What Do You do When Technologies Change And Your Business Model Becomes Obsolete

Double down and go big, of course. Somehow I’m reminded of this ad when I consider the current state of publishing.

Which brings us to the picture at the head of this post. Anybody ever hear of Lima Locomotive?  Here is what they did. That is a C&O RR H8 Allegheny.  It is the largest and most powerful steam locomotive ever built.  The locomotive was in the shed and there was no way I could get a side shot but the size of it boggles the mind.  The firebox is the same size as a small house.  The locomotive was designed to move mountains of coal and that’s what it did.

https://en.wikipedia.org/wiki/2-6-6-6

It was also obsolete before it was erected. It was rendered obsolete by this guy’s descendants.

DSC_6083

This is Central Railway Of New Jersey 1000.  If the H-8 spent it’s career moving mountains of coal the 1000 spent it’s career in the Bronx shuffling cars around a freight house.  If it moved more than a mile it was by barge to the shop and back.  It’s also 20 years or so older than the H-8. And was retired after the H-8. But the 1000 is important because of what it led to, which is this guy.

DSC_6076

The EMD F unit.  Now I don’t know which subclass of F unit this locomotive represents, and I’m not going to look it up because the F unit was the locomotive that changes everything.  EMD sold 1000’s of them for two decades and totally transformed the railroad industry.  The traditional railroad locomotive companies, like Lima which erected the H-8 were more or less caught flatfooted and tried and by and large failed to adapt and finally closed up.

Which brings us to publishing. The latest numbers from the Author’s Earnings(AER)  report and the  American Association of Publisher’s(AAR)  reports have sort of created perhaps a dichotomy on the effect of ebooks and publishing.  I’m afraid that like the locomotive builders in the late 1940’s and early 1950’s they are seeing things that are not there and no, steam is not coming back.

http://authorearnings.com/report/september-2015-author-earnings-report/

By and large the traditional publishing has not gotten ebooks.  As far as I’ve been able to tell traditional publishing has tried very hard to do as little as possible with ebooks.  When Jim Baen started to experiment with ebook in the early 2000’s many of us were mystified at how the other SF imprints didn’t seem to catch on. Jim experimented with all sorts of things and proved that most of the preconceptions about ebooks were flat out wrong.  Ebooks didn’t hurt print sales.  You didn’t need DMCA lockups, people would buy both print and ebooks, you could give books away and sales would still go up. Baen tried all this stuff and it all worked.  Bean books became easy to buy and the whole thing was fun.  Yet the traditional publishers ignored all of it.

Along came Amazon and kindle which could no longer be ignored and STILL the traditional publishers don’t get it.  They insist on treating ebooks as if they are the same as print or like this being even worse.  Seriously, this is just ridiculous.

http://dotclue.org/archives/004687.html

http://www.amazon.com/Look-Windward-Culture-Novel-Book-ebook/dp/B001D20270/ref=as_li_ss_tl?_encoding=UTF8&coliid=I2Q52EOXUBAL1O&colid=2LZL2PR80ND&qid=&sr=&linkCode=sl1&tag=dotclue-20&linkId=23bbbc850085cf622e8ae3febfba3ddd

$15.99 for an ebook of a fifteen year old novel.  From a book that’s been out for 15 years and in Mass Market paperback for most of that. I’m sure that Mr. Banks appreciates all those royalties he gets from all those used books that Amazon sells.  There’s money in the long tail, but you have to understand that you can’t charge the same for something that’s old and expect people to pay for it.  $15.99 would be a price for an entire series, not just one book. Of course maybe Simon & Schuster should try selling the book for $0.99  and see what happens.

http://madgeniusclub.com/2015/09/26/turning-a-blind-eye/

Of course the biggest problem the traditional publishers have is that while they were treating ebooks like pariahs other people were discovering that it was good way to get on the electronic shelf and get sold.  Thousands of people have used Amazon and other’s facilities and put books up to sell themselves.  And perhaps to nobody who’s been paying attention they ARE selling.  It’s because who’s more likely to pay attention to their readers, an Anthony Weir or Simon And Schuster?  Who’s going to be constantly checking sales, having sales and pushing their books in every venue they can?  It doesn’t take a genius to understand what’s happening.

http://teleread.com/chris-meadows/new-author-earnings-report-tracks-author-incomes-over-time-but-will-john-scalzi-buy-it/

http://teleread.com/chris-meadows/september-author-earnings-report-shows-traditional-publishing-fiddling-while-their-market-share-burns/

And what are the traditional publisher’s doing?  Building H-8s.

