Reading Nicholson Baker’s long piece in the August 3rd New Yorker while on the beach last week, got me thinking about the role of Amazon in the future of print book publishing. Mr. Baker, a novelist, is coming to terms with his new Kindle – its benefits and as well as its drawbacks. While I don’t get a few of his observations (especially his preference to read on the much smaller and much harder-on-the-eyes LCD screen of the iPhone), one comment made about the Kindle struck me as particularly eye opening. Read the rest of this entry »
There Will Be Disintermediation
The first two parts of this series, Disruption and Generation On-Demand, explored my own personal content consumption disruption and traced it through the seismic shift in my reading, listening, and watching habits. My experience seems to align with the generational experience of content at one’s fingertips, on-demand. I called this phenomenon Generation On-Demand because this generation has grown up with and expects that everything and anything (content) be available to them, however, whenever, and wherever they want.
4 Responses to “There Will Be Disintermediation”
-
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]
-
The Daily Square - Rockin’ of the Ten Thousand Edition | Booksquare
on May 11th, 2009
@ 4:32 pm:[...] There Will Be DisintermediationEvan Schnittman looks at the messes and possibilities we’re facing, and asks what happens on January 1, 2013. Will there be disintermediation? [...]
-
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 [...]
-
AmazonEncore Is Amazon’s First Step Toward Dominating Publishing | Dear Author: Romance Novel Reviews, Industry News, and Commentary
on May 17th, 2009
@ 3:01 am:[...] effectively wrests control of the entire value chain. (Authors, if you don’t know what disintermediation is as it relates to publishing, you should and yes, we will talk about the very last paragraph in that blog article soon). Like [...]
Leave a Reply
Tags: App Store, Apple, Audio CD, Authors Guild, Business, Digital rights management, DRM, ebooks, econtent, Evan Schnittman, Google, iPhone, iPod, iTunes, Kindle, publishing
Tommy
In 2006 The Smithereens did something really unique – they did a covers album. Actually, they covered an album. The Smithereens recorded the Beatles breakthrough album, Meet The Beatles, from the first track through the last. Meet the Smithereens is a fun romping and wonderful re-imagining of the spirit of the early Liverpool Beatles as heard through the power-pop chords and Marshall amps of New Jersey’s Smithereens.
Read the rest of this entry »
3 Responses to “Tommy”
-
Miico » Blog Archive » Tommy
on Apr 26th, 2009
@ 11:46 pm:[...] the rest here: Tommy Tags: covers-album-, early, ever-wrest, first, first-track, liverpool, nachos-cases, national, [...]
-
Daily News About the Moon : A few links about the Moon - Monday, 27 April 2009 01:00
on Apr 27th, 2009
@ 1:18 am:[...] Tommy [...]
-
Evan
on May 9th, 2009
@ 4:24 am:http://blog.oup.com/2009/05/the-who/
[Reply]
Leave a Reply
Tags: Amazon, Audio CD, Dennis Diken, iPhone, iPod, iTunes, Jim Babjak, Keith Moon, Music, Pat Dinizio, Pete Townshend, Smithereens, The Beatles, Tommy
Bang the DRM Slowly…
Two weeks ago on NPR’s All Things Considered I had a brief sound bite about DRM (Digital Rights Management) and the music industry. What you didn’t get to hear was the larger point I was trying to pull together – which is that DRM is not bad, nor is it good. It is like any tool, only as good (or bad) as it is implemented.
Read the rest of this entry »
9 Responses to “Bang the DRM Slowly…”
-
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]
-
Bradley Robb
on Apr 6th, 2009
@ 8:58 am:Hit enter too soon.
Forrester Research, which you have cited in your own article, has their own study regarding the habits of music downloaders. It would seem that those who download music, either through legal or illegal avenues, actually buy more music than those who don’t. Further than than that, I’ve yet to find a single independent study which suggests that piracy had any statistically significant and quantifiable impact on music sales. The argument typically made by record labels, sighting the number of people engaged in piracy and attempting to directly assert that pirated content is lost sales, is a logical fallacy.
Someone who downloads content is not necessarily someone who would have otherwise purchased that same content. Not with the increased competition for the much vaunted entertainment dollar.
However, this logic does convey in the opposite direction. That is to say, that someone who purchases a digital download is someone who might not have otherwise purchased an album. There is not yet proof that I have seen which says that a digital purchase actually hinders physical sales.
The key to understanding how digital content has affected the music industry, which is acting as the true vanguard in this area, is to look at a much longer time line, and attempt to pull out as many lessons as possible.
- Conglomeration was bad, as it lowered willingness to take risks while encouraging copycat behavior.
