Friday, October 14, 2011

How Long Will Blogger Keep My Blog?

I haven't posted anything to this blog in SO LONG! It's nice to see Blogger has kept it for two years :) I shall return SOON!!!

Sunday, January 25, 2009

Print Publishing vs. E-Publishing

Many writers and industry analysts are debating if e-publishing will conquer print publishing (various article links below). If is not debatable. When and how are. In other words, think about when print will be conquered and how to make money in the future of publishing.

Keep in mind that you are probably among the earlier adopters of digital technology. History has yet to run its course and digital habits have yet to go fully mainstream (consider the computer literacy of the 2008 Republican presidential candidate).

Historically, the automobile was an economic game-changer (an industry disrupter, if you will) for transportation just as digital technology is for reading. The method is irrelevant to the purpose. Transportation involves going from Point A to Point B. While people had grown up with and were accustomed to the horse fulfilling this need, horses aren't necessarily critical to the basic need of transportation just as paper is no longer critical to the basic need of reading. Aside from the paper milling industry, there are other unnecessary middlemen operations (lumber, shipping and storage, printing, binding, brick and mortar retailing via Barnes & Noble, Borders, etc.) that make the economics of print publishing unviable in the long-term when competing with e-publishing.

The resistance to abandoning paper is like the resistance to abandoning horses. Arguments to preserve paper – the feel of the book, the durability, less risk of reading in the tub – will seem as ridiculous in 100 years as arguments to preserve horses for transportation seem now. There were surely people who felt horses would never be replaced. After all, the automobile can't go everywhere a horse can go. Not everybody liked cars. Horses were the standard everybody grew up on. They used to call common sense "horse sense." There surely are virtues to printed copies of text just as there surely were virtues to keeping horses. On a different note and more personal level, I hold great affinity for the cassette tape. I still own dozens of mixtapes and can make strong arguments in favor of the cassette over the compact disc (although those don't hold water against digital music). Unfortunately for the tape, economics trump virtue. In other words: money talks, bull**** walks.

While we internet-savvy consumers from industrialized countries are early adopters, we are also fossils historically in that we even have some attachment to printed reading. How strong is that attachment among the youth in South Korea, the country which boasts the best broadband penetration in the world and whose citizenry performs most daily tasks and live their lives on smart-phones? If you're in the US, you may receive printed coupon advertising in the mail. In South Korea, they receive text message offers from restaurants and retailers as they pass the place. Paper is unnecessary.

To better understand where print is going, watch the newspaper industry. 50 years ago, every town needed a hard copy paper to publish the same world news and a few local stories. But in the 21st century and beyond, how many letters of record are needed past the New York Times, Wall Street Journal, and niche pubs like The Guardian and The Economist? Do people really need a hard copy of the St. Louis Post-Dispatch? People are already going online for news while the industry scrambles for revenue. Who needs the local classified section when there are superior digital resources like craigslist and eBay? Printed book publishers will eventually run into financial woes as well.

Determining when print will die is difficult. America won't match super-urban South Korea's broadband penetration any time soon because of its geography – suburban Americans live spread out in big houses with yards. This will inhibit the already slow digital adoption rate in America (don't forget about the presidential candidate who doesn't use the Internet). You may live most of your life before the inevitable death of print. In most of the world, the masses living in emerging markets don't yet have the means for digital technology. However, they may be able to leapfrog outdated technology like printing as they leapfrogged landline phones.

Determining how to make money is also difficult. I'm not going to pretend to have an idea how this angle will play out, but I'm confident that capitalism and the profit motive will find a way. I whole-heartedly disagree that the quality of literature will suffer. I imagine that argument was made by musicians complaining about the emergence of the phonograph record in the early 20th century. If people can buy our music once and listen to it forever, they won't pay to see us perform. How will we make money? All the good musicians will quit making music. Present day musicians revived that fear when downloading technology came in the picture, but society has managed to monetize that as well. While the kinds of art found in museums may need a government subsidy, music and reading have always demanded a high premium. There will always be a market. Does anybody honestly foresee a shortage of writers someday?

Then again, published content will certainly change. I converted from the Times hard copy to the Internet about a year ago and there is a clear difference in what I choose to read. With a hard copy, you are almost compelled to read all the articles. While I thoroughly enjoyed a 3000 word article about the growing exports from Brazil of HPC products featuring exotic ingredients from the Amazon rainforest, I probably wouldn't have clicked on it if I were getting my news online. On the other hand, should the mainstream public be subsidizing that article if nobody cares about it? Or should it be featured in a niche publication? Nicholas Carr in The Atlantic on how reading online may change what we read and even how we think: "Is Google Making Us Stupid?"

What's my point? Don't think if. Think when and how.

Marketing guru Seth Godin on the future of publishing

Samir Husni on the power of print

Bob Sacks says "It's a Digital World Now"

Friday, October 10, 2008

No Conclusion on the EU

Ten leading European economists have recently written an open letter to European leaders urging a coordinated rescue plan for the world financial crisis, specifically as it implicates European banks. (As ten economists drafted the letter, over 300 more have since signed it as of this writing, see this article).

