Which kind of innovation?
Instead of iterating on ebook formats and features based on customer adoption and needs, ebooks are leaping headlong into complexity.
They are sustaining to the current order—a disruptive innovation hijacked, controlled, and directed by the incumbents. It could have been truly disruptive but is now instead a discontinuous sustaining innovation.
So…
What makes people think ebooks are a disruptive innovation?
By and large, a disruptive technology is initially embraced by the least profitable customers in a market. Hence, most companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late. (Clayton Christensen – The Innovator’s Dilemma)
Unlike most disruptive innovations, ebooks were very quickly adopted by the publishing industry’s most profitable customers, people who buy the most, spend the most, and talk the most about books.
Disruptive innovations start out by addressing the needs of a small unprofitable market. They address a customer base that non-disruptive products do not. Those who buy a disruptive product at the outset are customers who are less likely buy the disrupted predecessor. Disruptive innovations are usually a viable but small business from the outset, create new markets, small at first, and then they grow them. The makers of disruptive innovations then iterate and scale into the incumbent market. That is, it’s only once the disruptive innovation begins to mature that it begins to target the customers of the disrupted product, and it goes for the segment with lowest profitability first.
Ebooks, on the other hand, when they first became an even remotely viable business by most standards (i.e. when the Kindle was launched) they directly addressed the industry’s most valuable audience. Their customers were heavy readers who bought mainstream books. This audience is the core of the industry’s profitability.
Disruptive innovations usually address markets that don’t exist prior to the innovation. Ebooks revalued a preexisting market and customer base.
Ebooks are to books not what tablets are to PCs but what laptops are to desktops. For a long long time laptops were a sideline in the PC business, but iteratively they improved until PC manufacturers began to make laptops that were viable as desktop replacements while retaining their portability. Laptops now dominate the market and are generally made by the same firms as those that made desktops. Much in the same way, ebooks have existed alongside the publishing industry for more than a decade (version 1.0 of EPUB’s predecessor, the Open eBook format, was released in 1999).
Amazon’s release of the Kindle was like the iteration of the Thinkpad or the Powerbook that first made them viable as desktop replacements, not a disruptive innovation but a discontinuous sustaining one.
Ebooks weren’t made viable by technological improvements. Amazon’s Kindle format remains for all intents and purposes a 1990s technology. Eink was slowly and persistently developed specifically as a sustaining technology to create readable screens. Ebooks, compared to most other modern software technologies such as the web and apps, plainly suck and have reliably sucked for more than a decade with little improvement in sight.
Of course, the same technology used by different people can either be sustaining or disruptive. Ebooks as used by Amazon, Kobo, and the big six publishers, aren’t disruptive. iBooks isn’t disruptive, but iBooks Author could have been. O’Reilly adding EPUB to the list of formats it sells wasn’t disruptive but Safari Online was and is. The disruption is in how the technology is applied to the business model.
The fixed layout portions of ebook specs and formats are the clearest indication yet that the ebook is a sustaining innovation. These format extensions contain no disruptive or innovative features to speak of, they are merely an accumulation of complex print-like cruft to aid the transition of illustrated or designed print books into digital. They are a complexity tax imposed by industry incumbents on the entire market.
Alternatively you could compare the ebook-print dynamic to the dynamic between software downloads and packaged software. The transitions from the latter to the former is discontinuous but still a sustaining innovation nevertheless. Most of the big downloadable software publishers used to be big packaged software publishers. Some of them are getting battered by the transition, but for the most part the big dogs in the new world were big dogs in the old world. It is just another distribution method to reach software publisher’s core market. (Web apps, on the other hand, truly are a disruptive innovation.)
Ebooks are a sustaining technology that are being mismanaged into devaluing an entire industry (that mismanagement is a subject worthy of a series blog posts) while the true disruptors get to work in peace. (In the long run, Google is the real winner here.)
The tech-oriented online retail side of the publishing industry didn’t get a lead on publishers in ebooks because ebooks are disruptive. As I’ve written above, they aren’t. Publishers failed because the skills and expertise at format transitions they had built up during the various paperback/hardcover/trade paperback format revolutions weren’t applicable in the digital context. That only happened because they stopped investing in sustaining innovations. It’s been clear for decades now that the future of publishing is digital. Communications are digital. Printing is digital. Organisation is digital. Production is digital. The publishing industry should never have been blindsided by ebooks. This is a sustaining innovation that has been a long time coming.
Clay developed the theory of disruptive innovations because he couldn’t explain why these firms were failing—their executives were doing a good job, too good.
He had to develop the theory because all the evidence he gathered showed that they weren’t stupid and incompetent. On the contrary, these were the best and the brightest of each respective industry, making all the right decisions but still failing when faced with a disruptive innovation. Before assuming that ebooks are a disruptive innovation instead of a discontinuous sustaining innovation we have to disprove the possibility that publishers have simply been incompetent and have flubbed a major sustaining innovation.
Ebook retailers, Amazon and B&N, were the primary retailers in print books. Kobo was launched by Canada’s biggest book retailer and bought by Japan’s biggest online retailer.
Kobo, Amazon and B&N are all classic examples of publishing industry incumbents, not disruptive new entrants.
The primary producers of ebooks, the big six followed by a smattering of smaller publishers, are generally also the primary producers of print books. Big ebook consumers are the industry’s best print customers: expert readers who buy and read dozens of books a year. The ebook industry largely consists of the world’s largest book retailers selling books published by the world’s biggest publishers, bought by people who are habitual and lifelong book buyers.
This isn’t a disruption no matter how you slice it.
Ebooks are sustaining innovation developed by the publishing industry. That’s why it’s technologically frustrating and that’s why the vendors of ereader platforms resist any change that would make it truly disruptive.
The only exceptions are Google, who has failed to gain any traction as it has tried to fight the publishing industry on its own turf by copying their own sustaining innovation without making it disruptive, and Apple, who has skirted on the edge of disruption while being hampered by a desire to work with the existing industry and an unwillingness to give up its self-destructive business policies.
What absolutely is a disruptive innovation, however, is the self-publishing programme Amazon pioneered. A self-serve self-publishing service for ebooks is a disruptive innovation where ebooks as a platform aren’t. It’s also the one part of the Kindle platform that hasn’t received any update to speak of in the platform’s history.
Kindle serials aren’t self-serve. Kindle shorts aren’t self-serve. KDP users can’t offer in-book payments or sell ebooks via a subscription plan. Amazon has iterated on the format and the production tools but the service that is the most disruptive of all in the Kindle platform is still limited to the same features it had when it was first launched. In fact, the way things are heading I wouldn’t be surprised if we didn’t start seeing core features cut or at least limited to KDP Select.
A lot of the tensions in the ebook development community are derived from this schism between sustaining the incumbents and disrupting them. Some people are focusing on the disruptive side of the platform, where wiping out the incumbents is a feature, not a bug. Others are focusing on the sustaining side of the platform, where the survival of the incumbents is vital and necessary and the concerns of self-publishers and independent developers secondary. Most companies and platforms are trying to be both at the same time.
Now that the battle for the ebook market is in full force, corporations that try to do both will not have enough focus to succeed at either.
The same obviously does not apply to authors who can easily be a supplier to both sides in this race, both publish and self-publish.
But for the rest, all of the startups, retailers, and platforms of one kind or another, you are either here to disrupt the publishing industry as it currently exists or you are here to preserve it.
Pick a side.