Disruptive Innovation

Value in the media industry is moving to the edges, and publishers are in the middle

30 October 2014

From GigaOm:

There’s been a lot of discussion recently about Facebook’s increasing role in how people get their news, and whether or not that is a good thing and/or what to do about it. But one of the smartest things I’ve read on the topic comes from freelance tech analyst Ben Thompson, who writes a blog called Stratechery — and who put Facebook’s dominance into context with a post about how value in the media industry is moving to the edges, and publishers are stuck in the middle.

. . . .

Thompson explains how companies like Largan have gained power, just as chip makers and software providers like Microsoft and Intel did during the rise of the personal computer — leaving the companies who actually assembled and sold computers in the middle, their profit margins dwindling as value moved to the ends: specialized manufacturers on one side, and services on the other.

. . . .

So for example, in the analog world in which newspapers, magazines and other forms of publishing controlled the distribution platform and therefore the channels through which content flowed, they also controlled much of the value. But new platforms have emerged — such as Facebook and Twitter and LinkedIn and dozens of others — and they have accumulated much of the value and market power that used to accrue to publishers and media companies. As Thompson puts it:

When people follow a link on Facebook (or Google or Twitter or even in an email), the page view that results is not generated because the viewer has any particular affinity for the publication that is hosting the link… if anything, the reader is likely to ascribe any positive feelings to the author. Over time, as this cycle repeats itself… value moves to the ends, just like it did in the IT manufacturing industry or smartphone industry.”

. . . .

In other words, Thompson believes that because of the disintermediating effect that the internet has on content, value is moving towards the individual creators of that content — writers, editors, artists, etc. — and towards the platforms that allow for discovery and/or distribution of that content (Facebook, etc.) and away from publishers and media companies of various kinds.

. . . .

So what does the future look like for those media companies in the middle of the “smiling curve?” Thompson doesn’t say, but it probably isn’t going to involve a lot of smiling — instead, it presumably involves trying to squeeze less and less revenue out of a market where they are rapidly losing control, and trying to form relationships with platforms like Facebook without losing even more.

Link to the rest at GigaOm and thanks to Matthew for the tip.

PG says this is one of the principal results of the disruption that ebooks and ecommerce have visited on traditional publishing.

In the old days, the author created the manuscript, the agent sold the manuscript to the publisher, the publisher took the manuscript and, with the help of a printer, turned it into a book, the distributor took a bunch of the books and put them in a warehouse from which smaller bunches were sent to bookstores/other retailers and the bookstores sold the book to readers.

Under this model, the manuscript was of no value to the bookstores and a lot of intermediate steps were necessary before the manuscript became salable to readers. Without the internet and in an era of mass broadcast and print media, an individual author had very few ways of affecting discovery of the book, which, for most books, happened primarily in bookstores and other B&M retailers.

Today, the author creates the manuscript and either converts it to an ebook or pays somebody to do so, Amazon takes the ebook and sells it to readers. Those are the only necessary parts of the ebook/ecommerce supply chain. Discovery of ebooks takes place online at Amazon, Facebook, Twitter, etc. The rest of the old supply chain is obsolete and an unnecessary expense.

The author and Amazon are the only places where significant value is created in the new supply chain.

The fight between Amazon and Hachette is about the dominant players in the middle of the obsolete supply chain trying to remain relevant and capture more of the value that they used to take for granted.

From Papyrus to Pixels

28 October 2014

From The Economist:

Fingers stroke vellum; the calfskin pages are smooth, like paper, but richer, almost oily. The black print is crisp, and every Latin sentence starts with a lush red letter. One of the book’s early owners has drawn a hand and index finger which points, like an arrow, to passages worth remembering.

In 44BC Cicero, the Roman Republic’s great orator, wrote a book for his son Marcus called de Officiis (“On Duties”). It told him how to live a moral life, how to balance virtue with self-interest, how to have an impact. Not all his words were new. De Officiis draws on the views of various Greek philosophers whose works Cicero could consult in his library, most of which have since been lost. Cicero’s, though, remain. De Officiis was read and studied throughout the rise of the Roman Empire and survived the subsequent fall. It shaped the thought of Renaissance thinkers like Erasmus; centuries later still it inspired Voltaire. “No one will ever write anything more wise,” he said.

The book’s words have not changed; their vessel, though, has gone through relentless reincarnation and metamorphosis. Cicero probably dictated de Officiisto his freed slave, Tiro, who copied it down on a papyrus scroll from which other copies were made in turn. Within a few centuries some versions were transferred from scrolls into bound books, or codices. A thousand years later monks meticulously made copies by hand, averaging only a few pages a day. Then, in the 15th century, de Officiis was copied by a machine. The lush edition in your correspondent’s hands—delightfully, and surprisingly, no gloves are needed to handle it—is one of the very first such copies. It was printed in Mainz, Germany, on a printing press owned by Johann Fust, an early partner of Johannes Gutenberg, the pioneer of European printing. It is dated 1466.

. . . .

Although this copy of de Officiis may be sequestered, the book itself is freer than ever. In its printed forms it has been a hardback and, more recently, a paperback, published in all sorts of editions—as a one off, a component of uniform library editions, a classic pitched at an affordable price, a scholarly, annotated text that only universities buy. And now it is available in all sorts of non-printed forms, too. You can read it free online or download it as an e-book in English, Latin and any number of other tongues.