Publishers, seeking to capitalize on the shift, are pouring money into their print infrastructures and distribution. Hachette added 218,000 square feet to its Indiana warehouse late last year, and Simon & Schuster is expanding its New Jersey distribution facility by 200,000 square feet.

Penguin Random House has invested nearly $100 million in expanding and updating its warehouses and speeding up distribution of its books. It added 365,000 square feet last year to its warehouse in Crawfordsville, Ind., more than doubling the size of the warehouse.

“People talked about the demise of physical books as if it was only a matter of time, but even 50 to 100 years from now, print will be a big chunk of our business,” said Markus Dohle, the chief executive of Penguin Random House, which has nearly 250 imprints globally. Print books account for more than 70 percent of the company’s sales in the United States.

The company began offering independent booksellers in 2011 two-day guaranteed delivery from November to January, the peak book buying months.

http://www.thepassivevoice.com/09/2015/the-plot-twist-e-book-sales-slip-and-print-is-far-from-dead/

http://www.nytimes.com/2015/09/23/business/media/the-plot-twist-e-book-sales-slip-and-print-is-far-from-dead.html?_r=0

Of course some people, Mr.Scalzi for instance, don’t get it.  The game has changed.  It may be that people are truly buying more print from bookstores that don’t exist.  Or it’s just a baby pushing the button, like the ad.  I do know one thing.

http://whatever.scalzi.com/2015/09/23/ebook-sales-and-author-incomes-and-all-that-jazz/

That if traditional publishing doesn’t get out of it’s NY offices, look around and see what’s happening, they are going to be talking to Larry here, real soon now.

http://www.americanrhetoric.com/MovieSpeeches/moviespeechotherpeoplesmoneydevito.html

Update:  The  Gutenberg Bible was brought up in a comment as a beautiful book, which it was.  It was also the product to a technology that was as revolutionary as ebooks.  It wasn’t mentioned that printing blew across Europe and put thousands of scribes out of business. And changed the world. And put the troubadors and scribes out of business.  In some ways the Gutenberg Bible is another CNJ1000.

Update:

Dave Freer has more over at Mad Genius club.

http://madgeniusclub.com/2015/09/28/like-you-would-do-for-one-that-you-love/

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15 comments

  1. davefreer · September 27, 2015

    I’m not sure I want it out of its office. Maybe it’s time it talked to Larry Garfield.

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  3. MishaBurnett · September 28, 2015

    Were those pictures taken at the Museum of Transport in St. Louis?

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  5. bpeschel · September 28, 2015

    fyi: Hachette is expanding its warehouses because it became a distributor for other publishers. And PRH is expanding its warehouse after closing a larger warehouse in Pennsylvania. So this is not an expansion, but a realignment of resources (in PRH’s case, after a major merger).

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  6. EndOfPatience · September 28, 2015

    As an aside, “Look to Windward” is NOT a Star Trek novel. Not even close.

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    • jccarlton · September 29, 2015

      Fixed. I hadn’t read it and the post I linked seemed to imply that it was. Still a 15 year old book for way too much money.

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  8. Michael W. Perry · September 28, 2015

    In many ways, it’d be great if the tale you’re telling were true. But to be accurate you need to make that diesel locomotive into an ill-designed, poor-engineered, ugly, maintenance-riddled dud that was so poor, the steam locomotive got another 20-year lease on life.

