The medium is the package

I like ebooks. Sometimes. For certain occasions or reads. This summer, for instance, I didn’t schlep a ton of paper bricks to the Greek island where we spent our family vacation. Instead, I loaded a lot of fine books onto my iPad. As I neither waterproofed the iPad nor found a working cooling solution for the beach, I still had to bring some paperbacks.

Sometimes, I choose the ebook over print for other reasons. Let’s take Debt: The First 5.000 Years, the unlikely pageturner by anthropologist/anarchist David Graeber. As Amazon Germany told me, I would have to wait for 4-6 weeks until it was ready to ship. The ebook was an easy choice. Zap – instant gratification.

But I still might get myself the print edition.
Why would I do that: duplicating content, if content is really king and all that matters?

The easy answer goes like this: I grew up with printed books. Case closed. True, socialization makes a difference. But having been math-socialized with a LED pocket calculator by Texas Instrumentsdidn’t prevent me from preferring Excel or nowadays Google spreadsheets for my calculations. I’m not a pure-bred Luddite. My music is not on vinyl or MCs, I treat CDs as a MP3 backup.

Book wannabe.

So what’s the thing with books and reading? As we haven’t reached the age of fully billable telepathy yet, any aspiring author will have to write down his thoughts and constructs. That’s a good start. But to reach any readers, he now has to replicate his opus magnum. A cloisterful of monks can accomplish this job quite nicely, a printing press will speed up the whole thing, and the Interwebs brought me Graeber’s Debt in light speed.

But in any case: to replicate, we need a carrier medium. And not all media are created equal. Production cost, durability, and usability may vary. Many 5.000 year old Sumerian clay tablets are still around and even pretty readable (if you happen to be fluent in cuneiform). They should get an A+ for durability. Maybe a  bit later, the neighboring Egyptians switched to papyrus as their medium of choice. Most likely not because they ran out of clay, but because of the superior usability if you want to write down more than some bookkeeping notes or an ancient tweet. As the Egyptians held on to their papyrus monopoly, the others were drawn to the parchment. Which, as it turned out, was not as lightweight and snazzy, but way more durable. Then the Chinese invented paper, Gutenberg the movable types, and so on and so on.

It took a while. But the modern printed book is a rather fascinating device. A dedicated handheld reader with a high resolution display, offering random access to its content. It’s easy to grab and hold. It’s rather sturdy (please do not drop your Kindle from a four storied building). It’s nice to look at and comes in manifold distinctive packagings, from cheap and colorful throwaway to leather-encased monolith.

Easily customizable spatial access to content.

Compared to this, the ebook is rather bland. Of course you can judge a printed book by its cover. Just compare this to that. Even a book spine says a lot. Pile up some books on your nightstand, and you have instant  access to your chosen bedtime stories. Pile them on your work desk, and chances are high, that you’re after business, not leisure. We’re talking spatially customizable 1click access to your readings.

Think about it: ebook usability really sucks. I’m not talking about the reading experience, which is constantly getting better and better (notable exception: iBooks with it’s kitschy when-I-grow-up-I-want-to-become-a-real-book page design). The real un-fun part is the time before you start with chapter one. Turn on, search, see results with tiny images and standardized typeface. And, come on, who in real life is so anal to sort his printed library by title, author AND/OR category?

List this: compulsive sorting disorder.

But it’s getting weirder. You have to know where you bought the book, or at least the file format. Buy some music, and any mp3-player will do the job. Buy Neal Stephenson’s highly recommendable Reamde on Amazon, and it will live in your Kindle or Kindle app and only there, not to forget. Buy Graeber’s Debt at the publisher’s store, and it will sit either in your iBooks or Stanza app or both or anywhere else, depending on which app you synced it in, but definitely not in the Kindle or the Kindle app.

Can we, at least. please get this sorted out?

How the iPod killed the music industry as we knew it

On Saturday, November 10 2001, Steve Jobs killed almost saved the music industry as we knew it: the first generation of the iPod reached the Apple Stores.

iPod 1st Generation
This machine ♥ CDs.

