Thu

May 18
2006

Tim O'Reilly

Tim O'Reilly

Publisher, be very, very afraid?

I just saw a printed copy of the New York Times Magazine issue that contains Kevin Kelly's brilliant essay What Will Happen To Books? (It's called "Scan This Book!" in the online version.) Kevin did an amazing job of bringing the potential of the universal electronic library to life, and highlighting both the issues and the opportunities. So I was really disgusted to see the cover treatment of the article bearing the subtitle, "Reader, take heart! (Publisher, be very, very afraid.)"

This is yellow journalism, pandering to fear of the future. Publishers need to get with the opportunity, not be afraid of it! As I've argued previously, in essays like Piracy is Progressive Taxation, the role of "publishing" is rediscovered in each new medium after a period in which everyone argues that the playing field has been leveled once and for all. I was writing about music and film being threatened by peer-to-peer networks, but the same argument applies to books:

The music and film industries like to suggest that file sharing networks will destroy their industries.

Those who make this argument completely fail to understand the nature of publishing. Publishing is not a role that will be undone by any new technology, since its existence is mandated by mathematics. Millions of buyers and millions of sellers cannot find one another without one or more middlemen who, like a kind of step-down transformer, segment the market into more manageable pieces. In fact, there is usually a rich ecology of middlemen. Publishers aggregate authors for retailers. Retailers aggregate customers for publishers. Wholesalers aggregate small publishers for retailers and small retailers for publishers. Specialty distributors find ways into non-standard channels.

Those of us who watched the rise of the Web as a new medium for publishing have seen this ecology evolve within less than a decade. In the Web's early days, rhetoric claimed that we faced an age of disintermediation, that everyone could be his or her own publisher. But before long, individual web site owners were paying others to help them increase their visibility in Yahoo!, Google, and other search engines (the equivalent of Barnes & Noble and Borders for the Web), and Web authors were happily writing for [publishers] sites like AOL and MSN, or on the technology side, Cnet, Slashdot, O'Reilly Network, and other Web publishers. Meanwhile, authors from Matt Drudge to Dave Winer and Cory Doctorow made their names by publishing for the new medium.

As Jared Diamond points out in his book Guns, Germs, and Steel, mathematics is behind the rise of all complex social organization.

There is nothing in technology that changes the fundamental dynamic by which millions of potentially fungible products reach millions of potential consumers. The means by which aggregation and selection are made may change with technology, but the need for aggregation and selection will not. Google's use of implicit peer recommendation in its page rankings plays much the same role as the large retailers' use of detailed sell-through data to help them select their offerings.

The question before us is not whether technologies such as peer-to-peer file sharing will undermine the role of the creative artist or the publisher, but how creative artists can leverage new technologies to increase the visibility of their work. For publishers, the question is whether they will understand how to perform their role in the new medium before someone else does. Publishing is an ecological niche; new publishers will rush in to fill it if the old ones fail to do so.

In the five years since I wrote that essay, things are turning out much as I predicted. iTunes is well on its way to becoming the Barnes & Noble of online music, and may soon become a next generation music publisher as well, as I predict that individual artists will soon be seeking to get their work into iTunes before they worry about a deal with an old fashioned record label. Meanwhile, blogging, another "bottom up" medium touted for its opportunities to throw off the shackles of publishers, has found many of the top performing weblogs part of next generation blog publishing companies like Weblogs Inc or Gawker Media, or affiliating with a marketing keiretsu like John Battelle's FM Publishing. (Disclosure: I am an investor in FM.)

Let's be clear: Kevin doesn't make the arguments that publishers are dead -- I'm just complaining about the cover treatment of the article. In fact, Kevin gives a compelling description of the new kinds of curation that publishers will need to perform. There is a lot to learn in the new world, but the biggest fear that publishers should be thinking about is the fear that they will be displaced by new publishers who are better at mastering the rules of business than they are.

