I've been looking into ebooks lately. It's interesting to me personally because I'd love to read more, but i just don't do it. And when technology or a gadget is involved, I tend to give it more attention (stupid, but honest). But it's also fascinating to see the category take off like it is with no real defined standards regarding formats, features, pricing, etc. I know, I know, this is the race to see who wins. But it's all happening just like it did in music and like it's happening now in movies and television. But the publishing industry doesn't seem to want to learn anything from the idiots in the music business and movie studios who tried to fight the technology. Guess what, digital is here. Connectivity and easy sharing is here. You have three options: 1. Try to control it with DRM and limiting access in order to hang onto your traditional business model. 2. Try to slowly evolve your model so when the tidal wave truly hits, you can stay afloat. 3. Blow it up and pioneer the next model. In scenario #1, you piss off your customers. You alienate possible new customers. You slow down the transition and buy yourself a little time. But in that time, you run the very, very real risk (I would even say likelihood) that someone is going to invent the "end around" technology or business model and leave you standing there holding absolutely nothing. Because when the authors figure out that they don't need you for anything more than an advance check (hello record labels!) and the customers have learned to hate you for trying to screw them, what do you have left? No content and no buyers leaves you with incredibly efficient, but empty distribution and marketing systems and a massive staff of nervous people and mortgages on office towers in the heart of Manhattan. Good luck.
Scenario #2 has potential. It's safer and it's a long term play. Still, it's scary as hell for an established industry. Run some pilot programs. Viewed through the right lens, this is more opportunity than crisis. Check out what they've done with Hulu. In the new digital model, not every author has to sell a bazillion books for you and them to make money. Don't give 'em an advance, but give them a bigger cut. Share the risks and rewards. Just like music, as there are less and less bona fide breakout hits, a system that relies on them will die. But ebooks have immense possibilities as minor leagues. Use them to try out new authors or limited interests topics and if they show potential, invest in them and move them to the majors. Give them a marketing budget and physical distribution. And if they don't, make sure you've managed costs so that you are covered or even make a little something off of each one. That's right, you're going to have to start operating like a real business, not a gambling operation. You'll have to understand the real costs of making and selling your product. And the true potential for that market. Then you'll have to make a decision whether or not it's worth it to invest in that project. And when you launch it, you'll have to control costs just like a company making soap. Crazy as it sounds, if you can't sell it for more than it costs to make it, you probably shouldn't make it.
Scenario #3 is for the wack jobs and for those with nothing to lose. It's for people in their garages and dorms and Moms' basements. But that's where Gates, Jobs and those Hewlett & Packard boys all came from. And, not to sound like a fan-boy, but the big difference is that Jobs did it twice (at least). He did it with Woz in the 1970s. And he did it again when he came back to Apple and put out the iMac, iPod, iTunes and iPhone. And people were waiting at every turn to say "you can't do that." It's easy to think now that iTunes was an easy call. But NOT ONE SINGLE person outside of Cupertino expected it to be what it is today. A niche computer company owning the largest music distribution point in the U.S.? Talk of a monopoly? Mark it down. Someone either inside publishing or outside publishing will make the leap. And they will own, or at the very least, redefine that market. Bezos is trying to be that guy. But he better open up the Kindle to ePub or Reader standards. My guess is that by the time anyone inside the industry is desperate enough to throw a hail mary, it will have already happened outside the industry. And it will be led by someone who is "naive and inexperienced" enough that they won't know that "you just can't do it that way."