I have poured through the requisite industry updates and readings that come anytime a bunch of executives and supporters and pundits gather as they have in the publishing industry since January beginning with  Digital Book World, then Tools of Change: Publishing in Feb and Publisher Business Expo last week, and I believe it is abundantly clear that there is a lot of redundant information being regurgitated to keep traffic up, but very few sources have articulated simply to authors and publishers what is generically “likely” to happen over the next five years. Therefore at the risk of ridicule I will boldly spend my “two-cents” telling you what I think will happen, the context for it, and what can be done to prepare to win.

First let’s align the context: Jeff Bezos didn’t care about books in 1995 and he doesn’t care about ebooks in 2012. He understood then (like Walmart did in the 90s) that books were a great “low risk” way to migrate customers into a shopping experience and leverage the marketing efforts of other companies (publishers and their authors) etc. to drive customers into his data machine and customer database. Walmart used a similar strategy to sell CDs at $9.99 when the market was at $15 just to get us into their stores, so he was copying them with a brilliantly genius eye on where consumption in the future was heading. Fast forward to the release of the first Kindle and the present day version and realize that he still doesn’t care about the books (or eBooks) except as a means to an end, and needs the publishers (who have lost their hold on the distribution channel because their primary customers have always just been intermediaries not end users) less and less, and is now competing directly with them and has $6B dollars in reserves and the DOJ to win the fight at any short term cost to Amazon.

The Bezos/Jobs/Walmart formula is about customer acquisition and data not product, ereaders, or anything else. As the web moved towards mobile it only made sense for Bezos to start his 1995 formula with ‘books’ again by creating a new mobile portal (packaged up innocuously as the first Kindle) to begin the strategy all over again with a different vehicle leveraging his existing momentum. As the iPad entered the market and changed consumption of all media, it put a silly “hope” in the Traditional publishers that a Free market would resume and allow them to keep on with business as usual and in control of the decline in print.  What it really did though was open the door for more immediate mass market migration to mobile consumption of web related, digital,  and app based content.

In both Kindle and iPad and in any other cases of their digital-first competitors it is about “owning the customer” relationship first and using whatever products (mp3s, books, free apps, and ebooks etc. are low-risk because they are low cost) to help nurture the ‘habit’ pattern of trusting and purchasing from these brands through their devices.

At last look I remember seeing a stat where Apple had over 155 million credit cards on file (BIG DATA) through itunes, and Amazon is probably even larger with their 1-Click Checkout. The ereader devices and tablets and smartphones being developed do something that PCs and other forms of personal communication never could. THEY EMBED THE STORE AND BUYING EXPERIENCE AND WALLET IN THE DEVICE vs providing just connectible access to the storefronts like a PC does through the browser and internet connection. We are now 95% of the way to purchase the minute we power on our phone or tablet.

What’s the bottom line? In my opinion this ultimately means that as bookstores evaporate into extinction over the next 5 years, total consumption of retail books is likely to ‘fall’ not go up (just like what happened to album sales), because the consumption act of physical CDs, records, Printed books, was less about buying new content in abundance for entertainment and more about the ‘retail browsing experience” and the inherent ‘obligation to purchase’ before leaving the merchant that isn’t present in a digital environment where I am not visible (in my mind to the store owner, which is funny because we are actually more visible and they can even target a promotion to our front porch with ge0-location). It is similar to coffee consumption (not because I need another 20 ounces today, but because I just used their “free” wifi for an hour during a meeting. If you take away the physical store I still surf, but don’t buy as much out of obligation, because I don’t experience the same set of emotions in front of a screen as in a store or in front of other people.

Assumptive models built around the initial high growth of eBook consumption continuing are faulty in my opinion and data from the BIG 6 already shows a substantial fall off in digital overall sales in 2011 from 2010. I don’t believe print will completely die (but it will feel like it and be hyper-niched), and certainly aspects of digital distribution and production will enhance and grow the overall market in key segments like education, training & development, but general market book consumption won’t be replaced in size or volume by eBook sales alone. I don’t believe prices will continue to drop indefinitely but they won’t go up again in some increment until the digital monopolists have won their war.

None of this will happen because we don’t value content (because content is like GOLD, but even gold is a commodity that at certain times becomes to cheap to invest in bringing out of the ground). What will continue to happen is millions of more people will enter the content creation game and without intending it consciously, simply become even “more loyal” consumers of either Amazon or Apple or both because now they will not only habitually trust the consumption model of those companies, but will also have their very own product on their stores to ‘promote’. If you are after data and owning the relationship, the oldest truth in the book is make it the ‘target’s’ idea not yours. Man these guys were brilliant!

What does an author do?  For starters, authors have to really define what they want to accomplish with their book and in my opinion better commit wholeheartedly to a marathon entrepreneurial experience and focus on building a powerful personal brand first and foremost through every means possible like Internet Reality TV, relevant and consistent content proliferation, an online, offline, and licensing strategy, database building, and personality. Micro and macro-monetization strategies must be implemented simultaneously. Every derivative work, publishing relationship, and mastermind partner must amplify, align and add value to that end or they are wasteful. Lastly, realize the hard but simple and freeing truth that it may be easier and less expensive to enter the game than ever before but the barrier to succeeding and getting over the line of sustainability is higher and costlier than ever. The good news is that very few will finish the race and once you get over the line the rewards are exponential in comparison to just a decade or two ago for the one’s that make it!

What does a publisher do? For publishers it is time we thought like consumers and authors and recreated the value equation and re-invented the relationship dynamic. Right now is the best time in the planet to build highly valuable relationships and ownership positions in “GOLD” content while the rest of the industry “hopes” this doesn’t happen as fast as it will. Authors are underserved, undercapitalized, overwhelmed, and in need of a true guide, advocate, and stakeholder. They are willing to invest in themselves, hungry to profess and be an evangelist for their body of work, but can’t afford to make too many mistakes, and don’t want to run a publishing business at heart in most cases.

Step 1 for publishers is to think about the last time they bought a book/ebook etc in the genre that they publish.

Step 2 is to look lateral to Traditional media content and realize that the most significant reason athletes and pro sports valuations have skyrocketed in the last 15 years is because it is the ONLY content you and I will actually watch ‘live’ and still schedule our day around. This has made it a necessity for major networks to own and outbid for these rights, because it is the only guaranteed block of time they have that allows them to promote the rest of their 24 hour schedule that we all DVR and watch online in clips, or wait for commercial free in Netflix!

Step 3 is to admit that our content is ‘avoidable’ and helping an author build a personal brand that benefits from “discovery” more than “search” is the only sure bet we can continue to grow their demand and the market as Bezos, Apple, etc continue to mesmerize them with new toys, use our product as bait to be discarded as they catch yet another ‘digital data-rich’ fish into their eco-system for autodraft!

I welcome your comments or debate! ~CJS