E-Publishing Business Model

Publishing and Business Plans for the Age of Digital Books
“Microsoft Gives up Scan Plan” Library Journal July 2008, p. 16

In a very short feature within Library Journal last year, we see that Microsoft has decided to drop a plan to digitize books and scholarly articles. Microsoft explained saying: “We believe the next generation of search is about the development of an underlying sustainable business model for the search engine, consumer, and content partner.”

"Sustainable business model"--get that?

Microsoft suggests in this decision to drop out of the e-book business--a decision made and reported a year ago--and they tell us that the traditional costs of book publishing are faltering, that we do not have a model to replace this traditional business structure. Microsoft suggests that the traditional infrastructure for the creation and dissemination of knowledge and books is obsolete. Microsoft also suggests that a new model is yet to have been built.

This is a fascinating admission from one of the most lucrative organizations in history. And prescient given the news about newspapers that we have had in the last six months. I want to draw an analogy here, once again. The problem in the newspaper industry since the internet is that newspapers no longer have a sustainable business model. The cost of reporting was traditionally borne somewhat by advertising and somewhat by readership. Today, both readership and advertising revenues are way down. We do not have a way to pay for reporting in our e-world. This is a crisis that cuts to the heart of a democratic society.

Trade publishing houses are trying to hang on to the remnants of the old business model system even as they are moving into e-books. For example, over and over again we see reported that one of the stumbling blocks for libraries with e-books is that publishing houses want licenses to restrict the use of the e-book, allowing libraries only one reader for each e-book at a time, as if it were a print book.

While I am sympathetic with the financial difficulties of publishing houses, this seems an odd and untenable prohibition in the long term.

This seems too big a problem to be left to the free hand of the market. Because ideas are central to a democratic nation and ideas require discipline and cultivation, we need to plan for this transition.