Harvard Business School Professor Clayton Christensen introduced the world to his analysis of technological changes in his seminal “The Innovator’s Dilemma,” where be coined the word (and idea) of “disruption.”
Long standing firms (incumbents) suddenly lose the power and dominance to disruptors who enter the market either at the low end, or in places that the incumbent does not serve; then the disruptor gets a toe-hold, and starts to move up the food chain where the profits are better.
It’s happening in publishing, just as it happened in automobiles when the Japanese entered the car market at the low end and pretty much overturned Detroit’s dominance.
Peter Drucker tells us about how products work in markets. First, there is the product itself; second, the channel of distribution; and third, the market itself (i.e., how the product is consumed). Managers can order a product change more easily than a distribution change or a market change.
Consider motion pictures, going back to the days of silent movies. It was a very cumbersome process—requiring consumers to go to a theater at set times to sit before a screen as a group and watch what the film maker had to show.
Today, while theaters are still a factor, movies are streamed directly to homes and watched commercial free. Odd, the place we see commercials now is in theaters. Moreover, we watch the films whenever we want.
At one time television almost drove movie theaters into oblivion. Television monetized itself based on the concept of the commercial—radio had been doing that for some time. Yet, with the advent of the DVR, such as TiVo, commercials could be skipped by a process of fast-forwarding.
And of course, Netflix takes it to a whole other level, not to mention series such as Game of Thrones, True Blood, and True Detectives.
Back to Drucker. The product has changed a bit, yet if someone from 1920 were to see a current movie, they’d pretty much get that that’s what it was…a movie.
But the channels of distribution, and how we consume the movie, have changed quite a bit and the old business models have been disrupted.
People got rich off those business models and anyone who’s seen Hollywood mansions knows that for a time the model worked well for the owners.
Publishing is going through much of the same—disruption.
Like the theaters of old, until recently books had to be “consumed” in special place—bookstores and libraries. With Amazon and Kindle and other electronic means, publishing is shaking out and the publishers largely do not like what is happening.
Detroit did not make long-term headway by pointing out how “crummy” the first Japanese cars were, though students of the early 1970s can go back and see there were all sorts of articles out there to prove just that.
However, with time, the Japanese automobile manufacturers came up-market all the way to the Lexus.
Publishers are trying to use the same argument about the e-press. “There are a lot of crummy books out there,” they say, and they’d be right, but anyone who’s spent any time at an antiquarian books store will probably say that it has always been so.
It’s not whether a book is good or bad, but how does it navigate the channels of distribution and how is it consumed? The existing channels are being disrupted, just like movie theaters went to their nadir as television made distributed home-viewing more popular than centralized theater-viewing. Everyone’s said, “I’ll wait for it to come out on DVD,” or is that Blu-ray or Netflix now?
At bottom, the artist (the writer) has not changed, though we’ve given up our candle-lit rooms with inkwells and quills for the halo light of laptops with word processors integrated with grammar and spellcheckers, dictionaries, and thesauruses.
Was it Marx who said that the Workers would do well to seize the means of production? Those of us who were early adopters of word processors, decades ago, whether we knew it or not, were doing exactly that—seizing the means of production.
But the other part of equation—distribution and consumption—are now being disrupted as other industries were in other eras.
We are now seizing the means of distribution and consumption, and like Detroit, there may be no way to stop this.
Indeed, Elvis has left the building.