On-demand book releases soar

Publishing information management service R.R. Bowker reports that a stunning total of 411,422 titles were released in the U.S. last year, a 39% increase over 2006. That is simply amazing. Print-on-demand and other short print-run releases fueled nearly all of the growth:

Bowker is projecting that U.S. title output in 2007 increased slightly to 276,649 new titles and editions, up from the 274,416 that were published in 2006.

While traditional book publishing was basically flat last year, there was a staggering rise in the reported number of “On Demand” and short-run books to 134,773, pushing the grand total for projected 2007 U.S. book output to 411,422 books.

Technology, by lowering barriers to entry, has made the publishing marketplace even more competitive. While there will always be big hits and bestsellers, this proliferation of content can only mean lower average sales and a greater focus on niches for publishers.

Authors in your office

The SF Chronicle reports that companies offering "enriched lifestyle" perks (such as Microsoft, Starbucks, and Google) have begun to host authors for speaking and book-selling events. This is an interesting manifestation of the long tail phenomenon.

Potteronomics not magical for booksellers

Reuters reports that stiff competition coupled with a generous 12 million copy print run means that Harry Potter and the Deathly Hallows could be a money-loser for many retailers. Besides explaining Potteronomics, the article provides a glimpse into the state of affairs facing booksellers in general:

Online retailer Amazon.com and Wal-Mart Stores Inc. have slashed nearly 50 percent off the book's $34.99 list price, forcing many independent booksellers to follow suit to stay competitive. Barnes & Noble Inc. and Borders Group Inc., the world's largest booksellers, are selling it at 40 percent off.

Such price cuts drive sales, but usually result in minimal profit margin, something Jefferies & Co analyst & Co. analyst Tim Allen said typically happens on every bestseller. "It's so discounted, there's minimal, if any, gain," Allen said. "Retailers try to make up the shortfall by marketing loyalty cards, which they hope will entice shoppers back into their store."

Industry data I've seen suggests that book retailers have it pretty bad, and the net margins (4-5%) for even the mega-chains are usually below those of publishers. Evidently it's difficult to make much money when you combine the high overhead of operating a store with the cost of providing choice in this "long tail" world. (See here and here for more on this topic.)

Google fights back against publishers' lawsuit

The WSJ reports Google is subpoenaing rivals Yahoo and Microsoft in an effort to defend its book scanning project from lawsuits by publishers and authors. While I understand the copyright concerns motivating the publishers in this matter, they're ultimately misguided -- this is nothing like the case against Napster by the record labels from a couple of years ago. Technology is changing the way people find information, and making a book's content available to online searches is a critical way to find readers and take advantage of the Long Tail phenomenon. Google is also implementing this program in a way that will make only portions of the text available, protecting publishers from lost sales. There are many decisions to criticize Google for, but this is not one of them.

Speaking of Google, the WSJ also reports they're in talks to buy YouTube, which was started by several of my fellow PayPal alumni. If the deal goes through, it would certainly be further leverage for Google in its escalating clash with the rest of Web...

Another PayPal alumni venture: YouTube

Earlier this week the WSJ ran a nice article on a couple of PayPal alumni -- Chad Hurley and Steve Chen -- who started the online video sharing company YouTube.

This venture is one to watch. I hate to compare it to MySpace (since everything in the new media gets compared to MySpace these days), but it seems merited. YouTube is wildly popular, viral, and another decentralized media platform that fits into Chris Anderson's "long tail" model. This kind of a platform is both a source of further media fragmentation, but at the same time it gives traditional content providers such as NBC an excellent platform for promoting their mass market offerings, as well.

Congrats, guys! Just be careful with those lawyers and regulators. (Radley Balko recounts how they tormented PayPal in his review of my book, The PayPal Wars.)

Murdoch: Tech is making publishers less relevant

Wired Magazine has just published an interesting article on News Corp's purchase of MySpace, using it as an analogy to discuss what's going on in the battle of new vs. old media. In it, Murdoch specifically states that my job is becoming less important: "Technology is shifting power away from the editors, the publishers, the establishment, the media elite. Now it’s the people who are taking control."

He's right. But also wrong.

Technology -- especially the Internet -- is empowering consumers by enhancing choice and lowering distribution costs. This gives rise to the "long tail" effect where the providers of content can no longer afford to focus on a handful of mass marketed hits, but instead must provide a greater diversity that caters to more targeted interests.

This isn't necessarily a bad thing for publishing, though. Contrary to what Murdoch implies, consumers have always had a say about what goes on in publishing via the marketplace; even in the days of mass marketing, publishers that were unable to meet their demands paid a financial price. But as technology changes the way the game is played, it enables savvy publishers who tap into hitherto unexplored markets to do quite well for themselves. Technology and the "long tail" are just as empowering for publishers as they are for our readers.