Truth Be Told: Five unalterable realities of the approaching publishing landscape

After a week or so of reading, writing and ranting about the Amazon-Big Six-Apple-DOJ battle for the fate of the publishing universe, I’m a little sick of it. Besides, at this point, what the hell else can be said that hasn’t already been said bunches of times over? Amazon is an evil monster hellbent on destroying the publishing world or they’re not. The Big Six minus one and Apple colluded illegally to fix prices or they didn’t. The DOJ is over-reaching and doing more harm than good or they’re not. Agency Pricing is a racket used to shield print and slow ebook adoption or it’s not. Everybody’s got an opinion, and many of those overlap depending on which side of the old/new debate your sensibilities reside. Either we’re cheering on the damage publishers inflicted on themselves or we’re bemoaning the inevitable end of literature, culture and the publishing industry.

The thing I’ve finally realized is that none of this really matters in the grand scheme of things. There are a few basic realities that will carry on regardless of what any of the parties involved in this debacle decide to do. Amazon will become a monopoly or it won’t. The publishers will see their preferred business models smashed to pieces from the fallout of the various lawsuits or they won’t. Doesn’t matter either way in either case.

Truth #1– Digital Publishing and eBooks are here to stay

There’s no turning back now. The massive print infrastructure that roadblocked so many writers from reaching the marketplace for readers is no longer a real obstacle. The so-called Big Six can no longer stop anyone from selling their wares on equal terms. They can no longer steer customers to the limited options they prefer at whatever price points they want. Protectionist actions like the Agency Pricing deal that got them sued are ineffective and counter-productive.

Digital publishing hasn’t just kicked open doors that were long shuttered, it has blown the whole side of the building wide open.  Trying to stack up some boxes or slide the dresser in front of the gap of their gatekeeper controlled entry points won’t work. The passage is clearer now than its been in a long time, maybe ever, and we’re only at the very beginning of the changes yet to come. Things are going to get a whole lot worse for those who formerly controlled the industry before they get better, if they get better at all. Digital reading will become ubiquitous sooner than later, and it will dominate the market no matter how many warm, fuzzy memories of the past we conjure up.  Nostalgia is not a business model.

Truth #2- Amazon’s perceived dominance is fleeting

When discussing Amazon, the conversation almost inevitably turns to monopoly and now its first cousin, monopsony, too. This is a mistake because it superimposes economic conditions of the physical world onto digital. Long standing monopolies are exceptionally difficult to build and maintain in the virtual realm, and that’s only going to get harder to achieve over time. Amazon may hold most of the cards right now, maybe even the entire deck, but the thing about digital is that there are infinite decks from which to draw your hand. They’ve built up their position today because they have all their bases covered–cheap prices, overwhelming choices, a reasonably priced device most people find unobjectionable and the single best store interface in existence for both consumers and sellers. But that’s the rub. They may have the bases covered right now, but the instant they leave one unguarded, someone somewhere is going to jump all over it. To make matters worse, it might even be a base (or several bases) they didn’t even realize was on the field. We haven’t even scratched the surface of the changes yet to come.

One nice idea from some other quarter has the same potential to pull the rug out from under them that they’re innovations had for the traditional industry. And companies, as they get bigger and more complacent about their positions tend to miss important things. Amazon today may not ignore a game-changing reality, but what about tomorrow? Or the next day? Amazon is currently competing with an old school industry stuck in an industrial manufacturing, physical goods past. In that regard, they look for all the world like an unstoppable force. The next generation of competitors, however, won’t be tied to a bloated and inefficient past. They’ll be digital natives building from the advancements of Amazon itself. When the disruption has finished chewing up traditional publishers, Amazon is next on the hitlist.

Truth #3- Bookstores are doomed in every possible circumstance

How many record stores do you see around these days? How many video stores are left? Bookstores are the next to fall. As digital reading inevitably continues its ascendancy, eventually becoming the default manner in which people read, the notion of a shop specifically catering to an outdated product will seem quaint. Physical books in the future are far more likely to be found in antique stores rather than their own dedicated shops.

We will soon reach a point where the physical bookstore becomes a losing financial proposition both from the customer and the retailer standpoints. Nothing that can be achieved by a trip to the bookstore won’t be done faster, cheaper, more thoroughly and efficiently online. Barnes & Noble and what’s left of the big box book retailers will fall first, followed by a steady stream of independents until all that’s left are a smattering of tiny shops, very likely willing to lose money on books just to keep the doors open. I’m not reveling in their demise, I love bookstores, but I loved music stores, too. It would be nice to see them thrive, but it’s unrealistic. When every service you offer can be done better and more conveniently by your customers from their own living rooms, your days are numbered. Talk about literary culture and their place in publishing history all you want, but it’s not going to alter anything. Again, nostalgia is not a business model.