So let’s flash back to those prehistoric times. For about two decades, the music industry had made a killing by distributing billions and billions of digital masters. The CD, as conceived in the 1980, wrapped up the vinyl album into a shiny digital disc and propelled sales figure to an entirely new level.

But now, at the turn of the millennium, the CD monoculture found itself under attack. The PC (formerly known as a strange device for decidedly uncool nerds) and the Internet (formerly known as a service for decidedly strange scientists) had tainted the love affair of the industry with all things shiny and digital.

And a monoculture it was. Let’s have a look at the US-sales figures in 2001. The CD delivered roughly 94% of all revenues. As we know from the world of agriculture, monocultures have their advantages. You can waltz with hugely oversized machines through fields the size of the Central Park profiting from economies of scale. The drawbacks are equally known. “Monocultures can lead to the quicker spread of diseases”, as Wikipedia drily states.

The music industry fought the digital pest of copying their freely distributed masters like any Idaho potato megafarmer would do. After ignoring the first signs of disease, they started crop dusting. As with any pesticide, spreading DRM and later on even (involuntary) infecting PCs with root kits had some serious side effects. Their legal crop dusting may have killed Napster. But in 2001, after several years of digital infights, legally buying and downloading music was still virtually impossible. (Look at the charts, based upon RIAA revenue figures: downloads will not even appear before 2004.)

The CD monoculture
The CD monoculture: making a bundle with bundles.

But back to 2001. “iPod’s built-in FireWire® port lets you download an entire CD into iPod in under 10 seconds and 1,000 songs in less than 10 minutes,” boasted Apple in their press release. Yup. Basically, the iPod was CD player on steroids – sans discs and drive. You filled it by ripping your CDs on a Mac (no Windows yet). Strike your CDs. Any CD was fine. (Or you gathered some music files by strolling through the darknets of the times. But that’s a different story)

Now, let’s have a look at the CD. The recorded music industry, as any media industry, extracts value out of content by selling it via a medium. It’s a productification process, but it does no stop there.

Traditionally, the music industry bundled their content either into a single (buy one medium, get two pieces of content) or an album or compilation (buy one slightly more expensive medium, get at least eight pieces of content). Broken down, an album equals to a price incentive of something like buying 10 for the price of six.

From the business perspective, getting consumers to buy such a bundle makes perfect sense. Especially, if you are in an increasing returns business like software or media: the production of the content is a one time expenditure. Duplication and distribution add only marginal costs. Hence, the more you sell, the higher the returns.

Music in 2010: downloads = mostly unbundled content.

The value proposition seemed to have worked pretty well. Can you spot the CD-Single, containing mostly four titles? In 2001 it’s this tiny little orangeish sliver down there on the right, with a share 0.6% of all sales. Good for the industry. Because the cost of producing and distributing the single equals pretty much the cost of the whole album – which generates much more revenue.

As we saw, the original iPod was still somewhat of positioned as a CD aggregating device, somewhat legally filled by buying CDs and putting your music onto your device. Yes, overall sales were declining. But the industry was still selling bundled content to the consumer.

On April 28, 2003 this was going to change. Opening as the iTunes Music Store Apple, albums were still available. And still, the price for the bundle was lower than buying just a single piece of content. But how did the consumer react?

Killing the CD.

Have a look at the sales figures of 2010. The CD is shrinking fast, downloads are gaining just fine. But look at the product shares: 20% Download Singles vs 12.1% Download Albums. Essentially, more than two thirds of the formerly sold content bundles are replaced by single downloads.

iPod family
The iPod device family of 2011.

Coming back to the iPod. The device family still holds a market share of way over 75%. As pure software, it lives happily in every iPhone. The interface still honors the good old times of the album and the compilation. But buying music has massively changed. Be it the iTunes store, Amazon’s mp3 downloads, or any other digital music warehouse: single downloads rule.

Next time: what is really going on there? Is this sustainable? And can or should there be anything done?