- The digital medium has led to more people listening to music, and more avenues for sales.
-The new medium does require some tighter general bookkeeping, but with the shift to digital, the new content can be produced less-expensively.
- Digital distribution is significantly less expensive than physical, which could have empowered the labels, allowing the loss of the middleman.
-The long tail means that back catalog can sell forever, which pushes sales from the front to the back, but allows for perpetual sales and even unexpected success.[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]
-
Global Color » Bang the DRM Slowly… « Black Plastic Glasses
on Apr 6th, 2009
@ 11:57 am:[...] View original post here: Bang the DRM Slowly… « Black Plastic Glasses [...]
-
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]
-
Keith Stoneman
on Apr 6th, 2009
@ 6:21 pm:I’m old like you, and personally think the recording industry is getting what it deserves. The DIY stuff that people are able to put out on a mass scale from their spare bedroom is amazing for its quality and variety and freshness.
The only trouble is finding it, but I’m sure I will have less trouble with that without having 99.9% of my choices limited by overpaid small-minded A&R dinks in LA, NY, Memphis, or wherever. I’m actually hoping that Apple will ultimately fail, too, since their success simply means they will employ the same kind of people Atlantic and Virgin and Geffen and Mercury and Motown and the others did…er, do still, on a reduced scale, I guess.
As for the Kindle, I’m old enough to refuse to buy one. The very many books I want to read before I die are nearly all off of anyone’s backlist, except for a few reprints of 19th-century theologians by specialty houses. (There simply are no good 20th- or 21st-century theologians, especially when compared with the older ones…but I digress.) It is nearly certain they will not make it to electronic format, and even if they do, I can get them cheaper from even older guys, with the benefit of whatever stray notes they may have left in them.
Further, as long as there is sunshine or candles and matches, I can read an actual book even when the power goes out for a day, or a week, or a month, but all the Kindles and iPhones will eventually lose their charge in such an eventuality. (Couldn’t happen in America, you say? I would have thought so too, until (among other things) the president decided who the CEO of GM would be.)
And don’t think I didn’t notice the sneer in the general direction of Swedish anarchists, by the way…
[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]
-
tycho garen
on Apr 9th, 2009
@ 8:37 pm:I’ve always been under the impression that the music industry; that
is, musicians, songwriters, etc., derived the lions share of their
profits and money from touring? That is selling
tickets plus tshirts, bumperstickers, and CDs *at their concerts*,
rather than what sells at [Insert Record Store Name Here]? Not that
distributed sales don’t count, but touring is where the money is, not
in records sales.In light of that, all this talk about DRM and music sales and CDs are
all mystification of the business model.Ultimately DRM makes the technology harder to use. That’s really
simple, and really core to the nature of what DRM is. One can’t have
DRM that doesn’t impinge upon the range of technological
possibility.Because of that there’ll always be an incentive to break DRM. You buy
your family’s sixth mac and can’t sync your music collection. You buy
a music player that isn’t made by Apple, you buy DRM’d music from
someone who isn’t Apple, etc. You choose to use Linux and can’t load
iTunes. etc. And no DRM that lets you play back your media is
unbreakable, and most methods of breaking DRM don’t resort to the
“analog loop.”But all this is aside the point that concert attendance, not song
sales, is what the music industry is about and has always been
about.[Reply]
Evan Reply:
April 10th, 2009 at 6:27 amTycho:
I have some personal experience that may perhaps help or shed some light. I am friends with a band that has been around since the late 1980′s, the Smithereens, and have enjoyed a role which they have referred to me a “consigliere” as I occasionally help with business issues in an impartial way as I have nothing to gain… in other words, I can be trusted as my only stake is friendship.
What I have learned as I have watched their career is that the only real money in music comes from creating and owning original music “publishing.” Everything else we associate with music money making – records, touring, etc., are about building the “publishing” aspect of music. For a band, records pay out twice as they receive direct income for the sales of the album (although usually that is paid in advance and is very hard to earn out) and indirectly through mechanisms such as ASCAP where uses of the music such as on radio, etc, are paid out. The band is paid more for their version of the music as they get “publishing” and “performance” fees, but they also get paid when someone else records or uses their music but not their performance.
Touring is set up to promote record sales – or promote the band itself which is trying to get a record deal. That said, mature bands such as the Smithereens have a following that can support them with 25 – 50 gigs a year. That doesn’t add up to very much, however, as touring is expensive – bands need transportation, they need hotels, they need to eat and drink and pay roadies or at least hire local sound and lighting tech’s, and they need to give the tax man a third off the top, a manager 10% off the tp, a booking agent another 10%, their accountant 5%, etc, etc etc… so even a high paying corporate gig for a 1 hour show $25,000 – 50,000 will net the band members 40% or $10,000 – $20,000 – and then they have to split that 4 or 5 ways (or more!). While $2500 – $5000 sounds like a lot, those are rare and far in between… so the reality is that after expenses the average take home is more like $1000 and at 25-50 a year, you are hardly feeling as if you are making your money off touring!
