More GMST and e-book musings.
OK, I think I finally get it. It may be a page out of "The Innovator's Dilemma". Look around at the titles and their prices for e-books. The prices are ridiculously high. The publishers avoid, at a guess, 60-70% of their costs to distribute a book and I get, what, a 15% discount (Note, all numbers in this post are a WAG... Wild ... Guess, based on a very quick sampling of the prices, so please point me to better data if you know of any).
Why, in the name of all that is sensible, are the prices for e-books so high? It sounds like the execs are saying "we can't undercut our bound-book business by selling these things too cheap". Currently, the book publishers have a lock on distribution channels and production for bound books. They don't act like they know it yet, but their days are numbered.
I boldly predict the following.
1> One niche market that the major houses don't care about is the out-of-print market. Some bright person (hereinafter BP) will address this market with scanning/optical-character-recognition (current) technology and establish a thriving business. Total capital involved to start this business up < $10,000 (as opposed to a really lotta money to set up a bound-book publishing business).
2> The BP will then move up-market by publishing new books by unknown/new authors who will be required to submit their work in a form easily translatable to e-book formats, creating an instant stable of writers. Cost to create a new e-book for the BP approx $100 (as opposed to some much larger number to publish even a "pulp" paperback).
3> established authors will see the chance to get much higher incomes by bypassing the publishers altogether and getting their miniscule compensation/book directly from the BP and will abandoning the major publishers, bringing major publicity to the BP.
4> The BP will figure out some way to print books to order (or at least economically in lots of, say, 100). This will allow me to buy a cheap e-book, and, if I really want to have it around for posterity, have a copy printed up.
5> the major publishers will go out of business if they haven't already.
6> The publishers who will survive will produce books that people want to hold in relatively small lots (a-la Sleeping Bear Press here in S.E. Michigan).
Now, the niche may not start with out-of-print books. Textbooks have been mentioned. Magazines are also a possibility. What seems entirely clear to me is that asking us to pay $7.50 for a bound book and $6.75 for an e-book is ridiculous. I know how much it doesn't cost to squirt some bits over the internet <G>.
The picture for magazines is even bleaker. As the content of magazines starts to get e-published, the advertisers will start spending less and less on them since circulation will plummet.... driving the economics of magazine publishing into the dumpster. McCalls and Sports Illustrated are on their way out too.
We can probably debate all day about whether these scenarios are accurate or not but that's beside my point. My main point is that e-book publishing is clearly being done poorly. Giving a 15% discount for an e-book is so obviously a rip-off that it can't continue very long. There'll be blood in the streets if e-books go through mass-adoption (and I think they will). The current publishing structure will be completely blindsided if they continue living in a dream-land that doesn't acknowledge the economics of publishing an e-book.
The above doesn't even begin to consider the effects of wireless, continuous updates of e-book readers.......
What does all this have to do with the GG? Well, GMST is obviously a player. Assuming that they can get some royalty for each e-book transmitted, we can salivate. However, that is a big assumption. I guess my point is that this is a completely unstable situation currently that I expect to blow up (to the detriment of the current publishing industry).
Thoughts?
Erick
P.S. My "bold prediction" should probably be read as "at least one scenario showing that the present situation is untenable and will change" |
