The publishers dilemma revisited

Posted on: September 15, 2009

Putting things into perspective:

When I first wrote “The publishers dilemma” my key concern was that publishers are doomed to manage the digital (ebook) business the same way as the traditional physical business. I developed two options that could help publishers to defend their core value proposition within the value chain. Since I published these ideas, news flow around ebooks and publishing increased and some interesting developments emerged. Even though I still support the core of my argument, I would like to revisit my arguments and offer a third option to solve the publishers dilemma.

The container does no longer matter: eBooks are nice but not the end of the story.

The revolution in the publishing industry is not that books become ebooks, but that reading itself becomes digital. This means that you can consume text on virtually any electronic device available, be it a mobile phone, game console, TV, Mac or e-ink reading device. Multi-use devices are increasingly popular and the race for dominance in the consumer electronics market has already begun. As virtually all these devices will have wireless access to the internet, the leading device or electronics manufacturers will develop direct download store-fronts. Without the ability to fill the devices with content, consumer electronics manufacturers will find it difficult to sell these products. From the publishers perspective, this is essentially a good thing, as exclusivity increases the value for content. Hence other than suggested in my initial post, I do believe today that investing into proprietary distribution might result counterproductive. The fact that Nintendo, Sony, Philipps, Apple, Samsung and many others might build content distribution platforms, creates a whole new ecosystem of competing platforms. Competition among these platforms will prevent the dominance of a single one and potentially strengthens the publishers bargaining power.

Here an example of how Nintendo enters the ebook market.

The opportunity of channel complexity: Publisher ought to adopt a service approach.

The new channel reality is far more complex than the old brick and mortar world most publishers were used to. Here however, lies the opportunity to defend the role of the publisher. In a complex world, disintermediation becomes more difficult. Technological know how and close relationships with the leading content platforms must be an asset that publishers have to add to their value proposition. Managing a complex channel, controlling different file formats or monitoring consumption behaviours, streaming or download patterns is an essential service, authors cannot sacrifice. The third option to solve the publishers dilemma is the transformation into a service business, with a strong bias towards technology and analytics.

Media, maybe more than any other sector, has to live with the paradigm of an information and knowledge economy. Our assets used to be printing press and physical distribution. These times have passed. In order to continue to add value to authors, retailers and consumers, publishing has to explore a service approach that takes the new market reality into account .

As always, feel free to comment.
Best, Tobias



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