[Reply]
Leave a Reply
Tags: AAC, Amazon, App Store, Apple, Audio CD, Babjak, Books, Cory Doctorow, Diken, Dinizio, DRM, ebooks, econtent, Evan Schnittman, Google, IDG, iPhone, iPod, iTunes, Kindle, macworld, MP3, Music Industry, publishing, Smithereens, Sony Reader, XML
I know three people with Kindles. My work...
Aaron Pressman
on Aug 3rd, 2009
@ 6:23 am:
I think you may be off-base here on your assessment of what Amazon is up to by not including results for dead tree versions of books when you search the KINDLE STORE either from a Kindle or the Kindle section of Amazon’s web site. Originally, Amazon did display print versions available on the Kindle pages for books. From the point of view of customers, there’s both a good and a bad reason explaining why Amazon changed the layout and neither is really about losing sales. Amazon is not in business to forgo any sales. They constantly change and tweak everything on their web site to maximize sales.
First, the positive. Almost always when I’m on my Kindle and I want a new book, I want a Kindle ebook to start reading. I don’t want search results showing me non-Kindle books because I’m looking for something to read on my Kindle. It’s actually annoying to click through to a search result that isn’t available on the Kindle. When I’m on Amazon’s web site and I go to the trouble of limiting my searching to “Kindle books,” I REALLY only want a Kindle book. In a minority of cases, when I’m looking for a specific book, it’s trivial to broaden the search by clicking on the “any department” line.
I think there is also a nefarious rationale for why they changed the policy. Amazon has been creeping up the prices of ebooks and frequently displaying a made-up “digital” list price. With some older books, they’ve actually priced the ebook edition above the price of available paperbacks. By “hiding” the prices of those competing, dead tree editions, Amazon is hiding information about relative pricing and doing a disservice to its customers. This is tilting a sale towards digital and away from print but only in cases where there’s a Kindle edition available. It’s not forgoing a sale completely, as you suggest.
You final point about the coming wave of competitors is right on. I think the growing and, hopefully, heated competition will improve things for us customers.
[Reply]
Evan
on Aug 3rd, 2009
@ 6:38 am:
They are books, not dead tree editions.
As to ebook pricing, I think you fail to understand the impact of low ebook pricing. Its the death of ebooks and the sooner publishers establish control over pricing and payment terms, the sooner they can rescue this fledgling industry.
Finally, I don’t think Amazon is hiding anything nor do I think they are inching up prices. They are testing pricing and seeing what works. Don’t confuse price testing with price manipulation.
[Reply]
Scott
on Aug 3rd, 2009
@ 12:20 pm:
Great post. I too have noticed the absence of other versions on the Kindle side of the Amazon store. I wonder if it is an attempt to show publishers/authors that if a book is not in Kindle edition then it won’t be seen (and therefore won’t be purchased) by a growing set of consumers. While some consumers (those who know exactly what book they want) will then search and buy on the print side of Amazon or search for the book elsewhere, others may simply find an alternative book in the Kindle format.
[Reply]
The Daily Square – From Her Fingers Edition | Booksquare
on Aug 3rd, 2009
@ 4:30 pm:
[...] Quo Vadis, Amazon?Evan Schnittman on Amazon’s apparent strategy to steer customers to the Kindle store and keep them there. Yes, indeed, why is a company so devoted to choice in other areas trying to force customers into a single choice? [...]
Anthony S. Policastro
on Aug 10th, 2009
@ 12:34 pm:
I would have to agree with Evan’s assessment of Amazon. Now wouldn’t it be nice when you searched for a book on your Kindle and it said not available in Kindle format you could order the print edition right from you Kindle and have it delivered anywhere you want?
Because of the small and slower access to the Kindle catalog on a Kindle, I would keep the catalog with Kindle books only. But, if the book was not in the Kindle format I would have just those books presented as print books and be able to purchase it from the Kindle.
[Reply]
Tracy
on Jan 7th, 2010
@ 9:30 pm:
I suspect that long term Amazon is training a new customer base to want digital and buy digital. Selling ebooks is a way easier business than stocking and shipping paper books all over the place. Digital sales also have the potential for a better profit margin. This is likely Amazon’s dream and goal.
[Reply]