Monday, 21 March 2011

Harper Collins vs the Real World

We're working on a really exciting e-book project at the moment, so I've been spending time digging around the e-book world seeing what's going on.

The other week Harper Collins decided that e-books sold to libraries could only be borrowed 26 times. Then they would expire. Give up the digital ghost. Cease to be bits.

It sounded bizarre - 26 times? Why not 25. Or 100. It turns out 26 is the amount of times a paperback would be lent before it became too shoddy and had to be replaced.


I'm getting that deja vu feeling all over again. HC is trying to map an old economy model on to a new economy business. And guess what will happen - exactly what happened to the music industry. When Napster and others came along the market spoke loud and clear to the music labels and stores: "We love this music, but we believe, with the new models of distribution, lack of packaging and retailer markup, we really shouldn't be paying £14 for an album any more. You're choosing to ignore what the market is telling you, so we will take matters in to our own hands. Goodbye Tower Records, hello BitTorrent". The first to go were the stores (Tower, HMV, Our Price, Virgin) labels had to reinvent themselves as 360 degree merchandising machines.

The first company (Apple) to come back with a sensible counter argument ("OK, we'll reduce the price just a bit, but we'll make it super-easy to get what you want legally") won the day. They've now sold 12 billion songs, and over 10 billion apps (an unforeseen bonus with the ITunes model).

The second company to come back with a sensible argument, Spotify ("All you can eat - $10 a month), just passed 1m paying customers.

When you try to shore up an old economy model in a new economy, you're just delaying the inevitable. In a mirror of the record industry, bookstores are now closing with Borders filing for chapter 11 the other week.

Harper Collins can try this on for a while, but the market has spoken. And I'm not sure they're listening.

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