Many are worried about what such technology means for books, with big bookshops closing, new devices spreading, novice authors flooding the market and an online behemoth known as Amazon growing ever more powerful. Their anxieties cannot simply be written off as predictable technophobia. The digital transition may well change the way books are written, sold and read more than any development in their history, and that will not be to everyone’s advantage. Veterans and revolutionaries alike may go bust; Gutenberg died almost penniless, having lost control of his press to Fust and other creditors.

But to see technology purely as a threat to books risks missing a key point. Books are not just “tree flakes encased in dead cow”, as a scholar once wryly put it. They are a technology in their own right, one developed and used for the refinement and advancement of thought. And this technology is a powerful, long-lived and adaptable one.

. . . .

Books read in electronic form will boast the same power and some new ones to boot. The printed book is an excellent means of channelling information from writer to reader; the e-book can send information back as well. Teachers will be able to learn of a pupil’s progress and questions; publishers will be able to see which books are gulped down, which sipped slowly. Already readers can see what other readers have thought worthy of note, and seek out like-minded people for further discussion of what they have read. The private joys of the book will remain; new public pleasures are there to be added.

What is the future of the book? It is much brighter than people think.

. . . .

Historically books were a luxury item. Having become cheap enough for the masses in the 20th century, in the 21st century digital technology and global markets have made them more accessible still. In 2013 around 1.4m International Standard Book Numbers (ISBNs) were issued, according to Bowker, a research firm, up from around 8,100 in 1960. Those figures do not capture the many e-books that are being self-published without an ISBN.

Many of those self-published books are ones in which traditional publishers would have had no interest, but which almost-free distribution makes worthwhile: do you feel like checking out some Amish fiction? The size of the text, as well as the size of the niche, becomes less of an issue, too; short stories and novellas are making a comeback. “Before there used to be too-big-to-carry and too-short-to-print,” says Michael Tamblyn, the boss of Kobo, an e-reading company. “Now all those barriers are gone.”

. . . .

[A]s Russell Grandinetti, who oversees Amazon’s Kindle business, puts it, the print book is “a really competitive technology”: it is portable, hard to break, has high-resolution pages and a “long battery life”. Technology companies that are used to consumers flocking to snazzy features and updates have found it surprisingly challenging to compete with a format of such simplicity, and consumers are uninterested in their attempts to do so. All most want is the ability to change font size, which is attractive to older eyes. Experiments with reinventing the presentation of books—by embedding sound and video inside e-books, for example—have fallen flat. Sales of e-readers, the most popular of which is the Kindle, are in decline. “In a few years’ time,” a recent report by Enders Analysis, a research firm, predicts, “we will look back at e-readers and remember them as one of the shortest-lived of all consumer media devices.”

You do not need a dedicated e-reader to read an electronic book. The multipurpose tablet devices which are replacing e-readers let you read books and—crucially—buy them whenever you like. Some forms of book benefit a lot. Heavy readers of genre fiction—romance, thrillers and science fiction—were early converts to the cheaper, more portable alternative. Other sorts of book have remained more stubbornly in print form, for various reasons. Physical books make better gifts; many people still want bookshelves in their homes. Parents who feel that their children are spending too much time with screens go for printed books as an alternative, which means a new generation is growing up in contact with print.

. . . .

“A bookstore is defending a very specific lifestyle, where you want to take time out of your day and write or think or read,” says Sarah McNally, owner of a bustling independent bookshop in Manhattan.

. . . .

Before the 19th century it was common for writers to publish themselves, a practice that carried no particular stigma, but imposed a significant burden of inconvenience on seller and buyer alike. One author in Paris had to direct buyers to his home on “Mazarine Street…above the Café de Montpellier, on the second floor using the staircase on the right, at the far end of the alley”. As publishing became a mass-market business in subsequent centuries, the self-published came to be seen as kooks or egotists, and treated as marginal in either case. Readers went to bookshops, bookshops bought from publishers and that was the way it was. Bookshops mostly refused to stock them.

Today self publishing has made a comeback. The internet enables people to sell their e-books and print books without the hassle of directing people to their homes or trying to get bookstores to display them. It also offers them success on a scale never before possible.

. . . .

Last year Amazon’s sales of self-published books were around $450m, according to one estimate; a former Amazon executive thinks the number is higher. In America about a quarter of the books that got an ISBN in 2012 were self-published, according to Bowker—almost 400,000 titles. In 2013 self-published books accounted for one out of every five e-books purchased in Britain, according to Nielsen.

. . . .

But the advantages of being “properly published”—editors, promotion, and the like—should not be oversold. “We have to be careful not to compare the reality of self publishing with the ideal of legacy publishing,” says Barry Eisler, a thriller writer. In 2011 he walked away from a publisher’s advance of $500,000 in favour of the self-publishing route; he says the decision paid off well. Susan Orlean, an author and a staff writer at the New Yorker, considered something similar for a recent book. “In a million years I would have never thought of that before,” she says. She thinks the day will come when publishers may have to start unbundling their services. “The mere fact that publishers make hardcover books won’t be a powerful enough argument. They will have to reimagine their role.” Publishers could start offering “light” versions of their services, such as print-only distribution, or editing, and not taking a cut of the whole pie.

. . . .

In 1471 [Niccoló Perotti] the humanist scholar complained to a friend, “Now that anyone is free to print whatever they wish, they often disregard that which is best and instead write, merely for the sake of entertainment, what would be best forgotten, or better still, be erased from all books.” His worries were echoed for centuries. “If everyone writes, who will read?” asked Christoph Martin Wieland, an 18th-century German writer.

Link to the rest at The Economist and thanks to Tina for the tip.

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.

****

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”.

****

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.”

. . .

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.

. . .

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.

. . .

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?

. . .

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.

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