more on Technology Rewrites the Book

[David Farber <dave () farber net>]

Begin forwarded message:

From: Thomas Lord <lord () emf net>
Date: July 25, 2006 12:01:37 PM EDT
To: dave () farber net
Cc: ip () v2 listbox com
Subject: Re: [IP] more on Technology Rewrites the Book

So, I've been working on starting Yet Another
Independent Record Label.

I've had occasion to explore the wholesale market
for on-demand CD/DVD production.   I looked at
production for all scales (one-offs, of which we want
no inventory, through hundreds-offs where inventory
may make sense depending on your distribution channels,
up through mass production).  I looked at packaging ranging
from plain slip-covers through fancy multi-CD cases
with full color artwork and multi-page booklets.  I
looked at order fulfillment options ranging from
on-street to in-store to mail-order.

I'm still cranking numbers so I won't (and probably
publicly wouldn't) offer a detailed report but the
executive summary is interesting:

The market is /just now/ -- as we speak -- hitting the
sweet spot of on-demand production, at all scales, in
all form-factors, for all modes of delivery.   By
"sweet spot" I mean that the marginal cost of production
even at the lowest point of the long tail ("we sold exactly
one") is (just barely) lower than where you can price
a recording, almost regardless of content.   By "just now"
I mean this is occurring within the past couple of years with new
developments all the time -- it's a hot market for wholesalers
some of whom already have nice models and others of
whom are working on interesting new models.

The largest obstacle, whether software or another medium,
is probably IP stuff.   There probably is (and some
people are already all over this) an opportunity for
technologists to force the IP stuff to evolve.  Namely:
go into the manufacturing business for kiosks and virtual
kiosks.   A customer goes to the kiosk or web site, inserts
credit, debit, or stored-value card, picks (or designs) a
recording from components on a menu -- it's either mailed
out or available at the register (because you generally don't
want customers assembling jewel cases or even handling
freshly printed "discs").   A do-it-your-selfer can already
do this.   For mail order there are already some turnkey
services around (though too many are dubious start-ups
and all are priced too high at the very low-end).

But... that alone isn't enough.

The profit margin at the low end of the long tail exists but is
rather pathetic and the marginal cost is dominated, for quite
a while to come, by labor costs.   It will be quite a long time
before it stops being necessary to manage inventory for
titles selling as little as a few or several hundred copies.
That's no big deal, in theory but it can't be overlooked, either.

-t


David Farber wrote:
> Begin forwarded message:
>
> From: Lauren Weinstein <lauren () vortex com>
> Date: July 24, 2006 6:59:05 PM EDT
> To: dave () farber net
> Cc: lauren () vortex com
> Subject: Re: [IP] more on Technology Rewrites the Book
>
>
> Dave, Egor,
>
> Some "on-demand" DVD burning seems to already be taking hold in
> mainstream media.  In particular, History Channel uses conventional
> DVD+R disks to create copies of many shows, apparently as they are
> ordered (and with a guarantee in case of playback incompatibilities,
> the last time I looked).  As I recall, these are bare-bones DVDs --
> no chapter titles, no extras, etc.
>
> This makes a lot of sense for programs that have relatively low
> demand, and can't justify the full-blown authoring and pressing that
> the more "featured" programs receive.
>
> --Lauren--
> Lauren Weinstein
> lauren () vortex com or lauren () pfir org
> Tel: +1 (818) 225-2800
> http://www.pfir.org/lauren
> Co-Founder, PFIR
>    - People For Internet Responsibility - http://www.pfir.org
> Co-Founder, IOIC
>    - International Open Internet Coalition - http://www.ioic.net
> Moderator, PRIVACY Forum - http://www.vortex.com
> Member, ACM Committee on Computers and Public Policy
> Lauren's Blog: http://lauren.vortex.com
> DayThink: http://daythink.vortex.com
>
>
>  - - -
>
> > Begin forwarded message:
> >
> > From: Egor Kobylkin <egor () kobylkin com>
> > Date: July 24, 2006 5:51:23 PM EDT
> > To: dave () farber net
> > Subject: Re: Technology Rewrites the Book
> >
> > Dave, for your list, if you wish.
> >
> > > From: Monty Solomon <monty () roscom com>
> > > Date: July 23, 2006 11:02:15 PM EDT
> > > To: undisclosed-recipient:;
> > > Subject: Technology Rewrites the Book
> > >
> > >
> > > Technology Rewrites the Book
> > >
> > > By PETER WAYNER
> > > The New York Times
> > > July 20, 2006
> > > ...
> > > said. "This is as good as any book in a bookstore."
> > >
> > > ...
> > >
> > > and Blurb will make a
> > > copy just for that buyer.
> > I was confused as to why the CD's or DVD's are not made completely on
> > demand? They have way lot less polygraphy on them, and they are
> > intrincically digital. But then I thought, there must be much less
> > titles of them in the top 80% of sales, than there will be of the
> > books. So by keeping, say 1000 preprinted titles in stock a small DVD
> > shop with no Internet can be in business.
> >
> > But also because of the higher variety, books should have a higher
> > price/cost ratio to cover the additional costs of the logistics due
> > to lover average volumes, it makes bookstores a more attractive
> > victim to substitution with a print on demand service.
> >
> > On the other hand, one already can have almost any album from a major
> > music studio for 9.99 from iTunes in 5 minutes.
> >
> > So now, when the books can be done on demand economically, when will
> > I be able to go to a shop and let them print for me any CD/DVD in the
> > world in 5 minutes?
> >
> > Curiously yours,
> > Egor
> >
> >
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