The news is out today that the seven Harry Potter titles have become available as ebooks for the first time. The interesting thing is that whilst the books can only be bought from Pottermore (JK Rowling’s publishing company) they will work on Amazon’s Kindle, Barnes & Noble’s Nook, Google Play and most other popular ebook readers.
For a long time I have thought this ‘artist sells direct to end user’ model is the most obvious and efficient way to structure the value chain for all content types in the internet era. Prior to the internet gatekeepers were required to manage the limited distribution platforms and provide working capital to various different players in the ecosystem. Those functions are now redundant and there is no longer a need for gatekeepers of any sort. The gatekeepers we have today exist because they have worked their way into being gatekeepers, rather than because the gatekeeper function is in itself important. Many of today’s gatekeepers have been gatekeepers for years and these businesses have simply managed to protect their existing positions, although they are all getting weaker. Good examples are TV companies like ITV, Sky and Comcast, record labels like Universal and EMI, newspapers like The Guardian and The Daily Mail, and publishers like Penguin and Random House. Some of todays gatekeepers are new, and they have leveraged innovations and control of adjacent markets to become gatekeepers. Good examples are Amazon with the Kindle, Apple with the App Store, Google with Play, and maybe Facebook in the future.
JK Rowling was able to leverage her popularity as an artist and force Amazon, Barnes & Noble, and others to relinquish control over their ebook reader platforms and let her sell direct. This is analogous to decisions by Madonna and other popular music stars to bypass record labels and organise their own concerts and music distribution. My hope is that competition between different distribution platforms will increase across movies, books, TV and music, and that more and less powerful artists will be able to sell direct. The gatekeepers are taking more money out of the ecosystem than they deserve and the more they are bypassed the more money artists will make and the more our creative industries will flourish.
Note that most artists will still need the help with marketing and distribution that the gatekeepers have typically provided. The difference is that they will get it from agency style talent management businesses who get paid according to how much they help instead of demanding exorbitant fees simply to open the gate. LiveNation, Simon Cowell’s Syco, and Simon Fuller’s 19 are all talent management businesses in this mould.
The biggest obstacles to this vision are rights management and financing of production. The former is solvable through technology and there are a multitude of potential solutions to the latter, not least crowdfunding so I’m hopeful we will get there. It will take a while though.