The one place where I do think Kevin waxed a little too enthusiastic is in his vision of how books can be linked and annotated in the library of the future. We aren't there yet. The libraries of scanned books that are being built right now are for the most part read-only. People can link to them, but not from them. People can potentially create active reading lists, but for now, they can't add to the works themselves. That still remains an exercise for the future, and one of the big opportunities for publishers who make that level of reader involvement with the work possible through a more open implementation, or through frameworks that provide additional layers on top of static texts. (Google Earth or any other GIS system is a good model. You can think of the original work as the base layer, just like basic topology of the earth is the base layer on which you can organize countless layers of additional data.)


tags: web 2.0  | comments: 12   | Sphere It
submit:

 
Previous  |  Next

0 TrackBacks

TrackBack URL for this entry: http://blogs.oreilly.com/cgi-bin/mt/mt-t.cgi/4672

Comments: 12

  Kevin Farnham [05.18.06 11:31 AM]

An early part of MySpace.com's success was that it offered all members an opportunity to post 3 of their own songs as MP3's that could be streamed by visitors to their MySpace page. Today's MySpace has two types of account: Band accounts (where you can upload songs) and standard accounts (where you can't upload songs, but you can select a MySpace band's song to play as the background music for your MySpace page).

Independent Artists Company (independentartists.com) is an all-music site for independent / new musicians. Pete Townsend (of the Who) is very active there. My daughter's MySpace band site and her IAC site have given her an audience of objective observers who appreciate her work. These people also visit her own web site. Between the three sites, she has established a little "professional network" centered on her music. A high school student with literally an international audience.

Increasing visibility of your work, awareness that it exists, is indeed the crucial thing for artists, authors, all those who creatively produce on an individual level.

Your 2002 assessment does seem to be coming true.

Meanwhile -- did you see the survey of Media that was in the Economist in late April? It talked a lot about blogs and the end of the age of "Mass Media" (which the authors say peaked in the 1950s as almost every American huddled around their black and white TV set watching 'I Love Lucy'). Some interesting commentary related to the future of publishing...

  Thomas Lord [05.18.06 11:42 AM]

Thesis: The entire publication industry, all media, will be reduced to four businesses -- retail, reviewers, librarians, and content creators. Primary commercial revenue sources will be from advertising and regionally limited public performance (theaters, radio broadcasts, one-off presses, juke-boxes, etc) -- and these will be the only "commercial use" rights that survive a rationalization of copyright law. Finally, on a cultural level, our notion of an authorial work will revert to something that more closely resembles the ancient model rather than the commodity model we see today.

I take "pro", on this question and here is how I got there:

About linked and annotated libraries...

We are there in terms of crude technology that can do it and we are at most a few years away from technology that can do it well, in decentralized form. It is only and exactly copyright law that puts a break on this happening more rapidly.

So what? Well, consider Michael Tiemann's "Metcalf's law" economic analysis of FLOSS -- very relevant, I think, to your own view of Web 2.0: "The value of a network is proportionate to the square of the number of users." The potential value, therefore, of the cross-linked, universally annotatable library is vast. Is copyright law enough to lead us to resist that potential value? I would think not -- rather, the assumption of such a library should be a dominant factor in planning for the next few years. (I say that copyright law is not strong enough here because it is unenforcable beyond a certain boundary and, if rivals outside of that boundary begin to realize the value of the hyper-participatory-library, those inside the boundary will have no choice but to adapt by emulation.)

Simultaneously, the need for physically pressed forms of works is diminishing and the cost of one-off production of pressed works keeps falling. Traditional presses, at least, look to become dinosaurs.

All of this puts the relationship between retailers and wholesalers in an interesting position. If physical production becomes an on-demand, one-off service, should not retailers bypass wholesalers? Or at least demand a more precisely focussed service from them? And what would that other service be? Review. Retailers are defined, more or less, by their scarce resource of "shelf space" (real or virtual) to which they congregate customers. How best to fill that shelf space? If all works are "in the big library" and equally accessible, there is no need for channel relationships with wholesalers. Rather, each retailer will focus purely on editorial selection of her offerings for which purpose, preferential relationships with reviewers may be advantageous. Because of the lowered transaction costs of receiving digital content, retailers won't need a cash register for customers leaving the store. Rather, they will have to charge for admission and perhaps supplement their income by other means such as advertising.

Finite "shelf space" and aggregated consumers can be designed to optimize for the revenue from paying customers and supplementary income, or they can be designed to optimize for accessibility by people who share a topic interest and intellectual orientation. There is a social and practical motivation to sustain human cataloging of materials as not-for-profit or cost-center resources. Librarians will rely on reviewers and direct relationships with content creators to select materials to archive and catalog.

