Comments on: Honey, I shrunk the publishing business: Reflections from the L.A. Times Festival of Books http://www.teleread.org/2009/05/01/honey-i-shrank-the-publishing-business-reflections-from-the-la-times-festival-of-books/ News & views on e-books, libraries, publishing and related topics Sun, 22 Nov 2009 19:55:06 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Michael Harrington http://www.teleread.org/2009/05/01/honey-i-shrank-the-publishing-business-reflections-from-the-la-times-festival-of-books/comment-page-1/#comment-1051335 Michael Harrington Tue, 05 May 2009 15:04:16 +0000 http://www.teleread.org/2009/05/01/honey-i-shrank-the-publishing-business-reflections-from-the-la-times-festival-of-books/#comment-1051335 Yes, I would agree, but as an author, musician, and an investor with a finance MBA, I see this from many different angles. It's sad because all players are constrained by the bigger picture. Corporate survival is driven by profit, but new technology has taken much of the profit (and monopoly rents) away. Do they know this? Yes. Can they do anything about it? No. Because the capital they need to launch a new business model is not there and their revenues are shrinking by the day. They're trying to survive by cutting off their air supply. What we're witnessing is Joseph Schumpeter's creative destruction and we can look at the record industry to see how the publishing industry will fare. In the 1980s and 90s I dealt with the record industry and now I deal with publishing industry and I can tell you it's deja vu all over again! Amazon is the new elephant in the room and we need competition lest Amazon's monopoly rents grow at all others' expense. Yes, I would agree, but as an author, musician, and an investor with a finance MBA, I see this from many different angles. It’s sad because all players are constrained by the bigger picture. Corporate survival is driven by profit, but new technology has taken much of the profit (and monopoly rents) away. Do they know this? Yes. Can they do anything about it? No. Because the capital they need to launch a new business model is not there and their revenues are shrinking by the day. They’re trying to survive by cutting off their air supply.

What we’re witnessing is Joseph Schumpeter’s creative destruction and we can look at the record industry to see how the publishing industry will fare. In the 1980s and 90s I dealt with the record industry and now I deal with publishing industry and I can tell you it’s deja vu all over again!

Amazon is the new elephant in the room and we need competition lest Amazon’s monopoly rents grow at all others’ expense.

]]> By: Steve Jordan http://www.teleread.org/2009/05/01/honey-i-shrank-the-publishing-business-reflections-from-the-la-times-festival-of-books/comment-page-1/#comment-1047825 Steve Jordan Fri, 01 May 2009 16:50:05 +0000 http://www.teleread.org/2009/05/01/honey-i-shrank-the-publishing-business-reflections-from-the-la-times-festival-of-books/#comment-1047825 There are a lot of parallels between this and the auto industry, the power industry, the financial industry... it's what happens when Capitalism gets complacent. A trickle of effort would have sufficed to keep up with most of the industry's changes, but the ones holding the purse-strings were intent on negating the changes, simply because their way kept their purses fat. Wait for too long, and the trickle of effort isn't enough... only a flood will get the job done, or it all goes dry. The biggest issue for the MBAs is that they are the ones losing value, not editors or publishers. It is far easier to publish without the advanced risk costs, especially in this digital era. New and radically different business models will allow publishers to get products direct to market faster with less production expense, see profit sooner, and thereby remove the traditional need for risk capital investment that the MBAs profited on. The MBAs are trying to cut their losses by trimming the other branches of the tree, leaving it ugly and unbalanced. They won't accept that it is their branch that really needs to go. There are a lot of parallels between this and the auto industry, the power industry, the financial industry… it’s what happens when Capitalism gets complacent. A trickle of effort would have sufficed to keep up with most of the industry’s changes, but the ones holding the purse-strings were intent on negating the changes, simply because their way kept their purses fat. Wait for too long, and the trickle of effort isn’t enough… only a flood will get the job done, or it all goes dry.

The biggest issue for the MBAs is that they are the ones losing value, not editors or publishers. It is far easier to publish without the advanced risk costs, especially in this digital era. New and radically different business models will allow publishers to get products direct to market faster with less production expense, see profit sooner, and thereby remove the traditional need for risk capital investment that the MBAs profited on.

The MBAs are trying to cut their losses by trimming the other branches of the tree, leaving it ugly and unbalanced. They won’t accept that it is their branch that really needs to go.

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