Saving scholarly publishing, and saving civilization.

In 16 minutes.

The full text, and the YouTube videos, are at:

http://www.nap.edu/staff/mjensen/scarcity.html

or you can watch Part I (missing my preface, that’s available in the full text):

and Part II:

A few segments from the text:

The realities I see ahead of us, in the next ten to fifteen years, militate for some radical strategic choices, in the next three years.

I believe that we must shift our business models — publicly, transparently, intentionally, thoughtfully, but radically — to a digital one, with open access as the backbone of scholarly publishing. We must do this to survive a tremendously turbulent next decade, and to ensure that our mission, and its survival, continues to be fulfilled.

…

But CO2 does something much worse. While we bicker with global-warming deniers, the ocean is getting more acidic. Excess CO2 plus ocean produces carbonic acid. Ocean acidification is a clear and present danger. A slight rise in acidity dramatically affects calcium-carbonate-based lifeforms, like most plankton, shellfish, and coral, the cornerstones of the ocean biosphere.

If humans do not drastically reduce our CO2 output in the next ten years, our rich, biodiverse ocean will become an acidic, jellyfish- and algae-filled cesspool, in our lifetimes.

If, over the next decade, humans continue doing what we have done for the last fifty years, then we will construct our own hell, and our grandchildren will curse our names.

…

Within the context of a world in crisis, we *must* demonstrate that we’re radically rethinking our relationship to the future. We must demonstrate that we are part of the solution, not part of the problem. We must seize initiative now, and start making changes as fast as we can.

Open access + digital publishing will help get us to a sustainable world, and keep us in the mix.

Imagine, in five years, a different income stream where 50% of your income comes from some kind of value-added digital sales, and 25% from print-on-demand, and 25% through institutional support of fixed costs. Dissemination and societal impact will increase 50x, because the material is openly available and promoted online.

With that kind of documented dissemination of scholarly value and University brand, to the broadest public, no dean would be motivated to cut the support that enables scholarship to thrive online. And, our CO2 production will be radically decreased.

The presentation was controversial, and raised both some hackles and some hair-on-the-back-of-the-neck. Far more congratulated me than condemned my analysis — and many said they were rethinking strategy in light of what I showed them.

It was risky, but knowing what I’ve learned over the last two years doing the Apocadocs project, it was a risk I needed to take. Time’s a-wasting.

I’ve been interested to see the  responses, and this post can become a response locale — I’m linking back here from the fulltext, in hopes that some discussion can ensue.

When Amazon started out, we knew little of all the things Amazon subsequently taught us, things like the ease of ecommerce, the technology of user authentication and online processing of credit cards, the value of superb customer service, and that unique characteristic of the Web, the ability to create a storefront that could claim to hold truly comprehensive inventory in a particular domain.  While not all organizations do these things as well as Amazon today, and none do them better, the fact is that Amazon has taught us well:  more and more of what Amazon does is now available to rivals.  It is no longer necessary to build your own shopping cart, and if you are stumped by the risks involved in taking an order by credit card, there are vendors lined up to take this problem off your hands.  The gap is closing, and for Amazon to stay ahead of the pack, it must continue to innovate at a breathtaking clip.

Unfortunately for Amazon, other Web services are coming up with comparable innovations.  Amazon built a community around its offerings, but the Amazon community is nothing compared to those found at MySpace, Digg, or Facebook.  And Amazon created what may be the first credible ebook device, the Kindle, but already the possibility of reading etexts on the iPod and iPhone is making the Kindle seem like an unlikely winner.  We can imagine a Dr. Frankenstein of ecommerce rummaging in the graveyard for body parts to cobble into the monster that will resemble nothing so much as Amazon:  A second-best shipping system, a second-best shopping cart, a second-best print-on-demand service–but in the end, a credible alternative to Amazon’s systems:  not good, but good enough.

Where Amazon continues to trump all pretenders is in the breadth of its inventory–The World’s Largest Bookstore was its original claim.  It would be very, very hard to replicate this inventory (or, rather, the online catalogue that represents that inventory, which may be warehoused at Amazon or at Amazon’s many vendors).  It may no longer be necessary to catalogue and support all titles, however, if a new online merchant could dominate a particular subject area.  Mike Shatzkin has argued persuasively that the infrastructure of online bookselling marks the end of general trade publishers, which will be replaced with “verticals” in particular fields, abetted by tapping into online communities built around particular topics.  In time the science fiction vertical or the ancient history vertical or any number of other subject-specific sites could incorporate ecommerce activity and pressure Amazon at the edge of empire, relying on the intensity of community involvement to strengthen their marketing proposition vis-a-vis the industry leader.  Amazon tries to be all things to all people, but a niche site must simply be everything to a self-defined group of people.  The intensity of focus becomes the merchandising weapon of choice.

