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The unit of appreciation and the unit of sale

September 26, 2010 by Mike Shatzkin 26 Comments

My professional background —  indeed, most of my life that isn’t family, friends, baseball, and politics — is trade publishing: the publishing that is intended for consumers and which got its name becaiuse it has been transacted primarily through “the trade”: bookstores.

But this past week I spent two full days with the Publisher Advisory Group for my client Copyright Clearance Center where trade is a small part of the total picture. In addition to the program, I had conversations there to prepare for a talk I’ve been asked to give at the IFRRO (International Federation of Reproduction Rights Organizations) meeting CCC is hosting at the end of October. So, while I always think about trade publishing, this week I’ve been doing it within the context of other publishing — indeed, in the context of the whole world of intellectual property, one that goes well beyond publishing and includes music and art and photography. These are businesses that don’t think about bookstores at all.

There was a point at the CCC meeting (at which people who work at The New York Times, the Chicago Tribune, and Associated Press were among the participants) where it was useful to offer my own articulation of why the problems caused by digital change for newspapers and magazines and record companies were so much more grave than they were for book publishers (so far.) It is simply stated.

For those businesses, the unit of appreciation does not match the unit of sale.

By that I mean that record companies sold us albums when what we wanted were songs. That’s what their economics were built on. The minute we could buy songs, it blew up their business model. Newspapers sell us the weather when what we want are the box scores, or the horoscopes when what we want are the comics. There are many books which will be read cover to cover. Newspapers and magazines are rarely read cover to cover. It was never thought of as wasteful or uneconomic that most people actually consumed a small percentage of every newspaper and magazine they bought. But it gets harder and harder to make that sale in a digital environment.

Of course, we have felt some impact of this effect in the book business. When you get beyond fiction and certain components of non-fiction (memoir, biography, some history and science), the books aren’t read cover to cover either. You usually use (what we now call) chunks of travel books, gardening books, cookbooks, computer books, crafts books. Even in the bookstore environment, sales of these books are suffering because a more granular offering is available online.

Grasping the significance of the “unit of appreciation, unit of sale” paradigm makes me believe that the “album” (do we still call it that?) of music, the newspaper, and the magazine are ultimately doomed as organizing principles. They were built to meet the requirements for content distribution in a world where physical practicalities had to be addressed. The Times couldn’t drop sports and economics on my doorstep and world affairs and theater reviews on yours. And The New Yorker couldn’t deliver Talk of the Town to me and the cartoons to you. The units of appreciation were far too granular to be delivered as units of sale.

It would be a reasonable guess that about half the units that bookstores sell are cover-to-cover reads, where the unit of sale equals the unit of appreciation.

Brainstorming with publishing colleagues about what I need to say at IFRRO gave me a new realization about what’s likely to happen with the half that’s not.

Exploring non-trade publishing — academic, professional, sci-tech, college texts, and schoolbook publishing — makes you realize everybody else is headed in the same direction. They’re anticipating that the “unit of appreciation” for their content will always be defined by the context of either (depending on the customer base) a “learning system” or a “workflow.” The content won’t be the point. Learning something or accomplishing something will be the point and content will be delivered within a framework designed to deliver on the objective.

Pretty much without exception, smart publishers in these non-trade areas see the day coming where controlling the platform is the key and the controller of the platform will be the gatekeeper for, if not the creator of, the content. Since that tracks pretty closely to my notions about “verticals”, it all seems very logical.

But if you think about it a little harder, peel back one more layer of the onion, you realize that much of the rest of our non cover-to-cover publishing — much of what we now call trade — will also be housed within platforms. There will be platforms providing workflow, and content in context, for chefs and knitters and gardeners. They too will be buying “solutions”, not “information”, and the material we now put in the books will be served up, as needed, inside the workflow. It won’t be so much about “units of appreciation” as “units of need” or “units of purpose” for the content because the entire system will be the unit of appreciation and the unit of sale.

That is: the instruction as to how to do a particular knitting stitch will pop up or be linked to the place in the “pattern” (or whatever digital delivery has made the pattern become). The explanation of how to broil or baste something will be linked to the direction to broil or baste something. It won’t be housed in a different physical volume; it won’t even be housed in a different program or file! The beginnings of this are already evident in some apps and enhanced ebooks.

The world in which we will be living this way and routinely getting content this way is not around the corner; it is a few years off. Not twenty, I don’t think; but maybe ten. We’ll be solidly in a cloud world by then with just about all the content we consume — music, movies, TV, and what we get from newspapers, magazines, and books — and all the software we use coming to our devices from remote servers rather than from a hard drive.

In that kind of a world, I think the idea of “owning” content will be nonsensical. Everything will be licensed. “Owning” is really a tangible object-based concept. We discover the reality of that whenever we try to apply the principles of first use — like lending and resale — to the digital things we “sell” today. And, when you think about it, purchasing access to whatever you want or need whenever you want or need it is the perfect matching of the unit of appreciation to the unit of sale.

If you’ll be at Frankfurt next week and you like talking about what I write about, please come by stand 8.0 L916 and if you can catch me when I’m not in a meeting (about half the time), please say hello. I am speaking twice at the Book Fair. On Wednesday, October 6 at 10:30 am, Mark Dressler will interview me about the 2011 Digital Book World Conference program.You’ll find us at the Sparks Stage, 8.0 P923. On Friday, October 8 at 12:30, I’ll be participating in a panel discussion on “The Ebook Business – Who’s in Control” which will take place in the “Entente” room in hall 4.C. I understand Victoria Barnsley of HarperCollins UK and Ronald Schild of the German ebook-selling consortium will be my partners for the conversation whose focus will apparently be on the big companies in the ebook space: Amazon, Apple, and Google. Maybe I’ll be a lonely voice saying “don’t forget that B&N and Kobo are very much here — which Google isn’t yet — that Blio and Copia are coming and that the collective power of yet-unaggregated sites and communities, which could be harnessed by yet another player, will be considerable.”

Filed Under: Digital Book World, eBooks, General Trade Publishing, Industry Events, Licensing and Rights, New Models, Publishing, Vertical Tagged With: Amazon, Apple, Associated Press, CCC, Chicago Tribune, Copyright Clearance Center, Frankfurt Book Fair, Google, Harper Collins UK, IFRRO, Mark Dressler, New York Times, Ronald Schild, Victoria Barnsley

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Mike Shatzkin

Mike Shatzkin is the Founder & CEO of The Idea Logical Company and a widely-acknowledged thought leader about digital change in the book publishing industry. Read more.

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