The cost of disruption

Over the weekend, posted an article that summarized a report from IHS iSuppli. The bottom line: digital reading will “wreck” the publishing industry.

The report sees publishing as an industry that has “entered a phase of disruption that will be as significant as the major changes impacting the music and movie business.” I think they might have a point.

The report forecasts that sales of physical books will decline five percent a year for the through 2014. Over that time, they think sales of e-books will grow to about 13% of total revenues.

This is the backdrop of digital change: revenues derived from sales of the same products decline, threatening the traditional model. Unit sales of old products fall faster than any gains in digital revenues.

Publishers are already making adjustments to better manage their fixed costs, and that will help buy time. But there is little doubt that the future of selling what we sell now will yield less revenue than it does today.

That’s why I’ve argued for more agile workflows that support current demands for content while remaining open to new and perhaps unanticipated uses. Waiting to make a change only adds to the inventory of static content that will have to be retooled before it can be monetized.

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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