What happens when the amount of books available to read
exceeds the market’s ability to read them! We have always struggled with more
books than buyers. The economics of market forces has always prevailed, choking
back on production, shrinking shelf space and reducing the rewards to those who
aspire to make fame and fortune from their writing.
It was simple when we only had the physical book. The market
was controlled by the shelf space available, the cost of the inventory and the
rate of purchases. We still produced more titles and units than could be
purchased, but for those who back the right works the rewards were significant
and for those with excess inventory there was always the ability to trade this
through. Importantly the sales were steady and although unpredictable at title level,
they were more predictable at market level. The supply chain was inefficient,
but worked and publishers wallpapered stores with their sale or return approach
to merchandising. Some aspects still remain, but those heydays are long gone.
Many blame the demise of the Net Book Agreement in the UK and the resultant
discount wars. The truth is far more complex and one element alone drove the
result.
The arrival of the Internet resulted in the virtual shelf
and inventory. No longer was shelf space an issue, as warehouse space, distance
shopping and customer service prevailed. The back list vied on equal terms with
front list and the mid list often found itself squeezed. Those mail order
players who were in the market should have won this battle, but were wedded to
yesterday, did not understand the new parameters and importantly did not
understand virtual inventory and changing consumer demands. The retailers
struggled to get the right people and often treated the internet as an adjunct
and not an integral part of their business. Amazon won and became a category killer
and although some shoots of new business have appeared, the ecommerce game is
firmly controlled from Seattle.
The digital book should have been the opportunity to address
the ground given away to Amazon, but the market lacked the commitment and
ability to work together. It stumbled from one white knight to another, as if
it was punch drunk and desperate to hold on to anything that offered anything.
We had Sony who promised much but understood little, Google who came to ingest
all and were courted, fought and allowed to offer not one but two poor settlements
and finally by Apple, who only wanted business on their terms. Some such as
Nook and Kobo were spawned from existing players, but these and others lacked
the technology clout, investment and global presence to succeed.
However, the biggest change that digital introduced was to
lower the barriers to publishing, not only allowing anybody to publish anything,
but also giving them channels and virtual shells on which to display their
works next to more traditional published works. Suddenly we were awash with
books, physical and digital. Self publishing was no longer to be dismissed and
looked down on. We were no longer just over producing new books, but
effectively bringing back every book ever published, but the consumers were
still only buying the same number of books. They may buy more to fill their physical
shelves, but why should they buy more to fill a virtual shelf?
The purchase model then came under a new threat –
subscription and on demand reading. It was working in music and film so why not
in books?
We have to look at music more closely to understand the
other changes that had taken place over the same period; the switch from album
to single, the migration from physical form to full digital, the high bandwidth
and availability of the internet, streaming technology, and the desire to
listen on the move. Film is no different and has had many different pressures
which make subscription viable.
We now even have the new EU regulations which have resulted
in Apple introducing, a no quibble, 14 day return policy. Some will suggest a ‘read
for free’ policy. The new EU and Japanese consumption tax changes may result in
ebooks costing more, but the extra money goes not to the creators, but to the
governments. Both these initiatives will hurt creators’ pockets and may drive
more to publish themselves.
So the facts are that we have a glut of content and in the
physical world even greater disparity between the successful and the others. In
the digital world we have a dominant channel which has understood the overall
business, its value chain and targeted elements overlooked by others and
integrated them into their offer. The market is no longer controlled by a
handful of publishers but by Seattle and yet we continue to stumble forward
with more of the same. If we have too many books we can no longer rely on
natural selection. The market isn’t suddenly going to grow and will continue to
flatline.
There will be increasing pressure to try something new such
as subscription.
However, what we are failing to address is the difference
between physical and digital. We are failing to create digital content for
consumers on the move. We are failing to look inside and see what’s in the
locker already and instead we continue to publish the same and expect that a miracle
will happen all by itself.
Time is the clue to the market opportunity.
