I don’t know anything about Quartet Press other than the fact that they announced today that they’re closing. And I mean nothing.
Reading the post about their closure, however, made me think of a similar note I’d read only a few days ago. This one was about Manifesto Games, a site/biz run by a friend in the interactive industry. The owner, Greg Costikyan, closed up shop in June, saying:
We did not achieve the critical mass of support by independent developers that we had initially envisioned (some of whom, bizarrely, viewed us as a competitor), though we appreciate the strong and enduring support we received from some. We always knew that the essential problem we were trying to solve was a marketing one, but we never figured out how to crack the marketing nut, at least with the minimal financial resources we had available.
Now, Greg knows more about the business side of the games business than I ever will, but I’m not sure that what hurt Manifesto was a marketing problem. And while I know nothing about Quartet Press or the reason for its demise, I’m struck by one way in which the two companies are similar. They were both third parties to the relationship that exists between content provider and content consumer.
Yes, I realize that’s stating the obvious. But that’s actually the point.
Until recently — and in some content-driven industries, very recently — third-party participation was essential to content distribution. Think about the music business and what’s happened to the availability of retail music. Sam Goody/Musicland: essentially gone. Tower Records: gone. Most of the independent retailers: gone. In their place another third party — Apple and the iPod/iTunes one-two punch — has now moved into prominence, but I think this specific example is causing people to reach the wrong conclusion about what’s really happening to third party players in content-driven industries.
The change from retail music to downloadable music is not simply a swap of apples for oranges, and it’s not just a streamlining of the content-delivery process. It is, rather, one evolutionary step on the road toward a system in which there are no third parties. Granted, in practice this may not happen for a variety of reasons, but for the first time in history the machinery is there that can make it happen. And that machinery is going to put crushing pressure on all third-party players in the content-delivery market.
As I’ve mentioned before, the most important aspect of the internet to me is the fact that I don’t need anyone else to reach an audience. Yes, a third party might be able to help me with marketing, but I can put my content online and it’s online: I don’t need it trucked anywhere, or stocked on a shelf, or anything else you can think of that a normal third-party business might do.
Which means that while Apple may be flying high right now, the same pressure to provide direct (and perhaps even free) content is bearing down on them as well. They may survive as a library, or a filter, or on price cuts and competition, but the fact remains that on a very basic level Apple doesn’t need to exist in order for me to get the content I want — unless of course they lock up content and services in exclusive deals. But even that will only buy them some time.
I think there’s a hint of all this in Greg’s quote above, where he states that some game developers ‘bizarrely’ viewed Manifesto as a competitor. In a way, modern-day online creators may see any third-party presence between product and consumer as unnecessary, if not as actual competitors for consumer dollars. Even if Manifesto’s terms and performance were beyond stellar, and even if Manifesto delivered a whopping number of sales, there is still a sense — a literal sense — in which they are not necessary in order to make any specific transaction happen.
I also think there is a big difference between being a third-party reseller (Apple), filter (The Sixty-One) or publisher (Manifesto/Quartet Press), and I don’t think people are talking about that enough. Filters seem to me incredibly important but hard to monetize; resellers seem inevitable and meaningless at the same time; publishers seem critical to vertical market penetration (and scale), but unnecessary for individual transactions — which means downward price pressure is going to be absolute death for publishers until this all shakes out.
How sure am I of any of this? I’m not sure at all. I just keep thinking that the worst place to be right now is between content providers and consumers, because I think that basic relationship is still in flux. Third party players of any size looking to make a buck in this environment are probably taking the risk of their lives (corporate or corporeal).
In closing, an apology for mucking around in other people’s pain. Anyone who puts their money where there mouth is and tries to make something work in an unproven market deserves respect for their effort. It’s easy to sit on the sidelines and quibble, and I hope I’ve done a bit more than that here.
I also hope everyone lands on their feet.
— Mark Barrett