Disruptive Innovation

Aspiring authors take e-route to success

9 October 2014

From Ashwin Ahmad at India Today

Books have been man’s best friends forever, and the advent of improved technology, more services and greater awareness has only led to a spurt in self-publishing in India. From online majors such as Amazon to traditional players like Penguin, they are all offering services for aspiring authors and giving them an opportunity to design their own book jackets and set prices. Publishing in India has taken a completely new turn. People in the trade point out that the change has been happening for some time now.

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With a large number of aspirant authors taking the new route to publishing, some reputed traditional publishers have ventured into the self-trade as well to give competition to the advantages of self-publishing. Penguin Random House have rolled out what they call esingles, which are short digital-only reads meant for “people who are short on time, fond of reading and want to catch up on some reading during their routine commute or lunch hour”.

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Penguin Books India is not alone. Harper Collins Publishing also launched their e-singles service called Harper XXI with genres ranging from crime and romance to sports and business. With prices starting at Rs.20 per story, esingles remain the traditional publisher’s answer to what can only be called the online “blitz”.

Valsakumar points out, “While big players have already made the transformation, it is up to small players to embrace this change quickly as it offers them a better chance in the marketplace.” Having recognised that today’s author, much like the customer, is the ‘king’, traditional publishers have unrolled a bevy of packages which the aspiring author can pick and choose from. Penguin’s new self publishing imprint Partridge, launched in partnership with Author Solutions, offers services ranging from design, illustration, print formatting and distribution to online retailers, international marketing and distribution. The fees can range from Rs.10,000 to over Rs.1.5 lakh, depending on what you choose.

So, president and CEO of Author Solutions Kevin Weiss rightly says, “It is truly the best time in history to be an author.”

Read the rest here.

From Guest blogger Randall

Randall says there’s nothing in this post that would be considered new information to regular visitors to The Passive Voice. The article is from India Today, where the self-publishing revolution is a few years behind the US, UK and other places. Randall was happy to see the warning regarding vanity presses but disappointed to see Authors Solutions mentioned as a viable option. Hopefully self-publishing authors in India will find their way to blogs like this one and learn lessons already hard won by their American brothers and sisters.

Bezos synergy

7 October 2014

New Washington Post digital magazine app coming to Kindle Fire

From Tom Cheredar at Venturebeat

The Washington Post, the paper of record for political happenings in the US and beyond, has decided to launch a news application that will appear on the next generation of Amazon Kindle Fire tablets.
The move marks the first time that the Washington Post and Amazon have directly interacted since Amazon CEO Jeff Bezos purchased the newspaper for $25 million in cash last year. The application, which is part of a new “Project Rainbow” initiative at the Post, is expected to appear first on the 8.9-inch Kindle Fire, according to Bloomberg who first reported the news.

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It’ll be interesting to see if people respond to reading the Post on this new format, especially when there are so many other options available for getting a daily dose of political news. Not only is there a plethora of news organizations willing to offer up their news coverage for free, but also there are plenty of digital magazine apps vying for consumer attention (Pulse, Flipboard, Zite, and News360, to name a few).

Read the rest of the story here.

From Guest Blogger Randall

Now this is cool! Vinyl is making a comeback.

6 October 2014

Vinyl Sales up 38% in 2014!

From Digital Music News:

4.0 million LPs have been sold this year in the US alone…

Julia

High tech guys want low tech for their kids.

6 October 2014

From the New York Times:

When Steve Jobs was running Apple, he was known to call journalists to either pat them on the back for a recent article or, more often than not, explain how they got it wrong. I was on the receiving end of a few of those calls. But nothing shocked me more than something Mr. Jobs said to me in late 2010 after he had finished chewing me out for something I had written about an iPad shortcoming.

“So, your kids must love the iPad?” I asked Mr. Jobs, trying to change the subject. The company’s first tablet was just hitting the shelves. “They haven’t used it,” he told me. “We limit how much technology our kids use at home.”

I’m sure I responded with a gasp and dumbfounded silence. I had imagined the Jobs’s household was like a nerd’s paradise: that the walls were giant touch screens, the dining table was made from tiles of iPads and that iPods were handed out to guests like chocolates on a pillow.

Nope, Mr. Jobs told me, not even close.

Read the rest right here.

