It took the music industry 15 years to get back to seeing the positive sign in front of its accounts. Today, however, the value of the music industry is still half of what it was in 2000. Two of the leading scholars of the digital economy, Erik Brynjolfsson and Andrew McAfee of MIT's Sloan School of management, have explained well this phenomenon that began in the early XNUMXs: while music consumption became a rocket just launched, industry revenues instead seemed like one that had no more fuel, they fell like dead leaves. Nothing like this had ever been seen in modern market economies, where increased consumption always increased revenues and wealth. It had happened that the ecosystem of music, established in the golden age of the mass media, had not been able to understand and adequately respond to the napsterization of the market, ie the change in consumption habits, behavior and preferences of music consumers.
Something analogous is happening in the book industry with the nephlixization of the cultural industry in the new digital scenario. Here, rather than a radical and absurd gap between consumption and revenues, we are witnessing a stagnation and even a contraction in the consumption of books. The matter is therefore even more serious.
A CHALLENGE ALMOST LOST
Book publishing is losing the challenge posed by the Pavlovian media for the conquest of free time dedicated to entertainment and education on new media, which is becoming the media tout court. And there will be more and more of this "non-working" time, with the advent of robots. Let alone when they will start reading too. At that point there will be a sidereal space for reading and writing. So it happens that people read more and more, but not books. They knew that the new media would lead to a fragmentation of cultural consumption as a result of the extension, diversification, breaking down of entry barriers and abundance of supply, but it was hard to imagine that a secular institution like the book would suffer so much, especially due to lack of innovation.
We don't need the Pew Center to know that audiences spend significantly more time on Netflix than on the pages of a book. On Netflix you pay a ticket of 7,90 euros a month for a gargantuan amount of content, while in bookstores you pay at least 15 euros for a novelty (let's say one) and it's not better than "Crown" or "High Castle"! Publishers and authors continue to work as if nothing happened. The only ones who understand anything are those of Amazon who, consequently, sail at full sail in the middle of a sea of wreckage, including the Titanic by Barnes & Noble.
A BOOK COMPETES WITH ALL OTHER MEDIA
Back in 2014 the Amazon staff wrote, between derision and general hostility, the same ridicule suffered by Churchill when in 1933 he thundered, like a summer storm, against the deadly threat of Nazism.
wrote the Kindle team on their blog in July of 2014.
“We must not forget that books do not compete only with books. Books compete with video games, television, movies, Facebook, blogs, free news sites, and more. If we want to develop a healthy culture of reading, we must take serious steps to ensure that books can compete with these other types of media".
Steve Jobs himself, in launching the iPad in 2010, had lucidly described the new scenario in which the entire cultural industry would find itself with the advent of new media. He had said:
“Once the media were separate, each was on its own on its own distribution channel. A piece of content competed only with a kindred piece of content. Today everything has changed. All media are together and compete in the same environment: a screen connected to the Internet”.
And that's exactly the point.
To tell us this is the incredible success of audiobooks, a book in another form through which the authors are finally starting to experiment with new storytelling and narration formats to meet the new consumption habits of cultural products. In the book and its clone, the ebook, nothing of the kind is seen, there is no attempt to innovate the content; rather the historical forms of this medium are reiterated as if the market were still that of the golden age of the mass media. We understand that it is not a simple thing to innovate a creative content historically settled in the collective imagination. Just as it is not drinking a glass of water, the act of making a remedy in the face of a technological change whose consequences are anything but technological. But the time to wait is over. Something has to be done, and quickly.
But let's see what happened in the economy of the book, and something really cruel happened.
THE BRUTAL FIVE YEARS 2012-2017
In 2017 it happened that the great bestsellers were missing which, as we know, have unfortunately become the engine of the cultural industry. Since 2012, to aggravate the situation in the United States, the most predictive market, fiction has lost 23% of its market value. Avoiding an even more bloody downturn were books about and around Trump. The American president is increasingly proving to be a boon for business. I don't know about other aspects, but for business the Trump effect is gigantic. Perhaps the stories of the controversial ex-brick tycoon are the fiction that works the most right now. In this case, the fine line between fiction and reality has completely vanished. This annulment, moreover, is the dominant tendency of the contemporary world.
Jonathan Franzen, one of the best expressions of literary fiction, gave a long interview to the New York Times Magazine in which he talks about the difficult moment his profession is going through. We will deal extensively with this interview in a future post, because Franzen is the standard-bearer of the techno-sceptic party and never misses an opportunity to point out how harmful technology is in his current expressions. What interests us here are his revelations about the market's reception of his books. Since 2001, the sales of his novels have plummeted, despite the fact that there has been a sort of Rossinian crescendo in the appreciation of his works by critics and the literary novel public.
His 2001 novel, The corrections, has sold 1,6 million copies. Freedom, published in 2010 and described as a masterpiece by the New York Times literary critic, has sold a whopping 1,15 million copies. His latest work purtity, released in 2015 and critically acclaimed, has sold 255.476 copies. Furthermore, the announced television adaptation of the novel, scheduled by Showtime with Daniel Craig in the title role, is stalled. Franzen is keen to let us know that, unlike what happens to him, he is not even angry about what is happening, he is simply resigned.
Franzen has no trouble recognizing that great cultural moments now flow more often on a screen than on the pages of a book. After watching “Breaking Bad” over and over again he understood “how great TV works” for storytelling. Now Franzen is an avid consumer of the farcical HBO series "Silicon Valley" which tells the stories and behaviors of a group of nerds gathered around Pied Piper, an unlikely start-up, which has developed an innovative compression algorithm.
