This is Part 2 of an
entry I began yesterday.
Nine years ago, I called for the creation of a digital content gumball
machine; that is, a Web site that would accept payment and send
back a file of some sort, whether a song, a video, or an ebook. It
was the start of a popular series and I got a lot of good feedback.
I've since walked back on several of the original essay's points,
primarily the notion that every author should have his or her own
ebook gumball machine, but also the notion that DRM needs to be
accomodated. At the time, I thought that while DRM might not help
much, it wouldn't hurt. I think the experiences of Baen and Tor
(and probably other imprints) have proven me wrong. Lack of DRM
helps. Besides, DRM is what gave Amazon its market-lock,
and publishers demanded it. Petard, meet hoist.
The really big lesson Amazon taught us is that Size Matters.
What we need isn't a separate gumball machine for every author or
publisher, nor even a clever P-P network of individual gumball
machines, though that might work to some extent. We need Godzilla's
Gumball Machine, or Amazon will just step on it and keep marching
through the ruins. To compete with Amazon, all publisher/author
storefronts must be searchable from a single search prompt. Payment
must be handled by the gumball machine system as a whole, via
Paypal or something like it. Publishers will probably sell direct,
and pay a commission to the firm operating the system.
This could be done. It wouldn't even be hideously difficult. The
technology is not only available but mature. Best of all,
well...it's (almost) been done already. There is a second
e-commerce titan in the world. Its name is EBay. (Ok, there's also
Alibaba, which I have never used and know little about
aside from the fact that it's bigger than Amazon and eBay
combined. Oh, and the fact that their TMall site is
already hosting stores for Chinese print-book publishers.)
I'll cut the dramatics and get right to the point: The Big Five
need to partner with eBay and possibly Alibaba to produce a digital
content gumball machine (or two) as efficient and seamless as
Amazon's. EBay's affiliate store model is a good one, and I've
bought an awful lot of physical goods on eBay, both new and used,
outside the auction model. In fact, in the last few years I've
bought only collectable kites at auction. Everything else was a
fixed-price "buy it now" affiliate sale.
Admittedly, eBay has some work to do to make their purchasing
experience as good as Amazon's. However, they are already providing
digital storefronts to physical goods retailers. I haven't seen any
plans for them to offer digital content so far, but man, are they
so dense that they haven't thought of it? Unlikely. If eBay isn't
considering a content gumball machine, it can only be because the
Brittles won't touch it. That's a shame, though I think there's an
explanation. (Stay tuned.)
A large and thriving eBay media store would provide several
benefits to publishers:
- Print books could be sold side-by-side with ebooks. Publishers
could sell signed first editions to people who like signed print
books (and will pay a premium for them) and ebooks to everybody
- Selling direct means you don't lose 55% to the retail channel.
Sure, there would be costs associated with selling on such a
system, but they wouldn't be over half the price of the goods.
- Cash flow is immediate from direct sales. It's not net 30, nor
net 60. It's net right-the-hell-now.
- Publishers could price the goods however they wanted, at
whatever points they prefer.
So what's not to like?
Readers who have any history at all with the publishing industry
know exactly what's not to like: channel conflict. In our early Coriolis years, we
sold books through ads in the back of our magazine. They weren't
always books we had published; in fact, we were selling other
publishers' books a year or two before we began publishing books at
all. The Bookstream arm of the company generated a fair bit of cash
flow, and it was immediate cash flow, not the net-180 terms we
later received from our retailers. Cash flow is a very serious
constraint in print book publishing. Cash flow from Bookstream
helped us grow more quickly than we otherwise might have.
However, we caught a whole lot of hell from our
retailers for selling our own products direct. That's really what's
at stake here, and it's an issue that hasn't come up much in
discussion of the Amazon vs. Hachette fistfight: Publishers can't
compete with Amazon without a strong online retail presence, and
any such presence will pull sales away from traditional retailers,
making those retailers less viable. If the Big Five partner with
somebody to create Godzilla's Gumball Machine to compete with
Amazon, we may lose B&M bookstores as collateral damage.
Then again, the last time I was at B&N, they'd pulled out
another several book bays and replaced them with toys and
knicknacks and other stuff that I simply wasn't interested in. The
slow death of the B&M retail book channel has been happening
for years, and will continue to happen whether or not the Big Five
create their own Amazon-class gumball machine.
Alas, the Amazon-Hachette thing cooks down to this: Do we want
Amazon to have competition in the ebook market? Or do we want
B&M bookstores? We may not be able to have both, not on the
terms that publishers (especially large publishers) are
And beneath that question lies another, even darker one: If
eBay/Alibaba/whoever can provide an e-commerce site with centrally
searchable ebook gumball machine for anybody...do we really need
publishers in their current form? Publisher services can be
unbundled, and increasingly are. Editing, layout, artwork,
indexing, and promotion can all be had for a price. What's left may
be thought of as a sort of online bookie service placing money bets
against the future whims of public taste. People are already funding books with
kickstarter. B&M bookstores may not be the only things
dying a slow death.
So what's my point?
- Amazon works because it's a single system through which
customers can order damned near any book that ever existed. Any
system that competes with Amazon must do the same.
- Digital and physical goods may not be sellable by the same
firm, through the same retail channels. How many record stores have
you been to lately? We may not like it, but it's real.
- Neither B&M bookstores nor conventional publishers are
essential to keep the book business alive and vibrant. We may not
like that either, but it's true.
- Publishing will probably become a basket of unbundled services.
Big basket, big price. Smaller basket (if you can do some of the
work yourself) smaller price. (I have an unfinished entry on this
- The real problem in bookselling is discovery. This is
not a new insight, and however the book publishing industry
rearranges itself, discovery will remain the core challenge. You
need to learn something about this, and although I'll have more to
say about it here in the future, this is an interesting and pertinent book.
And to conclude, some odd thoughts:
- The future of print-media bookselling may lie in used
bookselling. Used bookstores seem to be doing OK, and it's no great
leap to imagine them taking a certain number of new books. Expect
it to be a small number, and expect them to be sold without return
- The book publishing business may fragment into segments that
bear little business model resemblance to one another. Genre books
work very well as ebooks. Technical books, not so much.
- Change is not only inevitable, it's underway. Brittle will