OK, so a number of my readers will be aware of a controversial panel discussion at South by South West Interactive (SXSWi) two weeks ago, in part because I talked it up in my most recent post–a post which features some YouTube footage of the post-panel Q&A. One panelist, Peter Miler, a great publicist (runs publicity at Bloomsbury) and great bookseller (Freebird, my closest bookstore!), gave his perspective on what happened, and got a whole bunch of responses, including ones from me and Kassia Krozer which were, I’m chuffed to say, called out by Vroman’s Bookstore as useful additions to the debate.

So far, so good, notwithstanding some off-the-mark assumptions that bloggers don’t grasp the usefulness of an editor, and publishers do. In fact the author-oriented text editorial function needn’t be executed by a publisher, and is increasingly outsourced by publishers (to, inter alia, writers who blog, go figure). So chastising a person who doubts the usefulness of a publisher by saying the books need to be edited misses the fact that anyone can buy the editorial activity for $1000-$2000.

But. Moving on. Another publisher-side-of-the-equation offering came from the highly engaged Yen Cheong, one of the liveliest publicists at Penguin (and most generous publicists in the business as her blog attests), who was in attendance, though not a panelist. Her initial post, on the topic of how Twitter allows for audience and other interested parties to communicate their thoughts during the panel, was then amplified in an invitation to bloggers to give feedback on how their needs to be better addressed by publishers.

OK. I don’t want to dismiss the usefulness of publicists inviting the media community to tell publishers how to interact with them, just as happens with book review editors, and TV and radio producers at various industry events. But this is being framed as some type of response to SXSWi.

If anyone in our industry thinks that this forum is a meaningful response to the failure of New Thinking for Old Publishers, things are actually somewhat more fucked than I thought. The gauntlet thrown down was not thrown at the publicists. They happened to be there, because they are somewhat more willing to face the public than other people in the publishing business (which is why Peter Miller felt justifiably hard done by–it was the most transparent and open people that were the ones that got smacked around…).

The gauntlet was thrown at the CEO’s and Executive Committees. At the Board of Directors. At the people with Publisher in their title, and those above. They need to respond for real. Not because the folks at SXSWi called them out for doing virtually nothing to address the slow-motion collapse of the industry, but because the writers, readers, and employees deserve better, sharper, more honest and dynamic thinking. (I offered a little something in my Love Letter to Our Corporate Brethren post on the Soft Skull blog last year.

And, actually, while I hate to do anything to suggest that publishers shouldn’t be open to the needs of all media, on- or offline, I would actually beg that this forum not be a “response” to what happened at SXSWi, but be done for its own sake, as an absolutely de minimis activity. It should not be a substitute for learning, immersively, the vast ecology of opinion, analysis, and community expression that the term “bloggers” encompasses. For, yes, there were a few bloggers there in the audience at SXSWi who write about books, but that audience was there to hear about business models, strategies, real stuff, practical, yes, but big picture. Few were there with any interest in helping us move product. And it’s ever so slightly condescending (though I know that was not the intention) to think we are making up for the mistake that that panel represented with a forum on the brass tacks of pitching bloggers. We need to stop thinking that the rest of the world exists to offer attention for the books we deign to publish–why would it even occur to us that we are entitled to mount a panel discussion wherein that would be the substance of the conversation, and when people got pissed, decide to follow up with a forum wherein that is again supposed to happen. I know that might seem like openness, and humility, but only in publishing would that pass for humility–there’s a reason panelists get in for free, and the audience pays. It’s because they’re there to learn.

There is in fact a vast amount of information already out there in the developments in the music, TV, film, newspaper and magazine businesses to tell us what’s going on, and the onus is on us to learn from that. Departments are to be applauded for trying to do their job better, publicists like Peter and Yen in particular, but as an industry we have to far far far more profoundly examine ourselves, examine, and then transform–that was the message from SXSWi, nothing else, nothing less.

