The media industry — publishers of books, newspapers, magazines, music, film, and television — are distraught over their belief that consumers aren’t willing to pay for content like they used to. They used to be able to sell truckloads of hardcover books for $26, highly produced albums for $12, and daily newspapers for $40/mo.
But times have changed.
We can now download an ebook on Amazon for less than $10 (sometimes way less!) and start reading it immediately without having to wait or pay for shipping. We can subscribe to Spotify and listen to basically all the music we could ever want for $10/mo, or free with a few ads. And we can get the news for free on the internet through social sites like Twitter and Reddit, opinion articles in plenty on places like Medium, and even articles from the original big news channels like BBC and New York Times on their own websites.
So what do publishers do now? They’re basically in crisis mode trying to figure out how to make money in this new economy where content is expected to be way cheaper than it used to be.
As I wade through this world, trying to find—or make—my place in it, I’ve been reading. Like, reading a lot. I can’t tell you how many books, articles, and essays I’ve read in the last month, but it must be in the billions.
Disclaimer: I don’t agree with everything Paul Graham says, but he does have some interesting ideas worth thinking about.
One article that struck me the most was an essay by Paul Graham, @paulg, called Post-Medium Publishing. (Psst… Paul Graham is a computer scientist and venture capitalist, and you may know him as one of the co-founders of the seed capital firm, Y Combinator.) The article was written in 2009 but it shows how he can analyze the world and make some pretty spot on predictions about where it’s heading.
I recommend reading the article if you’re interested in this stuff, but I’m also going to talk through the concepts here as it relates to the more current state of things and to plans for publishing my book, We Are Fungi.
What Do Publishers Sell?
The first idea of the essay is that: publishers are in crisis because they see consumers paying less and less (or not at all) for content. And they think that’s wrong.
But Graham argues that the consumer was never paying for content in the first place. He says that publishers weren’t selling content, they were selling the medium.
Book publishers weren’t selling words, ideas, and stories — they were selling paper.
The publishers priced their books dependent on the format, on the cost of producing and distributing books. Same for the music industry and the newspaper industry. Better content didn’t cost more, but more pages or more discs did!
He makes the analogy that:
“they treat the words printed in the book the same way a textile manufacturer treats the patterns printed on the fabrics.”
Patterns on fabric allow you to mark it up and sell more wool, and words on paper allow you to mark it up and sell more paper.
The Mediums Are Changing
So now that the mediums—CDs, DVDS, and books—have been challenged by digital alternatives through ebooks and streaming, what is it that publishers sell?
Book publishers appear to believe they sell content, but their economic model is still to sell paper.
Content vs Information
Here Graham talks a little about the difference between content and information. He says that people have always and will always pay for information. For example, they’ll pay for subscriptions to Bloomberg stock tips because that information can make them money. But content is different than information. He says:
“content is information you don’t need”.
We don’t need music, and we don’t need stories or even nonfiction books. So will people still pay for content?
Will We Pay for Content?
For a short time people paid for mP3s on iTunes, before streaming came along. But Graham argues that was only possible because Apple controlled the entire channel from the music to where you play the music (iPod). Plus, there was heavy competition from pirating.
What about ebooks? Here again, Graham says:
“whoever controls the device sets the terms”.
Ring a bell? Amazon? Kindle? KDP? Kindle Unlimited? We’re there now. We’ve got a company who totally owns the ebook market and you can be sure it’s:
“in their interest for content to be as cheap as possible, and since they own the channel, there’s a lot they can do to drive prices down.”
Ok, but what about TV, huh? Back when Graham’s article was written in 2009, most everyone still had cable. But now in 2017, almost 25% of people have quit their cable subscriptions. Those people are opting instead for content streaming through Netflix, Hulu, and Amazon Prime.
There’s a big difference here between TV episodes and books, whether we’re talking about cable or streaming — you don’t own a TV show. The TV industry isn’t really selling copies of anything, like a book publisher sells copies of book, whether it’s print or digital. Nobody buys seasons of TV shows on DVD anymore (did they ever?).
The movie industry has been quicker to adapt as well. Movies were once like TV: the film companies were selling an experience in a movie theater rather than a copy of something. But then there were DVDs, and then there were pirated downloadable movies, and as Graham said:
“once publishing — giving people copies — becomes the most natural way of distributing your content, it probably doesn’t work to stick to old forms of distribution, just because you make more that way.”
Film companies make more money in theater ticket sales, but once pirated movies became available on the internet, they became a digital publisher. Hollywood had to choice but to adapt. And you see that now with content being made in new ways for new channels and new distribution.
