Appetizer. Dinner. Dessert. A la Carte No Imposition on Books
Recently someone in the newspaper business asked me which newspapers I read. I wasn’t sure how to answer. I do read the paper everyday — not the same one, and not always in the same form. I forget or never notice in the first place which organization I am reading. I decided to say I consume news a la carte.
I hadn’t yet considered the implications of the a la carte media diet on traditional business models. Then I read Mark Cuban’s post on internet video. Basically 80% of TV shows get kicked in the teeth once they no longer are subsidized by the top earners. Cuban asks what happens to ESPN2 once ESPN’s revenue is no longer transferable from Sportscenter?
Or what happens to the Globe and Mail if readers only choose to read Mathew Ingram? One answer is that Mathew Ingram (or Sportscenter) becomes really expensive.
The internet video example is particularly hot button because video is so costly, and there is so much at stake with network TV. The newspaper angle is covered in this great post via the TOC.
The book publishing analog isn’t as sexy. Unlike TV and news — the revenue source isn’t “decoupling” from the content. Our content is the revenue source. So consider what would happen to Simon & Schuster if it couldn’t use profits from Stephen King books (i.e., he goes it alone) to support new titles and keep the lights on? You would have fewer new titles for a while. Then S&S would find another Stephen King — someone who doesn’t want to do his own marketing, publicity, sales, and distribution and who is happy to let Simon do it at a premium. No need to panic right?
Reading Cuban’s post reminded me of all the kruft and bloat I witnessed in my time in TV production. The cost of producing television has reduced over time. The cost of producing television at a network hasn’t decreased at the same rate. I think squeezed margins in TV will help even if they hurt. I think the same for book publishing. Once publishers start seeing declining profits, they will be forced to become more efficient. That is not a bad thing even if it causes fewer books to be on the shelf in the immediate term.
One could argue that book publishing is a pretty lean business as it is and it doesn’t need to trim down. “We are doing just fine thank-you very much!” That may be true but I think that adds more incentive to experiment, not less. When your margins are tighter and your profits decline, your business is more likely to fail than to downsize. I think publishers would be wise to get started aggressively undercutting their own business model. “Fail forward and fail cheaply.”
No Comments Yet