As markets become digital, the middle men get richer

It still surprises me that authors, creators, musicians, you-name-it … all those people who are responsible for the existence of the final product in the first place, all of them get the short end of the stick when technology eliminates friction from any market. Does it always happen like this? Does anybody have examples of a market where more money ended up going to the authors proportionately than to all the other middle-man?

The particular visual is cute and all, displaying a stacked bar chart inside a Kindle.

But a pie-chart tells so much more of the story, like who’s slice got bigger? (Hint: not the author’s, theirs went from 16% to 15%)

E-books (avg. sale price $13.99)

Hardcover books (avg. sale price $26)

Wasn’t the Internet going to democratize publishing? Wasn’t it going to become the “new printing press”? How long until we don’t need a group of people telling us what to read while charging us a hefty size of the proceeds at the same time for it?

2 thoughts on “As markets become digital, the middle men get richer

  1. Oh this is kind of depressing… I could argue–that in some cases at least, the author (or artist) can get more out of the digital format. Take Seth Godin for example. He’s opted out of ever publishing traditionally again–and he’s a prolific author. He’s decided he can do better by selling directly to consumers through his website, and will, therefore, make quite a bit more profit–even if he sells less. Thoughts?

  2. Funny you should comment now after so long since I wrote this entry, as just last night we where talking about this very topic over dinner with Rose & Andy.

    I am most perplexed by the “big acts” who still choose to sell their product through the usual channels. It must be a volume thing. Time Warner can shove content down your throat at a scale that deserves their big commision. Sales channel/sales people is all they are I guess …

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