Digital Startups Need Learn A Thing Or Two From The Corner Record Store

From The Huffington Post:

Music sales have had a rough run of it since going digital. With e-books approaching ubiquity, is publishing ready? On the supply-side, digital means more published writers and far fewer gatekeepers — resulting in lower sales prices.

At the same time, traditional distribution networks have not adapted to communities created by social media. So is this perfect storm going to capsize a fledgling digital media market? Will informal, often illegal, alternative marketplaces triumph or is this an opportunity for publishers to reconnect with their customer base?

A couple weeks ago, a twenty-something year-old intern from NPR published a piece the gist of which was that in her entire music library of over 11,000 MP3s, she’s probably only paid for about thirty. The songs were acquired from a variety of sources — ripped from the CDs at a college radio station, downloaded illegally, ‘borrowed’ from friends, etc… They weren’t bought and, for the most part, weren’t pirated in the traditional sense. In other words, they came to her the same way that all the other information in her life did — through the on- and off-line self-publishing networks formalized by social networking websites.

And that’s music. As e-readers and tablets are approaching ubiquity, the growth of e-book sales is expected — and, because books contain less raw information than music does, the barriers to transmission are virtually non-existent. It takes about eight minutes to download the entire catalog of the Oxford University Press — over four-thousand books — with a high-speed internet connection. A flash drive can hold thousands of e-books; a single email can include dozens.

There’s also the little problem of supply… In the seventies, Fran Lebowitz wrote that “every artist wants to be rich and every rich person wants to be an artist.” With the rise of digital distribution, the means of production and publishing are available to all — and everyone, everywhere, wants to be an artist. 81% of Americans believe that they have a book in them; over one-hundred-thousand titles are published each month — the vast majority by the authors themselves. Sure, the reading and culture-consuming public may be growing too, thanks in part to the rise of ereaders and smartphones, but it’s in no way keeping pace with the explosion of content creators.

The old model relied on bookstores and record shops (recommenders), distributors, publishers and labels (gatekeepers) and content creators. The new model has already replaced recommenders and now threatens the gatekeepers — replacing both with algorithms. But, before the system even has a chance to fully come into its own, the friction points are starting to show. The Apple and Android app stores, designed from the ground up to function with no gatekeepers on either end, are fundamentally flawed mechanisms when it comes to finding new content — and both rely on human-curated ‘favorites’ mini-stores to focus customer attention towards new content.

Streaming sites that rely on computer algorithms to pick your next favorite book or band are novel, but can never compete with the power of an individual recommendation inside your network. Facebook might enter retail in a major way, in an attempt to take down Amazon and Apple, but that might prove antagonistic to their advertising model.

Continue reading the rest of the story on The Huffington Post