Very few forms of use of works, in the hyper-library, will be protectable by copyright as a practical and civil liberties matter. Some uses, however, can be strongly protected. A movie theater can easily be held accountable for the commercial use of works it displays. An advertiser, even on-line, can reasonably be held to account on which works he attaches his ads to. Even a retailer, creating a one-off pressing of some work (or aggregate or derived work) can be expected to track which copyrighted works are being reduced to physical form. We can generally group these under the headings of public performance and commercial use. And there, finally, is the well-spring of revenues to ultimately be directed in the direction of content creators or their copyright assignees.

On the cultural level, the hyper-library and network effects suggest that no work is sacred and that every presentation is customized (although some classic presentations may turn out to be most viewed -- presentations and customizations are copyrightable works on their own). For example, I may want a copy of Michel Foucault's "The Order of Things: An Archaeology of the Human Sciences" but not an ordinary copy -- I want one with the marginalia of my favorite three commentators. Or, I might want a copy of William S. Burrough's "The Place of Dead Roads" but peppered with a series of erotic images of 19th century frontier life captured as stills from a movie by my favorite Japanese film director. Being pleased with these purchases of pressed works, I might myself become a reviewer and offer the instructions for making them on my web site. Of the ad revenue associated with these works on my site, a portion goes to the creator estates in question. If a third party themselves ask for a pressing, I and the creators get portions of that. Meanwhile, the question of the authentic work becomes less important -- a question of forensics, not commodity. Is my offering the product Foucault created? Something else? Some hybrid? Does it matter, and how?

-t

  Chris Matthieu [05.18.06 01:27 PM]

Numly (http://numly.com) was created with this philosphy (or copyright 2.0) in mind. With tools such as blogging engines, Apple's Garage Band, Photoshop, and others, the number of authors/artists and publishers seem to be increasing exponentially and ultimately could be outpacing consumers. The problem exists today where today's copyright processes cannot keep up with the pace of real-time publishing.

What about the ability to assign each copy of a digital asset a unique identifier to licesee tracking? I call this concept simple DRM where content such as e-books, PDFs, music, etc. could invoke a web service to dynamically assign a DRM number to the digital copy of media at the time of download. That number would reflect the date and time of download (or purchase), the licensee information, and the copyright use of the media. I call this simple DRM.

Numly.com assigns Numly Numbers (Electronic Serial Numbers / ESNs) for all things digital. These unique identifiers provide digital rights management capabilities as well as third-party, non-repudiation measures for proof of copyright via real-time verifications. Numly Numbers are simple to generate and act as an electronic timestamp for copyright purposes. They also allow you to track content viewership, monitor ratings, and can be used as permalinks.

Let me know what you think!

Chris Matthieu, founder
Numly.com
chris at numly.com

  Anjan Bacchu [05.19.06 12:08 AM]

hi tim,

There's more of this stuff spreading.

I saw this month's DDJ coming with "Ruby on Rails -- Java's successor.

I thought that DDJ was above such bullshit -- how can a web framework be a successor to a general purpose programming language ?

BR,

~A

  Eric [05.19.06 05:55 AM]

Publishers are afraid. I don't think anyone really believes that publishers will die out... rather, their current business models will go the way of the dodo. These technologies are deeply disruptive to the marketplace. Google Book Search, P2P, digital distribution changes every aspect of the business model - the way it's published, the way it's marketed, the way consumers consume it and the way authors market themselves.

For an entrenched businessman, this is the most frightening thing imaginable. So the predictable, natural, wrong reaction of many is to try to force a square peg into a round hole and get the new technologies to behave like the old ones, at this point primarily through draconian DRM schemes.

  Stephen [05.19.06 07:32 AM]

Tim


The 2 models at the moment are, monopoly and giveaway.


Both depend on the responsible actions of people.
To misquote, most are responsible some of the time, some even all the time.


Every one who has worked for a living knows that you must compensate others for doing work. Very few would begrudge the IDEA of protecting that right in law, and so we pay the taxes to enforce the Monopoly.


Even fewer actually donate to the giveaway approach, mostly because of the extra effort involved but also because there is no pressure either positive or negative.


There are two parts to compensation, basic and incentive. Basic keeps you alive long enough to prosper from the incentive. Of course you should only get incentive if it is actually useful or enhancing to others.


So can we formulate a scheme to handle this?. I have made a start.


No I'm not proposing a subsidy scheme. Part of the proposal is that there is graduated protection. Exchanging decreased risk to basic but reduced incentive, for VERY strong protection till basic and spreading gain during possible incentive.


