Mark's Musings

A miscellany of thoughts and opinions from an unimportant small town politician and bit-part web developer

Competing with free: The challenge for publishers in the digital age


An article in today’s Sunday Times (sorry, no link due to the Murdoch anti-journalism paywall) is headlined “Pirates plunder ebooks trade”. As you might expect from the title, it’s all about how publishers are suffering from unauthorised downloads.

This was always going to happen, of course, and the publishers are only experiencing what the music and film industries have been suffering from for a while. But, on the other hand, the fact that ebooks are a relatively late entrant to the digital scene means that publishers have the opportunity to learn from the mistakes made by record companies and film studios. Here, in no particular order, are my suggestions.

Remember that not every unauthorised download is a lost sale.

And even those which are lost sales aren’t necessarily lost at the full retail value. As the Intellectual Property Office points out in its handy guide on producing Good Evidence for Policy the only meaningful loss is “foregone willingness to pay”. In many cases, that will be zero – if the free version were unavailable, people would simply go without rather than pay. And even where people are willing to pay at least something, the amount that they would be willing to pay is often negligible.

On the other hand, there is strong evidence from the music industry that people who download a lot of material for free are, on average, also the biggest consumers of paid-for downloads. So unauthorised ebook downloads may not be as much of a threat to profits as it may at first seem.

Accept that you will have to reduce prices.

This is a tricky one, because the retail cost of a book is a lot more than just the physical costs of manufacture and distribution. So there isn’t a lot of scope to make savings simply because of the fact that digital distribution is cheaper (especially since, in the UK at least, ebooks attract VAT but paper books don’t). But, on the other hand, the potential market for ebooks is considerably greater than the market for paper books.

I’m fairly unusual in that I like having books around. Here in my study, nearly the whole of one wall is taken up by bookshelves. But they’re a pain in the neck when I need to move them (eg, when moving house) – books are heavy, and take up space! Most people have only a fraction of the number of paper books that I possess. But, on the other hand, digital devices can carry almost an entire library in the same physical space. There’s much more scope, therefore, for speculative purchases of cheap ebooks, in much the same way that people will spend a quid (or a few quid) on new music just to try it out, because the cost is trivial and there are no associated downsides in storage requirements. Publishers need to be flexible on prices and experiment in order to find the sweet spot which maximises revenue. My guess is that it will be at a price point considerably lower than at present, but compensated for by significantly higher sales volume.

Don’t alienate your customers.

However tempting it may be to support legal action against people who download your books without paying, the experience of speculative invoicers such as ACS:Law should act as an object lesson in how not to do it. Equally, don’t be swept along into supporting legislation, such as the Digital Economy Act (in the UK) or the Stop Online Piracy Act (in the US), which attempts to subvert the working of the Internet in order to protect your revenues. As several organisations, such as GoDaddy, have found, consumer resistance to such legislation can cost you more than you would gain from the benefits it brings you. And, in any case, the long-term effects will be minimal as the measures they enable are trivial to circumvent.

Don’t blame Google and Bing for your inability to write a good website.

One of the biggest complaints mentioned in the Sunday Times article is that search engines often return unauthorised download sites ahead of authorised ones in their results. But, in many cases, that’s simply because the web authors responsible for the unauthorised sites are doing a better job of meeting the search engines’ guidelines on how to make their sites easily indexable (aka “Search engine optimisation”). Far too many “official” websites use search engine hostile techniques such as Flash and excessive Javascript. It’s an absolute truism on the web that an ugly but well-indexed site will get more visitors from search engines than a beautiful but badly indexed one. But it’s also true that far too many marketing departments are entirely unaware of this fact.

In any case, the Sunday Times article deliberately manipulated the search query they used as an example in order to get unauthorised sites nearer the top of the list, by including the word “torrent”. Well, d’oh. If people intentionally looking for torrent sites, then they’ll find them. You can’t stop that. But these people are not your target market anyway, since they are explicitly looking for free and hence are not potential paying customers (see the first point). Even if you stop them downloading, you’ll earn little or no additional revenue as a result.

Think global. Sell local.

Having different release dates, and different prices, in different countries was, thanks to Amazon, already becoming unsustainable in the printed book market. In the ebook market, differential prices and availability are not only one of the biggest drivers of piracy but also one which the publishers can easily eliminate. If you really care about combatting unauthorised downloading, then a single global release date at a single global price is the single biggest thing you can do to minimise it. So much so, in fact, that if you’re not prepared to take this step then I’d say you aren’t really serious about piracy at all.

Sell simplicity.

Much as I dislike the Apple way of doing things, it has to be acknowledged that iTunes has been a huge commercial success. And one of the reasons it’s been a success is because it makes buying music so simple – just a click of a button in iTunes or on your iDoodah. Torrenting, on the other hand, while not exactly rocket science, does require a certain level of computer literacy that a lot of people don’t have. So don’t give them an incentive to acquire it.

Be creative.

Technological change always threatens organisations which have built a business model on the old way of doing things. Those which survive, and thrive, in the new environment are the ones which focus their creative efforts on adapting to it rather than fighting it. This is something that the publishing industry should be well aware of: Over the course of history publishers have been at the forefront of new technology, from the invention of the printing press itself to computerised typesetting which made Gutenberg’s methods a thing of the past.

Even if paper books go the way of scribes and hot metal, publishing will continue; people have always written books and always will. And, unlike the popular music industry which relies heavily on artificially generating demand via disposable content aimed at an uncritical audience, the publishing industry’s customers are generally more thoughtful, less influenced by fashion and more mature. Equally, authors generate content themselves, as opposed to numerous pop artists whose only talent is the ability to look attractive and hold a note (or, with the aid of autotune, not even that). Unlike music, which has a hollow core of creativity with the most original content often emanating from outside the mainstream, publishing is a creative industry through and through with the best-sellers having as much originality as the fringe.

That gives the publishing business a huge advantage when it comes to handling technological change, because the people who run it are, on the whole, people with creativity at heart. And that means that unauthorised downloads aren’t necessarily a threat either. Maybe it’s time for the publishing industry to teach the music business a lesson.