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http://www.forbes.com/2009/03/21/ebook-iphone-oreilly-technology-breakthroughs-ebook.html

In the music world, someone who really gets that content/value point is Trent Reznor. There’s five different prices for one of his albums, ranging from free to $300–the $300 “limited edition” version sold out in less than 24 hours. http://ghosts.nin.com/main/order_options

The third deadly sin is cost-driven pricing. Most American and practically all European companies arrive at their prices by adding up costs and putting a profit margin on top. And then, as soon as they have introduced the product, they have to cut the price, redesign it at enormous expense, take losses and often drop a perfectly good product because it is priced incorrectly. Their argument? ‘We have to recover our costs and make a profit.’

This is true, but irrelevant. Customers do not see it as their job to ensure a profit for manufacturers. The only sound way to price is to start out with what the market is willing to pay – and thus, it must be assumed, what the competition will charge – and design to that price specification.

Cost-driven pricing is the reason there is no American consumer electronics industry any more. If Toyota and Nissan succeed in pushing the German luxury car makers out of the US market it will be a result of their using price-led costing.

Starting out with price and then whittling down costs is more work initially. But in the end it is much less work than to start out wrong and then spend loss-making years bringing costs into line.

Specifically (from Drucker):

“Customers do not see it as their job to ensure a profit for [businesses]. The only sound way to price is to start out with what the market is willing to pay–and thus, it must be assumed, what the competition will charge–and design to that price specification.”

(from http://www.independent.co.uk/news/business/management-the-five-deadly-sins-1501842.html — full piece well worth a read)

I’ll argue that we’re just scratching the surface of global demand for (paid) digital content delivered to mobile devices (specifically and primarily smartphones, but I’d include Kindle in there too).

For an eye-opening look at mobile phone usage (especially payment) in emerging markets, check out “txteagle: Crowd-Sourcing on Mobile Phones in the Developing World” at:
http://blip.tv/file/1868958

— Andrew

On Mar 30, 2009, at 5:34 PM, Richard Nash wrote:

But what if demand collapses? The model below presumes pretty inelastic demand. If it is more elastic, as I suspect, then the entire model of acquiring, editing, designing and marketing content gets completely blown up, as demand collapses in the face of lower cost alternatives the consumer considers sufficient for his/her edification and entertainment.

It does seem like a very different new model will evolve. I don’t know that an industry survives whose business model is predicated on treating its costs as fixed and its customers as in effect owing it a living. I recall Andrew’s recent interview in Forbes where he reminds of the Drucker-ist position that cost-plus pricing is the road to perdition…

_____________________
new blog: http://RNash.com
twitter: @r_nash

On Mar 30, 2009, at 5:18 PM, Peter Brantley wrote:

evan has a blog! and he tackles on his first post pricing
and revenue from ebooks. very interesting analysis –

http://www.blackplasticglasses.com/?p=5

“And therein lies the dilemma … how does the publishing
industry fund the creation, editing, design, production,
marketing, e-warehousing, and sales of ebooks, if the income
isn’t there? How do ebooks cover the huge advances needed to
buy books if we cannot generate the cash, especially at their
extremely low, discounted prices, cover the advances that an
entire industry has come to require? The answer is that
ebooks, alone, cannot.

“What this means is that unless a very different model evolves,
ebooks can never become the dominant version of content sold
by book publishers. It means that ebooks will always be priced
to sell, but sold as an afterthought, not as the primary
version of a work. It means that the need for blended e plus p
models will evolve, in order to take advantage of all the
great qualities of ebooks, while providing the financial
support and structure that print offers. It means that
consumer ebooks, as a stand-alone version of an intellectual
property, must fail.”

________________________________________
read20-l : sponsored by Panix in New York City

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This isn’t actually Clay Shirky on News but rather Clay moderating (after a fashion) a much-discussed panel discussion at SXSW Interactive yesterday evening. A conventional discursive blog post fails to do it justice so I’m offering embedded Youtube, the 250 tweets delivered mostly live, and a few after the fact . And link to three superb post-panel reflections, from Kassia Krozer and Kirk Biglione and William Aicher (this last dude is the questioner at the beginning of the YouTube clip)

All in all, it gets me itching to want to get started building the new infrastructure that can begin to offer writers and readers real opportunity.

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The power of Clay’s essay derives in part, I think, from its cumulative power–he’s been saying these things for a while, and others have too, but Shirky took the trouble to outline them manifesto-like. So, to amplify his piece a little, I’m going to quote a few of them below, to give you a sense of the breadth of the emergent consensus, ad I’ll focus on the one of his concepts that is getting the most repetition, at the moment at least: “Society doesn’t need newspapers. What we need is journalism.”

