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By jdb, February 19, 2010

The recent kerfuffle over ebook pricing led a lot of people to equate the publishing business of today with the music business of yesterday. There are some basic ways in which the businesses are similar, and given that, the book business can look at mistakes the music industry made and try not to duplicate them. At the same time, there are enough differences that the book business needs to find it’s own unique way forward.

Big publishers and big record companies are largely the same kinds of companies, they both have an IP based media product that is made and sold in similar ways. In some cases they are the exact same conglomerates, and the collection of imprints in a publishing conglomerate are actually structured pretty much the same as the collection of labels in a music conglomerate was through most of the 90′s – real integration came as the industry reacted to shrinking sales. Both types of companies, because of their integration, have the same hypersensitivity and vulnerability to market conditions, to the power of retailers, and to consumers choosing the ‘free’ option. The ‘evil music cartel’ meme is the same as the ‘evil greedy publisher’ meme. And, if the hue and cry on the Internet are any indication, the similar memes seem to enjoy the same appeal.

The publishing industry now faces a lot of the same problems that the music business did in the 1990′s. Those problems largely have to do with the wave of consolidation that went through media companies, starting in the 1980′s. Small companies quickly became the exception rather than the rule, and came to be referred to as ‘independents’ in publishing and ‘indies’ in the music business. In the book business, independent publishers have about the same minority share of the market that the indie labels had in the 90′s, and the problem for the indie labels twenty years ago wasn’t the big companies or even the distributors (an indie could get picked up, even if the distributor was owned by Warner, in fact, Warner’s distribution subsidiary reached out to indies) the main problem was retail consolidation – dealing with limited shelf space and the pricing demands of giant retailers – the same problem the book business is dealing with now. Although often referred to as ‘cartels’, the only real monopolistic action taken by the big record companies was when they tried to fight back against Best Buy – who was selling the product at a big loss, as a loss leader. Sort of like discount ebooks at Amazon, or discount hardbacks at Wal-mart.

One mistake the music industry made was not finding a (legal) way to wrest control of prices away from the big box retailers, who started selling the product at a loss – like Amazon does with ebooks.  The big chains put all the little guys out of business – like Amazon is doing now – and they started dictating to their suppliers – like Amazon tries to do now. The U.S. government convicting the labels of ‘price fixing’ was pretty much the death rattle of the music business – there weren’t enough outlets for their products and the price was being depressed by the ‘free market’. Pretty soon, the record labels couldn’t afford to put out any music that wasn’t a huge hit, and all the music had to sound like Britney Spears. 

Unable to get more than a relative few products on the shelves, they had to sell more of each one, and that made them more vulnerable to flops – and end user piracy, because they relied on fewer titles that had a mainstream appeal and failed to foster a culture of important music and music collecting as they had in the 60′s and 70′s. Most younger people were only buying a few cd’s a year, and when they started downloading the songs they wanted from Napster and Kazaa instead, there was no new base of collectors to keep the industry floating long term. Granted, that’s part of the nature of the corporate media beast, but they could have handled it differently and thought more about getting life-long fans for artists, even in the face of the retail consolidation and artificially falling prices.  

One of the mistakes the music industry made was thinking it could compete with ‘free’ based on price, so they started selling songs for a buck. One assertion made by anti-copyright activists is that pricing has a direct relationship to piracy, that people download because they won’t pay the price that a product is offered at. I think it’s more likely that people who won’t pay simply won’t pay.  Selling songs for a dollar as an ‘impulse buy’ was a mistake because it doesn’t matter if you charge five cents or fifty dollars, you can not compete with free based on price. Brigning the purchase price that low only a) devalues your product in peoples minds even further and b) creates that situation where you are competing on price, and if you do that people will always choose the lower price – free. The publishing industry needs to keep the prices of ebooks higher, not only to prevent cannibalizing their hard copy sales but to maintain a higher rate of return in the future if and when ebook use displaces hard copy use, and piracy increases accordingly.

