Buggy Whips vs Tesla
The internet has radically changed many industries. It’s killing print publications (because paper is no longer the optimal delivery medium), it forced/enabled appliance sales to move online (not even Best Buy sells microwaves in store any more), and it has redefined the workspace to include any place in the world that has an internet connection and power.
But when it comes to the book industry –
Part of the book industry have embraced the modern era, but the are still parts of the industry that still stubbornly refuses to admit that it is no longer operating in the 19th century.
I was reminded of this dichotomy yesterday when I was reading Techdirt founder Mike Masnick’s tweets about his recent car shopping.
"Last week, my 13-year-old car died. It was way too young and I had expected a bunch more years out of it, but it’s dead," he tweeted. "So I’ve started car shopping for the first time in many years. And after visiting 5 dealerships the experience is totally different from what was 13 or so years ago. The dealers are much friendlier and much less aggressive. There’s almost no sales pitch at all."
"One of the sales guys finally explained it to me during a test drive: 'The internet has changed EVERYTHING man. I get one bad Yelp review, dude, and my salary drops by like $10k. So it’s a different world. Whatever you want, you get."
Now, not all car dealerships have changed how they do business because of the internet; my mother’s last car buying experience was a four-hour endurance match negotiation with a local car dealership (Lustine Automall).
Like the book industry, parts of the car dealership industry have changed with the times, while other parts are still holding on to business practices a generation out of date.
That industry is seeing a divide similar to the current state of the book industry where the Big 5 has decided to cling to print books, and uses agency pricing to force the price of ebooks up, and the indie press that price ebooks in response to market demand.
It is almost as if the major vehicle manufacturers were insisting that people should be buying buggy whips and carriages when the market has moved on to electric cars.
Sure, the holdovers can make things go their way for at least a little while, but how long will they be able to keep their heads in the sand?
In the case of car dealerships, consumers are voting with their pocketbooks – they’re using the internet to identify the better dealerships, and also recommending them by word of mouth. As a result, the dealers that have adapted to the times are making as many sales as they have time for, while the holdovers fight tooth and claw to make the most they can from each individual sale.
And we are seeing a similar trend in the book industry. Reasonably priced ebooks are enabling newcomers to make inroads to an industry that used to be dominated by a few dozen gatekeepers.
The newcomers are making more sales every year while the legacy book industry is insisting that no one wants to buy ebooks at the same time they are papering over their decline by acquiring smaller publishers.
The conventional wisdom is that everything is fine in the legacy industry, but anyone with a modicum of sense can see that the Big 5 are behaving like carriage manufacturers who proclaimed that automobiles were just a fad.
How many of those carriage makers are still around?
image by melodyben