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Novel Technology

“The new way of reading books arrived hesitantly. It exploited a novel technology, reflected changing public habits of consumption and radically altered the distribution and economics of the traditional publishing industry.”

Am I talking about the Amazon Kindle again?   Actually, no.  Read on:

The paperback represented an intimidating revolution to the 1930s book industry. It took high literature to a far wider audience. But established publishers disdained it, fearing it would cheapen the industry and drive down profits. It might not have been – as its ancestor the pamphlet novel was in the 1840s – assailed as a threat to the “eyesight of a rising generation”, yet the reaction had much else in common with how the emergence of the electronic book is now being regarded.

The more things change, the more they stay the same.   I often hear from fellow readers that e-books don’t “feel” the same as real, physical books, that they don’t “smell” the same.  There is some truth to this.  Even among books, stately leather-bound volumes have a different feel and smell than pulp paperbacks, yet there is a market for both.  The most likely outcome with the e-book is that it carves out a rather large chunk of market shares (possibly close to 100% for school text books and certain reference books) but that it doesn’t fully replace the traditional book.  For infrequent or impulsive readers (say, someone at the airport suffering through a layover), a cheap, disposable paperback makes a lot more sense than an expensive electronic reader.

At any rate, the e-book is certainly making its presence felt, shaking the foundations of an industry that hasn’t changed much in 500 years.  The Financial Times article quoted above is one of the best we’ve read so far: “Brought to Book.”

“Book publishing is moving from a slow-moving, localised, opaque, oligopolistic and often highly uncommercial world to an open, global, highly liquid and highly commoditised world,” the FT quotes Benedict Evans of Enders Analysis.  “This is not a shift that we would immediately associate with higher profits for incumbents.”

Lower profits will push more marginal publishers out of the business.  But what will happen to the authors who would then not have a publisher to bring their work to market?  Might there be a new surge in self publishing?  Perhaps.  The whole process promises to be exciting to watch.

Charles Sizemore, CFA
Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy