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]
horse shoes come to mind
Argument is extremely short-sighted. He’s right if no entrepreneurial publisher cuts out all of the now-unaffordable and unnecessary costs of the traditional model and gets a distribution channel. The odds of that are probably worse than 10:1.
It’s dead wrong to say “ebooks must fail.” Ebooks cannot succeed inside the cost structure of contemporary publishing. So the cost structure of contemporary publishing must fail.
With all due respect, Dave, I think that’s exactly the point he’s trying to make – bear in mind he probably wrote that piece aimed at fellow publishing execs, and was aiming for shock value. Us consumers (and loud-mouthed commentators) are ahead of the curve. 😉
I agree w/ Dave – this sounds like an echo of the mp3 wars. basically,
books will always be around (old copies and the diminishing % of folks
that love real books…kinda like people who like vinyl records)
, but I think increasingly most people will go towards ebooks as their primary
source…maybe not on expensive ebook readers like kindle, but on their blackberry or
iphones, which even today do a decent job frankly, if you ever try it. The
market right now is set by the publishers because, they like it and are afraid of
change, but also because its still a lot harder to “rip” a book the way you
can a CD…. I think the moment someone comes up w/ a functional scanner that
can rip a book quickly on its own (robotic page-turning arm anyone?), then the
game is all over.
The phrasing was interesting: ebooks MUST fail. Because if they don’t, the publishing industry is up the creek.
If that’s what he meant, as Paul Raven suggests, it’s a damned odd way to say it. Because most folks in the publishing industry will hear him as saying ‘ebooks must fail because they are a bad model.’ And think that means they’re safe, all they’ve got to do is bide their time….
In fact, ebooks are a great model — for consumers. So yes, the cost structure of contemporary publishing must fail.
I’m not sure of the direction publishing will take in the future. I do know this: there are books I have read on my Kindle I would NOT have read otherwise. Not to mention the two newspapers I subscribe to on my Kindle.