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
Yes, the notion of third parties swiftly becoming redundant is interesting. Especially for me, because I work both in the music industry and the publishing industry (!)
What we’re seeing in Australia – in the music industry – is that retailers have reached a point where they don’t work to get business anymore. Many of the stores – esp indie stores – were set up when reputation was king, and they’ve never worked since then to recast their business, or renovate themselves, or whatever. In the metal genre, where image and music combine to make art, more than 80% of sales are still hard copy sales. Of course, industry figures won’t tell you that.
The notion of third parties and this palaver about where publishing and sales is going to go makes me wonder if we’re all just stuck? I think third parties will *always* have a place if they make themselves have a place.
In some regards, lots of commentary on the nature of publishing, or the music industry, and sales and etc, all comes down to the fact that here are these creative industries facing a “new beast” (which is new because they’ve ignored it for the past fifteen years) and don’t know how to reinvent themselves to remain relevant. It’s almost like going back to basic business strategy.
I may well be wrong, but in a sense I think that the huge commercialisation brought to us by major chains, then the internet, then all of the mainstream press about the death of this and that, has had a huge impact on the mindset of the small guys: when they just need to look at what they’re doing, and, if necessary, change it.
Whew! Sorry for this essay! LOL. I’ll stop now 🙂
If you haven’t read Appetite for Self-Destruction by Steven Knopper, I think you might enjoy it. In fact, you may come to believe that he plagiarized your comment above, then when back in time and wrote the book…. 🙂
I mention it here —
— and I think anyone trying to figure out what’s happening (and going to happen) in publishing should make a point of reading it. There are clear differences between text and tunes, not the least of which being that music is much easier to communicate, but the distribution issues are quite similar.
I agree that third parties will always be in the game. The main point of my post was that all of the certainty that used to exist for third parties is gone, and whatever the new certainties are going to be will not be known for quite a while. Every facet of any third-party content-delivery business in any industry I can think of is going to have to be re-learned — but only after experimentation gives clues as to what publishers and distributors should actually do.
In the meantime, all those old distribution jobs, and all the publishing jobs connected to them, are probably going to disappear. And I don’t see them showing up somewhere else. I think they’re gone for good. Which is the single greatest impediment to the reinvention that you rightly describe. Existing bureaucracies live first to protect themselves, so they’re going to be reluctant to change, or even recognize the new reality. Only when the bottom line makes it clear that things will have to change, will they actually change.
As for the length of your comment, you’re welcome to write until you fingers give out. 🙂
Whether you label them third-party resellers or publishers, I’ll note that the independent game developers who are being successful at present are selling largely through operations like Steam and XBLA. The sales they typically generate off their own sites are largely minimal, except perhaps for Stardock which, please note, has positioned its online sale site as something of a portal, offering the games of other developers with Stardock in the role of “publisher,” in addition to Stardock’s own titles. In other words, I’d like to believe that the Internet disintermediates all intermediaries, but that is not, in fact, how things seem to be settling out.
You’re right, of course. But even as I acknowledge that things are settling out in online games distribution, I’m wondering how long the current stability will last. Does Steam have a long-term exploitable portal/franchise, or are they simply on top in this snapshot? Only time will tell, but the moving target that is online distribution makes me think there will be more evolution.
I also agree, as stated in the post, that there will always be third-party players in content distribution. But I don’t know that I would want to try to figure out how to make a go of it. My hat’s off (and prayers with) anyone who tries.
For the first time in my professional life, as someone who makes things (these words included), I feel like I’m the one who faces fewer uncertainties. Or at worst, it’s a tie.