The Kindle, and its success, are just a small portion of the huge transformation that’s going on in Books and Publishing.
What Kindle is doing is shiny and beautiful and admirable. Yet, the transformation is much, much bigger and very dark and scary.
It’s the end of the Book World as we know it. And it doesn’t feel fine.
No one seems to be paying attention to what’s painfully obvious. There are a thousand different signs, and yet everyone’s pretending that we aren’t on the edge of a cataclysm.
The Death of the Book World as We Know It – In 5 Acts
Act 1: Tragedy of the Commons – No one thinks long-term
People are pushing for things without realizing the long-term consequences -
- Readers are demanding unsustainably low prices. Readers are disregardng all the benefits of ebooks, and fixating on the few characteristics of physical books that aren’t carried over.
- Publishers are asking for unrealistically high prices. They are expecting ebook buyers to support their inefficient print book businesses.
- eReader companies are putting in unnecessary restrictions. They are treating the ebook revenue stream as a new all-powerful demi-God - one that takes precedence over mere mortals (such as customers) and common sense.
Look at it from the perspective of any individual group, and what the group is doing makes perfect sense. However, the tragedy of the commons is that everyone acts out of self-interest, and it ends up destroying the shared resource.
Act 2: Infinite Competition rears its ugly head
Hand in hand with the Tragedy of the Commons is the fact that there’s infinite competition.
Any company can start selling ebooks. Any author can publish. It just means there’s a never-ending struggle.
Consider what we’re currently seeing –
- Amazon is selling 100 books in the UK Kindle store for just a pound each. Do check it out – it’s a crazy sale.
- Indie authors are selling books for $1 each – plus they’re giving them away for free on their websites.
- Kobo is offering 20% off coupons and 35% off coupons.
- Borders is offering a long list of books for $5.
- Publishers are offering older books for free, or for $1.99, to promote newer releases.
- We now get 100 book offers a month.
- eReader companies keep adding features like ebook lending, which cut into their profits.
Any 1 of these things by itself is not an issue. The company doing each of these is just striving for a competitive advantage. However, combine all of these, and you create the perception that $1 books and $5 books are sustainable. You can argue that $5 books are sustainable – However, even the most delusional reader would have a hard time claiming $1 is a sustainable price.
Yet, $1 books are where we’re headed. If we’re lucky enough to escape the race to zero.
As things get more and more competitive, the competing companies and authors try more and more suicidal things.
It can only get worse. We haven’t seen the worst things yet – Advertising, free books in return for user information, trickery, and all sorts of deceit.
Act 3: Desperate Authors make readers all-powerful
Check out any forum and see how desperate authors are to get noticed. They are willing to do anything to get a reader to read their book.
Authors are 1,000 times more motivated to find readers for their books, than readers are to find new books. It’s not that readers don’t want to find good books - Readers are very, very interested in finding good books. It’s just that authors’ desire to get people to read their books is so strong that it borders on insanity.
How else can you explain the authors who keep posting on the official kindle forum?
They get called spammers, and they get told to stop posting about their books – Yet, every few days they are back.
Act 4: Relative Competition and Powerful Readers set up a Race to Zero
Not only is there infinite competition, there’s relative competition.
Not only do you have to compete with Publishers, companies, and authors – You have to be better than them.
Which means you have to increase the value proposition for readers. But then, your rivals one-up you, and offer an even better value proposition. It keeps escalating until you’re offering so much value for the money customers spend, that you aren’t making any profits.
The current eReader world is a house of cards. It’s all based on the belief that ebook revenue is going to provide a steady stream of income, and make-up for all the investment. It’s not. There’s infinite competition, and there’s no way any sort of stable ebook price can be established.
A stable, non-zero eBook price can’t be established because readers have all the power. The ideal situation for them is to get books for free, or for unsustainably cheap prices. Since readers have all the power, they will manage to get the ebook prices they want.
Act 5: The Free Market Destroys All Profit
We have authors who are far more invested than readers. We have infinite competition. We have companies under-cutting each other. We have everyone ignoring the long-term results of their actions. And intertwined with all of these factors is the tragedy of a truly free market.
It’s a truly free market – no barriers, no restrictions, no gatekeepers. In a truly free market all profits go to zero.
The Publishers were the regulators – They kept out the barbarian hordes, and kept the supply of books lower than demand.
Now, there are no regulators. Anyone who wants to publish a book can. It’s all in the ether so books can be priced at any price-point. Which means that we’ll tend towards an iPhone App Store model or an Internet Model. That would mean $1 books or $0 books. Neither seems sustainable.
The Future is Bleak
There isn’t really a solution.
All the players feel they can open up the floodgates, let the waters wash away Publishers, close the floodgates, and then set up very profitable companies on the flood plains.
That’s delusional.
The waters have tasted freedom. The fields and plains have tasted the unrestrained waters. The floodgates are an illusion. The only thing stopping the waters from flowing freely to the plains is an illusion.
In the past we had real floodgates – the financial costs, having to print books, having to strike up partnerships, shipping and storage costs, bookstores, marketing budgets, the expertise required at every step. Today, there are no floodgates – combine the Internet and eReaders and suddenly books are just a single click away.
The only thing that would be nice is a convenient path for the waters to flow along. That’s all. There are no floodgates blocking progress.
The path simply lets the waters go where they want to go. To assume that a company providing the path can control everything is madness.
It’s the end of the book world as we know it. We just don’t know it yet.
Filed under: books
