Mike Shatzkin
on Jun 21st, 2009
@ 9:52 am: 

I like the thinking here, but I will pick a couple of nits.

1. Going to a licensing model does not necessarily require that an advance be paid on “royalties.” In fact, more and more publishers are trying to do “no advance” deals with authors so I think we’ll also see more “no advance” deals with rights. So whatever the problems with the rights paradigm in the retailer space, the requirement for an advance doesn’t have to be the thing which knocks it out.

2. The problem with your “net pricing” idea, I think, is that it doesn’t account for the fact that, in the digital download world, eventually most publishers WILL sell direct to end users even if they didn’t in the past. And they will sell at some price, which will be, de facto, the publisher’s retail price. This is already happening, of course, and Amazon has apparently raised the point with some publishers that their “discount” is meant to be off the publisher’s price, and if the publisher is selling for less on their web site, their discount should be based on the lower price.

That’s why I have advocated cutting the DISCOUNTS to intermediaries and have the publisher continue to sell at “full retail” (except for special promotional offers, bundles, etc) Seems like that would give us a cleaner playing field, if not a more level one.

This is all still in the stage of getting more complicated, not simpler.

[Reply]

Dual Screen eInk, LCD netbook based on Android? | Netbook Reviews - Netbook Review Blog
on May 21st, 2009
@ 2:58 am: 

[...] browsing through the web, we came across this article describing the iPhone vs. Kindle battle in the universities. The Apple iPhone/iPod and Amazon’s Kindle are not exactly neck to neck in the ebook reader [...]

Gary Arms
on May 11th, 2009
@ 5:43 am: 

As someone who teaches the Online Generation, I think it will happen the way it did with music and the way it is now happening with movies and TV shows. People with no ownership stake will put content on line so that others can “share” it. And so the dike will be breached. I agree completely with Evan’s analysis of the Online Generation and his prediction that they will increasingly ignore anything not in the cloud. Anyone who teaches knows it is increasingly difficult to get students to read books. There is a small but significant young audience for books, but a distressingly large portion of the younger generation will not read entire books unless required to do so by professors. When the online generation does research, they do it almost entirely online. Publishers and authors will continue to squabble. Again, I agree with Evan’s analysis; they will never come to general agreement. Meanwhile, the cloud will expand, gobbling up everything that exists in digital form. In music, it appears that artists will continue to make money but most of their revenue will come from live performance, the sale of tee shirts etc. To a considerable degree, the music industry has lost control of its product. “If you can’t beat ‘em, join ‘em.” The success of Hulu suggests that TV and movies can make money selling ads on their own site, a site that is easy to use, reliable and free of viruses. A huge amount of print (especially periodicals) is already on line; the magazines sell ad space too. This is the single most important problem facing all content providers. The future will belong to those able to adapt to the new environment.

[Reply]

Another copyright reshuffle that’s in the cards - The Shatzkin Files
on May 12th, 2009
@ 5:11 am: 

[...] Schnittman at Black Plastic Glasses posted the final chunk of a 3-parter yesterday that contained a real shocker (to me) at the end. The 3-part post shows through [...]

MikeShatzkin
on May 5th, 2009
@ 6:48 am: 

Evan, I think just about everybody buys less music as they get older. Two reasons.

1. You get introduced to music much more readily and frequently when you’re young and single and music is inextricably bound to the discovery of social opportunities with those of whatever sex interests you.

2. As you get older, your stash of stuff you KNOW you like gets bigger, and you never stop listening to it. So your NEED for new new music diminishes.

I bet if you checked you’d find that the pace of adding new ARTISTS has slowed even more than the pace of adding new music.

None of this applies to the other forms of content because they don’t tend to be reused the way music is.

[Reply]

Evan Reply:
May 5th, 2009 at 8:07 am

Mike:

One could make the argument that as you get older you wind up reading more books, watching more TV, and seeing more movies… which isn’t reflected in my experience.

Its not just about music… it’s about everything.

[Reply]

Generation On-Demand « Black Plastic Glasses
on May 6th, 2009
@ 2:52 am: 

[...] On-Demand is the second of a 3-part series.  The first installment,  Disruption, explored my personal content consumption over the years and ended with the observation that [...]

There Will Be Disintermediation « Black Plastic Glasses
on May 11th, 2009
@ 3:28 am: 

[...] first two parts of this series, Disruption and Generation On-Demand, explored my own personal content consumption disruption and traced it [...]

Jenny Ruhl
on Apr 15th, 2009
@ 9:04 am: 

Unless publishers confront head on the monopolistic nature of the ebook market–B&N’s Fictionwise vs Amazon and not much else, you’ll have no choice of models. And as Amazon has shown, they can and in the future will determine at their owner’s command what books should be sold and how.

Isn’t it time to fund a nonprofit organization to create a mega site that would provide open access download sales? Open it to all publishers. Put in a better review/rank algorithm than Amazon’s very flawed version to allow readers to find books they’d want to read. Offer multiple discounts to publishers of the type you’ve suggested here.

Right now you have as much ability to negotiate discounts with Amazon as you did with Ma Bell in the 1970s.

