Add Value, Not Price

Companies like Amazon and Macmillan need to re-imagine their role in the marketplace, not fight each other over yesterday’s supply chain.

I’m a bit torn about the recent struggle between Amazon and Macmillan over the price of ebooks. You see, I’m not sure which company to actually cheer for, but I’m glad that the battle is taking place.

My main concerns about the outcome have less to do with the state of these two giants than they do with the general health of the publishing industry and the two key players at each end of the playing field who will be most affected by it – the creators and the consumers.

Regardless of whether Amazon or Macmillan ends up “winning” this fight, the industry can only survive if there are people willing to create content and people willing to purchase and consume that content. Every other player in the game is pretty much disposable when it comes to the digital delivery of that content. Though Amazon and Macmillan are two giants struggling over “control” of the pricing and distribution of books and ebooks, in some ways they’re like two kids fighting over a toy that isn’t even theirs and can very easily be taken away.

Technology has gotten to the point where authors can route their content through a variety of print and digital DIY channels to get it into the hands of consumers. This is a very frightening thing for any of the people involved in the traditional supply chain (publishers, distributors, booksellers). The key for these players, then, is to worry less about where the money is and more about how they can continue to add value.

Personally, I don’t think we’re going to see publishers, distributors, and booksellers disappear any time soon. Even though it has been well over a decade since big box stores and deep discounting retail giants have been around, each taking their slice of the pie, traditional bookstores with friendly, knowledgeable, and helpful staff still survive. People continue to shop at these places not because they can get the book for the lowest possible price, but because of the additional values the booksellers bring to the equation.

In the digital world, selection and the “long tail” of books will continue to expand exponentially. Booksellers, publishers, and distributors then become more, not less valuable, because they can help consumers spotlight key selections and help filter out a lot of the “noise.” Time, after all, is money; the value of saving the consumer time should not be underestimated. As long as these players focus on this kind of value-add and not engage in bitter, pointless arguments based on yesterday’s supply chain models, there will still be a place for them.

I am curious to see what happens with this clash between Amazon and Macmillan. The pricing question certainly needs to be addressed. But I’m more worried about the long-term consequences of the outcome. I hope that someone out there steps in and offers a solution in which someone wins without everyone else feeling like they have lost.