There has been quite a lot of hubbub lately about e-books and the electronic readers such as Kindle, and the other proprietary readers offered by Barnes & Noble, Sony, Apple, and so on.
As a self published author, I have looked on with great interest as I have seen the big players battle it out in a price war for dominant market share of the future of reading the printed word in an electronic format.
Since no one else has offered any kind of historical perspective on this, I will be the first.
I wonder how many people reading this blog even recognize the word Betamax. This was a sort of an e-reader device, as it was the first device with which you could watch videotapes of movies in your own house/living room. It represented a major change, because up to that time if you want to see a movie, you had to go to a movie house or watch it on network television.
Betamax was a superior product in every way. It was first in the market, and it had much higher picture quality and sound quality than the “open source” format of its closest mongrel competitor, known as VHS. The difference was, Betamax was owned by Sony, and if you wanted a Betamax, you had to buy it from Sony at whatever price Sony cared to sell it to you. VHS was essentially a public format, and anyone could build VHS video decks. And they did. And after awhile, because so many companies were making VHS decks cheaper and cheaper, it became the dominant format. And even with all the inroads of DVDs, VHS decks are still universal. Betamax, well, it evolved into a high priced pro format that most of you have never heard of. And when digital video arrived, it disappeared altogether.
Another historical example is the computer most of you are reading this blog on. About 10% of you are reading this on a Mac. 90% of you are reading it on a nonproprietary design that was created by IBM. But IBM allowed other people to create hardware based on their original designs, and so again, the IBM computer design, not DEC (does anyone remember Digital Equipment Corporation?) not Wang, became the dominant hardware platform. How IBM made money on this deal I have no clue, but they seem to be doing all right.
I’m starting to suspect that the people who are in the marketing and strategy departments of these large bookselling companies have not studied the history of electronic hardware. Makes sense, as it is new to them. You could have the best e-reader in the world and still go the way of Betamax. If somebody out there creates a basic “good enough” e-reader and makes it "public" for other people to manufacture it, and various services to offer content upon us it, that will become the dominant machine in this emerging market.
Incidentally, along with selling books, I also sell music on Itunes. I get something like 90% of the sale price. This makes me happy, and so I work hard to promote the product. Itunes doesn’t charge content contributors like me very much, and so they are the dominant player. It’s important for any electronic distribution entity to have that author energy added to the marketing mix. It does not make sense to just think in terms of charging customers less, and then demanding higher percentages of the gross from content providers. If you pay less, you get less. You might get the product, but you don’t get the marketing energy. DUH.
You can’t really justify using the same percentages for electronic publishing as for paper publishing, because there are no freestanding bookstores, there is no cost for paper or ink, and there are no shipping charges. Who ever is willing to be a pass-thru through provider for e-books for a 3% commission is going to win this fight.
Instead of focusing on trying to get a bigger piece of the existing pie, I think it would behoove the larger book resellers to try and think in terms of creating larger markets, promoting author brands more effectively, and offering unusual new services, rather than simply trying to annex and monopolize sections of the existing finite market. Never worked in the past, and won’t work now.
© Justin Locke
