Free! Free! Free!
“Aside from any kind of monetization of it, I’m glad to know that a million people have it on their iPods,” Mr. Reznor said. “If you paid for it, great, but I want everyone to hear it, you know? I want to blow people’s minds.”
Mr. Reznor lets his music travel freely at Internet speed, extending album concepts into parallel online universes. He’s familiar with file-sharing sites and music blogs, including those that irk him by taking potshots at Nine Inch Nails. Playing live, his laptop now replaces pedals and effects. Mr. Reznor even posts online all the raw digital tracks from Nine Inch Nails albums for anyone to remix. “I’m done with them,” he said. “Why not?
“It’s all out there,” he added. “I don’t agree that it should be free, but it is free, and you can either accept it or you can put your head in the sand.”
The last quote is the money shot. It’s no longer about whether or not to make it available for free or whether it ought to be free. The point is that if it’s not free substitutes are available, for free. And it’s near impossible to compete against free.
Paul Krugman writing on how to pay for and value digital content in a networked world.
Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.
Now, the strategy of giving intellectual property away so that people will buy your paraphernalia won’t work equally well for everything. To take the obvious, painful example: news organizations, very much including this one, have spent years trying to turn large online readership into an adequately paying proposition, with limited success.But they’ll have to find a way. Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we’ll have to find business and economic models that take this reality into account.It won’t all happen immediately. But in the long run, we are all the Grateful Dead.
Publishing has only two indispensable participants: authors and readers. As with music, any technology that brings these two groups closer makes the whole industry more efficient—but hurts those who benefit from the distance between them.
This is something we’ve talked about in the past. A platform that can substitute for a publisher. Here’s another data point, or nail in the coffin, an article on how Amazon, a book seller, is building a platform to bring the two ends of the industry closer together.
Amazon is poised to revolutionize the book printing business through vertical integration. Let’s look at the numbers. Assuming that Amazon already pockets 50% of the retail price of a book, it could directly engage with authors and cut out the middlemen: the agent and the publisher. That would free up 30% to 40% of the pie, which can easily be split between Amazon and the author. Let’s say, in the new world, Amazon becomes the retailer, marketer, publisher and agent combined and takes 65% of the revenues, offering 35% to the author–we end up with a much better, fairer world. Vertical integration is where Amazon is headed. Jeff Bezos is a shrewd business man. I would be very surprised if he hasn’t figured out the inefficiencies of the book publishing business and Amazon’s opportunity. The company recently announced it would require all print-on-demand publishers to use its BookSurge print-on-demand service for their books sold on Amazon. Over the next few years, Amazon likely will use its power to build direct relationships with authors and gradually phase out publishers and agents. It will first go after the independent print-on-demand self-publishers and get the best authors from that world. Amazon will then take on the large publishers. For decades, the publishing industry has taken advantage of authors. Amazon: authors are counting on you to turn the table!
Scary times to be a publisher and yet opportunities abound.