You may have seen this already, but just in case: Evan Schnittman is head of global business development at the Oxford University Press, and he sure knows how to make the first post on a new blog punch hard. In his inaugural piece, he explains why the success of consumer ebooks would collapse the publishing “Ponzi scheme”.
I’d advise reading the whole thing for a very honest warts-and-all explanation of the economics involved, but the money-shot is right at the end:
And therein lies the dilemma… how does the publishing industry fund the creation, editing, design, production, marketing, e-warehousing, and sales of ebooks, if the income isn’t there? How do ebooks cover the huge advances needed to buy books if we cannot generate the cash, especially at their extremely low, discounted prices, cover the advances that an entire industry has come to require? The answer is that ebooks, alone, cannot.
What this means is that unless a very different model evolves, ebooks can never become the dominant version of content sold by book publishers. It means that ebooks will always be priced to sell, but sold as an afterthought, not as the primary version of a work. It means that the need for blended e plus p models will evolve, in order to take advantage of all the great qualities of ebooks, while providing the financial support and structure that print offers. It means that consumer ebooks, as a stand-alone version of an intellectual property, must fail.
Of course, it’s not an utterly bleak prognosis; Schnittman promises to follow up with a series of business models that will explore the factors he describes, including one that he believes will let the publishers have their cake and eat it, and I know I’ll be looking forward to reading them. It’s good to find someone close to the core of the industry who isn’t beating around the ebook bush. [via GalleyCat; image by smellyknee]