2. Who’s adding value when distribution shifts?
Established publishers will say, not incorrectly, that a big part of publishing isn't about making stuff. Rather it’s about getting that stuff in front of people: distribution. But with the rise of digital books, distribution also changes markedly. So far, distribution of ebooks has proven to be a natural monopoly — or at least an oligopoly.
No one wants to go all over the Internet searching for a book to buy. And — at least as long as ebook formats (locked with digital rights management) are mostly tied to a particular brand of reader — once you have the reader you’re stuck with a single vendor. (Technically that’s not necessarily true, but it is as a practical matter.)
As a result, Amazon currently owns more than sixty percent of the ebook market, while Barnes & Noble has thirty percent. As ebooks continue to displace print books — especially in the fiction category — the effort required to achieve near-one-hundred-percent market penetration diminishes. Instead of shipping thousands of books to thousands of stores, you're sending an electronic file to three or four, and inexpensive services have already arisen to facilitate this distribution.
Dilemma: When ninety percent of the market is available to authors at the click of a button, what value is a traditional publisher adding?
