The publishing industry feels under threat from a lot of places these days. And the most commonly mentioned cause of this fear is surely Amazon. Starting off as just another book retailer, Amazon has grown hugely and very cleverly to become a true global giant.
Amazon seems to be the kid everyone’s afraid of – bigger, stronger, and not afraid to use its muscle to get what it wants!
Playing by the rules
However, Amazon is still playing in our playground, basically working with the same rules publishing companies are used to – getting books to customers more effectively and more cheaply than ever before. This is a game that publishers understand and play all the time. And we can see this by the way that publishers and Amazon are always talking about this or that, arguing about a particular situation and coming to new agreements.
The problem, it seems to me, is that Amazon isn’t actually what publishers should be most worried about. We fear Amazon, I think, because we understand it pretty well and so can predict clearly what effect its actions are going to have on us.
A different game
The true danger may not be Amazon but other giants who are playing entirely different games. Companies like Google and Facebook, who use content (including content from publishers) as part of their business but who don’t really care much about that content because their real business is selling advertising. Or how about Apple, who make a lot of noise about ebooks, as they do about apps, but who clearly have no interest in allowing a profitable business to flourish actually providing that content?
You only have to look at the parlous state of the app industry to see how Apple would like publishers to fit in. The news is all about the success stories – Angry Birds and Clash of Clans, even The Elements. But the truth is that the vast majority of apps make no money. The economics are far worse than those of book publishing, where at least there’s a mid-list even if it’s not as vibrant as it once was.
In the app world, the 1% succeed while the 99% fail utterly.
Choose your sport
The way for us to succeed is, I suggest, to pick a game that we can win. Don’t play a game that’s rigged by the referee. Don’t start playing at all until you actually understand the shape of the pitch and the basic rules. Always be on the lookout for changes to the rulebook you learned.
And keep an eye open for other players on the same team as you. You might not recognise their team colours, but you might discover some unexpected allies. There are lots of content industries going through the same problems as publishing – not just books and magazines but newspapers, music, TV, film, games. Some are probably in worse shape than us, some better. But there are places where we have the same problems.
For example, everyone seems to be trying to make subscription models work, but there are few (if any) real success stories. NetFlix is still the poster child – and, even there, there are signs of problems in paying for and keeping enough content to satisfy their users. Amazon is again flexing its muscles here and demonstrating its willingness to run at a significant loss for many years in order to get a dominant position.
In music, though, subscription is hugely controversial. Spotify famously pays tiny amounts to the artists who create its content, and artists themselves are trying to change the conversation – if not always very successfully, as with the much-mocked launch of Tidal recently by Jay-Z and a raft of the pop elite.
Will ebook subscription be different? Who knows. But we can certainly learn a lot from the struggles of our team-mates. And the same will be true of negotiating Google, Facebook, Twitter, SnapChat and all the other giants out there.