Three things we don't know

Written by Michael Bhaskar

Wednesday, 24 February 2010 09:56

The first step in facing the digital future is to admit to the known unknowns, Michael Bhaskar writes in his first column for BookBrunch

It’s been three years since I started working in the digital side of publishing. A couple of months ago I wrote on The Digitalist blog about some of the changes we’ve seen and about how the industry as a whole has woken up from its prelapsarian ostrich impression. We’ve gone from a world of hot metal type and the smell of ink to a place where everything is prefaced with the letters "i" or "e". These changes may have taken a little longer than three years, but had you wafted the iPad in front of a publishing executive from circa 2006 it would have appeared as some kind of devilry, a strange and magical device beamed down from the Planet Future.

Then suddenly it’s here and the world goes mad. Still.

Alongside the growth of digital over the past few years there has been an even more explosive industry: growth in the commentary on the growth of digital. You can barely move on the internet for a finely honed opinion about game-changing strategic plays. While there is a lot of good commentary, much of it - my own included - too often fails to acknowledge the self-evident truth of digital that, to quote William Goldman, nobody knows anything.

Whenever one reads about the impact of digital on publishing, one reads hearsay, rampant speculation and after-the-fact rationalisation. Guessing at the strategy of company X doesn’t mean you know what they are doing. Data is shrouded in veils of corporate secrecy or simply doesn’t exist. Technologies, trends and tastes evolve and die and at a pace that makes predicting tomorrow impossible. At digital conferences the standard speech will claim that: a) consumers expect new things; b) we are in a new world; c) everything is changing; and d) you need to experiment. The actual substance of this: nobody knows anything.

It seems that for publishers digital is defined as much by what we don’t know as by what we do. In the manner of Donald Rumsfeld then, we need to categorise our "known unknowns", as it will be these that ultimately shape the future of the industry.

Things Publishers Don’t Know

1) Which platform will win? And will one platform dominate anyway?
We are all drearily familiar with iTunes and the story of how online music sales became an effective monopoly for Apple. Sure, the market is evolving now and becoming more competitive, but as the platform nears its 10 billionth download there has been only one legitimate download service to gain traction for music. With the West Coast muscle of Google, Amazon and Apple involved in a three-way wrestle for the future of books, not to mention a whole host of other retailers and start-ups getting involved, there is a genuine openness to how we consume and purchase our content. The proliferation doesn't even stop at one platform - witness the range of possible offerings on the iPad alone.

Fundamentally we don't know whether we will be in a music industry, winner-takes-all environment, although that looks increasingly unlikely. Moreover, we don't know exactly who will be significant or how, we don't know what the market breakdown will look like in two years let alone 10, and there are few reliable precedents to work with. This means that publishers and retailers alike have to be flexible and capable of moving quickly, reacting to a febrile and ever-evolving scenario where "game-changing" events happen every week.

2) How many people will actually read ebooks?
Get publishers on the topic of digital and one question crops up: how large will the readership for ebooks be? It’s a welcome change from the 2007 version at any rate ("Will anyone ever read ebooks? Really? From a screen!?"). In two years' time, will it be 10% or 20%; in 20 years' time, will it be 25% or 50%? There are many permutations to this, and anybody from the CEO of a multinational to a humble Digital Publishing Manager can throw out a plausible statistic, but none of it changes the fact that for all the apparently scientific calculation behind these figures we might as well put on a blindfold and pin the tail to the ebook donkey.

For the most part any such predictions contain a hidden agenda: to justify investment, to stoke investment, to pour cold water on an investment. Yet almost any outcome can be made to have some plausibility, and only with the unfolding of events will we ever know how big the market for ebooks actually is. All of us therefore need to be prepared not to rely on digital, but also to be ready for a significant shift. Once again, we need to be flexible in the face of uncertainty.

3) What impact will piracy have?
Piracy is not a glamorous topic: almost an embarrassment for content producers. It means having to talk about DRM and slagging off clueless 14-year-olds who really really love your stuff but are actually taking your business model and calmly presenting it with a grenade, turning their backs for the ensuing explosion and then doing it all over again. However, the level of piracy will dictate the success or failure of publishing. Other industries that moved to free, legally or illegally, arguably had more fat to trim. Suffice to say there is very little extra margin to be squeezed in publishing, and a significant transfer of reading to piracy will wreak havoc on the value chain.

This is not to argue the rights and wrongs of piracy, copyright and DRM; just to make the observation that at this stage we have no idea how much these issues will dominate the discussion and indeed the bottom line. At the minute the problem is not yet acute. We just don’t know whether it will be, how it might manifest itself, or to what its extent will be. What we don’t know, in short, is how the business of selling ebooks will turn out. Anyone who says they do know – and there are plenty - is either lying or labouring under a self delusion. Just because we don’t know anything though, doesn’t mean we shouldn’t or aren’t doing anything. The message for publishing is simple. Agility and quick thinking are crucial. Having a grand and inflexible strategy will do you well; until that game changing event comes along next week and forces you to redo those colourful PowerPoint slides. In the world of digital publishing, as in so many things, admitting that we don’t know anything is the first step to knowing something.

Coming next: Three things we in fact do know

Michael Bhaskar is Digital Publishing Manager at Profile

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