Recent developments in the world of publishing, clearly demonstrate yet again that the primary objective of the content industry is to make a tidy profit. Nothing wrong with that, if you ask me; however, it usually turns into a rather sticky mess when that pursuit is clouded by accusations of skulduggery, conspiracy and outright price fixing.
I refer to a recent lawsuit filed by the US Justice Department against Apple and 5 major book publishers, over allegations of conspiracy, collusion and price fixing. According to this article from the Wall Street Journal, it could change the course of a rapidly expanding eBook publishing industry. But how so, you ask?
Well, it is really down to opposing business models, (i.e. the so called agency versus wholesale approach to eBook pricing), where, on one hand, an agent such as Apple will allow publishers to set their own price, and take a cut (in this case 30%) from sales on its iBook platform. On the other hand, a wholesale pricing model is one where the retailer (e.g. Amazon or Barnes and Noble) sets the price for eBooks and can effectively apply discounts as they wish (even if it means selling eBooks at a loss). Obviously, this latter scenario leaves publishers with less control over prices, and consequently profits, hence the opportunity to take advantage of a more favourable option could not fail to be attractive.
However, the question remains about the value proposition for consumers, who are themselves increasingly embracing eBooks for its convenience, ease of use and, perhaps more to the point, a huge potential for significantly lower prices overall. One might argue that eBooks do not require paper, glue, physical stores / shelf space or any significant distribution / transport costs, therefore they really shouldn’t be priced anything close to their physical versions. Surely, this quest to keep prices high can only be in favour of publishers, and their bottom lines, mustn’t it?
So what are the key arguments / rationale for keeping eBook prices artificially high? Perhaps the main reason has to do with high operating costs incurred by large publishers, as well as the need to maintain a powerful marketing and promotional machinery. Furthermore, it may also be argued that lower cost eBooks are somehow cannibalising the margins to be had from physical books. Whatever the case, it seems publishers stand to lose out if they don’t do something (innovative?) to counter the effects of change.
Hmm, now where have we seen this before, (and how did that industry cope / survive)? Ah, yes, the music industry went through something similar, except they chose to sue those pirates and freeloaders (aka the people formerly known as customers), that supposedly ‘stole their bottom line’. However, they seem to have found other ways to complement dwindling revenue streams, e.g. via ticket sales for live performances. By the way, death may no longer prevent artistes from performing before a live audience, assuming this deceased artist hologram idea catches on.
Luckily the book publishing industry don’t have to take quite so drastic a measure, especially as it has been shown time and again that new media formats and channels do not necessarily mean the complete demise of existing ones. This is arguably the perfect time for publishers to embrace even bolder / more innovative thinking to discover complementary initiatives that will bolster an industry under threat, real or imagined. They must observe and capitalise on consumer trends and emergent user behaviours. For example, the sheer capacity, variety and anonymity (i.e. no tell tale covers) of reading material to be found on your average eBook reader means that users now carry, consume and explore hitherto unthinkable (at least in public) subject matter. The current boom in romantic erotica sub-genre, aka Mommy Porn, is an interesting case in point.
Perhaps even more fundamental, is a need to seriously consider the verboten idea of evolving copyright into something much better aligned with the digital age. Unfortunately, that will be a tough sell to the publishing industry, if this report of a speech given by HarperCollins International Chief Exec, at the London Book Fair, is anything to go by. According to the article, “others in the book trade, including the Publishers Association” have criticised the recent Hargreaves Review of Copyright, which some feel could weaken the current copyright regime. As you may have gathered by now, I don’t subscribe to that point of view, but then I am only an author and may not see things in quite the same light as a successful publisher might.
In many ways, this whole situation could be seen as a remix of circumstances surrounding the birth of copyright. In 1710, the printing industry lobbied for creation of a law to govern the rights to print or reproduce works (now known as the Statute of Anne), in order to protect their interests and the authors / creators of said works. Copyright is essentially an artificial system, which routinely needs a degree of manual intervention whenever new and disruptive content technology or consumer trend emerges. That, in my opinion, is the fundamental flaw with copyright which any revision thereof must try to address. In an age of multi-platform, multi-channel and multi-format publishing, there really is no place (or time) for manual intervention each time a new and disruptive trend, challenge and opportunity presents itself. I for one would be more than happy to attempt to demonstrate just how such a system could work (based on real copyright content), but then I would probably need a hefty six figure advance from some far-sighted multi-publisher to make it happen. Who says there is no future for publishing?
This is really a sequel to a post written for end of last year (which can now be found here), about the likely direction of things to come, and the perils of following the crowd / herd mentality, particularly for those in the creative industries. Read on for some key messages and evidence in support of those observations:
1. Privacy? Fuggedaboudit – According to Facebook founder, Mark Zuckerberg, “Privacy is no longer a social norm”. Yet people remain fixated with this fantasy that they can stay private online, as perhaps encouraged by such guides as this NY Times article on 5 easy steps to stay safe and private on Facebook!
2. Opening up protected video – The Digital Entertainment Content Ecosystem (DECE) has come up with a way to enable playing of protected content on various compatible devices. So is this really Interoperable DRM at last? Maybe, but perhaps it might just be a little too late. A good explanation of this move, and its implication, is available on the Copyright & Technology blog. In any event, one key question remains i.e.: what happens to your protected digital content if / when the provider goes bust?
3. How to make the same mistake twice, or not – Moves by the publishing industry to protect revenue by delaying ebook releases smacks of a similar pattern of mistakes made by the music industry over digital content. According to this excellent Forrester blog, “there are better ways to Window eBooks” and it would be prudent for publishers to take heed.
4. The future is Mobile – Contextual applications enabled by mobile / geo-location services will be the killer proposition, no question. Just ask Google.
There you go. Comments welcome.
Note: This post was previously published on my BCS DRM Blog, where you can find the original post, and reader comments, in the archives.
The ebook publishing industry has become an interesting place to observe how commercial stakeholders battle for control of online content standards in order to further their own agendas. The very future of electronic publishing may well be at stake….
Recently Adobe’s .epub format was declared an ebook standard by the International Digital Publications Forum (IDPF). This may not be surprising to most people, considering that Adobe is a recognised leader in online formats like PDF and Macromedia Flash. However their capture of this standard has raised eyebrows in the blogosphere (e.g. this article in The Register) for several reasons.
First of all IDPF, the standard granting body, is a one employee outfit and its single employee is apparently leaving to join Adobe. Go figure. Secondly, there has been relatively poor uptake or implementation of this standard (apparently even Adobe’s examples are not fully compliant). Which raises the question of why battle for this standard?
The answer, according to The Register, may be for competitive reasons like regulatory adoption of this standard for archiving purposes, which will effectively block the path of competitors like Amazon’s Mobipocket,SamHain publishing, or many genre specific publishers like Baen (Sci-Fi), Ellora’s Cave (Romance).
Currently you can choose to read a typical electronic book in the following formats: HTML, Rocket/Ebookwise, Palm/Mobipocket, PDF, RTF or Microsoft Reader Formats and the list just keeps getting longer.
It is still early days, but the indications are that the publishing industry may end up in a state similar to the music industry if they do not get their electronic publishing formats in order. I wonder if they will succeed. What do you think?