Alex Shephard, one of the culture industry's most perceptive observers, has commented so Franzen's book numbers "Sales of Franzen's books are declining because the era of novels selling millions of copies is gone forever." Here is a big problem for the whole ecosystem of the book.
THE SINKING OF AUTHORS' REVENUES
Let us now turn to what happens in another context which constitutes another litmus test precisely because of its proximity to the American one, the United Kingdom, whose book market is worth 4,5 billion dollars. The Guardian reports that the latest report by the Authors' Licensing and Collecting Society (ALCS), an association that protects the interests of authors, signals the worrying impoverishment of British professional writers. It is not that this is new, previous ALCS reports already complained about this trend. The matter takes on a different significance in light of the statistics in the medium-long term.
The 2017 survey, which involved 5500 writing professionals, shows that their revenues fell by 43% compared to 2005. In fact, the average annual income of writing professionals amounts to 10 pounds when in 2005 it was close to 14. pounds. This is an economic value, already modest in 2005, but which now stands well below the minimum annual income estimated in the United Kingdom, by specialized agencies, at 18 pounds. According to these estimates, the hourly wage of a professional writer in 2017 was £5,73. Frustrating, right? We are in the full area of poverty. Perhaps Ken Loach is already thinking about it for his new film. It was not robots that impoverished writers, but the great fragmentation of the market due to the action of the web and the change of habits of consumers in the cultural industry.
The company of British authors has slammed publishers and Amazon for not sharing revenue equally with authors as revenues have grown since 2005. But the explanation isn't as simple as pointing to a Smerdjakov on duty. The reasons are more structural and the authors should start reflecting on the new state of affairs.
The general phenomenon of inequality in the distribution of wealth that is taking place in tertiary economies is also acting in the publishing ecosystem. Few bestselling authors make huge profits, while for the others, marginal resources remain to be distributed. A phenomenon that prevents new talent from emerging and flattens the offer of content. The book industry's bestseller economy threatens to further marginalize the book form by forcing writers to turn to other, better-paying outlets or to play the game of imitating bestsellers instead of developing original ideas and content. In the great majority of cases, writing books is becoming, precisely due to the lack of resources, a support, ancillary and promotional activity to other more heavily paid activities; it is becoming a sort of component of a marketing mix aimed at increasing the reputation and awareness of one's brand. A book is a great weapon for building a brand.
BARNES & NOBLE, TOO IMPORTANT TO FAIL?
We come to the third and depressing piece of bad news. Will Barnes & Noble do what happened to its twin Toys 'R' Us? That is failure?
Last June Demos Parneros, the fourth CEO of Barnes & Noble in just five years, was fired without compensation from the group's board. The exit from the crisis of the largest chain of bookstores in the world seems like an unsolvable puzzle, despite the whole publishing world hopes that this will happen as soon as possible, because Barnes and Noble is the last decisive fortress before the surrender -commerce, a space that neither big publishers nor big authors control. For this Barnes & Noble, like the large investment banks in 2008, is considered too big and too important for the ecosystem of the book to fail without causing a systemic crisis.
The group's crisis is not only financial, it is above all in terms of identity. Revenues are steadily declining, management has no other plan than to close shops, fire expert booksellers and open new outlets with an uncertain concept. There is a lack of a strategy capable of restoring stability in the accounts and in operations. The share price, which before the 2008 crisis was more than 20 dollars per share, is now close to 5 dollars.
After the closure of Toys 'R' Us, which left a market space to be filled in which Barnes & Noble would like to jump, Parneros' idea of modeling the chain's stores on the model of the independent bookstore seems to have fallen out of favor , which is experiencing an unexpected renaissance, with staff who understand books and strong roots in the territory, abounding in the idea, supported by its predecessors, of creating gift shops with areas for catering, for drinks, for display stationery, toys, electronic appliances and more. In short, what is in question is the identity of the group which has been exposed to sudden changes of course for too long.
Some investors are calling for Barnes & Noble to go private, seek private capital, restructure, and then go public when the time is right. A path that Dell has followed successfully, enriching its founder, Micheal Dell, but which has been fatal to Toys 'R' Us. Given the age of Riggio, the founder of Barnes & Noble, there is no one who can play a decisive role like that of Michael Dell, that is to ferry the boat across the Styx without losing all the cargo. And this seems to be the fate of the chain. Alex Shephard concluding his comment on the Barnes & Noble crisis he writes:
“For the moment, any change is far from coming. Barnes & Noble is dealing with a bigger, more intractable problem: chaos. It has suffered a series of bankruptcies and seen the failure of the administrators who had to restore it. The challenge now is to find the thing that has been missing for too long: not success, but stability”.
Everyone wishes him so.
WHAT TO DO? MARKETING AND CONTENT INNOVATION
A fixed point, however, exists in this odyssey. Books continue to be important in people's media diet and will continue to be so in the future. They will be even more so in an increasingly complex, fragmented and inexplicable world with the categories of thought that have guided the understanding of the reality that surrounds us. There is still an audience that wants them, seeks them and is ready to welcome them alongside Netflix series and films.
The first task is to adapt books to new times and make them known to the public, something that can no longer be done with traditional means and strategies, unsuitable for cyberspace. So publishers and authors have to deal and develop two activities that have never been too congenial to them, marketing and product innovation. The first thing to internalize and metabolize, however, is that Amazon is neither the enemy, nor the problem, nor part of the problem. As Bezos replies to those who criticize Amazon "the problem with publishers is not Amazon, it is the future".
As we will see in a future post, there are those who are already doing something for the future. And this is precisely the only positive news under the summer sun.
