Sunday, May 23, 2010

On The Digital Revolution

Here are three articles I found and read within 24 hours of each other, all on the digital revolution.

First, Adapt Or Perish: Why Authors Need To Prepare For The e-Book Era, by Garth Nix. An excerpt:

First off, no one is absolutely sure exactly what is going to happen, because technological change is like that. Only one thing is pretty clear and that is that things will change, and we need to proactively adapt to those changes, lest we be forced to adapt in ways that are less appealing.

History has shown that you can't build a sandbag wall against the tide of technological change, you have to either have a boat, build a boat, or get on someone else's boat. Or be very clever and do something no one could have predicted ... perhaps with my boat metaphor this would be to grow gills or turn into a fish.

So there will be changes, but in many ways authors are less affected by the rise of e-books than some of our other other partners in the book industry, particularly printers and booksellers.

Second, author Cory Doctorow explains why he publishes his books for free online. An excerpt:

I give away all of my books. [The publisher] Tim O'Reilly once said that the problem for artists isn't piracy – it's obscurity. I think that's true. A lot of people have commented: "You can't eat page views, so how does being well-known help you earn a living as a writer?" It's true; however, it's very hard to monetise fame, but impossible to monetise obscurity. It doesn't really matter how great your work is; if no one's ever heard of it, you'll never make any money from it. That's not to say that if everyone's heard of it, you'll make a fortune, but it is a necessary precursor that your work be well-known to earn you a living. As far as I can tell, these themes apply very widely, across all media.

As a practical matter, we live in the 21st century and anything anybody wants to copy they will be able to copy. If you are building a business model that says that people can only copy things with your permission, your business is going to fail because whether or not you like it, people will be able to copy your product without your permission. The question is: what are you going to do about that? Are you going call them thieves or are you going to find a way to make money from them?

The only people who really think that it's plausible to reduce copying in the future seem to be the analogue economy, the people who built their business on the idea that copying only happens occasionally and usually involves a giant machine and some lawyers. People who are actually doing digital things have the intuitive knowledge that there's no way you're going to stop people from copying and they've made peace with it.

Third, via Guy Kawasaki's The Decaying Market For Printed Books, this article: E-Books Rewrite Bookselling. An excerpt:

But the digital revolution sweeping the media world is rewriting the rules of the book industry, upending the established players which have dominated for decades. Electronic books are still in their infancy, comprising an estimated 3% to 5% of the market today. But they are fast accelerating the decline of physical books, forcing retailers, publishers, authors and agents to reinvent their business models or be painfully crippled.

"By the end of 2012, digital books will be 20% to 25% of unit sales, and that's on the conservative side," predicts Mike Shatzkin, chief executive of the Idea Logical Co., publishing consultants. "Add in another 25% of units sold online, and roughly half of all unit sales will be on the Internet."

Nowhere is the e-book tidal wave hitting harder than at bricks-and-mortar book retailers. The competitive advantage Barnes & Noble spent decades amassing—offering an enormous selection of more than 150,000 books under one roof—was already under pressure from online booksellers.

It evaporated with the recent advent of e-bookstores, where readers can access millions of titles for e-reader devices.

Even more problematic for brick-and-mortar retailers is the math if sales of physical books rapidly decrease: Because e-books don't require paper, printing presses, storage space or delivery trucks, they typically sell for less than half the price of a hardcover book. If physical book sales decline precipitously, chain retailers won't have enough revenue to support all their stores.

Some question whether book stores will go the way of music stores, which closed en masse once consumers could sample and download music digitally. Blockbuster Inc., the video rental giant, is struggling to reshape its business at a time when movies can be downloaded directly to digital devices.

Unlike music, the book industry didn't suffer dramatically from digital theft and, for years, couldn't figure out how to make money from e-books. There was no sense of urgency.

"It's fair to say that the leadership folks at the major trade publishers didn't believe until very recently that e-books had any economic life in them," says Arthur Klebanoff, chief executive of New York-based RosettaBooks LLC, an e-book publisher.

The success of Inc.'s Kindle e-reader recently changed all that, proving to publishers that the e-books market was real.

But it wasn't until the arrival of Apple Inc.'s iPad last month—with its promise of one day tapping more than 125 million iTunes customers—that the true potential of the e-book market became apparent.

"It's taking digital books to a new level," says John Makinson, CEO of Pearson PLC's Penguin Group.


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