Then check this out. Again from the New York Times:

LOS ALTOS, Calif. — The chief technology officer of eBay sends his children to a nine-classroom school here. So do employees of Silicon Valley giants like Google, Apple, Yahoo and Hewlett-Packard.

But the school’s chief teaching tools are anything but high-tech: pens and paper, knitting needles and, occasionally, mud. Not a computer to be found. No screens at all. They are not allowed in the classroom, and the school even frowns on their use at home.

Schools nationwide have rushed to supply their classrooms with computers, and many policy makers say it is foolish to do otherwise. But the contrarian point of view can be found at the epicenter of the tech economy, where some parents and educators have a message: computers and schools don’t mix.

Here ya go.  Take a gander. We have a saying in California- All these high tech guys send their kids to Waldorf schools.

Julia

Give Customers What They Want

3 October 2014

From Hugh Howey:

Two forces tug legacy industries from opposite directions. On the one side, you have customer demand. On the other side you have a mix of fear and laziness. In-between is where corporations and industries find themselves, and they face a choice. Sadly, in most cases, the fear and laziness win out. It’s left to radical new upstarts to provide customers with what they actually want.

. . .

Check out what the New York Times had to say about [Tesla's] attempts [to sell their cars directly to consumers]:

Car dealers in New York, New Jersey and several other states are waging legal, legislative and regulatory campaigns to stop Tesla, the fast-growing electric-car company, from selling its vehicles directly to consumers. These moves are little more than attempts to protect an old retail model by limiting consumer choices.

. . .

How about that great disrupter, Netflix? Having put video rental chains out of business and then proving that dropping an entire season of TV all at once can be a good thing, Netflix is now arguing that the classic program of “windowing” is not good for the film industry. Netflix wants to release the sequel to 2000’s smash hit Crouching Tiger, Hidden Dragon on Netflix as well as in theaters, all on the same day. The theaters (which are predominantly three companies) refused. Netflix appealed to the Imax chain, but Imax waived control of their screens to the same three aforementioned companies, who host their installations. Again, the companies refused. And again, the New York Times had fair coverage of the event, saying:

Theater chains in the United States have rallied against attempts to change the traditional model for releasing films, worried that movie fans might stay at home rather than pay for movie tickets. The theaters now typically play movies for three months without competition.

Netflix, Imax and the Weinstein Company, which is producing “Crouching Tiger,” said that movie fans were asking for new ways to watch films. “Going out to the movies is a very different experience than staying in,” said Ted Sarandos, chief content officer at Netflix. “Withholding access only invites piracy.”

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The stodgy and entrenched vs. the awesome new innovator. That’s how these showdowns are rightly portrayed.

Ah, unless it’s books. Unless it’s the publishing industry.

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When the six major publishers banded together to raise prices on consumers, charging upward of $14.99 for ebooks and getting hammered by the DOJ for collusion, the coverage was often sympathy for the publishers and lack of concern for the consumer. This article starts out not by detailing what publishers did, but by making the story about the DOJ’s aggressive response.

The Justice Department jumped directly into the fight over the future of digital books on Wednesday — and Amazon came out the winner.

In an action that could lower the price of e-books and shift the expanding market in Amazon’s favor, the Justice Department slapped Apple and five of the largest book publishers with an antitrust lawsuit, charging that the companies colluded to raise the price of e-books.

Note the “jumped,” “fight,” and “slapped.” How rude of the Department of Justice! And note that the winner in lowering prices, according to the New York Times, is Amazon, not the consumer. Reading the paper every single day, these differences in coverage jump out at you and clobberyou over the head with a baseball bat.

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Start watching for these trends, and you’ll see them everywhere. . . . While other companies, in expensive towers built of stone, are conspiring with one another and appealing to the courts to do whatever they can to fool and rob their paying customers. Who do you think is going to win with those two strategies? Who should win? And what affect can a biased media play in the outcome?

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Read the full article with relevant links and lots of brilliant analysis from Hugh Howey.

Link to Hugh Howey’s books

Sitting-in-for-PG guest post by Bridget McKenna

Legacy Media: The Lost Decade

11 September 2014

From Monday Note:

The asymmetry is staggering. By every measure, the digital sphere grew explosively thanks to a combination of known factors: a massive influx of capital; the radical culture shift fostered by a “blank slate” approach; obsessive agility in search of new preys; flattened hierarchies; shrugged-off acceptance of failure; refocusing on the customer;  a keen sense of competition; heavy reliance to technology…

By showing neither appetite nor will to check theses boxes, the newspaper and magazine industry missed almost every possible train. In due fairness, some were impossible to catch. But legacy media stubbornly refused to overhaul their culture, they remained stuck in feudal hierarchies, invested way too late in  tech. And, perhaps their cardinal sin, they kept treating failure as an abomination instead of an essential component of the innovation process.

