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

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

The end of this four-part series is really why it all started: the differences between the digitization of the music industry and the world of books. This series is beautifully summed up in one big illustration, made by Esther Gons (@wilg). Click for big. Previously Timo Boezeman and Niels Aalberts (with important additions and nuances by Erwin Blom, Eric Rigters and Jelte Nieuwenhuis) wrote about the similarities, gave a brief history on the digitization in the world of books and the digital history of the music industry. Today: the main thing. A comprehensive final episode therefore.

Way of consuming

The main difference between the two worlds is perhaps the way of consuming. Where music is almost always consumed time and again, for the average book this is usually only once.

(Change of) revenue streams
Another distinctive difference is the way the two industries create their revenues. While the music industry managed to compensate the decline in music sales (physical) with the income from performances and concerts, this is hardly an option for the average author. Of course, not every artist or band is good in playing their music live, or able to fill a music hall on a regular basis, but on average you could say that they are better in this than an author giving a lecture and thereby earning a substantial part of his income. Another important difference: the (intermediate) parties that (also) benefit from these revenues differentiate. The shift from media to gigs and concerts, means that record companies are partly to be put offside. Their main source of income (LP’s, cassettes, CD’s) gets smaller and smaller, while wages and ticket prices are going up, but basically they are not benefitting from this (at least not directly). In the modern contracts (so-called 360˚-deals, shared revenue deals or joint ventures of performers with label(s) and/or management) however, there is often included a solution for this: labels and record companies are treated as parties who, through employment and investment, help building the ‘brand’ of the artist, thus creating value or increasing it, and in return profit from other revenue streams: wages, (publishing) rights, merchandise sales, sponsorship, music in commercials, movies, TV shows, games, etc. Nowadays, contracts in the music industry don’t get signed if there are not one or more of these other revenue streams included as a part of the deal.

Price and market system
Much more than in the music industry, the book world has a tradition in market corrections, or market control through policies like a law on fixed book prices (physical books may only be sold for the price the publisher has set, this applies in for instance The Netherlands) and by subsidizing authors. This results in the (often incorrect) idea, that (pop) music, unlike literature, is low (mass) culture, and can save themselves. Therefore, you cannot say there is a free market system in the book world, at least not with paper books. With e-books there is no fixed pricing and more competition is a possibility. However, almost no one dares to change the price. Everyone seems to look at each other and by that keeping the price high. An unwritten standard for the price of e-books is 80% of the paper price (in The Netherlands).

From a decline in sales towards growth 
Meanwhile, there is a trend in the U.S. to be observed where a number of publishers are able to bend their declining revenue into an upward trend. This increase in revenue is due to the rapidly growing sales of e-books. Where Amazon made it easier to obtain printed books (the ratio of bookstores per capita in the U.S. is much lower than for instance in the Netherlands, and online sales was therefore an outcome), with e-books this effect is even larger. And not only for sales within their own borders, but also beyond. A large part of the world’s population reads English, and with the advent of Internet and digital products, the borders in the book world disappear as well. Something the bigger retailers (Apple’s iBooks, Amazon, Google, Kobo) successfully managed to profit from, and where the publishers get the advantage of as well. This is trend will be a lot harder to achieve for other languages (like Dutch). Of course there are Dutch people who live and/or want to consume abroad, but that is almost nothing compared to the English territory. Conversely, it would be an interesting option for Dutch publishers and authors (or other languages) to self-publish books in English, and sell them worldwide. 

In the music industry the digital sales and revenues from streaming services still don’t make up for the halved physical sales of the last 10 years. And The Netherlands is relatively a little further behind on the other territories. 

Ideal marketing channel
Another big difference between books and music, is that music has the ideal marketing channel that the books miss: radio. Radio acts as a major trigger for content promotion. And although the focus shifts, especially under young people, going more and more from radio to internet, smartphones and apps, even these new 2.0 ‘radio stations’ (podcasts, YouTube,, 22tracks, MixCloud, Shuffler.FM and many more) have already proven their impact as a promotional tool and their right to exist. One of the most important marketing channels for publishers and authors – the newspapers and their book reviews and attachments – are under the influence of digitization themselves. Which for them is already difficult enough...

Unlike with listening to music, whilst reading a continuous physical contact with the carrier is required (except for audio books). This makes the emotional bond between consumers and carriers perhaps greater with readers than listeners. It could be a reason why the paper book might have a longer life span (in any market share) than vinyl and CD. Although time will tell. The downside of this benefit for books however, could be a benefit for music: modern devices to consume books with, from e-reader to tablet, have more capabilities than just reading. Where the e-reader is still limited in this (slimmed internet, listening to music and showing photos), the tablet makes it into a whole new ball game. And that is where the book gets in trouble. For instance: you are reading a book and suddenly receive a notification that new mail has arrived. Or, whether you're just getting started in the book, or not yet entirely drawn into the story, you could come to think: I can also continue with Angry Birds. Or watch a movie, or surf the Internet. Temptations which affect music much less, because it is consumed in a different behaviour. You can listen to music while you are surfing on the Internet, reading or writing an email, reading a book or while you are working. But you can only read books if you are reading the book.

Times They Are a Changin' 
Another major difference between the two worlds, and perhaps the greatest and most important, has nothing to do with the products, the manner of consumption or the ability to give performances. It's time. When music transformed to digital, the Internet from dial-up modem to broadband and the first P2P networks emerged, it was all still pretty new and calculable. The noise from the industry was no less but, in retrospect, the direct impact at that time was much, much smaller. Since then, nearly 15 years later, the world has changed so much that you could say the digital ecosystem has grown up as well. From P2P programs to torrent search engines, from newsgroups to middle-aged women exchanging CD-ROM’s with e-books (knowing exactly which file to use or not). The infrastructure is now there and the consumer know how to find its way. And that means, that if you put a digital book in that full-grown ecosystem in this day and age, there is only one more thing that is needed: the urge for the consumer to want it. And that's a huge (negative) difference the book world has to contend with. You could say, that all the developments the music industry experienced, and still does, the book world experiences it now in a tempo that is 3 to 4 times as high. Where the music industry needed almost 10 years to come up with Spotify (a streaming service, going from ownership to access), the book world is there already (see 24Symbols and Amazon), barely four years after the introduction of the e-book in the U.S.

The, for now, final difference. One of the most controversial implications of digitization is to prosecute illegal providers of content, pirates. Metallica's lawsuit against Napster (2000) and many lawsuits after that, earned the music industry a reputation wanting to protect their content at all costs. This has not yielded into much success (see the two books we mentioned before), although some people want you to believe otherwise. Most e-books are still ‘protected’ with DRM, although a slow shift towards social DRM (also called watermarking) or no DRM at all can be seen at this moment. The music industry stopped with DRM several years ago. For a reason.

And perhaps that is an appropriate closing of this series. The immediate cause: there are certainly differences to be seen, but also many similarities between what happened to the music industry and what is happening to the book world now because of the digitization. These developments are going faster than ever. Let's hope the book world learns from the mistakes of the past, in their own and for a large part similar industry. Hopefully this series gives a small but constructive contribution to this. Thanks to everyone for their contributions and the positive feedback (here, by mail and on Twitter). Did we forget something? Do you see more differences or similarities between the digitization of the music industry and book world? Leave them in the comments.