Ebooks and the Future of Publishing

Posted on June 9, 2008

Paul Krugman is making waves with his new article in The New York Times, in which he discusses the future of books -- and it's not pretty. Krugman believes that with the advent of ebooks -- and devices such as the Kindle -- books will get cheaper and cheaper and will eventually almost be given away. That is bad news for authors.

It's a good enough package that my guess is that digital readers will soon become common, perhaps even the usual way we read books. How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won't last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.
Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors' other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it's good enough for me.
Now, the strategy of giving intellectual property away so that people will buy your paraphernalia won't work equally well for everything. To take the obvious, painful example: news organizations, very much including this one, have spent years trying to turn large online readership into an adequately paying proposition, with limited success.
But they'll have to find a way. Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we'll have to find business and economic models that take this reality into account.

Krugman's article is based on the premise that intellectual property will become worthless, that the real money is made selling ancillary products. His example is the Grateful Dead, which makes its money not from its music but from sales of tshirts and memorabilia. We don't buy it for a minute. Great content has value in and of itself. Harry Potter's adventures will sell, even without any related tshirts, bookmarks and action figures. Content has value as does the intellectual property of writers and songwriters. Don't let anyone tell you otherwise.