My Say: Thinking Outside The Book

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My Say: Thinking Outside The Book James Lichtenberg -- 10/9/00 In the first 550 years after Gutenberg transformed a wine press into a word press, the publishing industry had only one way of delivering its goods to customers: a physical book. In the last five years, our value chain has been knocked off its stool by an ever-expanding array of possibilities--new products, markets, channels--brought about by digital technologies. As is clear from the past month of e-book conferences, we are still in a very early phase, with more questions than answers. Now, at least, our questions are becoming more focused, on such issues as format, platform and partners. Here are three points to consider: the biggest risk to traditional publishing comes from below, from technologies that currently provide much less than a book or a bookstore; the disaggregation of books into "content" may be the industry's salvation from Napster-like threats; and wireless technology is probably where e-publishing is headed. In The Innovator's Dilemma, Clayton Christensen defined a key phenomenon of the modern marketplace: too many successful organizations get carried away improving their products, overshoot the customer's needs and invite disaster from cheaper, simpler products. "Who wants to watch those grainy little portable TVs?" snorted executives from Zenith, makers of behemoth living room consoles. And now: "Who wants to read a book on those little screens?" "Why should I download something and then print it out, when I can pop into a bookstore and buy it beautifully printed and bound?" The issue is not the fineness of the product or about the "end of the book." Rather, the issue is a change in the way that the function, utility and price of a product combine in the mind of the user as a result of new technologies, prompting new decisions about purchase. Students may choose to buy electronic textbooks to avoid schlepping a heavy book bag. And it is a lot quicker, and lighter, to download a bunch of novels to my computer or Rocket eBook for the trip to Frankfurt than to run to the store before the flight. You're right, it's not as good as a printed book. Even with the second generation of greatly improved readers, the price points are too high and there's not enough content for mass acceptance. But they're becoming good enough. And you can feel a new calculus blooming in the mind of the consumer. Customization--melting down complex books into chunks of "information" or, worse, "data"--is one of the most distasteful aspects of e-publishing for many. Besides which, there are real business problems with the entire scheme, including copyright protection, pricing, search methods and delivery. Unfortunately, it is precisely the "rich and complex" self-contained beauty of a book, like a music CD, that makes it appealing for piracy. The silver lining for publishing is that the transition from mass to customized products means that peer-to-peer sharing and mass snatching like Napster loses some of its appeal, since what you want is not exactly what I want. Most of us will obey the law, assuming we can get what we want for a "fair price," without a hassle. Technology is teaching us that we can get exactly what we each want. Consumer experience with Internet searching, as well as growing sophistication of search engines and expert systems, are the early signs of a new marketplace. Look at it this way--publishing is no longer selling books and journals, it is selling consumer flexibility, answers, entertainment, enlightenment and learning. And, oh yes, there is margin to be found here, and brand is important! Wireless delivery--snatching content out of the air--is where it comes together. Today, book industry executives can be seen checking e-mail on their Palm Vs during lunch. Of course, it's a little hard to read, but, oh, how convenient. And why just e-mail? Why not the latest article on incubators from Business 2.0, an analyst's report or a recommendation for a good wine? But isn't this broadcasting? Well, in a way, yes. And broadcasting is a very different way of doing business than creating books and hoping that you have guessed the needs of your customers. In this situation, it's actually easier for customers tell you their needs exactly. To be successful, publishers will have to market directly to customers, just as TV channels do, letting them know what they have for sale; developing a cadre of subscribers. You may even create revenue through advertising, with certain products offered free to the user. Some fiction may return to serial delivery. Bottom line: publishing is about customers acquiring content--some of which will be books--in a new integration of function, utility and price. If we can make publishers' content easier to get and not too expensive, why shouldn't we? And while it's not coming tomorrow, watch for the arrival of broadband wireless, which will permit the quick download of large files through the ether, whether books, movies, journals, even interactive sites. It's time to think outside the book. James Lichtenberg is president of Lightspeed, LLC.