The digitization of the music industry vs. the book world: the ultimate overview (part III)

The digitization of the music industry vs. the book world: the ultimate overview (part III)

Two days ago we did a brief history on the digitization of the music industry, yesterday the digitization of the book world. Today: the similarities between the two industries, tomorrow the differences. Together they form a four-part series written by Timo Boezeman and Niels Aalberts, with important additions and nuances by Erwin Blom, Eric Rigters and Jelte Nieuwenhuis. All work(ed) in book world and/or music industry

• The first similarity is the most visible and persistent: both the book world and music industry were slow in embracing the digitization. This is a traditional process in a changing world: saying farewell to an old business model, without the certainty of a successful new one, first leads to denial and then to a counter-reaction. In both the music industry and the book world more or less the same happens: catch the offenders (litigation, personally or through bodies such as BREIN - the Dutch FACT/MPAA/RIAA), protect their products (DRM) or even accommodate them with spyware. Seen from the point of view of the industry this is understandable, but from a distance, it reveals a complete industry hunting on its own, often best, customers instead of adapting their products and services to new the technical possibilities and the thereby changing customer needs and consumption patterns. The result: customers 'get used' to illegal versions, get irritated, have too few alternatives and are becoming less willing (or simply don’t have the chance) to pay for music or books.

• Also, big industries turn out to be slow, difficult or not able to collectively respond to the changed circumstances. Napster, Kazaa and others show the world around 1997 what is technically possible (albeit illegally). And the consumer shows its need for convenience and completeness in the offering, but has to wait for nearly 10 years before a similar legal alternative appears on the market (in 2006, Spotify). It is the classic the-chicken-or-the-egg story: should illegal opportunities be thwarted and punished first, before they can develop legally (more or less the view of bodies like BREIN and thus the industry that it finances), or should licit solutions be developed in such a way that they are a serious alternative to illegal versions?

• Digitization makes the production process and therefore the product cheaper. Recording an album required tons of money for decades, amounts of money which made an advance of and a contract with a record company necessary. Recordings of a sufficient high quality are now, under certain conditions, possible for only a fraction of those expenses. Naturally, talent, songs, ideas and experiences with this new technology is a prerequisite, but recording and producing music are now accessible to a much larger number of musicians. And also writers can publish their own work, publish digital and reach the public on their own strength. Blogging is free and high-speed Internet is everywhere. Though, it needs to be said that reaching an audience isn’t an automatism to anyone, and writing is something completely different as selling. For a wide breakthrough with a large public, media and other partners are often still necessary. But not always, see for instance Amanda Hocking and John Locke.

• Another similarity is the relatively large role of the middlemen that, under pressure of the digitization, rapidly diminishes. Because of the Internet and especially social media, creator (writer, musician) and user (reader, listener, fan) are able to find each other more easily. Record companies and publishing houses roughly have four roles:

1. Scouting and developing talent (artist & repertoire (A&R) in the music industry; selection, acquisition and editing of the book world; research and development (R&D) in other industries)
2. Financing recordings or paying an advance to fund recordings or the production time for writing a book
3. Distribution
4. Marketing & promotion

If the digitization continues, and it will, fibreglass replaces the moving trucks with goods and thus the role of the physical distributor. And thanks to online media, an author or musician is able to find and have one-on-one contact with the reader or listener, and (with a good and remarkable product for the audience!) much of the marketing and promotion will primarily go through social media. The role of industry, record label and publisher, will shift more towards scouting and developing talent at a sharper price than before. The roles of finance, distribution, marketing and promotion will not disappear, but diminish: the creator (musician, author) is increasingly able to do it himself and only pays for the services he uses. Publisher and record company are not finished, but will (in some cases) appear on stage later then before and determine less than before in the route from creator to recipient.

Did we forget something? Do you see more similarities between the music industry and book world? Please leaves them in the comments. Tomorrow, in the end of this series, the differences between the two industries.