The book industry can only use the music business as a model to a certain extent, however. The main difference between the music and publishing business is the product. It could be the audience for books will remain attached to the interface they are used to – whereas with music the interface doesn’t matter so much, because by and large people do other things while they listen and it’s a less intimate, more passive experience. People decided that their experience of MP3’s on their portables or in their car was the same as their experience of CD’s except more convenient. The interface for books by it’s nature demands more from the person enjoying the media, and may prove to be integral to the experience that most people want. The paper book has a much older and deeper cultural significance (500+ years) than do shiny silver discs (25 years) or handheld gadgets for that matter (about 50 years). Ebooks are seen as less valuable than ‘real’ books which isn’t exactly what happened with recorded music where people feel that it is only the ‘content’ that matters. Also, unlike CD’s which are the ’security hole’ for music, the existing book product is analog and much more secure, due to the effort required to copy it, while it’s the newer product (the ebooks) which can be easily copied.

So while the publishing industry can get some insight by looking to the plight of the music business, in my opinion it’s important to realize that the products are different and along with that, the audience feels differently about books, and the businesses are in a different position. The publishing business does not need to make the last resort decisions that the music business has had to make. The ‘access model’ that Google tried to foist on the book world as a foregone conclusion in their ‘Book Settlement’ would mean less income for everyone involved and the ghettoization of their whole business. Authors would have less leverage unless they were really star attractions, and you could bet on a reduction in author’s rights, and an increased role for packagers paying authors on a work for hire basis. Exactly how the economics and rights issues might play out will be seen in the music business as it clutches at straws and attempts to rebuild itself in some form. The book business is not where the music business is, and if they play it right, they never will be.

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By jdb, November 11, 2009

I don’t mean to advocate blind acceptance of the situation. Only a calm objectivity. If you’ve got a patient on the table and his guts are spilling on the floor, it’s not the time to think about curing the underlying disease or giving him lessons in nutrition. You’ve got to sew him up so he doesn’t die. That’s the priority.

When the Bush administration first approached the financial crisis, they were going to buy the bad assets – but I think it was too late for that. What they ended up doing was swallowing a bitter ideological pill and just giving the banks some money. That scares the hell out of me, not because I think they were rewarding their friends for being dipshits or whatever, but because the money that wasn’t used to acquire banks that were basically dead outright was needed as operating capital. It got them through Christmas, and hopefully through the bottom of the financial markets. What that says to me is that those banks were weeks away from complete collapse.

So I think the bailout was 100 percent necessary, and nothing would get done in terms of reform if it hadn’t happened. You can’t re-engineer jack shit if you’re broke, and a good chunk of the third world is one hundred percent dependent on those banks being solvent. Famine, anyone? The entire world is intertwined with those banks. I don’t think I’m overstating the case when I say that, given how interdependent and ‘globalized’ we are now, if there is deep depression in this country, then there are parts of the world that would experience famine and plague. I say do whatever we have to do. I don’t care whose fault it is, all hands on deck! There is a hole in the boat and we can worry about shouting matches later. It might not be the boat I want to be in but that doesn’t mean I want it to sink.

Without the bailout money, Wachovia would have gone under, and let me tell you it would have cost a lot more to fix that one! All that FDIC insured money, you see. I don’t give a piss about some fat cats bonus, it’s a drop in the bucket, and if you have to prime an engine to keep it going so be it. I’d rather have a different engine but that’s the kind of thing you have to build first then put in, especially if you need the thing to work.

Speaking of engines, I think the ‘bailout’ of the auto industry is necessary even though it preserves the status quo – a drawback that people are rightly upset about – because right now our industrial capacity is only half used, and if the gov. didn’t step in and buy big chunks of it, it wouldn’t be there later. If our transport network even hiccups we’re pretty much screwed. Even if other nations were able to buy a lot of it up, I’m not sure that’s a good spot to be in. I think it’s for the same reason we subsidize grain and basic foods – and other countries do as well. You don’t want to get into a situation where you have to import all of your food.