Tim what it would need from you and other "practical idealists" would be to act as a cross between midwife, ombudsmen and Guardian angel.


I assume you will want more details published, but are you willing ?


I am willing to set up first a concept system to experiment with and a model system to deploy it. All web 2.0 of course, though I must warn you I have a day job.

I apologise for not contacting you privately, but I believe this must be a very public endeavour.


Stephen

  Tim O'Reilly [05.19.06 10:18 AM]

Tom -- a couple of responses:

1. I totally agree about the network effects of the online library. Kevin did a great writeup on the subject. The only point was that the article implied that what Google, Amazon et al were doing today were steps in that direction. But they aren't really, because they are just creating scanned images of pages, which makes a lot of the things that Kevin waxed eloquent about a lot further off than they sounded.

2. You say "All of this puts the relationship between retailers and wholesalers in an interesting position. If physical production becomes an on-demand, one-off service, should not retailers bypass wholesalers?" I completely disagree. There are already new wholesalers for the digital files that power print-on-demand. Think about it: where does the POD engine get its files? Will it be from hundreds of thousands of individual sites, or from a central known source? This is why the diverse web led to the "wholesalers" like Yahoo! and Google, why Napster led inevitably to iTunes (and even there, Napster was already set up to become a wholesaler.) LightningSource already plays that role for print on demand. (See CEO Kirby Best's recent presentation: http://www.bisg.org/docs/MIP06_Best.pdf.) And that's what Google, Amazon, and Microsoft are racing to become for the eBook world. Except that they want to collapse the wholesale and retail role whenever possible, and collect both slices.

3. Finally, I disagree with your thesis: "Thesis: The entire publication industry, all media, will be reduced to four businesses -- retail, reviewers, librarians, and content creators." Ultimately, if any content industry is to prosper, it will have a *rich* ecology of roles, and its success will be proportional to that richness. Look at the web, and how many more roles there are today than there were in 1992 -- the whole SEO industry, for example. Look at any mature content industry, and you'll find people who've found a way to make money filling a unique role. Just like a natural ecology, an economy abhors a vacuum.

  Tim O'Reilly [05.19.06 10:20 AM]

Eric -- my point was not that publishers aren't afraid, it was that Kevin's article never made that point, and the magazine cover used the sensational hook just to pander to the fear factor.

  Tim O'Reilly [05.19.06 10:24 AM]

Stephen, I don't agree with your premise that there are only two copyright models, monopoly and giveaway. There is plenty of flexibility in current models (except around the term of copyright, which I think is way too long.) And there are lots of hacks as well. You can look at the GPL as a copyright hack, for example, and Larry Wall's artistic license as a hack on that hack. And as for the issue of graduated rights, Creative Commons has already solved the problem that (I think) you're suggesting, unless there's something I'm misunderstanding.

  umair [05.19.06 01:15 PM]

Hey Tim,

You know, the results of your and KK's argument is that a single company company profits: Google.

History tells us monopolists don't do nice things - they make life very nasty for consumers, just like MS, Standard Oil, and the telcos did

Even if the company in question is "not evil", they will possess enormous market power, which always gives them the option to be incredibly evil.

So I think this argument has a huge, enormous, massive flaw the size of Jupiter which you guys should talk about :)

  Kevin Kelly [05.23.06 11:25 AM]

Tim,

You are right. I really worked hard against the subtitling on my piece. The entire editorial process at the Times Magazine was superb, and much nicer for the author than at Wired. I have nothing but praise for their work in improving the article -- except for the subtitles. I rebeled against them because I felt that I was bending over backwards to be both fair to publishers (and not BLAMING them), and because I certainly don't think they will go extinct. This is indeed a time of incredible opportunity for publishers and broadcasters and labels. I didn't labor that point in the piece because I've made it so many times elsewhere and because the piece was about the future of books and libraries and not the future of publishing. Sadly the attention given to the publishers in the subtitles *does* bring a lot of press attention, but it also distorts the point of the article -- which is about the future of the book. And yes, Tim, books don't yet have the amount of linking, activity, etc. that I talk about, but that's where they are headed.

Post A Comment:

 (please be patient, comments may take awhile to post)






Type the characters you see in the picture above.

RECOMMENDED FOR YOU

RECENT COMMENTS