The Second Phase of Technological Disruption

July 3, 2014

I’ve been thinking about a book called Why Nations Fail, by Daron Acemoğlu and James Robinson. To (over)summarize, the coauthors say that nations fail because they resist, and try to stifle, the disruption that follows technological breakthroughs.

Technological disruption challenges prevailing power. Naturally, those established institutions try to fight back. But they rarely win. Disruption tends to release a dam of pent-up and democratic energy. Eventually, it overwhelms or transforms the established order.

Digital publishing is a case of technological disruption. Its challenge to the gatekeeper of a traditional publisher is now clear. Can’t get your book published? Do it yourself, and do it a whale of a lot faster—meaning you can capitalize quickly on issues of the day.

But I’ll propose that disruption has three predictable phases.

The first phase is the attempt to fit the new paradigm into the old. The automobile, or horseless carriage, is fitted with reins, if you will. Publishers make ebooks disappear mid-read; in other words, we still put ebooks on hold and make checkouts expire. Libraries are used to working through distributors, so turn to mega-aggregators and middlemen like OverDrive. It’s business as usual, just in another model.

Except it isn’t the same.

In the second phase, core premises are challenged, and new standards evolve. The obsolete reins give way to steering wheels. Libraries buy direct from a more nimble crop of new publishers and entrepreneurs, and/or publish their own works. New ebook distribution models emerge: Books are instantly available to multiple users.

In the third phase, the new paradigm matures, and grows its own new power structures.

In my opinion, digital publishing is now at the beginning of phase two.

Again, the old powers rarely make the transition, particularly if they fight the change. Not all carriage makers became successful automobile manufacturers. (Although the Durant-Dort Carriage Company of Flint evolved into General Motors, so it’s possible.) Will the Big Five thrive in the new ebook world, using the old rules of scarcity and friction? Or will bolder, more daring companies thrive because they give paying customers what they want, the way they want it?

At ALA Annual in Las Vegas, the Digital Content Working Group celebrated some of its successes, one of which was that now all Big Five publishers sell at least some of their ebooks to libraries—a significant change from the lockout of a few years ago. Unfortunately, the terms of those sales are so uniformly insulting, punitive, and corrosive to library operations that I have come to believe that librarians would be fools to agree to them.

The Big Five know how to sell print books to libraries, and we still buy them. But a new, hungrier, more engaged, more collaborative group of entrepreneurs has just discovered the library market. These independent e-publishers (such as Workman and Open Road Media) are open to experiment and eager to forge new relationships of trust. Other platforms (Total BooX and Biblioboard, for instance) base their business models not on the high prices of front lists, but on something else: the relationship between reader and author, with the goal of minimizing friction.

My conclusion: Let’s not buy ebooks from companies stuck in the old paradigm anymore. Just . . . stop. Let’s move our digital publishing purchases—a growing part of our budgets—over to the newcomers, because it is surely they who herald the future. 

JAMES LARUE (jlarue[at] writes, speaks, and consults about the future of libraries.