Consequences have been terrible. Today, an entire industry stands on the verge of extinction.

. . . .

Between 2003 and 2013, Google revenue grew by 60x. In the meantime, according to Newspapers Association of America data, the total revenue of the US newspaper industry shrank by 34%. While sales (newsstand and subscriptions) remain steady at $11bn in current dollars, print advertising revenue plunged by 61%.

Link to the rest at Monday Note and thanks to Karen for the tip.

Album Sales Hit A New Low

28 August 2014

From Billboard:

As streaming gathers momentum, the U.S. music industry keeps breaking sales milestones — the wrong kind.

This week’s 3.97-million album sales tally is the smallest weekly sum for album sales since Nielsen SoundScan began tracking data in 1991. It’s also the first time weekly sales have fallen below four million in that time span.

. . . .

This decline is actually in line with historical trends. In 2013, average weekly album sales experienced a similar fate, falling from 5.7 million units in the first quarter to 5.23 million units in the second quarter and then 4.86 million units in the third quarter. This year, overall U.S. album sales are down 14.6 percent, while digital album sales are down 11.7 percent and track sales are down 12.8 percent.

As more and more consumers transition from purchasing music to streaming tunes, it’s natural to see album sales shrink. This year, there have only been five weeks where album sales were above 5 million.

. . . .

Record label sales executives are not surprised by the latest downturn. “Sales have been going in the wrong direction all year,” says one label sales head. “I guess its overdue, when you look at [the growth of streaming].” This year, label executives finally conceded something there were reluctant to acknowledge last year: Streaming is cannibalizing digital sales.

. . . .

“What can I say about this week’s sales,” says yet another distribution sales executive. “I remember when album sales fell under 10 million units and the industry reacted like it was a tragedy.”

. . . .

“This year the bottom fell out of digital sales to a degree that we never anticipated, which is why many companies are not meeting this year’s revenue projections,” laments one indie distribution executive.

Link to the rest at Billboard

But, of course, this kind of technology disruption is clearly limited to music and would never happen with books.

 

Disruptive Innovation Theory Revisited

26 August 2014

From Off White Papers:

Perhaps it was on the limb-strewn battlefields during the Franco-Prussian war in the 1870s that one disruptive innovation gained great favor with a whole generation of adherents. Young doctors on the frontlines readily embraced Dr. Joseph Lister’s new and rather simple technique for combat triage using anti-septic surgery for life-saving amputations and skin piercing compound bone fractures. Previously almost any large incision resulted in death from infection caused by unsanitary conditions.

Lister’s carbolic acid concoction was easy to use and quite effective at getting the job done even in the field of battle. It prevented infection from what turned out to be airborne microbes. Unfortunately the U.S. medical establishment did not embrace Lister’s radical idea of germ theory even when presented with incontrovertible evidence. They defended the long-standing medical wisdom that bad air or miasma were the source of infection, and not invisible microbes. Germ theory was outright rejected. While there was ample documentation and statistics provided by Lister to the AMA and the establishment, it would take a public outcry after the assassination attempt and the unfortunate, and probably avoidable, death of U. S. President James Garfield to create a serious enough crisis to challenge the entrenched thinking of the old guard. A paradigm shift was at hand.

The medical establishment’s resistance to Lister’s technique is an instructive narrative in trying to better understand innovations that, on the face of things, should catch on and spread rapidly. Yet in certain domains, where entrenched worldviews, attitudes and values are deeply woven into the societal architecture, innovation can come to a grinding halt. This is particularly noticeable in those domains with multiple stakeholders whose identities and livelihoods are being challenged by the threat of innovation. In those situations where simply getting well-defined jobs done a product or service’s utility is the main driver. But in those domains where stakeholders’ identities are being challenged the identity function can often overwhelm the more straightforward utility of the innovation. In turn, the predictive power of disruptive innovation theory is diminished.

. . . .

