Tuesday, December 17, 2013

Future Shock: Where Are the New Technologies Taking Us?

‘Right now, the book industry consists of authors, publishers, agencies and retailers. Thanks to people like (bestselling e-book author) John Locke, one of those last three categories is going to cease to exist and the other two are going to absorb its functions.’
- Jeff Bercovici, Forbes magazine writer

There’s quite a bit of innovation and experimentation going on in the world of publishing today. Apart from the aforementioned inventions like the Kindle, here are some more creations:

Vook, founded by Bradley Inman is a platform for e-books that seeks to combine text, video and social networks such as Twitter. Inman is also the founder of TurnHere, a production company that creates author videos for publishers. Exploring the potential of such e-book devices as the Amazon Kindle, Inman wrote his own thriller, The Right Way to do Wrong, and used TurnHere to create two dozen short videos to promote it.

WE-Book, a New York Based startup, allows people to collaborate on writing books and is looking for ways to let readers give writers real-time feedback on their literature.

Wattpad, based in Toronto, Canada, is among several startups soliciting the work of unpublished authors and distributing it on the Internet and on mobile phones – completely bypassing traditional publishers.

Innovations like these have turned publishing on its head. Nobody knows what tomorrow will bring. The demise of Borders shows how serious the challenges facing bookshops are. In a Deutsche Welle (German) TV magazine show some years back, a young man was shown walking past a bookshop, his hands buried deep in his trench coat. A translated voiceover said, to wit: ‘When I need to buy a book, I don’t go into a bookshop…’ The next scene showed him sitting in his house, surfing the Net. ‘…I can get any book I want on the Internet.’ Cut to the computer screen. Lists of authors and titles scroll upwards.

To make matters worse, some online booksellers like Amazon are so successful, they inspire upcoming entrepreneurs to follow them into the online world (not invest in traditional tried-and-tested book-selling methods). Not only does Amazon sell physical books, it's also the biggest seller of e-books. Five authors including Steig Larsson (Girl With the Dragon Tattoo),
Stephenie Meyer (Twilight series) and James Patterson have each sold more than 500,000 digital books via Amazon (James Patterson over 800,000 via Amazon and over 1 million in total). John Locke is an American e-book writer said to generate a six-figure annual income purely off Amazon sales. J. A. Konrath, another American author living off e-book sales, recently had the honour of having his thriller, Shaken, picked by Amazon’s printing arm, AmazonEncore. Why is it an honour? Amazon has the e-mail addresses of everyone who has ever purchased an item from them. That’s millions of (book) buyers’ e-mail addresses! Imagine if you’re an unknown writer and Amazon decides to promote your book – you’ll become a bestselling author overnight! And their method of picking writers to promote is virtually full-proof: they check the reader reviews on your Amazon e-books.

Unfortunately, no bricks-and-mortar bookshop has that kind of mega tonnage. Traditional bookstores and book publishers don’t even have the contacts of the individual readers who have bought their books, leave alone the contacts of buyers worldwide. One of those two entities may have to adapt or die, most likely the bookseller. If online shopping is the way of the future, then the publisher can simply add an e-commerce section (shopping cart) to his official website and buyers can order from the catalogue and pay via credit card or mobile phone credit. We call this mixture of traditional and computer-age business practices ‘clicks-and-mortar’. The new Barnes & Noble is the perfect example of a clicks-and-mortar business.

Should bookshops become redundant, the author and the publisher will be no worse for wear because bookshops take massive commissions in order for their role in the book chain to be profitable. A bookshop’s commission is usually 30% – 35% while the author’s royalty is usually 10% – 20%. Sans middleman, there will be more revenue for the writer and publisher to share.

One of the new buzzwords floating around these days is ‘Book 2.0’. It is shorthand for an ongoing revolution that will change the way readers read, writers write and publishers publish. Book 2.0 takes into considering such powerful market forces as Amazon. Billionaire Jeff Bezos of Amazon.com fame:

‘This (launching the Kindle) is the most important thing we've ever done. It's so ambitious to take something as highly evolved as the book and improve on it. And maybe even change the way people read.’

Overall, the book industry is growing. Literature is not in danger. According to BookStats, a comprehensive survey conducted by two major trade groups, US publishers generated a net revenue of $27.9 billion in 2010, a 5.6 percent increase over 2008. US Publishers sold 2.57 billion books in all formats in 2010, a 4.1 percent increase since 2008. However, the nature of the book business is changing. Some players, like book chains or traditional publishers, might have to evolve into something else or go out of business.

All of publishing has been on shifting sands over the last twenty or so years. Music publishing has also seen drastic changes, most occasioned by modern technologies like the Internet and mobile phones. Back in the days of cassette tapes, pirating or ‘dubbing’ was done by means of a stereo player with two cassette slots. Stereos that could ‘dub’ were not very common but they still gave record labels a headache. The Compact Disk, or CD, was supposed to end the piracy. This was a new, advanced, technology. The music was ‘burnt’ onto a shiny, durable, disk and read by a faint laser. Wow! That would be hard for the pirates to beat, right? Wrong. The Personal Computer began to gain currency in the 80’s and really caught on in the ‘90’s. As the ‘90’s wore on, new, sleeker and faster versions of PCs were released. Computer software also took a quantum leap. The music industry was caught with its boots off. With so many computers in homes and offices, pirating CDs became easier than ‘dubbing’ could ever have hoped to be. It was the Internet, however, that wrote finis to the old-school music industry.

Napster was the main villain of the music revolution. It allowed Internet users worldwide to download music for free. It was eventually sued and stopped the illegal file-sharing but the damage was already done. Other, smarter, file-sharing networks like Kazaa and iMesh emerged and continued distributing music for free. And then Apple invented the iPod and iTunes. Songs were now being sold for as little as $0.99 and the worst part was that the invention had come from outside the music industry. Industry players like Sony tried to make their own devices but they could never catch up to Apple’s iPods. Mobile phones also made their mark on the music industry with ringtones and ring-back tunes. Some musicians make more money from ring tones than from any other revenue stream. Live events are also key now because any song they ‘put out’ can be pirated in various ways.

Whereas there were many prominent record labels in the past, today there are only 4 major labels left in the world. These are: Universal Music Group, Sony BMG, EMI Group and Warner Music Group. Most of the small labels you see credited on music videos are under these four.
Even previously prestigious record labels like Arista, Atlantic, Reprise, Epic, Columbia, RCA,
Geffen and Motown are now just imprints under the Big Four. The biggest record label is Universal Music Group which accounts for about 25% of all music sales and handles such artistes as Eminem, the Black Eyed Peas, Mariah Carey, 50 Cent, Gwen Stefani and Kanye West. Speaking in Jerusalem not long ago, the CEO of Universal Music Group confessed that he could not predict the future of the music business! That’s the head of the biggest music conglomerate in the world and he also doesn’t know where the business is headed!

The same goes for book publishing. I challenge any publisher to paint a picture of the print industry ten years from now. You can’t. Nobody can. We don’t even know what will happen in the next few months that will turn publishing on its head. Will Barnes & Noble go bust? Will Amazon go out of business like so many ‘dot com’ companies before it? Will Amazon purchase Barnes & Noble? Will Nokia allow all its phones to purchase and download e-books like Kindles? Will Apple come up with an ‘iReader’ or something that will rival the Kindle? Nobody knows the answers to these and similar questions. But one thing’s for sure, technology will make some of the current arms of the book industry redundant.

Remember Borders.

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