Technology Ending Physical Product…Ramble



Last week Barnes & Nobles released it’s electronic book reader, nook. Cries went up from writers en masse “no, no it’s the death knoll of our industry.” Writers were also slammed with the extra fun Wal-Mart enterprise, aka The Death Star of Everything Good, who are releasing ten top titles for $10 from top authors Stephen King, Michael Crichton, and Barbara Kingsolver.

Publishers are the ones who made these deals and according to the Curtis Brown lit agent with a sparkling smile, shaggy long surfer hair and understanding of technology and rice harvesting (sorry ladies he is engaged), Nathan Bransford, Wal-Mart is actually doing this at a loss, to lure people in -but the deal is only available online if you pre-order the books. Here’s how Nathan breaks it down the deal financially:

On a $25 hardcover:

Wal-Mart pays roughly $12.50 and if they charge $8.99 they lose about $3.50

The author usually gets 10-15% of the list price, so let’s say 10% and $2.50. Deduct 15% agent commission ($0.38) and they get about $2.12.

Publisher gets $10 ($12.50 minus author share), which covers cost of the book, shipping, overhead, and (hopefully) profit.

Oh my! It brought to mind a discussion I had with Travis Barker of Blink-182 a few years ago, about the appreciation for going to the record store every Tuesday to see the new releases. The feel of picking up a physical product, appreciating the artwork that called out to him like a siren’s song, irresistible and futile to resist. These days technology has made lives more convenient in the case of entertainment, but has done nothing to help with medical records.

Every new doctor wants the same paperwork filled out ad naseum. If you are a regular visitor to the ER or have multiple issues and therefore multiple doctors, there are always the forms and even if you bring a list of your medical history, medical professionals want to talk to you about everything and question you as if you didn’t just waste that time filling out their forms. But I digress…

Publishing, like every other business, the physical value has been traded in for ‘get it now’ and that’s a short step to ‘get it for free.’ But wait, there is already a place to get books for free, it’s called a library! Don’t forget there’s also Google books as well as Concord Press, a publisher who gives books away for free including The Next Queen Of Heaven by Gregory Macguiere (uh huh the dude who penned Wicked.) Concord’s tag line “Free Their Books And Their Minds Will Follow.” Hmm, that sounds familiar….

Record labels are always chasing technology. It’s a sad arguement at every music-technology conference and the same cast of characters speak at every one, their opionions unchanging for the past several years.  On the tech side things are ‘exciting’ and ’embraceable’, the frustration is labels are so caught up in that pesky thing called copyrights On the label side, they want money for publishing, something that almost killed online radio and went to Congress to decide the rates. Then there’s the law suit and labels get paid in ad banners or media or wind up owning part of the company. It can’t be sustained and smaller businesses get bought out like the recent iLike and Lala services into MySpace and Google.

The  NY Times has a 25 million user audience online. They have been giving away  their content for free for years. Now newspapers are interested in setting up a pay for click system where the reader would be paying .03 cents to read a full article. Really? Why didn’t the NY Times charge for their iPhone app? It’s one of most popular apps since it’s launch. iPhone owners pay for a damn Koi Fish app! Why didn’t you use the Apple model and charge for the item (iPod, iTouch, iPhone) that houses the content? In this case the app. I would gladly pay $4.99 a year for the app to have a one time pay model instead of worrying about reloading with .03 here and there. Learn from other industries before jumping into tech mistakes and devalueing content further.

The truth for music is digital sales are not making up for the lost physical sales. For those authors worried about the deal with Wal-Mart and banding together under the American Book selling Association to bring the matter to the Attorney General, what is the reality?

1) Publishers are hurting and they are going to keep looking for deals to bring attention and more readers out in the market

2) It is a commitment to reading to invest $200 in a device to read books. Readers that were grabbing a last minute book at airports, now can pick it up without having to wait in the slow Hudson News line worrying about missing their flight.

3) There are bibliophiles who are not tech geeks and will never want to take on an e-book

4) It’s sad but we’re losing our appreciation of the physical. Listeners don’t know the sound quality difference or even CARE about it, as long as they get music for less so why record at top quality? Kanye West realized this long ago and cut down his production costs. The reason I point to Kanye is not only is he hated by many, he makes great music so people buy his music, they want to own it. Wal-mart putting out cheaper versions of books will not matter to consumers who’s shrinking paychecks make even a $10 purchase of a book a luxury.

5) Technology is not perfect– and we’ve become so used to it a lot of consumers go through media burnout. Every time Twitter is down users whine about it. Cuddling up with a Kindle is going to take a bit of a mental switch, just because the top media consumers are going wild for it, doesn’t mean it’s an instant conversion for the entire reading population.

6) Consumers want to own great content no matter what. If it’s good, they will want it!

7) Gadgets are not going away. Learn how to embrace and change with it in a smart way instead. I know writers spend a lot time alone, but you should be informed about what’s going on outside your doors, you know where people buy your books.

8) Personally I get Internet A.D.D. to borrow a phrase from my friend Brian. When I attempted to read Chris Anderson’s book “Free” for free on Google Books, I read a few chapters, then had something else to do and never went back. If I had the physical book with me I would have taken it with me on the subway later on but now I’ve completely finished with it, cause look over there, there’s a puppy video on YouTube of a French bulldog who can’t turn over by himself. Chris who? What….ohhhh puppy.

8) The library provides books for free! Oh no shut them down!

That’s just my two cents, hey I saw ‘Ragtime’ last night and the first song was 20 minutes long. My two cents can be a couple hundred words. This is me editing my opinion.


Never one to miss out on putting together a conference, MediaBistro is holding an e-book conference Dec. 15-16. Register early to save.


3 thoughts on “Technology Ending Physical Product…Ramble

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s