The New Yorker recently ran a piece that proves why in court, you need to the whole truth and not just part of truth.

First, for convenient sake, the music industry likes to blame their current state of their business on iTunes or the iPod. That is like the horse carriage industry blaming road pavers in the early 1900′s. That the sale of individual tracks is death to their business – both creatively and income wise but they ignore some convenient truths. The album was invented in the the 1930′s but didn’t really gain a true place until the late 1940′s and while Broadway cast albums or classical music took advantage of the longer playing availability on both sides, it wasn’t until the 1950′s that artists – most notably Frank Sinatra began using the album format itself thematically … and not really until the 1960′s that artists created specific thematic music to purposely fit the format of 20-30 minutes on each side in order from side A to side B to tell a complete musical tale … but if you look at every album every released in the rock era, how many really do you listen from beginning to end? How many are necessary to listen from beginning to end? You might listen to SGT. PEPPER from beginning to end but ABBEY ROAD? It’s really just a collection of tracks as are 98% of long playing-albums-CD’s EVER released – and really, no artist and no one in the music industry and EVER lifted a needle or hit FF while playing a long playing album? O RLY?

The music industry has itself to blame plus the advent of the broadband and the consumer internet – for better or worse. The CD era of the @1982 to the early 1990′s was the pinnacle of the Music Industry 1.0. In that 10 year period, they were basically able to re-sell most everything they had sold before to the same and a new generation who loved music – there might’ve been a slight downside as it was now on a much more sturdy format (no grooves to wear out) but with the economy flush, they could also sell re-masters and re-packaging over & over again. So while the CD format replaced vinyl, it was good because it was a business model they understood. Major record labels controlled who got signed and as the ones with all the major artists, record stores supported them from their age-old distribution model – physical products were manufactured, COSTS and PROMOTIONS was charged to artists … but the record labels controlled accounting of returns, promotions, distribution, returns and reported sales. Artists really had no way to verify the numbers unless you were a mega superstar like the Rolling Stones or Michael Jackson. And it worked to some artists advantage – you got an advance, if your CD album was a flop, the label might drop you but you didn’t have to repay anything and you had a nice time but conversely, that’s why the labels worked hard to make you a star or a success because maybe you lost them money on the first two CD’s but if the third is a hit, they go back and charge you for everything up to now … especially the little things all lumped under “promotions.”

But before Mp3′s and before Napster, it was clear this gravy train was not forever sustaining. Of course, the music industry couldn’t see past this golden goose era. As sales kept increasing, they kept raising prices, and now that the labels were suddenly valued at hundreds of millions or billions, they were sold off or spun off and of course, the new owners or venture funds were banking on keeping the revenue growth at the same rate so it meant raising prices … so while the prices of VHS and later DVD’s new releases dropped in price from the beginning of the format (from $39 to @$12) and just as importantly, personal computer and PC storage devices were dropping in price, CD prices actually rose from @$12 to close to $20 dollars. And also as importantly, the labels started dropping the single format. Sure, you could argue the CD single format was kind of a waste – 3 to 10 minutes used on a disc that could hold 60-minutes+  but for an industry built on using tracks or a particular track to promote the rest of the album – and certainly true of the rock and roll era for 99.5% of the artists, this was a major changed forced on its users and consumers mostly on greed. If you can no longer buy a $3 or $5 CD single and your only choice is a $20 album CD – you start looking at alternatives.

The Mp3 format was “invented” in the early 1990′s but for the most part it was not really all that useful. Hard drive space was still relatively expensive so there was no real point in converting your CD’s into digital files and in addition to no real gain in value, there were no real portable players (none that were not fragile hard drives you carried around) unless you were really rich.

But as hard drive space started to drop in price and PC based music players started, while you had no real portability, you at least could start playing all your music at your desk without having to look for the CD. And of course, as PC & storage prices continued to drop, at the same, the music industry was deleting singles and raising prices. By the mid 1990′s – Mp3′s (along with WMA) were becoming accepted digital formats – while broadband was still only 10% in most US households – thus making actual swapping or downloading Mp3 files excruciatingly slow – college campuses were opening their research internet networks to students. Then with the advent of Napster – the spark ignition to the music industry pile of oily rags and gasoline situation.

Since 1999, the music industry kept trying to stuff the genie back into the bottle – clearly, not going to happen. There were obviously many DAP/MP3 players before the iPod but it was the first to make it convenient and sensible (I had a DAP that required you to actually create folders called FOLDER_01, FOLDER_02. (of course, with the underscore and NO personalizing – up to FOLDER_99). But again, blaming the iPod or iTunes is like blaming paved roads.

Unlike the previous generations where seller-manufacturer had full control – it’s the internet digital era – loath it, or like it – it is what it is. It’s like living on an island nation and seeing the first trade ships, you might hate the fact the world has changed but you can’t ignore them or hope they ignore you – clearly, not going to happen.

