Time for Book Publishers to Study Napster

Anyone who observes the market development of electronic books cannot help but wonder about two things. The first is which of the various platforms such as Amazon's Kindle or the alternatives will carry the day. Secondly, one is struck by the fact that Napster's effects on the music industry are not properly heeded by book publishers today. In spite of the fact that the industries are not the same and the effects of digitization are not the same, there are ways in which the complete refusal to consider new formats shows that there is lack of thought by book publishers.

While I have written on this blog here and here on my thinking about Kindle and what effects it would have on the book publishers markets. Writing in Slate Magazine, Jack Shafer illustrates the wrong-headed thinking that characterizes the responses from book publishers with their obsession with higher margins from hardback and other copies of books. To my mind, in spite of the evidence that there is consumer appetite for electronic formats in books, the industry's giants seem to be prepared to die defending their longstanding business models. I admit that there are no certainties about how big the e-book industry will eventually become but that the option for buying books in this format is one that cannot be rolled back.

To my mind, the majority of books are being read in formats that are comfortable today but the spread in the proportion of books available electronically will drive more intense readers towards digital formats. All these mean that the industry will not remain the same and that the Kindle and its competing gadgets will only get better and provide cheaper products while people ask why a hardback really has to cost US$ 25. Whatever happens, my bet is that consumers will win and e-books will continue to take up an increasing proportion of books that are sold. While Napster did not live to appropriate all profits from sale of digital music, no doubt it changed the music industry by destroying a comfortable business model. As these book publishers are spending time defending their paper-based markets, they are letting the gadget sellers as Amazon and its competitors to define the market. That cannot be good news. Let's watch.