Streaming, Sharing, Stealing

[nabsltd]

Originally Posted by pwalker8

I read one fairly popular SF author who called his backlist his 401K. To a great extent, that's how many authors say it. Their backlist books got released every 6 or 7 years, which generated a fairly steady stream of revenue.

Although ebooks do go out of print just like physical books, I assume the point the authors were making is that they get new buzz every time the book goes back in print.

But, my guess is that like the new release ebook vs. hardback, it will turn out that there won't be any negative affect on overall author revenue even if the ebook is permanently in print. Yes, an ebook is supposedly forever (although we have seen that DRM screws that up), but then so are my physical books. OK, they have some wear, but only the 40+ year old ones. Also, if all I care about is reading the book, I can get a physical copy of some printing for less than $10, and it's probably not going to be a first sale that gives money to the author.

On the other hand, if the ebook is always available, then people who want the book might buy it, which would give money to the author. Meanwhile, with that same book out of print in paper form, the author would have to wait until their publisher decided a re-release was worth the money.

About the only good thing for the author in the current reprint world is that hopefully the new printing will have some sort of proofreading/editing/etc., that will allow fixing old mistakes. With ebooks, the one thing that does seem to be "forever" is that you have to live with the crappy release that most catalog titles seem to get.

[pwalker8]

Originally Posted by nabsltd

Although ebooks do go out of print just like physical books, I assume the point the authors were making is that they get new buzz every time the book goes back in print.

But, my guess is that like the new release ebook vs. hardback, it will turn out that there won't be any negative affect on overall author revenue even if the ebook is permanently in print. Yes, an ebook is supposedly forever (although we have seen that DRM screws that up), but then so are my physical books. OK, they have some wear, but only the 40+ year old ones. Also, if all I care about is reading the book, I can get a physical copy of some printing for less than $10, and it's probably not going to be a first sale that gives money to the author.

On the other hand, if the ebook is always available, then people who want the book might buy it, which would give money to the author. Meanwhile, with that same book out of print in paper form, the author would have to wait until their publisher decided a re-release was worth the money.

About the only good thing for the author in the current reprint world is that hopefully the new printing will have some sort of proofreading/editing/etc., that will allow fixing old mistakes. With ebooks, the one thing that does seem to be "forever" is that you have to live with the crappy release that most catalog titles seem to get.

The interesting point that the authors make (though they are talking about DVD verses streaming rather than ebooks) is that when people move to streaming, they broaden their selections rather than focus on the best sellers, thus the note that in walk in stores, 85% of the rentals is for a small group of best sellers, but in the streaming world, the ratio is reversed. I find that a very, very interesting finding and one with interesting ramifications.

[darryl]

Originally Posted by pwalker8

The interesting point that the authors make (though they are talking about DVD verses streaming rather than ebooks) is that when people move to streaming, they broaden their selections rather than focus on the best sellers, thus the note that in walk in stores, 85% of the rentals is for a small group of best sellers, but in the streaming world, the ratio is reversed. I find that a very, very interesting finding and one with interesting ramifications.

To what do the authors attribute this? I would guess the factors include:

1. A lot of streaming sources are generally on a Netflix type model and subscribers are watching a lot more bacause of this..
2. It is also more convenient for subscribers to watch at any time. This also increases the number of movies subscribers watch, and the impulse "buys" are no doubt much more frequesnt.
3. Choosing something subscribers like is also a lot easier online than in a physical store.
4. Binge watching is now possible, available and affordable. Take, for example, Amazon releasing all episodes of a series together.

The convenience and related factors still seem to be powerful even without a subscription model. I have friends who love Google's options on their Smart TV and "rent" movies and TV on it regularly at prices I would associate with old physical video stores.

No doubt there are other factors?

[fjtorres]

Originally Posted by darryl

No doubt there are other factors?

One more I can think of: shelf space.

Physical stores could only stock so many movies and only so many copies of each. So, not only did the top 100 titles make up a bigger fraction of the store catalog, the odds of finding an available copy were higher. Especially new releases.

Online they not only carry more titles, there is no zero-sum competition for a specific movie if suddenly the entire country decides to watch the original GHOSTBUSTERS at the same time.

We see this playing out in books and especially ebooks.
A previously obscure title is suddenly in demand. Newstands and indie stores don't have it. B&N might have one copy per store. Amazon might have a thousand. But Kindle (and maybe Apple and Kobo) has an infinite number to sell. For instant delivery.

Of course, eyeball hours are finite. With a greater variety of "lesser" product to consume, the attention paid to the favored of B&M declines. This too is happening in books.

