Chris Anderson, the editor of Wired magazine, has just published a new book, entitled Free!, which attempts to shed light on the changing countenance of monetization in the digital world. I have not read the book yet but, based on an interview with
As I understood from the podcast, because the marginal cost of each item of content is zero, or nearly so,
In the digital world, however, the circumstances are reversed. Because the marginal cost of production and distribution is so low, the appropriate strategy is to distribute a large quantity of the product for free, and then ideally to recoup by sales of relatively small number of units, where the after-cost-of-sales-of-goods profit for each unit sold is large. It appears that the book is available for free in a limited fashion for online reading (it was in fact blocked in my geographic area), and there is a form of variable pricing for hardback and soft back versions.
What particularly grabbed my attention, however, was
If so, the day may not be too distant where the publisher for the three-dimensional copy will become increasingly irrelevant to the book business. Once promotion and distribution of book titles on the internet are perfected, the publisher’s role is severely diminished. Revenues are garnered by differential pricing for on-line reading, Kindle-like downloads, and permission to make a single copy from the on-line text. For the really successful books, the author and his ancillary activities may become the prime source of revenue. The publisher is irrelevant.
In such a case, we will have a reversal of the balance of interests in book publishing from the model that prevailed in the 16th-17th century, in the run-up to the Statute of Anne. In that period, publishing was largely about regulation and censorship by the Crown, and profits for the guild-protected publisher. The author, to the extent that author-based contents were published, was largely irrelevant. By contrast, in the Free! World of Anderson, the public’s interest is directed supported by the author only, who acts both as content creator and distributor (not to mention personal celebrity, if the book enjoys success). Like the author in the pre-Statute of Anne days, the publisher of the not-to-distant future becomes largely irrelevant.
With such an eventuality lurking, I am compelled to express a word of caution. Being a hopeless romantic about books and publishing, I still believe that a three-way relationship between the public, the author and the publisher is in the best interests of all three. If so, and if the ancillary book-related activities of the author become a material part of the book’s revenues, I would suggest that the better arrangement is to provide for a sharing of these revenues between the author and publisher with respect to revenues received by the author in connection with the author’s book-related ancillary activities. In this way, the publisher will have a greater incentive to carry out its distribution and sale function, while taking into account that the on-line world will likely materially alter the nature of the publishing business and the sources of publishing profits.
I think if you dig a little deeper into most of Chris Anderson's claims, there is some truth. But as usual, his advertising is misleading.
ReplyDeleteHow can an author distribute her own work over networks owned by large corporations?
Michael,
ReplyDeleteThanks for your observation. Still, the dream of the internet being the ultimate disintermediator is never far away, is it?
The role of a publisher is to select and not to print.
ReplyDeleteIt has always been the case. Before tha publisher beared the risk to loose a lot of money if the choice was not good.
++Will++ you afford to risk a lot of time and energy to select through a MMOMUW (massive mass of mostly useless words)?
Do you have the energy to wander through zillion of blogs ?
The question is what is the business model for that ?