Graham even predicted music streaming, although he didn’t think it would work out. He said the music industry would try to:
“retroactively convert it away from publishing, by getting listeners to pay for subscriptions. It seems unlikely that will work if they’re just streaming the same files you can get as mp3s.”
I think what Graham missed here is that streaming allows you to not have to own the mp3s. With streaming, I don’t have to have the files on me to listen—I can listen to anything, anywhere as long as I have wifi.
As far as the news industry, most journalism is surviving right now (barely) off subscriptions to digital editions (ie. New York Times), hawking ads on their website (ie. ESPN), or straight up asking for donations PBS-style (ie. The Guardian). But they’re struggling to make it work.
What Happens Now?
So, the question still stands: what happens if publishers can’t sell content?
Graham lays out to choices:
“Give it away and make money from it indirectly, or find ways to embody it in things people will pay for.”
The first option is currently playing out in the music industry: give your content (songs) for free—the earnings from Spotify are negligible—and make money off concert tickets and merchandise. And some journalism is trying this route as well with ads on their free articles online.
Here, Graham makes a point publishers may not like. He doubts these routes will be successfully navigated by the existing groups. He says:
“the optimal ways to make money from the written word probably require different words written by different people.”
Ring a bell, again? No… not Amazon.
I’m a different person. And I’ve got different words.
Attempts to Adapt
Graham goes on to talk about the ways the current players could try to adapt and evolve. Movie theaters could: “return to their roots and make going to the theater a treat”, book/magazine/newspaper publishers could compete with digital formats and entice people to buy print by prioritizing the physical object and making “lush” editions or autographed copies.
He argues there will always be a market for print, but:
“it’s hard to foresee how big, because its size will depend not on macro trends like the amount people read, but on the ingenuity of individual publishers.”
Content as Physical Object?
How big is the market for selling content as a physical object? Graham says people “overvalue physical stuff,” and I agree. I try to keep a somewhat minimalist mindset when it comes to stuff, and I keep my possessions as low as possible.
But books seem different. As Graham says in another essay, Stuff:
“I’ve now stopped accumulating stuff. Except books — but books are different. Books are more like a fluid than individual objects. It’s not especially inconvenient to own several thousand books, whereas if you owned several thousand random possessions you’d be a local celebrity. But except for books, I now actively avoid stuff. If I want to spend money on some kind of treat, I’ll take services over goods any day.”
Why do books prevail? What makes books feel so different? No one displays their CDs or DVDs in their living room anymore, but we still show off all our books lining the walls of our homes. We can read books cheaper and more conveniently on a tablet, but most people still choose to buy print books.
Why are books being so difficult in adapting to the digital world?
I’ll let you know now: Graham doesn’t tell us the answer. He doesn’t know what the future will hold, but he believes change like this:
“tends to create as many good things as it kills.”
He makes the assertion that the more interesting question here is
“not what will happen to existing forms, but what new forms will appear.”
So it’s not: What will happen to the print book?
Or: What will happen to the ebook?
But instead: What new forms will be created?
No one knows yet what those new forms will be. No one has made them yet. But Graham offers some advice in finding them:
“when you see something that’s merely reacting to a new technology in an attempt to preserve some existing source of revenue, you’re probably looking at a loser”.
This, I believe, is where the industry is at. Ebooks and Amazon are attempting to disrupt the book industry with a new form, but an ebook is essentially just a digital representation of the same printed book. It’s the same form, only mildly different. And that’s why it hasn’t taken off like people predicted it would. It’s not really a new form.
Streaming movies is a totally different experience than buying a $25 theater ticket to sit on crusty seats eating over-priced snacks, and not being able to see over the person sitting in front of you. Streaming is a new form, and it’s disrupting the film industry.
Streaming TV shows is a totally different experience than buying an expensive cable package, remember what time the show airs, what channel it’s on, getting home in time to watch it, and not having to pee in the middle of the show. Streaming is a new form, and it’s disrupting the television industry.
Streaming music is a totally different experience than buying a $12 physical CD or store a ton of mP3s on your computer, only having access to what you can afford to buy, and not having access to playlists or recommendations or new discoveries. Streaming is a new form, and it’s disrupting the music industry.
Can you stream books? Can you sell books on subscription? Companies have been trying and failing at that for years. Books are proving stubborn.
Finally, Graham advises:
“when you see something that’s taking advantage of new technology to give people something they want that they couldn’t have before, you’re probably looking at a winner.”
Ring a bell?
It’s me. And you. Together.
Stay tuned. :)