[John F]

Originally Posted by darryl

To what do the authors attribute this? I would guess the factors include:

1. A lot of streaming sources are generally on a Netflix type model and subscribers are watching a lot more bacause of this..
2. It is also more convenient for subscribers to watch at any time. This also increases the number of movies subscribers watch, and the impulse "buys" are no doubt much more frequesnt.
3. Choosing something subscribers like is also a lot easier online than in a physical store.
4. Binge watching is now possible, available and affordable. Take, for example, Amazon releasing all episodes of a series together.

The convenience and related factors still seem to be powerful even without a subscription model. I have friends who love Google's options on their Smart TV and "rent" movies and TV on it regularly at prices I would associate with old physical video stores.

No doubt there are other factors?

I'm guessing that Netflix is skewing the findings? They account for what, 60%? of the bandwidth used on the internet? Netflix doesn't offer many newer releases, so people watch what is offered.

[pwalker8]

Originally Posted by darryl

To what do the authors attribute this? I would guess the factors include:

1. A lot of streaming sources are generally on a Netflix type model and subscribers are watching a lot more bacause of this..
2. It is also more convenient for subscribers to watch at any time. This also increases the number of movies subscribers watch, and the impulse "buys" are no doubt much more frequesnt.
3. Choosing something subscribers like is also a lot easier online than in a physical store.
4. Binge watching is now possible, available and affordable. Take, for example, Amazon releasing all episodes of a series together.

The convenience and related factors still seem to be powerful even without a subscription model. I have friends who love Google's options on their Smart TV and "rent" movies and TV on it regularly at prices I would associate with old physical video stores.

No doubt there are other factors?

House of Cards was one of the examples. The authors talk a lot about scarcity verses non scarcity. They mention the ability of customers to watch what they want, when they want, and mention binge watching. More than anything it's control. Plus, since Netflix has the data on the individual customers, they can present them with more movies that they might like. Discover ability, if you would.

As mentioned earlier in the thread, on pay TV and PPV, there are only so many slots available. Same in your local blockbusters, there is only room for a few hundred different titles. The movie companies put a lot of money into advertisement and placement. With iTunes and Netflix, you have almost unlimited choices.

(one factoid mentioned is that Netflix paid $100 M for 26 episodes of House of Cards, right off the bat, rather than the usual pay for a pilot that has to fit a specific time slot )

[darryl]

Originally Posted by John F

I'm guessing that Netflix is skewing the findings? They account for what, 60%? of the bandwidth used on the internet? Netflix doesn't offer many newer releases, so people watch what is offered.

That could be the case. But newer releases are available from other streaming sources usually including Amazon and Google, but the cost is much higher and per movie. They are also available to buy. But people are not doing so in favour of watching the not so new releases.

[darryl]

Originally Posted by pwalker8

House of Cards was one of the examples. The authors talk a lot about scarcity verses non scarcity. They mention the ability of customers to watch what they want, when they want, and mention binge watching. More than anything it's control. Plus, since Netflix has the data on the individual customers, they can present them with more movies that they might like. Discover ability, if you would.

As mentioned earlier in the thread, on pay TV and PPV, there are only so many slots available. Same in your local blockbusters, there is only room for a few hundred different titles. The movie companies put a lot of money into advertisement and placement. With iTunes and Netflix, you have almost unlimited choices.

(one factoid mentioned is that Netflix paid $100 M for 26 episodes of House of Cards, right off the bat, rather than the usual pay for a pilot that has to fit a specific time slot )

Agreed. Convenience, variety, instant gratification, discoverability and affordability, all favour the streaming services. Consumers only have so many leisure hours, and it is very clear that books, movies, music, games etc. are all competing for these hours.

When Amazon opened its first store I found it quite amusing that critics were claiming the stock level was so small. The reality, at least in my view, is that the stock level in that Seattle store may as well be limitless. With Amazon's Warehouse so close it is possible even for Non-Prime members to order a title not stocked in the store, do some shopping, have something to eat and pick the book up from the store on the way out. I don't know if Amazon is actually offering that, but would be surprised if it isn't. In effect, that store is like a hybrid, a Window into Amazon's total stock. Perhaps this is the future of many B&M retailers?

[fjtorres]

Originally Posted by darryl

Perhaps this is the future of many B&M retailers?

If B&M is to have a future it lies down that path. Regional depots serving an abundance of small storefronts.