The letter made the argument that the “piecemeal” actions being taken in Europe will never amount to a solution for the crisis. “The current approach of rescuing one institution after another with national funds will lead to Balkanization of the European banking sector.” The letter went on to say that the US has already learned that bailing out a few giants did virtually nothing to stop the bleeding. Due to the credit-default swap industry, or banks insuring each other’s bad debt, the banks are all tied together as if with rope while trying to stay afloat in deep waters. When one or two go under, they will take others with them.

Those economists are not alone in their assessment. According to a recent Bloomberg article about Europe’s challenges, European Commission President Jose Barroso called on Europe to remove the “mismatch between a continental-scale market and national systems of supervision,” (see this article). The European Union, while comprising 27 different nations with 27 national governments, acts as one financial market with one currency (one currency for 15 member states, anyway). Banks across national borders are deeply intertwined with each other and their relationships affect smaller countries where neither bank is located. So a “systemic crisis demands a systemic response.” Coming up with an aid package that successfully navigates all the multinational bureaucratic red tape involved will prove extremely difficult if not impossible.

Adding to what seems like a perfect storm in Europe is the extreme diversity within the continent. Besides having 27 different governments, 27 different heads of state, and 27 different constituencies to independently please, there are extreme cultural issues to overcome. There are 23 official languages within the EU. Whether generalizing Europe in terms of East vs. West, North vs. South, or Christian vs. Muslim, there is really nothing in common among all states besides soccer. Imagine the possibilities for disagreement over a solution between the Greeks and the Swedes, or the Spanish and the Polish. One doesn’t even have to cross the continent to find such contrasts. England and France, neighbors, are well-known rivals who loathe each other, and my Swiss roommate often has less than kind words to say about the Austrians. Besides the fact that Switzerland has been involved in fewer wars, how many people can detail the cultural differences between those two? I can’t. As the Bloomberg article notes in its lead sentence, “It took the European Union almost three decades to agree on what could legitimately be called chocolate.”

While America is the most diverse country in the world, she has centuries’ experience of dealing with its ethnic, geographic, and economic diversity. America also has the benefit of only one federal government in control. So the US is at an advantage over the EU in executing its comprehensive public bailout of the financial services industry. The House of Representatives voted against the first bailout plan and showed how difficult drafting such a plan will be even in the States. I just can’t grasp how pain-staking of a process it will be for Europe.

In my International Banking class of my graduate program, the professor explained how the European Union was relatively young historically, and that there was no real conclusion on how it will turn out. It has yet to pass the test of time to call it a success. This directly contradicts what almost came to be considered common sense in the media – the US dollar was in the toilet and it would never come out. Some day the Euro would be the reserve currency of choice. I also heard this incessantly from my European friends.

While never arguing with my friends native to the other side of the big pond, I always viewed the fall of the dollar as a normalization of what was long overdue. I thought that the dollar was probably overvalued for the generations that Europe was economically splintered (what I wouldn’t give to be an American in the 80s vacationing in Europe!). Europe finally united and quickly grew its buying power. Imagine how much waste was saved by creating a common financial groundwork and establishing an ease of crossing borders. Imagine the waste, before the economic unity, of all the financial professionals dedicating their time, labor and resources to currency arbitrage alone. The EU became a much more productive, cohesive continent despite its inherent diversity and government fiefdoms.

The EU normalized economic standards and collectively grew faster than ever. The Euro increased in value to somewhere around $1.50. However, most of the economic reforms were planned in 1993 and executed in 1999. Being so young, the EU has yet to pass a significant test such as the global financial crisis we are in today. This is a historic time, especially for the EU. How quickly it can produce a continent-wide solution, and how effective that solution is, will help determine its historical success. As the Bloomberg article explains, the unanimity requirement for changes makes decision-making terribly slow. In trying to solve this problem, it has tried to change rules in favor of a stronger governing body twice. The French and Dutch rejected a constitution in 2004 and the Irish rejected the 2007 Lisbon Treaty (which the Polish were expected to do if the Irish hadn’t). As the crisis deepens and pressure mounts, the financial bloc may hastily push through a plan that satisfies everybody but is ineffective or not ideal.

As the US dollar was artificially over-valued while Europe was an economic mosaic similar to America in the 18th century under the Articles of Confederation, the Euro may prove to be overvalued after it overshadowed the dollar, never having proved itself in the absence of the EU’s ever seeing a crisis. The dollar has already started to gain on the Euro (currently $1.34 / 1 Euro). Only time will tell what will happen. Being one who earns US dollars, I am cheering for a 1:1 ratio someday. But if the EU can successfully come together and take swift, effective action, it will bind the countries even more. This may set the stage for, and I will be dead long before this happens, the conversion from 27 nations in alliance to 27 states in one country: The United States of Europe. In 150 – 200 years, who knows? It could happen.