Book publishing has followed the music, movie and computer software industries in experiencing significant change due to technological changes and the efforts of companies like Apple, Google, Amazon, Hulu, Netflix and Sony.
There is so much talk of ‘netflix for eBook’ lately; we thought we would take a closer look at how digital business models evolve, and see if there any lessons we can take from other industries.
With widespread use of the Internet and improvements in streaming media and compression technology, digital music, images, video, books and games can now be distributed instantaneously across the Internet to end users, changing business models forever. When the music and movie industries realised they had lost control of the means of distribution, they struggled to main the status quo and were forced into new ways of doing business. There are lessons to be learned.
The music industry, which was product focused rather than consumer focused, was not prepared for a fundamental change and resisted digital, ferociously fighting back by issuing lawsuits for breach of copyright to people who were illegally downloading songs from the Internet, thus widening the gap between the market and the record companies. However, consumers now have access to more products (music and movie) through more channels, both legal and illegal, and the business model has evolved from the traditional one of selling singles and albums and DVD’s through stores, to online subscriptions, bundling, and value add services. In the music industry this shift created a move from the old superpowers to open up opportunities for content creators to reach consumers independent record labels and laid the foundations for a healthy and vibrant music industry with increased possibilities for artists and consumers. Sound familiar?
Music: The Death Knell
It began before the twentieth century even ended, and the last nail was hammered into the coffin with the release of iTunes and the first iPod back in 2001. That was when artists and labels stopped fretting over DRM and learned to love downloads. In other words, music became wholly, inescapably digital, and labels had to learn to live with the new model, sink or swim.
Hollywood: Big Screen Bombs, Small Screen Blockbusting
Another industry faced a similar transformation in the past decade...Hollywood. Many actors and production companies are now saying that TV shows are more lucrative than motion pictures, offering more creative license to a creative industry. In the age of Hulu and Netflix this is truer than ever - opportunities for TV show ad placement have exploded, forcing an industry wide change. Sure, people still go to the movies for a social experience and “silver screen magic”, but is box office seating is going to remain consistent over the next decade?
Publishing: Turning Over a New Leaf
If we’re going to make a fair comparison of contemporary publishing to the music and movie industries, it’s probably somewhere between the two. Publishing, as an industry, is moving steadily towards digital and has overcome some early barriers around DRM and piracy etc, to leverage itself into the digital arena, changing workflows, taking on board new skill-sets, dealing with new business models, new vendors and learning more about B2C. Publishers understand now, better than ever, that eReaders, eBooks, and an “eBookstore” are a core part of their future. What percentage remains to be seen, but most will struggle to maintain revenues without a sustainable eBook strategy to take pressure of declining print sales. When it comes down to it, we’re in a time of great flux for publishing, and it’s both exciting and slightly terrifying. There are now more opportunities now than ever for publishers to breathe new life into old titles and invent entirely new product lines.
3 Lessons Learned:
In order to keep up with the changing profile of readers, the ever-evolving eReader landscape, and the innovative pricing models and packages indie writers are cooking up, publishers should take note of the lessons learned from the failures and successes of the music and movie industries. Here are 3 ways we should learn from them:
One of the first issues publishers hit when engaging in digital. All of a sudden you are dealing with different sales channels, demanding different discounts, through different business models. Publishers should experiment with their options and figure out how to get readers coming back for more of their eBooks. There is a learning curve involved in this, so staying out of the game due to prohibitive discounts and business models will only harm your long term sustainability.
Indie publishers are way ahead of the curve when it comes to thinking up new ways to engage their readers and sell their books (and sometimes even just single chapters). This is hardly surprising since indie writers have to compete in an increasingly saturated market. Often it’s one author sitting on one book and they can give it more time and energy than traditional publishing houses can. They’re literally writing by the seat of their pants to stay alive, and evolving with the consumer.
So publishers are facing stiff competition from both Indies and retail giants, and one way for publishers to set themselves apart is by thinking up new ways of selling things. If this means letting go of DRM, then that has to be an option on the table. The music industry accepted the existence of torrenting applications and moved on, and they’re still making money because they’ve switched business models. The debate on the eBook market seems to have shifted gears and focus in 2013. While in previous years, the fast pace of the expanding market share of eBooks had hit the headlines, 2013 saw more complex patterns emerging around commercials, legal battles, pricing strategies and marketing.
3. Redefined Product Experience
Another way to liven up sales is to introduce new products to the market. Almost everyone believes that eBooks, by dint of their digital nature, have the potential to evolve the reading experience beyond anything we have yet experienced or imagined.
Right now, the majority of eBooks are basically just digital replications of the print version, with some built-in digital experiences like ‘search’, but they could be so much more. In the same way that DVDs reimagined the linear VHS with the introduction of a main menu and extras features, eBooks can include “layered” digital commentary, like author annotations, pictures, or references. And the best part about this digital reading experience? Readers can display/hide whatever they want.
Another huge way eBooks could reshape the reading experience is by allowing readers to plug in to shared experiences, book blogs and forums, where millions of readers share and comment on their favorite reading experiences. Readmill is pioneering this new form of shared reading, and it’s safe to say they have their fair share of fans.
These are just a few of the ways in which the landscape of publishing can learn from music and movies in an effort to move the industry forward in a sustainable manner. Publishers should continue to think of new and innovative ways to evolve the digital reading value chain, learn from the experiences of the music and movie industries and ultimately, burst open the doors that long term digital revenue is lurking behind.
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