McQuivey Explains His Thinking

Thanks to Teleread for pointing me to a new post by James McQuivey of Forrester Research. I've mentioned both Forrester and McQuivey here on this blog before.

On November 8, McQuivey had a post here on Paid Content titled "Why The Book Business May Soon Be The Most Digital Of All Media Industries." A couple of lines from that report have already been widely quoted online:

... 2010 will end with $966 million in e-books sold to consumers. By 2015, the industry will have nearly tripled to almost $3 billion, a point at which the industry will be forever altered.

Last Tuesday, McQuivey did a post on his Forrester blog that's worthy of mention. In a post titled "On The Certain Economics Of Relegating Paper Books To The Margins Of The Business" here, McQuivey contends that paper books will not disappear completely; paper will simply not be the dominant medium:

... publishers will think of their eBook strategy first. Paper decisions will be made as an adjunct to digital decisions. Many, many books will be published without paper versions at all, at least until they get enough critical mass to justify going to paper. Bestsellers from proven authors will always get both, launched simultaneously ...

But that wasn't the part that interested me. It was this line: "Ultimately, we're talking about a change in economics, not formats."

He reminds readers what happened in music when the "dominant retailers" found their economic model "drying up," which naturally lead to less shelf space. Dedicated retailers like Tower Records went out of business while the big box stores like Wal-Mart cut shelf space dramatically. McQuivey predicts:

This will mean an automatic retraction in how many books are printed because publishers won't get the massive bulk purchases they used to get ...

The natural consequence will be fewer (and lower) advances for authors, which will naturally push them toward e-publishers and/or self-publishing.

Economics, not technology.

Read the whole article. It's worth it.