The future of paper

Monday, June 02, 2008

Seth’s Blog: Do you own trees?

Many businesses act as if they have a stake in their suppliers and other vendors. Instead of scaling the part of their business that can move quickly and well, they defend the part they don’t even own.

Many in the music industry are figuring out that there are new ways to make money. As Techdirt says, every aspect of the music business is growing rapidly except the sale of plastic discs with music on them. And Godin says, “there are more people reading more news every day than ever before”. He doesn’t substantiate his claim, but I’m willing to give him the benefit of the doubt. And then he talks about the book industry.

I worry about my esteemed friends in the book publishing industry as well. The amazing thing about the Times story today was the report that the mood at BEA was ‘unease’ about ebooks. The fastest-growing, lowest cost segment of the business, the one that offers the most promise, the best possible outcome and has the best results… is causing unease!

This is what hits closest to home for me. I like to maintain that I have a book or two in me somewhere that will come out eventually. But I look at the industry of selling pieces of paper with words on them and I think it’s in trouble. It hasn’t happened yet because no one has made the book equivalent of the iPod (No, you didn’t do it, Amazon. The Kindle is kind of cool, but not there yet), but ebooks WILL be better than books. It’s inevitable. We’ll all miss the feel of paper in our hands, but we’ll get over it because of all the things you’ll be able to do with electronic words that you couldn’t with paper ones. And since the marginal cost of producing an additional copy of an ebook is nothing, the price of ebooks must go to zero in an efficient market. Sure, the book industry can go down the same route as the music industry did and put artificial barriers in place to drive up prices. But that kind of an industry can’t last for long. It’s economically inefficient, and it’s insulting to the customer who just wants not to be treated like a criminal. So, how do we get authors to write more books? Sure, JK Rowling can make money without selling paper books. The top authors in the world, and some who hit small but dedicated niches, and some other authors in special situations will all make money. But what is the equivalent of concert tickets in the book industry? Speaking engagements? That might work for a few, but not for most. I don’t know the answer. I don’t know how we can replace the paper book industry with the ebook industry. I wish I did, because I’d be in good position to make a lot of money.

Posted in: books , failed business model , Wind kissing