But I digress. Now that patient, the economy, is stabilized, it’s time to set up a program for healing. Unfortunately, I think there are some people in Congress who are far more aware what the situation calls for then we are, and they are playing politics and fueling populist anger in order to grab for their lost power – regardless of what is best for the country. I think this is more than gauche, this is dangerous. Because they are opposing the kind of regulation that will keep the system they are attached to from failing completely in the future.

I’d like to see regulations that make it more profitable for banks to be smaller, help small banks out, that prise apart consumer and investment banks more permanantly this time so Republicans can’t mess it up. I’d like to see a new international currency system that limits trading. Maybe an international standard for Alex Jones to get an ulcer about. Hopefully 10 or 12 years down the road we can have a more sustainable system, more able to withstand shock. Over time, it could be reshaped and no one has to shoot anyone else or go hungry.

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By jdb, March 30, 2009

(This post is from 2007)

I have some pretty deep doubts that ‘the market’ as the world is referred to in capitalist lingo has any ability to regulate itself and provide a greater good for mankind, especially in regards to maintenance of the ecosphere. Choosing which kind of shoes I buy or which brand of gas I buy, or even which kind of fuel, will not

A) Make it so that I can drink out of rivers.
B) Stop the ‘greenhouse effect’ which we have known to be happening through the last four presidential administrations
C) Stop the shift in agriculture from foods that anyone can grow to foods that are controlled by a few companies

etc. , etc.,

All of which can or could have been addressed if we had a government more interested in the common good than in vested interests, or profiteering as we like to say in these parts. The government that we can have a direct effect on, as opposed to liquid organizations that can always find customers somewhere in the worlds seven billion.

The attitide that spending decisons somehow affect political change is just another indicator of how much power corporations, as controllers of capital, have gained in the last fifty years, at the expense of our elected reperesentatives. Not only do they have de facto control of our culture and body politic, but the current mantra of the left and the right is

WANT CHANGE? BUY MORE STUFF!!

Now that Climate Change has been accepted by mainstream politicians, every other company in the US is rushing to put ‘green’ labels on their ‘green’ product lines, to cater to just that kind of thinking. When you’re talking about the destruction of the environment, it’s just not good enough.

It’s important that the people of the US, using the body politic, tell industry what it is they want - to put the brakes on the kind of unrestrained profiteering that multinational corporations have engaged in for the last thirty years, behavior which got us into this jam.

Tell me that for some economic reason multinational corporations can’t suck up tighter emissions standards, and I’ll say that’s a cop-out. It’s like all those companies that protested the minimum wage. They said it would kill small business, small business is bigger than ever and there’s been a minimum wage for forty years. No, what it all boils down to is individual responsibility.

Every company has a CEO, a board of directors, etc., who decide what to be and how to behave, how to treat people, how to go about making a profit – just like we all do. Every nation has people in power, elected or not, that make the same decisions. We are all responsible, blaming abstract forces like ‘the market’ or ‘the economy’ is misguiding, because the market is made of people, the economy is made of people, who all have names and faces. Events that shape history happen because of individuals coming together and making them happen. We have to come together in our government and make the changes that need to be made.

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By jdb, February 28, 2009

Not Really. But a casual perusal in the internet reveals that, along with Disney, the RIAA and M$ are the biggest targets for hate. It would be so much easier if Microsoft would buy all the old major labels,  and Disney, so people could pour their pseudomystical hatred onto one simple target.

Just as strange is the net folk’s irrational exuberance for Google. They sure do love their former-search-engine-in-the-process-of-acquiring-and-researching-itself-into-a-PC-yahoo. As if Google wasn’t a company at all, but a big friendly cloud of milky teets. MMM.

Maybe after M$ buys the major labels and Disney, Google can buy M$ and we can love all our operating systems, search engines, theme parks, cartoons, and moo-sick in one big lovin’ teetfest.