Manchurian Books

Yet, having said all that, content intermediaries still over-
charge their clients (the content creators) for their
services. This is especially true in an age of just-in-time
inventory and digital distribution. Network effects mean that
content brokers have to invest much less in marketing,
branding and advertising once a product's first mover
advantage is established. Economic laws of increasing, rather
than diminishing, returns mean that every additional unit sold
yields a HIGHER profit - rather than a declining one. The pie
is getting bigger.

Hence, the meteoric increase in royalties publishers pay
authors from sales of the electronic versions of their work
(anywhere from Random House's 35% to 50% paid by smaller
publishers). As this tectonic shift reverberates through the
whole distribution chain, retail outlets are beginning to
transact directly with content creators. The borders between
the types of intermediaries are blurred. Barnes and Noble (the
American bookstores chain) has, in effect, become a publisher.
Many publishers have virtual storefronts.


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