It is astonishing to think of how little a new, topically-based ecommerce site would have to do for itself.  Inventory can be drawn from Ingram or Baker & Taylor; ecommerce software can now be purchased off the shelf; fulfillment (once a big headache for warehouses that were not set up to handle orders to individuals) now has several suppliers; metadata for catalogue entries supporting the ONIX standard can be sent from publishers to the new site; and so on.  Part of Amazon’s position at the head of the pack derived from its willingness to invent new infrastructure and build it.  Now the world of ecommerce is being disaggregated, and the vertically integrated Amazon is beginning to look like it was built for an earlier era.

These thoughts, and the controlling metaphor, were prompted by a recent experience in my local, beloved used-book store.  I wandered among the idiosyncratically organized stock, the stacks of books of all description, the book spines whose lettering had worn away:  paradise.  There on a shelf I spotted the two-volume Modern Library edition of Gibbon’s Decline and Fall of the Roman Empire.  I hesitated before picking up the books and carrying them to the cash register, but I had promised myself to read Gibbon before I died.  I joked with the cashier that she wouldn’t see me for a long time because I had a very long book to read first.  She said that I would have to read quickly, as the store would close in a month.

Among other causes, Amazon had helped to put that store out of business.  But the proprietor has already begun his next venture, in online bookselling.  He is not himself a threat to Amazon (some of what he will do will be with Amazon’s many services), but he is one of many people and companies gradually coming to terms with the behemoth and finding new ways to find a customer, turn a profit.  It is an army of thousands and they are starting new ventures, testing new value propositions.  It could be said that if any of them achieve anything of importance, Amazon will simply buy them.  But Amazon can’t buy everything:  unlike the imaginative space opened up by a book, the balance sheet of even an imperial corporation is not infinitely extensible.

Is Amazon’s weakness its growing arrogance?  Perhaps.  Speak to the vendors who are now struggling with Amazon’s new Vendor Central system and you will find countless volunteers ready to bring down the tyrant.  Or perhaps Amazon, seeing the success of the iPhone and Stanza ebook reader, is getting desperate, as was suggested by one individual (not cited by name here as the comment was made in a private mailgroup); and this desperation has resulted in Amazon’s new insistence that it will only sell ebooks in the Kindle format.  Amazon would have us believe that resistance is futile, but the growing number of publishers studying alternatives to the Kindle suggest otherwise.

Amazon’s decline will come about because it will not be able to monopolize ebook distribution with the Kindle; because new business models (mostly based on subscription sales of aggregated content to consumers, not unlike Safari Books and similar in form to NetFlix) will challenge Amazon’s operating philosophy; because social networks organized around special interests will help to solve the problem of bringing traffic to a new or series of new online stores; because so many of the pieces necessary for an ecommerce site are available at modest cost from multiple vendors; and because many people are motivated to storm the barricades, whether for profit or just for the hell of it.

Amazon will not go quietly or quickly.  It is a great company and no stranger to risk or innovation.  But we are not likely to see Amazon continue to grow and increase its dominance of publishing and bookselling.  Sometimes it’s just time to go.

     The Kindle is a watershed event in electronic publishing.  It is not the first ebook device, and it may not ultimately be the one that will prevail (it could of course be one of several). But its appearance marks the point where ebooks move from theory to actuality.  Whether the leading device is the Kindle, the Sony electronic book, a cell phone platform, or some variant on an iPod, ebooks are here to stay.  In discussing the Kindle, then, I am thinking about ebooks in general.

     Not a few people have been waiting for “the ebook moment” for years.  The arguments in favor of ebooks are many and include: efficiency in the supply chain (because there are no atoms to move around); the ability to store multiple titles on one device (a boon to travelers); and the added value of links, bookmarks, and adjustable text size.  We should add to this a very important aspect of ebooks: the coolness factor.  I read a post recently by a woman who extolled the virtues of the Kindle, which she took to bed with her.  She could have taken a print book to bed, of course–she could have dragged into bed the entire Oxford English Dictionary (think of all the dirty words!)–but that would not have been as cool.  We love some gadgets precisely because they are gadgets.

     One of the unintended consequences of the Kindle and its brethren (desirable for readers, more woe for publishers) is that it will reduce the number of books that are actually sold. This will happen not because of piracy (with the proprietary Kindle, piracy may be a small problem, though ebooks built with open standards may pose larger problems for publishers), but because the architecture and business model for the Kindle support a “buy only when you need it” frame of mind, aka “just in time” inventory management.  In the hardcopy world, where many books (no one knows how many) are bought “just in case,” the number of books purchased exceeds the number of books read.  The Kindle will remove the excess, adding to the legions of misfortunes of publishers and authors.