[Reply]

Mike Violano
on Apr 15th, 2009
@ 12:40 pm: 

Evan,
I think you’re actually raising the bigger issue of publishing business models. Reseller discounts in the print book world have evolved and increased based on multiple factors such as returns, volume purchasing…and “risk” and have actually contributed to rising cover prices to accommodate both higher discounts and lower net unit sales.

Ebook pricing, reseller discounts, author royalty share and publisher profit is a very perplexing equation; traditional book selling models are not an effective guide. Most trade publishers do not yet embrace ebooks as an intrinsic part of their business…they continue to consider ebook sales as incremental to “core” (hardcover, paperback, audio) formats.
eBook sales are growing but not as fast from trade publishers points of view to cause an extreme makeover of business models, discounts, author agreements or even book production processes. Until ebooks make a greater contribution to revenues most publishers will continue to apply or tweak the old print rules to handle ebook sales, reseller discounts, and authors royalties.

[Reply]

Why Ebooks Must Fail « Black Plastic Glasses
on Apr 18th, 2009
@ 6:09 am: 

[...] inflammatory title, but this article, especially when taken in context with the follow up piece Discounts Must Align to Risks, is about supporting growth in the ebook market, not predicting its demise. Ebooks are the future [...]

Anita Pyke
on Apr 22nd, 2009
@ 6:39 am: 

Evan, how do you see new discount models possibly rolling out in practice? Would publishers band together to negotiate with Amazon and other retailers?
What incentive would there be for ebook retails to renegotiate the current discount structure?
I still feel strongly for revision of advances. Big authors should take their cue from the players in Hollywood – the real money is in profit share.

[Reply]

Evan Reply:
April 22nd, 2009 at 11:47 pm

Thanks for the comment.

Publishers cannot band together to negotiate with resellers as that would be collusion. Each publisher must negotiate on their own and set their own rates.

The big question is why would retailers accept this change? My answer is that it will take some work, some cooperation, and some experimentation. I am not sure the specific plan outlined here will work – though I am convinced that publishers and resellers need to find smarter ways to work out risk management in publishing. Payment terms and discounts are one obvious place to start – but there are others – profit sharing by authors is certainly one route, as you mention.

[Reply]

J.
on May 3rd, 2009
@ 3:48 pm: 

Hey Evan,

First of all, thanks for posting all these interesting perspectives on the publishing industry. As a student I started a project about ebooks and I need to do some research for it. So I contacted several publishers but nobody gave me clear answers or possible solutions on how to (r)evolutionize the industry for the new way of reading. But your blog is very helpfull and I’m really looking forward for your other posts. There’s only one big question that rose when I read all your posts: what about the educational market? In your posts you’re only talking about the trade book market… I guess there is a big difference in the educational segment because of lower risks in that segment.

What do you think?

[Reply]

Evan Reply:
May 5th, 2009 at 8:15 am

J:

Yes, education is quite different as nothing, to date in the world of ebooks or electronic content delivery has come close to being successful. Textbooks still reign as there isn’t a direct to consumer pathway as is found in consumer (trade) oriented publishing. Textbooks are selected (adopted) by faculty and/or administrators who in turn require the purchase by students or local schools. There are too many competing interests for this to work now – but watch Amazon as they will supposedly be announcing a unique experiment in Higher Education for a new Kindle.

[Reply]

Jeroen Reply:
May 5th, 2009 at 3:07 pm

Thanks for replying! So a good way to get the educational market into e-reading would be to team up with universities and decide on which books need to be transformed into e-content? By teaming up with the universities an e-book distributor knows, by estimation how many students are going to buy the books so a model of Advance Purchases should be applicable. I think for the educational market this is the way to go… Or is this just to shortsighted? What about the competing interests? I dont understand that part.

[Reply]

Bradley Robb
on Apr 6th, 2009
@ 8:44 am: 

With all due respect to you(r) position, the belief that pirated content is the source of the decline in the music industry is a flawed one, and one that placing DRM on compact discs wouldn’t have helped. While the finger is often pointed towards Napster and the programs which followed as the cause of the decline, they are more accurately described as a harbinger of change.

The rise of the CD represented the start of a bubble for the music industry in which many people rushed to replace their aging LP collection with a medium that captured the same sonic fidelity, or to upgrade their tape collection. This collector’s motivation was one of the key sources of increased sales numbers.

A second noticeable increase was that the compact disc largely killed off a large previous sales leader – the single. Prior to the early 1970s, the concept of a “full album” was indeed a rare one, the multitude of bands recorded 45 RPM singles, while earning their income from touring. With the rise of the compact disc in the middle 1990s, there was no technical difference between a full length CD and a single, and so bands were encourage to put together entire albums consisting of two or three singles, while padding the rest together with filler material. While returning greater profits for the labels, the perceived value of the album was reduced.

Putting together full albums, however, was more expensive for the record labels. Pair that fact with the number of labels shrinking into four global conglomerates, and there was a drastic reduction in risks that the labels were willing to take. This lead to cyclical trends where each label would push out copycat bands, pitting similar bands against each other in the media in order to enhance sales across the board. During the rise of the blond pop tarts in the late 1990s, it was actually common for a single label to have several essentially identical singers competing for sales. This lead to market place confusion for listeners and a further degraded the value of music.

