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Friday, 14 October 2011

And Someday, Our Way of Life…

Polybius stood beside Scipio Africanus as the general surveyed the burning carcass that was Carthage. As Rome’s greatest enemy went up in flames Scipio wept and grasped his companion’s hand. “It is a glorious sight,” the General explained, “but I confess a dreadful foreboding that the same fate will someday befall our country.”
He was right and if Polybius had not been an historian, we may never have known of Scipio’s moment of prescience.
His words are more than a famous example of ‘I told you so’, they are an immutable law of nature. Just as generations grow old and pass away, so do civilizations. Whether it is the Aztecs, the Babylonians, the Egyptians or the Romans; all great civilizations carry their ultimate doom within their genetic makeup.
The same is true of our current system.
Our economic systems are rotten at the core and the only thing our elected leaders can think of is to pour more money down the hole. They gave bailouts to the big corporations, allowing the chief executives to protect their hefty bonuses while the public get nothing. Meanwhile, Greece teeters on the brink, French banks tiptoe around the word ‘run’ and Germany is printing deutsche marks so they can be ready to leave the Euro at a moment’s notice.
The rampant consumerism that has propped up the system is grinding to a halt. Most of the driveways in my city are filled with the owner’s vehicles. This is because their garages are filled with jet-skis, ATV’s weekend motorcycles and last year’s LCD TV’s (gotta have LED now…). How much of that was paid with cash and how much involved a payment plan that still bleeds money from their accounts?
When the system finally falls apart, how far will we be knocked back?
I ask that question every time I look at my children.

Wednesday, 5 October 2011

The Sleeping Giant Awakes - eBooks and India - Pt 3

Back in July I posted about the potential impact that India would have on the eBook market if a device were offered with the right price tag. Then in July I continued with a second installment noting , among other things, the potential for the educational system.  
Imagine my surprise when I saw an article at The Passive Voice announcing that the Indian government has inked a deal with Montreal tech firm Datawind. I did a quick search and found a flurry of corroborating sources such as this article from PC World. The deal is for an initial order of 100,000 Aakash Android tablets at an initial price of $50 per unit though Datawind believes they can bring the price down with higher volume. The initial order is believed to be destined for a subsidised program at the nation’s universities.
As to volume, the government expects to buy eight to ten Million units before the current fiscal year end. That price is going to start sliding down to the sweet spot pretty fast.
Though the unit can handle web browsing, video and double as a cell phone, it can also handle eBook apps. Remember, were talking about the second largest population on Earth and with a unit price closing in on that magic 0.5% of per capita GDP, we are going to see a massive shift in how books are consumed.
Every now and then, I manage to anticipate the news. I just usually don’t get excited enough to write about it…

Saturday, 1 October 2011

Death of a Salesman - Part 2 Bookstores Tired of Selling Books

In years past, I used to work for a company that sold general merchandise. It made the lion’s share of it’s revenue from groceries and by lion’s share – I’m talking about somewhere between thirty five and forty Billion dollars a year. I know, you’re thinking ‘Andrew, that’s pretty vague. A Billion here, a Billion there, pretty soon it adds up to real money.’ Well, you’re right but I can’t be bothered to look up the exact numbers on their latest quarterly statements and l like throwing Billions around like candy.
Anyway, when my employer realized how much higher the profit margin was for GM, they decided to give it more space. They did this by building larger stores. People kept coming to buy groceries but they started to buy a lot more GM (bathmats, pillows, strollers, automotive, clothing, books…). Profits increased and shareholders were happy.
The reason I mention this is because of what I am seeing in the bookstore down the street. Over the last four years, I have noticed that the impulse purchase racks by the checkouts have been multiplying. At some point a couple of years ago they evolved, becoming heavy duty floor displays and they moved out onto the sales floor. Firmly established in their new habitat, they continue to displace the weaker species – books.
With eBooks doubling their market share every year, you would think they would reflect that in the pricing  but they don’t. Publishers often list eBooks for 60% more than the paperbacks. So you have the industry cannibalizing the eBook market to bolster sales of paperbacks even while reducing the square footage where those sales happen.
They are killing their business at both ends.
Frankly, when I see the type of impediment pricing I don’t think “I’ll just spend twenty minutes getting to the bookstore to buy the paperback like a good little consumer.”
I log onto Amazon or Smashwords and look for a new indie author (more on that in the next post).
We tend to assume that businesses know what they’re doing. In reality, this tends to be false. If you need further proof, then have a look at the bookstore down the street. They are slowly but surely getting out of the business of selling books. Roughly a quarter of their floor plan is dedicated to selling general merchandise, and that’s not counting the space taken up by the Starbucks franchise. Where books used to sit, we find coffee mugs, note holders, and various knick-knacks.
In another couple of years, this will reach a tipping point. People like to go shopping for books and sure, they might pick up a mug while they’re heading for the checkout but nobody will say; ‘Let’s go to the knick-knack store’.
A shame, really. They might have decided to pick up a paperback at the impulse rack by the checkouts.