Inherent in every product or service is both a utility function and an identity function. Understanding each of these functions and the interaction between the two might shed light on some of the anomalies observed in the original theory. It appears that in utility-centric products and services such as mini-mills, semi-conductors, disk drives, MP3 files, Wikipedia, Amazon and the like, the original theory does keep its predictive potency. Consumers and non-consumers with no vested interest in anything other than “getting the job done” will change behaviors quickly and readily with little anxiety. They are simply focused on the product or service’s utility—and the incumbent will be disrupted. All you need to think about is how quickly we “consumers” (or the new “non-consumers” as the case may be) migrated from vinyl to cartridge to cassette to CDs to MP3s on our iPods; from Encyclopedia Britannica to Wikipedia; from Borders to Amazon.

In utility-centric innovations water runs downhill; there seems to be very little consumer resistance to successful adoption and diffusion. Resistance to change, however, does often come from within from industry incumbents whose jobs are dependent on maintaining the existing business model and power dynamics. As Upton Sinclair said “never expect someone to understand change when their livelihood depends on not understanding it.”

. . . .

ITunes successfully introduced modularity to the consumer who could now buy singles rather than an entire album to the dismay of most record industry executives and to the occasional artist protestation. The interdependence created by having to buy 16 songs when you only really wanted four might have been highly profitable for the record companies but over-served the consumer at a cost substantially higher than purchasing the four singles. No wonder, as the original theory neatly predicted, disruption in the music industry was fast and ugly.

In high-identity domains, however, products and services are almost always highly interdependent and successful modular architecture is elusive. Even when the consumer is over-served and the price too expensive, and modular solutions are “good enough” resistance is still encountered.

Link to the rest at Off White Papers

“in certain domains, where entrenched worldviews, attitudes and values are deeply woven into the societal architecture, innovation can come to a grinding halt. ”

Sounds like traditional publishing.

For PG, understanding the difference in disruptive innovation for products that present a utility function vs. those that present an identity function was useful.

He would suggest that for most readers, books serve a utility function. Whoever can provide the reader with a book that pleases the reader most efficiently will get the reader’s business.

On the other hand, for publishers and agents and booksellers and many traditionally-published authors, books are definitely the basis of identity and serve an identity function. “Literary culture” is a pure identity construct.

Clearly, the value of the identity as an author whose books are the product of a well-known publisher outweighs the increased monetary value that self-publishing presents to a significant number of traditionally-published authors. Hence, some tradpubbed authors feel impelled to vociferously trash indie authors to protect the value of their identity. Indie authors are breaking the rules that underlie that identity.

The identity function is also prominent in the rapturous descriptions of the joys of purchasing physical books in an physical bookstore. For a reader who finds a basis for identity in being a “book person,” as well as for booksellers and producers of physical books, the physical-bookstores-for-physical-books meme, complete with deep conversations concerning the merits of one book over another, Amazon is anathema. Clicking “Add to Cart”  just doesn’t bring on the rapture for these people.

However, pursuing the book-person identity as a reader requires access to a bookstore and a decision to devote time to the browsing/discussion/purchasing pursuits instead of competing pursuits like making a living, family life, GOT or actually reading books.

PG suggests that the Amazon vs. the rest of the world battle will be fought and won with readers and that, for the vast majority of readers, books serve a utility function. For utility-focused readers, the combination of ebooks and Amazon’s convenience and pricing are the clear winner, disrupting and replacing the traditional world of books.

The book identity group is simply unable to impose its will on the online Amazon market at least in the United States. We do see organized attempts by book identity people to hamstring Amazon with pricing, taxation and other impediments in some non-US jurisdictions, but PG believes any success in these attempts would be a Pyrrhic victory because interfering with the tremendous reader benefits of ecommerce coupled with ebooks with lower prices would result in fewer readers buying fewer books.

No one has compared Jeff Bezos to Joseph Lister, but PG suggests Amazon’s efforts to make books cheap and easy to purchase is, in its own way, just as life-saving for literature and reading in the 21st century as carbolic acid was for the wounded combatants in the Franco-Prussian War.

And ebooks smell a lot better than carbolic acid does.

Publishing Is Not Dying

25 August 2014

From The Harvard Business Review blog network:

If marketers want to produce content, they need to think like publishers. After all, content isn’t an extension of marketing, it’s an extension of publishing.