Truth #4- Publisher’s whining about ebook prices is irrelevant

Traditional publishers are stuck between the rock of their expensive print-centric business models and the hard place of cheaper, more efficient digital-centric changes to the industry. Given how quickly digital is eating away print’s market advantages, that is a very bad place to find yourself. Many small publishers and independent writers know that ebooks are almost insanely cheap to produce and distribute. They have direct, first hand experience selling ebooks very profitably at half or less of the price traditional publishers claim is too low for the industry to survive ($10). They, and everyone else including readers, know it. When the head of a Big Six publisher says that ebooks are only 10% less expensive to produce than print, it sounds like bullshit because we know it doesn’t have to be that way.

Print’s share of the overall market is as high today as it’s ever going to be. There’s nowhere for it to go except down. If you’re a publisher who’s business is built on a print infrastructure packed with layers of middlemen trying to squeeze ebooks into the identical framework, you’re screwed. As digital continues to grow, bookstores die off and other physical retail outlets discard large book sections, that print-first dynamic will become ever more untenable. Publishers are making a crucial error in trying to unilaterally increase ebook prices in the service of supporting print infrastructure. If they can’t profitably sell ebooks today at $10 or less, they need to make changes to their businesses so that they can. Whining about market forces and taking actions in opposition of your own customers’ desires and beliefs isn’t going to magically turn things around, and will very likely make it much worse for those that do. Yes, publishers have built virtual empires on the back of expensive print-based models. But the market is moving away from that model. If publishers don’t follow it, their predictions of doom will become self-fulfilling prophecies.

Truth #5- Writers who succeed in the future will be their own publishers whether they like it or not

Conventional wisdom suggests that publishers will eventually adapt and reclaim their positions as the principle gateway for authors to get their works to market. I don’t agree, unless, and this is a big one, their adaptations convert them into a service industry catering to writers. Thus far, I’ve seen nothing to indicate that’s going to happen. So, a far more likely outcome is that writers will, in most cases, be small businesses responsible for producing, marketing and selling their own material. This entails developing relationships with editors, designers and other services, essentially becoming micro-publishers each representing one writer–themselves.

As digital continues to threaten traditional publishers, we’ve seen more hard line stances taken with regards to writers. Rights grabs, revised contracts, shrinking royalties, non compete clauses and more efforts undertaken to mitigate their risks by cutting compensation and snatching more value from the writers under their collective umbrella. As print’s importance fades, eventually we’ll hit a point of no return where a traditional publishing contract does far more harm than good for a writer. Some have suggested that we’re already at that point for the vast majority. There may be other businesses emerge that service the essential activities of publishers, but I don’t expect their agreements to be significantly less one-sided. This means that the primary means for writers to reach publication will be essentially do-it-yourself.

“I just want to write,” is by far the most commonly used excuse by authors to place themselves under the endentured thumb of publishers, and, from a business standpoint, it’s not a very good one any more. The thing is, if a writer just wants to write in the future, they willingly will have to subject themselves to egregiously one-sided agreements where they’ll be fortunate to earn a pittance of what their work actually produces, even less than is currently the case. The current fight over the ebook market contains only occasional lip service from publishers about the benefits of writers. They seem to be treating it as a battle over who amongst the corporate giants gets to reap the rewards from writers’ efforts. The far more viable, and sound business choice for writers will be to become publishers themselves. The control, creative freedom and ability to earn the lion’s share of revenue from your efforts will make it worthwhile. It will also pose a greater risk, but that’s a tradeoff. No matter how much digital changes things, you still don’t get something for nothing.

There will be a contingent of writers who ultimately will bristle at the notion of having to expand their skill set and devote more time, effort and resources into pursuing their own success, but that’s the breaks. Traditional publishing seems to be trying to establish a pattern of poaching independent writers once they reach a certain level of success. That may make some sense, depending on who you ask, given the benefits they can potentially bring in the physical print market, but as print declines, those justifications from going indie to traditional will evaporate right along with it. If a writer puts in the time and effort to reach a level of success independently, the benefits of signing a traditional contract in a principally digital world are almost exclusive to the publisher. Sure, you might be able to no longer worry about things you don’t want to, but you will pay dearly for that “convenience.” It’s also highly debatable you’ll get the benefits you think, particularly when it comes to marketing, which is a burden already being shifted to writers today.

We may well develop a two-tiered writer system–those who are essentially lowly paid employees of publishers and those who become publishers themselves. In that environment, the big winners will come from the second group. Some writers may not like things going in that direction, but just as everyone is so keen on the notion that publishers will have to alter their conceptions and business practices, writers must also adapt to the new realities. No one on any side of the disruption is immune to having change thrust upon them.

Published in: on April 20, 2012 at 9:20 am  Leave a Comment  
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