Internet and Books (2) the Supply for Content Exceeds the Demand

Sunday, December 11, 2005

Internet and Books (2) the Supply for Content Exceeds the Demand

When supply increases and demand stays the same, the price is sure to fall.

[+] All creative works are depreciating.

In fact, all the publishers and authors neglect one thing: the popularity of Internet has lowered the entry barrier to publishing, which means creative works are no longer valued as much as before. This is a cruel fact, as well as the origin of all disputes.

In the startup phase, many websites started with provision of free content as an experiment with new business model, and as strategy to quickly expand their user bases. However, free content can be produced by not only commercial websites but practically everyone.

The rise of Blog is an obvious example, which leads to the popularity of online writing. As tools for online publishing become more user-friendly, those who know how to type, to post a picture, and to write all go online. Writing has become a popular movement.

We can foresee that these small individual publishers will all own a small group of loyal readers and a certain degree of publicity. Yet as the Internet is a kind of a distributed medium, it is not that easy for an author to develop a large readership.

Why? Because when you enter a keyword in the search engine, you'll find loads of such small online publishers/creative workers. Back to the basics of supply and demand: when supply increases and demand stays the same, the price is sure to fall.

[+] the depreciation and dissolution of knowledge

The first (and very likely the last) eBook of the horror writer Stephen King is priced at USD 2.5, and his fans rushed for this eBook. But if we go search the Net, we'll possibly find tons of Bloggers who are writing on similar fields.

We need to learn to understand that, when everybody can be an author, the knowledge is then liberated. While we enjoy the fruit of liberation, we have to accept that the price of knowledge will continue to drop with no rolling back.

This is true for the creation of texts, and of music and video works sooner or later.

In addition to depreciation, there is also the dissolution of knowledge. When we search the Net, what we will get is usually many many one-sided information. Under the influence of fast changing living styles, we tend to look for pieces of convenient information instead of lengthy solid one that is hard to digest.

So, it is not to our surprise that a major part of works published online are those of a smaller size. Books are to be disintegrated and sold in several separate parts. The most striking example is Amazon, which breaks books into chapters and has them sold in the electronic form at a lower price.

It surely does not mean that all kinds of creative works will become valueless ever since. More possibly the Internet will cause an effect of polarization. At one end is most general content, which is to be liberated and becomes free of charge. At the other end is some niche content, which is able to gain popularity in a short time and brings in revenues from a large sales volume with a small margin. There will be people who are willing to pay.

[+] Popular lightweight online creation rocks the foundation of physical publishing

There are loads of writers of all kinds. They are Pro Amateurs. They have full jobs during daytime, and they are online writers in their professional or amateur areas. They own a small readership, and sometimes there are exchanges of various natures among these online writers.

Some of them may suddenly become a "Master for One Day." A Master for One Day refers to a person who, in some particular situations, becomes the focus of attention for her/his work (be it a novel, a commentary or music) online all of a sudden. But when attention disperses, everything returns to normal. And this is online creation.

As long as there are these people continuing to create online, your incentive to buy a hardcopy of books in your daily life will remain low. Ten years ago I was a person who needed to read a dozen of magazines every month, and now I can find practically all information on the Net. The time for magazine publishers will only get harder.

Putting digitized library collections online is only to recognize the popularization of knowledge of the past. The Internet has long become the biggest library for all, and with the advancement of search technology, people can easily access the information they need.

Existing copyrights can protect the intellectual properties of the old days, but it runs short of ways in dealing with the liberating online publishing. Copyright owners may be able to accuse Google in the court, but they can never prevent people from creating their own works, and this is exactly what rocks the foundation: the jobs of book authors have been taken away since long time ago.

[+] Advertising model is the ultimate model

When the production and distribution of knowledge gets more common, free offering becomes inevitable. At the moment, it appears that the only way to reward to the authors is through advertising income. As Google has introduced keyword advertisements to the world's biggest library (the Internet!), it can surely do the same in the case of traditional libraries.

For a product that forgoes the right to direct sales and turns to sources of indirect incomes (like advertising income), it means that the price of this product has reached at the lowest possible level. The massive content and creative works on the Net will sooner or later drives the price to such a level; it is also true for physical publishing.

So, at the end the point is whether there is an effective way to allow creators some reasonable reward for their works. Like what I've argued in my previous article on Blog: Bloggers are producers, not consumers. This is something we should respect.

The practice "content for free, and advertisements for sale" has been molded, and those rules that used to work on the Internet only have begun to shake the physical world. What is impacted is not only the publishing business but also the software industry (even Microsoft will soon provide software free of charge and make money from advertisements). No one can argue that all content has a price any more. ( 2005/12/11 - By Digitalwall.com - Way to China Internet/Telecom )