In the age of online you can't assume customers are willing to travel far to get to the products. In their heydey, the Key trait of BLOCKBUSTERS was their ubiquity. In my area I had two within a 5 minute drive, one heading east, one west. That was in addition to three independent "video clubs" and, later, a Hollywood video. All survived...
...until Netflix popped up and started bringing the disks to the customer.

At that point, ubiquity became a liability.

[darryl]

Originally Posted by fjtorres

If B&M is to have a future it lies down that path. Regional depots serving an abundance of small storefronts.

In the age of online you can't assume customers are willing to travel far to get to the products. In their heydey, the Key trait of BLOCKBUSTERS was their ubiquity. In my area I had two within a 5 minute drive, one heading east, one west. That was in addition to three independent "video clubs" and, later, a Hollywood video. All survived...
...until Netflix popped up and started bringing the disks to the customer.

At that point, ubiquity became a liability.

And the "instant gratification" aspect cannot be overlooked. Gone are the days when a specialist book store ordered something in for you which took weeks to arrive. Amazon has destroyed that with delivery times that are little short of miraculous. And things are only going to get better, at least for consumers. Amazon is not exactly planing for things like Prime Now to contract! And, of course, options such as drone delivery which not long ago seemed like Sci-Fi are now being actively explored.

And "if B&M is to have a future", as you put it, I think it does indeed lie down the path of being a doorway to this online world, plus possibly some particular retailers where a physical presence is really an advantage. A home handyman needing a hammer on a Sunday morning or someone baking a cake who runs out of flour will probably always want to drive to the local store to get it now. Some products may require retail premises by way of a showroom where people can inspect and try out the physical products.

[pwalker8]

Originally Posted by darryl

And the "instant gratification" aspect cannot be overlooked. Gone are the days when a specialist book store ordered something in for you which took weeks to arrive. Amazon has destroyed that with delivery times that are little short of miraculous. And things are only going to get better, at least for consumers. Amazon is not exactly planing for things like Prime Now to contract! And, of course, options such as drone delivery which not long ago seemed like Sci-Fi are now being actively explored.

And "if B&M is to have a future", as you put it, I think it does indeed lie down the path of being a doorway to this online world, plus possibly some particular retailers where a physical presence is really an advantage. A home handyman needing a hammer on a Sunday morning or someone baking a cake who runs out of flour will probably always want to drive to the local store to get it now. Some products may require retail premises by way of a showroom where people can inspect and try out the physical products.

Amazon tried grocery delivery, which didn't really seem to work well. When one talks about instant gratification, ordering something and getting it from two day to a week later can't compete with the local grocery store. (Ironically, Piggly Wiggly, the first self serve grocery store turned 100 this week. Before that, you handed your order to the clerk and waited while he filled the order. Kind of interesting how things go round.)

[spindlegirl]

Originally Posted by pwalker8

Amazon tried grocery delivery, which didn't really seem to work well. When one talks about instant gratification, ordering something and getting it from two day to a week later can't compete with the local grocery store. (Ironically, Piggly Wiggly, the first self serve grocery store turned 100 this week. Before that, you handed your order to the clerk and waited while he filled the order. Kind of interesting how things go round.)

I am just guessing about the history here, but I imagine before 1916 most things sold in a grocery store were pretty basic. "I'd like a dozen eggs, half a pound of chuck roast, 3 ears of fresh corn and, a head of lettuce, Oh and tell the butcher hi! Hope his wife is feeling better!".

I gather things were more local, and now everything is more processed. Not that processed foods didn't exist back then, perhaps, but one could go into a store and know what "a tin of cocoa" was.

Nowadays you go into a store and everything comes in "kinds", and different brands. Then there's fat free, gluten free, cholesterol free, low carb, high carb, etc. No wonder people have to pick out their own kinds!

But back to the topic about books, I'm all about the "instant". I don't take it for granted that minutes after the idea to read a book pops into my head, I can either download it from the library or buy it to my kindle (if I have the money for it, which I don't for this particular title

[pwalker8]

Originally Posted by darryl

To what do the authors attribute this? I would guess the factors include:

1. A lot of streaming sources are generally on a Netflix type model and subscribers are watching a lot more bacause of this..
2. It is also more convenient for subscribers to watch at any time. This also increases the number of movies subscribers watch, and the impulse "buys" are no doubt much more frequesnt.
3. Choosing something subscribers like is also a lot easier online than in a physical store.
4. Binge watching is now possible, available and affordable. Take, for example, Amazon releasing all episodes of a series together.

The convenience and related factors still seem to be powerful even without a subscription model. I have friends who love Google's options on their Smart TV and "rent" movies and TV on it regularly at prices I would associate with old physical video stores.

