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Richard Nash weighs in on publishing’s identity, Part 2 of 2

OK, so it wasn’t in fact tomorrow when I supplied my discussion of what a two-sided marketplace entails. As we all know, executing plans takes priority over talking about them, so some plans had to be executed, sorry for the hold-up!

It in fact proved to be a useful little gap, in that during the intervening time, two very interesting items appeared on the Internets. The first exemplifies the problem of obsessing over the superficial digital vs. print issue, this nonsense (and this) in The Atlantic. I won’t belabor this except to note that the App Store does not magically suspend the laws of supply and demand. What we see in the App Store is a brief period when something new arrives and there are temporary barriers to entry because of high initial costs and learning curves. Supply takes a little while to catch up with demand.  The reality however is all the folks who figured out Quark, and all the folks who figured out Dreamweaver and all the folks who figured out Wordpress will figure this out too, and everyone with a website have an app, assuming folks haven’t already moved onto the next thing, and Walter Isaacson will move onto the next nebulous notion permitting him to this the status quo ante will be restored. IN other words, there isn’t a digital solution to your problem, because your problem isn’t just digital.

The second item, however, “The Spectrum Of Change When Media Shifts From Scarcity to Surplus”is describing at far greater length than I can why the paradigm I described in Part One of this is, well, true. The supply of information and entertainment is asymptotic; the demand is not. But the demand remains big enough for there to be a marketplace, simply one is which the supplier, rather than being one hundred publishers or record labels, is them, plus a whole lot more. And while digital did enable this, digital can’t disable it. Once we discovered nuclear fission, we couldn’t undiscover it.  We simply learned new ways to manage a world in which we knew what it could do.

And that world, to depart my apocalyptic metaphor, is a two-sided marketplace. That link is to the Wikipedia entry, this is to the summary of a Harvard Business Review article on “Strategies for Two-Sided Marketplaces.” Yes, I said, Harvard Business Review. What radical leftie countercultural indie publisher is quoting Harvard Business Review articles? Answer: the one that’s trying to pull his head out of the sand. By any means necessary.

Now, I’m not about to list all the damn “strategies for two-sided marketplaces” I can think of. For one, I need some to try out myself, with Cursor. For another, no really innovative idea ever came from listening to some guy yakking—it comes from within, from within you. But I’ll offer a couple thought experiments to help prod the creative process.  The first is to forget what you think you know of the marketplace, whatever number of sides it might be. We have thought of ourselves as being in the marketplace for books. That’s done. Or rather, it’s not done, but it’s only a facet of the marketplace, like the marketplace for hammers is a facet of the home improvement business. Think about the needs and desires you satisfy and think about the marketplaces they represent.  The second is, Don’t do lots of little experiments. I know that’s the wisdom these days, right? Try out lots of little things, see what works? Wrong. We’re doing that already, it’s failed. The business that succeed are going to do things in a profoundly contrarian fashion.  In Bizarroworld fashion. Think of everything you think you know about video games. You sit down, stationary. Yet with the Wii, you stand up, and move. When you hire someone, you offer a bonus to stay. But with Zappos, they pay you a bonus to leave after four months. These aren’t little experiments; these are things that get you told you’re crazy. That get you fired. But look around you. Can you be sure this company will even exist to fire you?

To address Brett’s formulation then.  The crisis is not digital. The crisis is that we’re not thinking the unthinkable.

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Posted in publishing publishr identity Richard Nash Cursor
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Richard Nash weighs in on publishing’s identity, Part 1 of 2

Odd as it sounds, let’s perhaps avoid making this print vs digital conversation. Though the transition to digital methods of creation, transformation, distribution and consumption of media is not at all a red herring, it is also not always the best lens through which to look at the changes in producer and consumer behavior. For one, the digital transformation of publishing is now already twenty-five years old, commencing with the publication of Aldus Pagemaker in 1985; for another, we’ll be selling analog reproductions of our created and licensed intellectual property for decades to come. 

So, to arrive at a conception of what added value publishers can offer, I’d instead like to look at changes in the shape of the marketplace.  Historically, the market for books has been effectively single-sided: few producers, many consumers.  The “fewness” of the producers was partially ordained by society (low literacy, few leisure hours, endemic racism and sexism), and partially by industry strategy (remember that “copyright” began as a privately-enforced cartel run by printers who were sick of competing against one another to drive prices down). The “manyness” of the consumers was in spite of society (since lack of literacy and time would hurt book sales) and producers, frankly, weren’t in much of a position to act to increase the size of the marketplace since the tools for producing and distributing media other than books were not more advanced than the tools for producing books themselves, so any increase in demand for books was as a result of the book itself (up until at least the late 18th century, when newspapers, pamphlets etc. developed broader and speedier distribution…).

The Industrial Revolution dramatically increased the “manyness” of the consumers as the cost of producing media declined relative to income. Although initially it did little more than that, in its latter stages, it permitted such efficiencies that leisure hours increased and the sophistication of the technology required better-educated persons, meaning far greater literacy and less intolerance.

Initially, at least, the Industrial Revolution did nothing to increase the number of producers. Its technology favored the production of few things, many, many, many times. So while its latter stages permitted and necessitated greater literacy and social tolerance which would in theory cause more production of culture as well as more consumption of culture, the scope for the increase in production was stymied by the very steep returns to scale. It also is worth bearing in mind that while consumers benefited enormously, the benefits lay more in the area of price (orders of magnitude lower) than choice (only somewhat greater). 

Here I introduce the digital transition only to say this—the power of scale becomes less significant because the marginal cost of reproduction is zero, lower than even the additional cost of printing the 10 million-and-one-th copy of a massmarket paperback. It’s zero for everybody.

So, suddenly, all the growth in consumption our society has enabled is now also available to the production side. What was once a one-sided marketplace now becomes a two-sided marketplace. And tomorrow, I’ll discuss what that entails…

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Posted in publishing, publishr identity Richard Nash Cursor