The questions in this post got me thinking about the publishing industry, so I decided to answer them.
1. Which industry do you work in?
In the publishing industry (where I have worked since 1997), the transition from print-only to print-plus-digital that began around 1999 and really got underway after Amazon released the Kindle in 2007 has finished. Now we have an industry in which print and digital co-exist (at different levels – 50/50 for fiction, but more like 80/20 for non-fiction, and even less of digital for more complex product types like Bibles). Currently the growth area is audiobooks, led (of course) by Audible.
2. What are the biggest problems stopping your industry from growing?
Publishers have not really solved these problems:
(a) How to distribute very small publications and receive very small payments? We’re still reliant on credit cards for payments, which pushes us to a smallest payment size of about $1.99 or so.
(b) How to increase discoverability? Most publishers are reluctant to post all of their content in a web-searchable and social-shareable form (for somewhat obvious reasons). However, this means that it’s hard for them to draw direct traffic to their books.
(c) How to reduce reliance on the behemoth of online retailing? As physical bookstores have died away, publishers have recognized that they are too reliant on one distributor, which is a dangerous position to be in (as that retailer has shown itself very ready to use monopsony powers to bully their suppliers). Most publishers have direct-to-consumer selling operations. But (a) and (b) and other factors mean that they find it extremely difficult to draw traffic to their sites.
3. Can something be done about it?
I have been working on some of these problems in my business (http://blackearthgroup.com). Here is a sketch outline of how I would encourage publishers to solve these problems:
(a) Micropayments are needed, and to do that we need an online currency that can be used to buy content without going through the credit card processing network. Publishers should invest in the development of an online token that they would support on their sites. Customers could then purchase a supply of tokens and use them on publishers’ sites to buy content. There are a couple of projects like this in the works. The simplest approach would be to create a coin based on the Ethereum network, and then support that coin for all purchases. (The hardest part of this is probably that the value of the coin would not be completely stable, because Ethereum is not, which means that publishers would have to either adjust their token prices regularly, or would have to live with variability in revenues to sales – this problem is solvable, but it requires a lot of capital to create a value stabilization mechanism.)
(b) Publishers should put all their content online in excerpt chunks using non-discoverable public URLs, then submit it all to the search engines, and start sharing excerpts through social channels. It is true that some of the content would be given away, but that would be limited because each excerpt chunk would not be linked to the others in the same publication – access to one would not grant access to all. Using full-content search and sharing is one of the best ways for them to draw more organic traffic to their own sites. (They’ll need to invest in better discovery mechanisms on their sites, too.)
(c) Publishers have a real chance of building a customer base in their own content niches, if they invest in developing a content discovery and purchase experience that is significantly better in that niche than what customers experience on Amazon.