Friday, February 12, 2010

You Can Pry My Ebooks From My Cold, Dead Fingers

Recently, I've been blogging about the inevitable dominance of ebooks over dead tree books.

My own experiments show I can make more money selling ebooks than print.

I talked about how Amazon was losing money on Kindle ebooks sold, and envisioned a new publishing system involving estributors.

I refuted some of the common arguments against ebooks.

I predicted what the future of ebooks might be like. And how format is largely the reason we haven't fully embraced ebooks yet.

I considered the new agency model in selling ebooks, and came to the conclusion that publishers seem to care more about selling paper than connecting writers with readers.

I talked about the perception of ownership and the perception of value with print and ebooks.

Barry Eisler put forth a terrific argument about the inevitability of digital dominance.

And finally, I considered the difference between destination value and journey value, and concluded that the sentimental connection people have with print books will likely change, as it is no more compelling than an attachment to any other outdated method of media.

The overwhelming conclusion I've come to is that ebooks will one day be the preferred method of reading. This day is inevitable, and is coming quickly. Print publishers don't seem ready for it, and their methods to delay this eventuality will only lead to annoying their customers, piracy, and alienating their authors.

When I first talked about ebook piracy, I made an argument that cheap sells, free sells even more, and the only way to fight file sharing is with cost and convenience.

The music and movie industries tried to fight piracy, and failed. As a result, companies not previously associated with music and movies have become rich by doing three things.

1. Understanding consumer need.
2. Giving the consumers what they want at a price consumers are willing to pay.
3. Making it as convenient as possible for consumers.

As a result of this, the biggest music player maker and music seller is a computer company, and companies such as Tivo and Netflix, along with services like Direct TV and On Demand, are changing the way people watch movies.

Apple, and the companies that rent TV shows and movies through subscriptions, have discovered something interesting about the media habits of humans.

It used to be thought that we really valued the physical object the media was presented on. As consumers, it was important for us to own VHS and cassette tapes, DVDs and LPs, CDs and BluRay.

And yet, consumers have shown, in greater and greater numbers, that they don't care about the delivery system, and they don't care about ownership of a tangible product. They just want a cheap and easy way to watch the damn movie and listen to the damn song.

Where did this trend begin? When did we start to realize that ownership of an experience didn't require a physical object?

Oddly enough, I think piracy plays a large part in the acceptance and adaptation of new technology.

Let's look at three types of media. Music, movies, and video games.

I've already yakked at length about the many different formats music has had over the years, so I won't recap it here. But when we did fully embrace CDs, it seemed to coincide with the invention of the CD recorder. Being able to share media, ironically, led to the sales of more media.

The RIAA says that the widespread adoption of mp3s lead to more piracy than ever before. But perhaps piracy is what lead to the widespread adoption of mp3s. While music companies tried to block it, Apple created a player for it, and a store to sell the media. Apple looked at what consumers were doing, and responded accordingly.

In the latest video game console wars, is it a coincidence that the only system that has remained hack proof, the PS3, has also sold far fewer units than the hackable Xbox 360 and the Wii? The PSP and Nintendo DS are also hackable, as is the iPhone. All are flourishing.

People like being able to do what they want with their media, and with their media readers. They like to share, and copy, and customize. And as a result, more units, and more media, winds up selling on systems where piracy thrives.

There's a lot of movie and TV show piracy online. But it's a very odd phenomenon. On one hand, there are those who sneak camcorders into films still in the theaters, and upload their copies. There are also those that make 1:1 copies of DVDs and BluRay disks, complete with cover art, so you have a perfect copy of something you'd otherwise pay for.

But, believe it or not, the majority of movie and TV piracy isn't with first run flicks and full DVD copies.

It's with rips and with recent TV shows.

A "rip" is taking a movie and stripping out most of the extra stuff so it's still good quality, but under 700mb (a DVD is normally 4.7 to 8.5 gigabytes.) 700mb fits on a CD, but more often than not, pirates will watch these directly on their computers.

Right after any TV show airs, the torrent sites and file lockers are flooded with people sharing the latest episode of Lost or House or The Biggest Loser.

The conclusion I draw from this isn't that pirates are interested in stealing media. They're more interested in file sharing as a cheap and easy distribution method. You search for what you want. You download it quickly. You experience it.

So along come Tivo, On Demand, Direct TV, and Netflix. What do they do? They allow consumers to experience media cheaply, easily, and quickly. And consumers have embraced these distribution methods to the point where Blockbuster Video--the same dominant force that squeezed out all the mom and pop video stores across the country--is now themselves closing stores left and right.

Consumers have shown us what they want. Ownership of a tangible product is becoming less and less important. Downloading a song, or a movie, or a TV show--either permanently or temporarily through a subscription model--is how many people are deciding to experience media.

I've said before that piracy is human nature. The internet was created to store and share information. It's directly tied to how we communicate. That's why we lend each other blooks and movies, and send emails linking to YouTube videos, and link to each other's blogs and then Tweet the link on Twitter.

How do books play into this? A hardcover book is a luxury item in today's market. It's eight hours of entertainment for $30. That's a month's worth of movies on Netflix, or thirty songs on iTunes. And a paper book is far from an instant delivery system.

If books are going digital, as most seem to predict, the ability to share media, and get it instantly, will help advance the adoption of ebooks by the masses. And as companies like Apple and Netflix and Gamefly (for videogames) have learned, the masses dictate what they're willing to pay for this service.

Not the film producers. Not the music producers. And not the videogame producers.

It's a third party that stepped in, saw the need, and exploited it.

So along comes Amazon. They already have a huge advantage over any other third party. They're the largest online book retailer. It didn't take a huge leap in faith for Jeff Bezos to realize he could also become the biggest online ebook retailer, if they only had an ereader device.

Now the Kindle is the market leader. The technology is only going to become more widespread, more advanced, and cheaper, as time goes on.

Where are the print publishers? Why aren't they making ereaders? Why aren't they allowing for cheap ebook downloads on their websites? Why don't they have customer forums and subscription models? Why are the clinging to an outdated model so tightly that they're now demanding to set both wholesale and retail price of their products?

The videogame industry got it. The PS3, Xbox, PSP, and Wii all allow for downloadable games and online subscription-based play. And guess what? The PS3 finally got hacked. I predict sales will rise as a result.

People want inexpensive media at the press of a button. Books will follow the same model as movies, music, video games, and TV.

It will be an ebook future. A cheap, instant, ebook future.

And we'll embrace it. We always do.