I’m first reminded of Simon Doumenco’s discussion of news-qua-cloud as opposed to news-the-thing in AdAge only last week in responses to an article discussing the Hearst Corporation’s involvement in an eInk r-based reader, Plastic Logic.

The Hearst e-reader project suggests that media executives just can’t stop clinging to the concept of news as a thing–news as a discrete product that can and should be purchased like milk or cereal or any other package good. It’s amazing that in 2009, that idea still has such a grip. Arguably a death grip…Once upon a time, it made sense for media executives to behave and think as if they were Procter & Gamble executives–package jockeys…: If only we could come up with a snazzier, hipper, more futuristic container for our product …

This actually puts the news people a step ahead of the book industry, of course–we’ve hardly done anything to even improve the container of the past 30 years. Most publishers are trying to reduce the number of trim sizes they print in, lower the weight of the paper, and so forth. (I was a big offender in that regard too, I’ll confess…). That said, it is absolutely clear that the book is a snapshot of a process and the present container used to house it, also known as a book, just happens to be a successful technology. In other words, these things are not fixed. Never were, in fact.

I’m then reminded of Bob Stein, yet another person exploring this process alongside Shirky, “a book is a place”. (Or, to quote myself “books are…the richest kind of social glue”…) “A book,” continues Stein, “obscures the social relations that underlie a book. They are much more a social experience than we realize.” Here Stein is again playing with the little bit of linguistic sleight-of-hand, the book being both container and contained, the former historically contingent, the latter as culturally eternal as any cultural form. The story. And stories are told. And from the beginning of time they were told, sometimes one person to another, something in small groups, or large ones. Told and retold. Stories that organized societies. Thus, highly highly social. And Shirky and Stein and Dumenco and me, we’re going to keep telling that story too.

For, to again quote Shirky: “‘You’re gonna miss us when we’re gone!’ has never been much of a business model.”

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Well, I ain’t at SXSW, but damn, a man can’t just give that sort of excuse when the time comes to look at the changes in the news business and highlight how one might view current issues in publishing in that light. Clary Skirky, already in progress, and now Steven Johnson. Batch one of reactions.

Let me say one final thing. I am bullish on the future of news, as you can tell.

I’ll discuss that anon.

But I am not bullish on what is happening right now in the newspaper industry. It is ugly, and it is going to get uglier. Great journalists and editors are going to lose their jobs, and cities are going to lose their papers. There should have been a ten-year evolutionary process: the ecosystem steadily diversifying and establishing its complex relationships, the new business models evolving, the papers slowly transferring from print to digital, along with the advertisers. Instead, the financial meltdown — and some related over-leveraging by the newspaper companies themselves — has taken what should have been a decade-long process and crammed it down into a year or two.

Well, it’s less the specifically financial meltdown and more the economic meltdown that resulted in advertising revenues that fell far faster than they would otherwise have. But yup, that’s basically right, though a bit overly generous to the companies that owned the news media, I think.

That is bad news for two reasons. First because it is going to inflict a lot of stress on people inside the industry who do great things, and who provide an important social good with their work.

I expect most folks reading this personally know people in both the news and in book publishing who are those very people.

But it’s also bad news because it’s going to distract us from the long-term view; we’re going to spend so much time trying to figure out how to keep the old model on life support that we won’t be able to help invent a new model that actually might work better for everyone. The old growth forest won’t just magically grow on its own, of course, and no doubt there will be false starts and complications along the way. But in times like these, when all that is solid is melting into air, as Marx said of another equally turbulent era, it’s important that we try to imagine how we’d like the future to turn out and set our sights on that, and not just struggle to keep the past alive for a few more years.

The kicker. And that’s exactly what we’re seeing happening in the book business. Yet another world is possible.

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Over the weekend, I’m responding to Shirky’s superb disquisition on the fate of newspapers. As much for myself, really, given that the interwebs are already not short of commentary on the subject, and to do a little close reading to draw the lessons for publishing.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of its most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.

In book publishing, the Innovation Department is called Online Marketing.

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