     Let’s back up to the bricks-and-mortar world to see why this will be so.  When John Doe steps into a bookstore, he browses a bit.  He may buy a specific title that brought him to the store in the first place, but he also may buy something that happened to grab his attention. He buys that second book with the intention of reading it after book #1 is completed or perhaps for some future time–that upcoming vacation in Aruba–where, blessed with time, he will immerse himself in a book.  Book #1 is just in time, #2 is just in case.

     Prior to departing on that trip, however, something may have come up.  A friend recommended another book (worse: a friend wrote a book, signaling a requirement to read it), or something broke in the news that demanded attention in the form of a book, or Doe’s mood has changed, or any of dozens of other reasons.  The result: Doe now has in his hands book #3.  This is also just-in-case.  If Doe is compulsive, the number of just-in-case books grows and grows; if Doe’s house is like mine, the number of not-yet-read books greatly exceeds one’s life expectancy.

     With ebooks you don’t purchase a title to have it waiting for you when you get time to read it.  You purchase at the very moment you are going to read it.  There is no reason to purchase it sooner, because it is always available: there, in the Cloud, living 24/7 on Amazon’s servers.  What the Kindle does is introduce digital accountability to book publishing and purchasing.  It saves consumers money, but it does so at the expense of publishers, whose income statements for decades have been propped up with the sale of things that ultimately do not get used.

     Digital accountability has already reached into many corners of the publishing industry; in this respect, the nefarious implications (from a publisher’s point of view) of ebooks are nothing new.  Retailers have computerized inventory systems that, when they are working well and are properly managed, help to cull slow-selling stock.  Librarians review Web statistics for online journals, canceling those that are not used.  And publishers have always reviewed their own sales records in order to help determine what new properties to invest in. What’s different about the digital accountability brought about by ebooks is that it does not simply result in one title being chosen over another; it results in the wholesale reduction of the total number of books sold.  It is an industry-killer–or, if that language overstates the case, an industry-diminisher.

     What’s at issue here is that publishers who look to ebooks for grand sales opportunities are in fact taking steps that reduce the overall market.  There are exceptions to this, however.  College textbooks will likely sell more copies in electronic form, since many students currently fail to purchase expensive hardcopies at all.  And in the developing world, it is possible that digital texts may find markets that print never could (assuming the digital infrastructure can be put in place).  But for consumer books in the developed world, ebooks shrink the market.

     Not that publishers have any choice.  If consumers want their books in digital form, a publisher would be foolish not to satisfy the demand. After all, if HarperCollins decided to be print-only, it would lose sales to Simon & Schuster, if S&S decided to be both print and digital.  This is a fight for market share, however, not a strategy for growth.  Publishers who have hoped that ebooks could be a vehicle for growth will have to look elsewhere.

I’m pretty sure my demos sold three Kindles this weekend. I am more convinced than ever that the overall value proposition here — easy connectivity and the fast and direct acquisition of many of the books it would occur to people to want — will create success despite the real flaws in the product design.

I made the leap long ago to reading books on a hand-held device, currently a Palm Pilot. The always-with-me aspect combined with the back-lit screen for reading in bed in a dark room created book-reading opportunities no paper book could fill. And I learned to like the small page and short line width; I have come to notice when reading something forces my eyes to move and to have to work to find the beginning of each new line on the left. Doesn’t happen on the Palm. Or the Kindle.

For straight narrative reading, there are two serious disadvantages to the Palm, both solved by the Kindle. One is the purchasing and loading experience, which for the Palm is time-consuming and often frustrating. You shop either at Powells.com, which isn’t bad, or EReader.com, which is atrocious. Then you download to your computer, open the file, and load it to your Palm by hot-synching it. Failures can occur at every step. The other issue is the battery life. I can only read the Palm for a couple of hours before it starts needing juice. And I have other things I need the Palm to be functional for. So it isn’t a good tool to provide airplane reading for a trans-Atlantic flight.

The Kindle gadget itself is actually pretty seriously flawed. You have to get used to holding it while you read in a way that avoids inadvertent page advances. The “cursor” and selection wheel is limiting and, consequently navigation is over-involved. If using the iPod and iTunes defines elegant, using the Kindle and Amazon through it defines clunky. And yet…

Once you get used to keeping your fingers off the page-turning bars, reading on it is just fine. I hate right-justified lines, which it’s got (and why no way to choose out of it?), but the page width and depth are very paperback book-like. I’m fine with the default type size, but changing it to a larger (or smaller) one is two clicks. It’s lighter to hold than a book and advancing through pages is no harder or more distracting than with a paper book. Halftones and line drawings are okay — not great. I have a feeling, as I’m reading it, that I’m missing a lot of visual elements in the Stephen Colbert book. Like maybe they just left them out of the Kindle version. But I don’t read that many books that have visual elements.