    The problem with ebooks isn’t hide-bound Big Five print industry executives. They did not get where they are by being stupid. They’re smarter than their critics and showing excellent business sense. If they let the book market go heavily digital, then they become thralls of Amazon. By pricing digital versions of their popular books high, they depress the market for those books and keep that for print books alive and well. Print books are sold through a wide variety of outlets, none quite powerful enough to dictate to publishers. Those executives aren’t thinking in terms of this year’s profit margins. They’re thinking of the long-term viability of their company and their industry. They are being smart, very smart.

    That’s why, if you want to know whose to blame for those high prices of digital bestsellers, the answer is Amazon or, more precisely, Amazon excessive ebook marketshare and bullying tactics. The very fact that Amazon is trying to drive the prices of those books down so low, the entire editorial-to-marketing scheme that creates a bestseller is driven into penury is why large publishers don’t need to conspire to share a common mindset that the ebook market—which is in practice the Amazon market—needs to be kept down.

    ——-

    The other factor, for which Amazon is merely the worst offender among many, is the pitiful nature of ebook formatting. Take a look at the first well-known product of movable type printing, the Gutenberg Bible:

    http://www.hrc.utexas.edu/exhibitions/permanent/gutenbergbible/pages/

    Lovely isn’t it? And I might add that the real thing looks even better than that digital reproduction. Now ask yourself if it’s possible, with our supposedly superior digital technology, to create an ebook that looks 10% as attractive. The answer is no, not even close. Ebook publishing is almost literally webpages circa 1995. Few modern technologies have advanced more slowly, in part because Amazon dominates the market with their ugly proprietary formats.

    The reality is that all but a tiny fraction ebooks look ugly, and ugliness that’s magnified by the fact that ereaders don’t even try to adapt to make the book they’re displaying look good on varying size screens. After over fifteen years, they can’t even manage concepts such as widows and orphans taught on the first day of Book Layout 101.

    That’s not getting into a host of other factors that matter to the public. Do people really buy an ebook or are they merely leasing it as long as they own certain devices, keep a particular commercial account open, and the technology permits. Ebook retailers such as Amazon haven’t bothered to clarify that issue or a host of others that matter to a savvy public.

    –Michael W. Perry, Inkling Books

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    • MishaBurnett · September 28, 2015

      Odd. I’ve read a couple of hundred e-books over the last few years, and I can only think of a couple that had formatting issues that I noticed. And the ones I can think of were all from major publishers re-releases of older books. And I don’t see how Amazon can be blamed for having a large market share, any publisher has the capacity to sell e-books directly to customers through their own websites–the technology is not that complex or expensive. Much smaller companies than Random Penguin are able to make their e-books exclusive through their own outlets.

      Liked by 1 person

    • jccarlton · September 28, 2015

      Mike, The people that run the Big Five have no say in the whether the book market goes digital or not. That’s for the readers, who by and large have said that that’s the way to bet. The book market is going to go digital whether Big Five like it or not, at prices the market sets and the Big Five can either participate, or like Lima Locomotive, no matter how excellent the product is, close down and go away. Frankly I’ve been appalled at traditional publishing’s lack of “business sense” for years. Especially when I compare to scrappy little pubs like Baen.

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    • jdwampuscat · September 29, 2015

      >>[snip]blame [snip] Amazon or, more precisely, Amazon excessive ebook marketshare and bullying tactics.

      Free market economics does not equal bullying tactics.

      >>[snip] the entire editorial-to-marketing scheme that creates a bestseller is driven into penury

      It is already destitute. It is dead. It was viable when dead trees and bookshelves and storefront windows and the New York Times were needed to push bestsellers. That ship has sailed. And thank goodness. I believe best seller status should be given to those books that sell the best, not just the ones that a select group of individuals sort through and deem appropriate to choose from.

      >>[snip]large publishers [snip] share a common mindset that the ebook market—which is in practice the Amazon market—needs to be kept down.

      That is a bully tactic.

      You seem to really dislike free market economics. Too bad, because this will sort itself out in the long run by that very mechanism. The decision will be made by the people buying books, no one else. They want good product for low prices. So, until the last nail is driven into the free market coffin by people who think competition = bullying, you’ll just have to deal with it.

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