Monday, June 01, 2009

GoogleWorld Is One Big Onion

So Google is now officially going to be the biggest digital bookseller on the planet. The New York Times reports on the latest layer to be peeled back on the Google onion as it plans for media and content domination.

They certainly know the buttons to press and the words to say. Imagine you could paint a picture of a big bad wolf, blame them squarely for screwing up digital pricing, blame them for the audacity of dictating terms, point at them and deride them for creating a digital silo ereading offer that only worked in their world, with their content and on their devices. Then calmly turn around and claim that you (and only you) can save the world from this single state monopoly, give pricing back to the publishers, make digital content available anywhere, anytime and secure and delivered from a single digital warehouse. Not difficult to see the appeal of such a white knight.

The NYT claim that the Google white knight appears to be throwing down the gauntlet in the e-book market. Some would be more sceptical and suggest that they are merely herding sheep. Some would suggest that many can only see Grandma in bed and are unable to see the big bad wolf in Grandma’s clothing.

Mr. Turvey, Director of Strategic Partnerships at Google, is reported saying that Google’s program would allow consumers to read books on any device with Internet access, “We don’t believe that having a silo or a proprietary system is the way that e-books will go.” He also said that Google would reserve the right to adjust prices that it deemed “exorbitant.”

If we step back and look at the potential scenarios that could evolve:

1. Google’s Book Settlement goes backwards but Google is seen to be ‘nice’ and a settlement is sweetened by their books position with publishers and ‘free’ subscription deals with libraries.
2. Google’s Book Settlement goes through and you now have the biggest retailer, custodian, whatever, single source of new, old, and everything ever written. Who will dictate terms then? What alternatives are there to it?
3. As Google shift the model online they effectively kill off the lame ereaders and exposing their greatest weakness – the old ownership/ download model. The move creates a single source repository for all - Google Book World.
4. Google enters the print on demand world and render these through affiliated printers.
5. Google roll Audio into You Tube, or ‘You Play’ or ‘You whatever’ but do so on a streamed ad model (a la Spotify)
6. Google becomes the bibliographic source of reference and holder of all secondary material.
7. Google Book Search becomes the physical book search and discovery source using physical sources as affiliates for supply.

Forget the discounting battles of today what Google can even afford to do is shift the price up and maintain or even grow margin. This sounds like the answer to everyone’s prayers, or those still left standing after the digital Tsunami.

2 comments:

LK Hunsaker said...

Interesting post. I'm wondering though, what's the difference between Google trying to dominate content and Amazon trying to do the same. Amazon is making it very hard for small and independent publishers in many ways. I think they need the backlash competition for that. This is what a free economy is for, isn't it? To let them fight against each other in the consumer's interest? It's the only way to check big business.

Martyn Daniels said...

i agree and free marketers would agree too. However there is a difference when the fight is between two giants because when one wins or starts to dominate the natural check balances disappear and you may be left with a monopoly. When there are say four competitors and a market share battle ensues they tend to check each other. The other point is that there is no counter balance in the supply chain there are thousands of publishers and authors all with unique product which today is non exclusive in supply.
Take one step back an imagine only one search and discovery, one source of distribution, one rental and purchase supplier. Commercially its a nightmare. The consumer may get convenience but at a huge potential risk. That why monopoly and merger boards and bodies exist.