It is solving my two prior ebook complaints: ease of title acquisition and battery life. And it is adding something fabulous: Amazon offers quick-loading samples of every book that are free. What you get in the sample, which you have about ten seconds after you click for it, seems to be all the front matter and a chapter or two. In an otherwise busy week, I’ve downloaded about ten samples, bought two books (and read big chunks of both of them) I’ve only had the device for ten days, but it looks to me like I will actively be reading two different books on devices from now on: one on my Kindle and one on my Palm. Which I’m reading at any time will be a function of circumstances and, of course, the urgency of reading the next chunk of one book or the other. The Palm is in my pocket all the time; the Kindle will travel in my laptop case and be with me at home, at the office, and in my hotel room and in transit when I’m travelling.

When I show people the device, they’re intrigued. When I show them the reading experience, they’re satisfied and accepting. But when I show them the buying procedures, they’re entranced. Amazon’s core competence ain’t devices, but they sure know how to maximize the shopping experience.

As you’ve read elsewhere, the Kindle takes you quickly and directly to Amazon, where you shop selections (bestsellers or new and noteworthy) or search the site in the normal way. Then you get the full Amazon data set, including those reviews they have. And you are offered an opportunity to buy or download the sample with a click.

I didn’t know the price of either of the two books I have bought when I bought them, so quick and seductive is the purchase button. And, of course, I was “sold” because I had, in both cases, read the sample. But I was pleasantly surprised. Ken Follett’s “Pillars of the Earth”, for which the new paperback costs $11.99 at Amazon, and the cheapest used copy is $11.05, was $6.39 for my Kindle edition. And Stephen Colbert’s “I Am America (And So Can You)”, a current hardcover bestseller for which the publisher’s list is $26.99, the new book is $16.19 at Amazon and the cheapest used copy is $12.48, was $9.99 for my Kindle edition. Based on this very limited sample, savings (over Amazon prices) are $2-5 per book. If that holds up, it would take 100 or so books to repay the $399 (current) cost of the device (assuming one didn’t plan to re-sell the print editions after reading them.)

I have seen Jeff Bezos quoted to the effect that ebooks should be cheaper because you can’t pass them around like printed books. On that basis, the price comparison above might not be accurate. But one of the people I showed the Kindle to, who travels a lot and reads lots of books and who does not re-sell her printed editions, did the arithmetic for herself about the same way I did above.

And the Kindle does more than deliver you cheaper books; it also, in a way most people wouldn’t use a lot but which can certainly be helpful from time to time, delivers the Internet.

The dynamic the book business needs to wrap its collective brain around is that the more straight text narrative books you read, the more useful Kindle is and, on balance, the less it costs. And once you have a Kindle, it will take some real reason to make you buy a book of that kind another way. This is fraught with implications, which will be the topic of another post.

Lessing is quote as saying:

And just as we never once stopped to ask, How are we, our minds, going to change with the new internet, which has seduced a whole generation into its inanities so that even quite reasonable people will confess that once they are hooked, it is hard to cut free, and they may find a whole day has passed in blogging and blugging etc.

Nate Anderson responds with more sensitivity for evolving patterns of information creation, distribution, and consumption:

And yet, perhaps book lovers will need to accept that the “great tradition” of literary art is moving into a new medium. It’s not the first time. Print did the same thing to an oral culture, and recorded pop music has largely replaced poetry for most in the modern world. But television, films, and web sites can all offer powerful stories. And print, far from dying out, is being consumed in massive quantities online. The issue, as it has always been, is pointing readers and viewers to the sort of material worth their time and attention, material that tells true stories about the world or enlarges our sense of what it means to be human or offers real entertainment. What needs to be avoided is the content, online and off, that is little more than pabulum spoonfed to those who want fare just rich enough to keep them from boredom. …

Lessing tells an anecdote about a visit to a posh London school. She goes to the library. She is told, “You know how it is. A lot of the boys have never read at all, and the library is only half used.” If true, it does seem a sad story, but the answer simply cannot be a fetishization of books. We need instead to encourage the consumption (and thoughtful digestion) of artful fiction and nonfiction on whatever page or screen it appears.

Yep.  We need to get over the concept that the book offers a primality unmatched.