame to another park.