I am hardly the only one to make that case, but skeptics are still vocal in their disagreement. “Aren’t publishers failing?” they say. How can I hold up a struggling industry as a model? If publishing is a viable model, why aren’t publishers making money?

These sentiments are common, but they are not based in fact. In truth, publishing is flourishing, creating massive new fortunes for entrepreneurs and more choices for consumers.

. . . .

First, the obvious: a new breed of online publishers has been generating hundreds of million dollars of value in very short periods of time. “Mommy blogs” created an entirely new category. Bleacher Report was sold for over $175 million in just five years. The Huffington Post was sold for $315 million in just six years. And it’s not just the financial results that are impressive — Huffington Post has won a Pulitzer Prize, as has Politico, a news organization launched in 2007.

. . . .

Sure, you may say, tech-savvy startups are doing great, but old-line publishers, like magazines and newspapers are doomed. Aren’t they?

It’s true that magazines in the U.S. were more profitable in the pre-digital age because of the fragmented broadcasting market, but they do make money today. Magazine consultant Jay McGill estimates that profit margins in the industry have dropped off from a stellar 20–25% to a more earthly, but still healthy, range of 12–15%, which is pretty close to the average for the S&P 500.

. . . .

The reason why many publishing businesses continue to make money is simple: they’re selling a product that people want and need. As long as people want to be informed, entertained, and inspired, there will be profitable opportunities in publishing.

Yes, some old-line publishers are faltering and clearly there are challenges ahead, but that can be said about any incumbent industry.

. . . .

The key is for publishers to stop trading digital dollars for analog dimes.

Link to the rest at HBR blog network and thanks to Paul for the tip.

Print Is Down, and Now Out

18 August 2014

From The New York Times:

A year ago last week, it seemed as if print newspapers might be on the verge of a comeback, or at least on the brink of, well, survival.

Jeff Bezos, an avatar of digital innovation as the founder of Amazon, came out of nowhere and plunked down $250 million for The Washington Post. His vote of confidence in the future of print and serious news was seen by some — including me — as a sign that an era of “optimism or potential” for the industry was getting underway.

Turns out, not so much — quite the opposite, really. The Washington Post seems fine, but recently, in just over a week, three of the biggest players in American newspapers — Gannett, Tribune Company and E. W. Scripps, companies built on print franchises that expanded into television — dumped those properties like yesterday’s news in a series of spinoffs.

. . . .

For decades, investors wanted newspaper companies to become bigger and diversify, so they bought more newspapers and developed television divisions. Now print is too much of a drag on earnings, so media companies are dividing back up and print is being kicked to the curb.

Setting aside the brave rhetoric — as one should — about the opportunity for a “renewed focus on print,” those stand-alone print companies are sailing into very tall waves. Even strong national newspapers like The Wall Street Journal and The New York Times are struggling to meet Wall Street’s demands for growth; the regional newspapers that make up most of the now-independent publishing divisions have a much grimmer outlook.

As it turns out, the journalism moment we are living in is more about running for your life than it is about optimism.

. . . .

The people at the magazine business Time Inc. were not so lucky, burdened with $1.3 billion in debt when Time Warner threw them from the boat. Swim for your life, executives at the company seemed to be saying, and by the by, here’s an anchor to help you on your way.

. . . .

In the main, it’s been like one big, long episode of “Divorce Court,” with various petitioners showing up and citing irreconcilable differences with their print partners. It’s not that television is such a spectacular business — there are plenty of challenges on that front — but newspapers and magazines are clearly going to be smaller, less ambitious businesses and journalistic enterprises regardless of how carefully they are operated.

. . . .

Newspapers will be working without a net as undiversified pure-play print companies. Most are being cut loose after all the low-hanging fruit, like valuable digital properties, have been plucked.

. . . .

More ominous, most of the print and magazine assets have already been cut to the bone in terms of staffing. Reducing costs has been the only reliable source of profits as overall revenue has declined. Not much is left to trim.

. . . .

So whose fault is it? No one’s. Nothing is wrong in a fundamental sense: A free-market economy is moving to reallocate capital to its more productive uses, which happens all the time. Ask Kodak. Or Blockbuster. Or the makers of personal computers. Just because the product being manufactured is news in print does not make it sacrosanct or immune to the natural order.

Link to the rest at The New York Times and thanks to Tom for the tip.

Paper newspapers are toast, but paper books! Nobody will ever give up paper books!

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