Online Pricing: Disruption Is the Game
February 8, 2010
It’s Monday morning. The Super Bowl is over, but the world football ecosystem is unfazed. The same cannot be said of for-fee content. I want to point out two seemingly unrelated developments and link them to one of the keystones of doing business in an online, Web-centric world. I am working on a couple of oh-so-secret write ups, and I will make oblique references to research findings by the goslings here in Harrod’s Creek that will be more widely known in the spring.
When world’s collide. The boundary is the exciting spot in my opinion. Image source: http://www.sciencedaily.com/images/2008/01/080112152249-large.jpg
First, consider the plight of Google Books. Suddenly the Department of Justice is showing some moxie. That’s a good thing, but I think the reality of derailing Google Books is like to have some interesting repercussions going forward. For now, the big story is that Google Books has become the poster child of Google being Google. You can get the received wisdom in the UK newspaper The Telegraph and its write up “Justice Department Cr5iticises Google Books Settlement.” The glee is evident to me in this write up, but perhaps I am jaded and worn down by the approach certain publications take to Google. The company is essentially the first examples of what will be a growing line up of firms that use technology to alter business processes. I will be talking about this in my NFAIS speech on March 1, 2010. I am the luncheon speaker, and I think some of those in the room will get indigestion. The reason is that Google comes from a domain that people within 20 years of my age of 65 don’t fully understand. The Telegraph doesn’t get it either, and I think this passage highlights that generational divide:
The ruling is a blow to Google and authors’ groups who had supported the search giant’s ambitious plan to create a vast online library of digitised books. The controversial Google Book Search project attracted fierce criticism from authors, who believed their rights were being eroded, while winning praise from other quarters for helping to widen access to classic, rare or useful works of literature.
Too bad the writer, a real journalist, omitted the word “goodie”. My hunch is that since national libraries have not shown any interest in creating digital collections, students and researchers will be doing their work the way John Milton and Andrew Marvell did. Great for those who have the time, money, and cursive writing skills. Not so great for those who need to sift through lots of content quickly. With library budgets shrinking and librarians forced to decide which books to keep, which to store, and which to trash, I think the failure of national libraries is evident. Google made a Googley and somewhat immature attempt to step into the breach and look what has resulted? A bureaucratic, legal eagle snarl. Books are an intellectual resource and I keep asking, “If not Google who?” Reed Elsevier? The British government? The National Library of China? A consortium of publishers? The answer is, in my opinion, now clear, “No one.” Maybe Google will keep going with this project. Hard to tell. Life might be easier to shift gears, go directly to authors, and cut specific deals for their future work. In a decade or so, end of problem. Also, end of traditional publishing. If Google actually talked to me, I would offer this advice, “Go for it, dudes.”
The second development is the dust up over the pricing of electronic books or eBooks. You can get a run down of the matter in “The $9.99 Ebook Is Dead: third Major Publisher Hachette Dumps on Amazon.” I think that Amazon, like Google, is a different domain. My hunch is that the closed world of Amazon thought it was being clever by offering books at a lower price than anyone else. You know the discount stuff that a Dartmouth professor has been explaining for the last 15 years. Well, the folks at Apple figured out that with a little cash sweetener, publishers would go for the iPad and then all by themselves crush Amazon’s $9.99 deal. The problem with this type of pricing battle is that the publishing sector is dead no matter what Amazon or Apple do. In fact, toss in Google. I don’t think it makes much of a difference either. Here’s why. Whoever gets the most eyeballs can go directly to authors and sign them up. The deals can be exclusive, embargoed, or something that makes these new “publishers” and their content providers happy. Assume that Amazon, Apple, and Google become the de facto publishers of books and content segments in their respective client environments. As an author, I would shop for the best deal. Period. I don’t really care much anymore who publishes my books. I just want to get whatever revenue is possible. I write a free Web log because it is too much of a hassle to monetize content, so I just use this as a marketing vehicle. So what happens to the traditional publishers? Domains collide and some of the companies get crushed in the contact. Game over.
These two developments illustrate that more is at stake than an old business model. New methods and business processes are in the process of self assembly. Remember disintermediation, a word I used in an Online Magazine article I did when Jeff Pemberton owned the property. I took a lot of heat from librarians who objected to my assertion that online would squeeze the information specialist. End users would just do the research themselves. Ignorance is bliss. Hello, Enron. Bad decisions result from misunderstanding information. Not much I could do in the 1980s and there’s not much I can do now.
So these two trends mean disintermediation. Who will be disintermediated? The companies that cannot adapt to the new domains that are emerging. In this context, the Google Books hassle and the Amazon pricing dust up are single, important data points on a map that is going to fill in quickly.
Stephen E Arnold, February 8, 2010
No one paid me to write this. I thought make this clear in the text above. But in the interest of disclosure I herewith report I received no money for this write up to Senate’s Sergeant at Arms.
Comments
One Response to “Online Pricing: Disruption Is the Game”
-
- Subscribe to Beyond Search
Feature archive
News archive
-
So SLA, a global association of Information Professionals has gone through a debate over changing the name of the association as a step in an Alignment project. The Alignment project is a result of well conducted and documented research that tested language and such. Lots of information about the project is available on the SLA website. Your post reminds me that the alignment research revealed that end users truly do not care about physical libraries…they want information on their desktops. Information professionals should provide resources and information analysis to bring value to the organization and help make business decisions.
If Google takes on more of the publishing and access role of information, businesses and information professionals must align to use those resources to continue to fuel good decision making and support the organizations business and bottom line.