I'm in Rochester, NY. One of the major institutions for the city is this little company called Eastman Kodak. With the money George Eastman made with his business he founded a number of institutions that are still vital to the city's public life, ranging from the Eastman School of Music, the Rochester Philharmonic Orchestra, the George Eastman House, and many others. Further, the company also has been a major supporter for other institutions that were not founded by George Eastman. Add to that the thousands of employees at Eastman Kodak, and the thousands more retirees in the area, seeing the company going down the tubes has been a long, drawn-out torture.
This week, Kodak announced a deal with the retiree's representatives to end their current retirement benefits package. Concurrently the company continues to flail trying to find a new line of product to tie their star to, to give them a goal or direction to bring them out of Chapter 11 restructuring. Particularly disheartening is to see that the company has decided that the previous killer ap that was going to save them - going very aggressively into the home printer market - was not going to work after all. Again, not a surprise - I know I'm not the only person who questioned the optimism that was being brought to that project - but disheartening all the same.
I believe that Kodak's problems date back twenty years, or more. And they can be summed up by one simple aphorism: You can't hold back the tide.
Newsweek has announced yesterday that this December will see their last print issue. Newspapers across the nation are suffering, and cities that used to have two or three daily papers may now be served by a single paper that prints on a less than daily schedule. Digital publishing is here to stay, and for a lot of ephemera the buying public has made it clear that as a whole it's not willing to pay to support print editions of many former national institutions. Until recently I hadn't been aware that the Christian Science Monitor hasn't had a print edition in years.
Then there's book publishing. The bankruptcy of Borders after that company's expansion (along with the expansion by Barnes & Noble, and the shift of marketshare to Amazon) was blamed for the mass eradication of the small bookseller finally got some people to admit in public that the market for publishing is changing from the old models. Recognizing the problem exists is the first step, but it's not a sufficient step by itself, and working out a new model is going to be a bear of a solution.
I got my notification this week for the proposed settlement for the Texas et al v. Hachette Book Group et al. Case No. 12-cv-6625 price fixing lawsuit pursued by the State Attorneys General of 49 states. I was disappointed by the fact of a settlement, because I happen to believe that the price-fixing of ebooks, and the way they're tied to such a large fraction of the hardcover price for the same volume should also be exposed. I simply find it impossible to believe that the costs for bringing an ebook to market are actually identical to those for bringing a paperback volume to market. Quite frankly - transport, warehousing, and sales costs (both labor and associated inventory costs) are not of the same magnitude for the two formats, and anyone who insists they are, or should be, is insulting my intelligence. I would have loved to see a trial where all the issues involved with setting ebook pricing might come out in front of judge, or jury. Which, I'm sure, is one reason that most of the publishers involved have chosen to accept this settlement.
For the moment, anyone who claims that ebook publishing can exist without associated paper editions for most general market volumes is deluded. But observe that caveat. There are already places where for niche markets getting away from the major publishing house model not only makes sense, but works. The market is changing and the major publishing houses, at the moment, are screaming and scheming to find ways to make sure that the newer model doesn't supplant the old model they already know. There has been progress made - the general ebook retailer I use most often, Sony, has ditched DRM on its books, except in very rare cases where the publisher insists on it, still. (I say general ebook retailer, because I'm a long-time customer at Baen's ebook website, which never had DRM in the first place, and still has what I consider the closest to ideal ebook policies that I'm aware of in the whole marketplace.) With the exception (admittedly, it is a kiler exception) of the Kindle, ebook readers have gotten away from requiring proprietary formats. But for the moment, I believe there is much progress yet to be made.
Particularly of concern to me is the upcoming Supreme Court case that's going to be looking at the legality of restricting after sales on the basis of copyright violations. This case strikes me as having the potential to be explosive for all aspects of intellectual property rights. Given the support the RIAA and MPAA can find in Congress and the Justice Department, I'm very, very concerned about this.
But the key thing about all this to me seems to me to be that there is a determined effort by the publishing houses to not simply avoid changes, but to force the whole market to declare that change is illegal, immoral and even fattening.
I repeat: You cannot hold back the tide.
Kodak invented digital photography. Yet they never attempted to capitalize on that in a major way with the average consumer. They did put out digital cameras, but those were never as heavily marketed as their film cameras. There was fear that if there were a major shift in the marketplace away from film they'd be hurting their core business. Which is, with the benefit of hindsight, a very valid fear.
What seemed shortsighted then, and insane now, is to believe that they alone could dictate what the marketplace would be or do. The assumption that if they kept their digital camera offerings to a limited degree, they'd be able to force digital photography to remain a curiosity and insignificant to the market in general. In short, they tried to hold back the tide, and have ended up bruised, bloodied and in bankruptcy.
What's particularly ironic, if you like that sort of thing, is to think of how George Eastman made Eastman Kodak into a worldwide recognized product. George Eastman did not invent the camera.
I don't believe that he, personally, even had much interest in photography until he discovered just how difficult it was for the average person to use the cameras of the day. That not only were individual photographers being expected to have a functional understanding of opitcs that seems bizarre to the modern consumer; but for most people development was likewise a home-process using a number of noxious chemicals. For most people who expressed a casual interest in taking home photographs, the reality was so daunting, and expensive, that they simply chose not to.
What George Eastman eventually managed to do was to bring to market a sealed camera with film in it that the home user could expose, not getting the same quality that a studio photographer might get in the same situation, and then send in to be developed at a central site. There are some people who claim it was his Brownie that brought photography to the masses.
By making it accessible.
I can't help but see the contrast there with the decisions made by the Kodak board of the 70s and 80s.
I don't know what business model Kodak have might have used to better position itself with digital photography. But I can't imagine that making the effort to control the emerging market wouldn't have had a worse effect than the one we have today.
I think that's a lesson that the publishing houses ought to be thinking on, too.