21 October 2011

The macroeconomics of publishing

Last week, I discussed the microeconomics of publishing -- the detailed revenues that I got from different sales channels for my book and the overall experience of self-publishing.

In this post, I will offer a few thoughts on the impact of publish-on-demand (PoD) and electronic distribution (ED) on the book business. [Here's the Economist's view.]

First, both PoD and ED remove the need for warehouses and bookstores. Both distribution channels ship directly from the printer to the buyer, saving time and expense. It's possible to extend this argument to cut out the "publisher" (editor, design, marketing) when Amazon (et al.) are willing to connect authors directly to readers.

Second, PoD and ED remove the need for discrete print runs, returns and so on.  That means that books can be continuously updated (the upcoming version 1.2 of TEoA will fix 4-5 errors). Way more important, the improved matching of supply and demand means that fewer books will go unsold -- lowering costs and thus prices to consumers.

Third, eBooks will expand the demand for books (instant gratification), even if they do not increase reading (limited time). Offsetting higher sales volumes will be lower prices -- 99 cent books are one thing; pirated books are another thing altogether. It's possible that pirating will force authors to make their money via paid public speaking -- the way that music artists now make more money in live performances.

Fourth, bookstores are in trouble -- in the same way that computer stores are already in trouble. People try the product in the store then buy it online (you can sit in Borders [bankrupt!] a bookstore and download a Kindle book right now, while holding the unbought hard copy in hand). The trouble with bankrupt bookstores -- as many have told me -- is that they provide a distinctive browsing experience. Lots of people like to wonder around and see what's available, not knowing exactly what they want. Luckily for these people, another experience awaits: public libraries.  I bet public libraries become the "bookstores" of the future. People will visit to browse books. Some will check out the books but others will buy the books from online vendors affiliated with the library. The library may get a small commission for sales originating at its kiosks.

Bottom Line: People will still read, but they will pay less for a product that's distributed more efficiently (cutting out a few middlemen in the process).

3 comments:

  1. Yes, bookstores are in trouble.

    No, there isn't a future for the library. Maybe a transition to museums.

    Why would I go to the library to download a book when I can do it anywhere I'm holding my Ipad. The best book browsing experience is on Amazon.com.

    I now only buy physical books for the design. For example, I just purchased We are all Weird in hardback and kindle. I'm reading the kindle and keeping the hardback as a collectors item. They only made 10,000 and promised to never print again. Scarcity creates demand.

    Great post by the way, and obviously my opinion expressed above.

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  2. Yes, e-commerce has shattered the book business in many ways, mostly good. BUT. Have you ever tried to work on a project requiring five or six books open at the same time, or needed to flip back and forth between a history book and an atlas? Try this on a kindle sometime, if you have already pulled your all teeth out and can think of nothing else sufficiently painful. Physical books can also be objects of great beauty; one copy can be lent or gifted many times; they don't need electricity; they can contain wonderful marginalia and tipped-in notes and letters; they may possess sentimental or historical value; the text may not be manipulated by outside powers to say something else. Brewster Kahle, founder of the Internet Archive (www.archive.org), is compiling a gigantic physical library of books just for this "ground-truthing" purpose. Look what the jackasses tried to do to Huckleberry Finn. Imagine if your kid got her official PC e-books through the school computer system, all mutilated to comply with what The Authorities demanded.

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  3. - With ED there is no shipment from printer to buyer, as there is no printer.
    - You cannot sit in Borders, as they went bankrupt last year and the last branch in Scotland had disappeared more than a year ago and the last one in Australia was closing down when I was there - a terrible loss.
    - "fewer books will go unsold -- lowering costs and thus prices to consumers": this depends on the numbers. With large numbers it is cheaper to leave books unsold.
    - I prefer buying in bookstores and always do so if possible - I want to see and hold the book before I buy it. Libararies are a totally different thing: you cannot buy there, the books are not new, and they tend to have a time-lag of at least a few months, if the publication is not lent out. Which means I cannot see what I want to buy, and I cannot buy and take what I saw.

    I want more bookshops - places with no bookshops suck generally, and tend to have stupid inhabitants.

    Oh, and I also browse books online to buy them in a bookstore. Never the other way around.

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