And actually ironic, iTunes has delivered about $10 BILLION dollars in revenue to the music industry where all others had failed to create a digital store used by more than a small percentage of users – even when the music industry tried to dent the market share of the iTunes store for digital music by granting Amazon and others DRM-Free Mp3 tracks for a year, the iTunes store market share dropped by just a few % points from something like 71% to 69% while most other music stores dropped equally but they were all in 6-8% market share. (Amazon has about 13% of the market share now). What does this really say? iPod and later iPhone users decided the iTunes stores was their online digital store of choice. After nearly 10 years, it’s clear that given ALL the easy choices of switching, consumers prefer the iPod and the iTunes Store over all others – even when there were other features not available on the iPod-iTunes during that same time period.

So, for the music industry to try and blame Apple or iTunes is frankly ludicrous. It is like blaming the road pavers for the auto industry usurping their horse carriage industry. Clearly, there are other forces at work including many aspects that be traced to their decisions.

So, now, the book industry faces a similiar crossroad but again, do not believe that history repeats itself just because it involves media and iTunes. Sure, there are aspects that are the same but unlike the music industry where consumers want singles and the indstry wants the 10 year period where they sold BILLIONS of full length CD’s.

What is similiar is that books are distributed by a few major publishers who control the process. THEY approve the authors who should get published, they pay for the actual printing of the books, pay the advances, and sell to retailers/bookstore – and accept returns if necessary. They control the promotions and ultimately the accounting. Again, it’s a known process and they have a vested industry in the status quo because they are familiar with this process. But like CD’s – physical books are controlled by them with their accounting. How many are actually published? Returned? In transit? Being shipped? Re-routed – there’s no RFID chip to say exactly what the status is unlike a digital book.

The iTunes store and the Kindle store can tell you EXACTLY to the second right now how many have been sold. There’s not much to hide – does that scare book publishers as much as the music labels who desperately hang onto the CD because it’s physical and easy to nudge numbers?

After all, digital books means NO INVENTORY. In publishing, you pretty have to guess how many to print and if it’s a massive hit, you have to go back and buy paper, ink and printing time. You have to create artwork for the dust jacket and pay for shipping. If you guess incorrectly, you have to accept returns – sometimes hundreds of thousands of copies. With digital, whether you sell 5,000 copies of 2 million, once you upload the file, you are DONE with production costs. Sure, you have to spend money on promotions but that’s true of anything.

And as digital is an interactive format – the world is open to selling and re-selling different editions. Or take full advantage of the fact that unlike print where each additional page costs you money and ultimately you have to upgrade the binding and pay for shipping this newer heavier thing – adding another thousand pages to a digital file just means a slightly larger file size.

SOME OPTIONS

For instance, take something like CATCHER IN THE RYE – a beloved classic – why not offer a version where you get a typeset version like it’s first release? Or you can switch between every release in its type look & design to today? Choose the cover you prefer best? Or something like the JOY OF COOKING which has been revised for 80 years – you could sell each version separately or sell the older editions as an add-on – for instance, the receipe could have a year edition at the bottom and tapping on 1956 would show you the changes from 1956 or of course, receipes for things such as racoon which are no longer included. Same with the James Bond books or the nancy drew-Hardy Boys books – to be able to see the revisions from the original would be interesting and fun.

Or for fiction or certain non-fiction titles, why not offer a soundtrack option if you are interested in purchasing or maybe it’s included. Or even sound effects. Of course, it’s gimmicky but for most pop fiction? In the case of history books, you can even offer alternative views with just a tap. Of course, educational books with specific examples with just a tap … instead of trying to explain A MINOR – how about an example?

Obviously one of the problems with the monochrome Kindle is art-photography-travel, etc books are of limited value just in monochrome – clearly that limitation is lifted.

Publishers have to think out of their business model now … where are they were limited by page count or distribution, there is none of that – and of course, they have the advantage in that books are not like CD’s where you can just split off a chunk – unless of course that’s an advantage where someone might just want to buy the WESTERN edition so offer that option.

Publishers have to not just think of books as PDF’s as eBooks – that serves some purposes but to treat the published version as one and the interactive version as a DIFFERENT thing – much like a pop up book or an art book.

But instead of fearing change, they need to simply realized their island has been visited by this new trade ship and they better get with the program. Now, unlike the CD business who had their last fort breached before they realized maybe trading with these strangers was better than trying to fight them with sticks, book publishers are in better shape in that it’s just the early stages of trading with these new strangers but if they don’t get with the program, in this digital internet age, USERS and or PIRATES will fill the vacuum. If all you are just going to offer “static” PDF versions of eBooks, then people will just start digitizing their own books or just downloading pirate PDF versions.

Publishers do not need to fear iTunes because there is literally nothing to fear unless you have something to hide … and for music, movies, tv shows – it’s clearly consumers #1 choice – whether it will be for books is another matter but it’s an opportunity to re-sell and sell to the new generation. Just as movie studios sell a disc DVD with a digital copy – why not for books? Embrace the new world – don’t fear change or transparency.