With the onset of a digital music, listeners were able to once again upgrade their music libraries, and had access to extensive back catalogs. However, this time around, music listeners were able to purchase individual songs, which left record labels footing the bill for continuing to churn out LP-length song collections which only contained a handful of songs which the listener actually cared about.

The real harm which was done to the music industry was not downloading, or even the shift to digital, but rather the belief that the compact disc bubble would extend indefinitely, when since the dawn of the wax tube, music format shifts have been happening at an increasingly rapid rate.

If the record labels had put DRM on the compact disc from it’s inception, one could make the argument that customers would have likewise been forced to repurchase all of their favorite music over again in digital format. However, as the real world has shown, music listeners have grown disinterested with the major labels willingness to pad singles into LPs, and given the option, will purchase just the single.

The other major stumbling block for the belief that placing DRM on the compact disc would prevent people from ripping their own CDs is the very real fact that no DRM scheme has ever lasted. True, some require a certain amount of tech-savvy amongst the user, and current law makes the act of removing DRM a criminal one, but that has yet to stop people. Even the flaunted DRM schemes attached to the Blu Ray disc, claimed to be unbreakable, are broken with rapid success each time the format is updated.

[Reply]

Marshall T. Vandegrift
on Apr 6th, 2009
@ 9:33 am: 

I’m afraid I have to disagree with your assertion that the Kindle’s DRM scheme is “smart,” or that a “smart” DRM scheme is possible. Amazon has made it easier to read a book on multiple devices linked to the same account, but this feature is present in various forms in all the existing commercial e-book formats and viewers. The Amazon system is still DRM, and still contains the two fundamental flaws of DRM: (1) it inherently treats the reader like a criminal and attempts to lock the content into a system which prohibits legitimate fair use and uses possible with print books; and (2) it is inherently ineffective, providing no true barrier preventing actual pirates from decrypting the content and distributing it as they wish.

[Reply]

Kirk Biglione
on Apr 6th, 2009
@ 1:30 pm: 

What you’re talking about in this post is transparent DRM. That’s pretty much the holy grail for anyone trying to sell content protected by DRM. The ideal is that DRM should be so unobtrusive that consumers don’t notice it. To achieve this goal content publishers need to minimize friction during the initial purchase and media transfer process, and provide consumers with freedom to use their legally purchased digital media in a variety of ways. For Apple that meant allowing consumers to transfer songs to a certain number of devices and the ability to burn songs to CD. For Amazon that means the ability to transfer ebooks to multiple Kindles, and now to the Kindle iPhone app.

The problem for consumers is that this freedom is illusory. DRM protected songs purchased from iTunes will only play on an Apple brand media player. DRM protected books purchased from Amazon will only play on the Kindle or Kindle iPhone app. Consumers are not only locked into a specific brand of device, they’re also locked into a specific marketplace where content may be purchased.

The real challenge is not so much creating a transparent DRM scheme (Apple and Amazon have both demonstrated it can be done), but rather creating transparent and *interoperable* DRM in an *open* marketplace. The market leaders aren’t about to provide any assistance.

Apple could have licensed Microsoft’s DRM for use on the iPod, but there was no reason to. Why willingly make your device compatibility with rival digital music retailers when you’ve already built the industry leading marketplace for digital music?

Amazon could easily build support for Adobe DRM into the Kindle. They won’t. Again, there’s no reason for them to.

The real reason iTunes went DRM free is because the recording industry eventually realized that the only hope of overcoming Apple’s dominance in the marketplace for digital music was to eliminate the one thing that locked consumers into iTunes — DRM.

As publishers consider these issues it’s important to fully understand the many ways that DRM shapes the marketplace for digital content.

[Reply]

Aaron Ardiri
on Apr 6th, 2009
@ 7:58 pm: 

As a swede – i had to say something *g*

I think DRM in its current form is flawed because it doesn’t adapt to the changing environment of the end-user. DRM should be transparent; it should not be an inconvenience. Instead of putting anti-copy measures in place; why not turn DRM into a validation environment – is that a real CD you are extracting that song from? are you person X, trying to use item Y – on devices A, B and C?

In today’s model; we are living in a connected world and digital signatures should rule the DRM scene. if the device isn’t sure your allowed to use it; make a network request and validate/generate a new digital signature. if someone copies the file; they’ll have to revalidate and hence, fail validation.

One of the biggest issues is that the audio/video format’s were designed first; then DRM came into play. what needs to be done by these “giants” if they want to provide a fair-play environment is to re-design the audio/video formats so they include DRM. sony tried this; and failed. does this mean doom for anyone else who tries?

i think the minute someone realizes they can make money of something; it’s just too late – proof of concepts are typically DRM free and they form the foundations of anti-DRM (once free, always free)

every DRM system will eventually be beaten – so, there is no ultimate solution; just a delay.

// Aaron Ardiri

[Reply]