No doubt there are other factors?

To finalize what the book says a bit, the last couple of chapters are the author's preferred solution, which is not terribly surprising, the "big data" approach, i.e. companies should look at the data from their customers and come up with a strategy that focuses on place, price and promotion. They point to Harrah's casino company as how a company used the data to determine that by marketing to the low rollers, rather than the high rollers like the Los Vegas companies were, they were able to make more money over the long run.

Some of the conclusions won't be very popular here. For example, they think that content companies should experiment with levels of prices and have more tiers. They were involved with the decision to tier the iTunes songs with some songs going for $1.29 while others go for .99 and think there should be way more tiers that are constantly updated. I think this particular idea is wrong thinking, myself.

[pwalker8]

I'm going to split this post off because I'm going to start talking less about what the book says and more about what I think.

One of the reasons that they give for the entertainment industry tending towards a group of 4 to 6 controlling companies (movies, books, music all had this structure for a long, long time) is that those companies where able to control things from beginning to end. Right now, in the music industry, we are seeing some very interesting things that I suspect will translate over into books and movies/TV.

The music industry is being fragmented. When iTunes and youTube (which is where a lot of people get their music) came about, that destroyed the old model. The music companies controlled the price and promotion, but they no longer controlled the place, the platform if you will. For a long time, we wondered what would break iTunes lock on downloadable music (there are of course, a lot of small niche players, but iTunes has most of the market).

I think that now we are seeing a plethora of streaming services that is taking the place of downloading music. I think that people will always want to download their favorite songs and artists, but the market is starting to shift towards streaming. I use Apple music and Pandora, but there are a number of companies out there. Part of what unlocked this is that musicians no longer need the record companies to produce records, so record companies no longer controlled content and were forced to accept streaming services.

That leaves promotion. In my personal opinion, that's the big frontier with regards to the entertainment industry, but rather than promotion, I would call it discover-ability. How do you find new content, be it music, books or video? To a great extent, that is the problem that Apple's curated playlist tries to solve. It is a mixture of the pure data driven "people who bought what you just bought, also buy" approach that Amazon uses and some human interaction. I think that the market is wide open for multiple approaches. I do think that a pure data driven solution won't work. I also think that a pure marketing approach of trying to push what they want you to buy, kind of like Amazon has been doing recently, won't work either.

I like the idea of a curated list, but then the question becomes how do you monetize that. It almost has to be paid for by the platforms to be effective. It also has to be driven by what the customer wants rather than what is perceived as most profitable by the content provider or platform company.

[fjtorres]

Originally Posted by darryl

And "if B&M is to have a future", as you put it, I think it does indeed lie down the path of being a doorway to this online world, plus possibly some particular retailers where a physical presence is really an advantage. A home handyman needing a hammer on a Sunday morning or someone baking a cake who runs out of flour will probably always want to drive to the local store to get it now. Some products may require retail premises by way of a showroom where people can inspect and try out the physical products.

Pharmacies and convenience stores/gas station shops seem to do fine despite objectively (but not objectionable) high pricing. I've seen some of the gas stations adding home repair tools in addition to the expected auto tools. A lot of that is maximizing the take from the traffic you get. Covenience and timeliness factor into the buy-no buy, buy here or order online and wait, decisions. It doesn't always favor online.

Likewise, higher pricing per-se isn't offensive as long as it stays within range of the sweet spot. We see a lot of this with Indie books where proper pricing (or price jogging) can be very profitable. The sweet spot globally is known to be around $4 but it varies by genre and by author. Romance typically clusters around $3, SF around $5. Variance of a buck or so from the genre baseline isn't necessarily a dealbreaker if the author has a track record with the buyer.

Which is one reason for the toys and trinkets Indigo/Chapters has done so well with (reportedly) and B&N not quite as well. On the latter end, I recently saw a comment to chew on re: store layouts. I saw a comment by a parent saying she and many she knew now actively avoided B&N while shopping for kids books because of "the toy gauntlet", having to drag the kids past all the pricey, "enticing" toys they aren't going to get, in order to even look at the books.

Valid point.
Toys and kids books might seem like a good fit...during the xmas season. The rest of the year?

Directing traffic through B&M stores is an art; it can be a plus or a minus.
Online it's "simpler": just minimize the steps needed to find any specific item, either through indexed categories, search, or both. (Not that doing either right is trivial, as Walmart, Rakuten, and B&N.com prove. Haven't heard great things about Kobo's search, either.)

Like so many commercial activities, there are way more ways to get things wrong than there are of getting things right.