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The november issue of Wired Magazine include a Post from the venerable Lawrence Lessig, the author of Code and Other Laws of Cyberspace.

Lessig discusses the conflict that is brewing between Google and the Association of American Publishers (AAP). Read his comments yourself to get the complete picture. To paraphrase, Google is forcing book publishers to awaken from their centuries old business model to recognize the shift in information control that the Internet has enabled.

At one time, book publishers maintained all control in dissemination of mass media. There was no radio or TV to compete. Last century, these new content providers arrived, but quite frankly posed only a limited threat to the publishers. While it is true that we now have a nation of couch potatoes who spend less time reading than watching so-called reality TV, industry consolidation has allowed the publishers to survive. Let’s all be thankful for that. Today, however, the Internet and content indexing (ala Google) poses a much greater threat to paper-based book publishers.

The dynamic that Lessig missed in his analysis is content supply and demand. As with anything else consumed, written content is subject to this well-known economic theory. How? Put simply, as more literary content available for consumption (supply), demand for any individual piece of content is reduced.

An example may help here. If I am interested in reading a comprehenisive discussion about Buddhist meditation techniques, today my best is to search Amazon or visit Borders. Because the supply of current published content is limited (even at Amazon) by virtue of the “heavy” printing requirements of physical books, my choices are limited. And, moreover, the price (or license) associated with that content is relatively high.

By comparison, when Google completes its indexing of some 15 million books — 90% of which are out of print — I may have ten times the number of sources. And, if I find a definitive book that is out of print, my cost is zero. Why wouldn’t I search for a quality source, freely-available, without dissemination restrictions and easily downloadable. No shipping fees. No rainforest logged.

This is not a unique paradigm shift. As Lessig alludes, the same occured with the advent of the VCR/Betamax. This new found ability to store, copy and share video content caused dramatic alarm within the entertainment community. Sony challenged consumers to watch BOTH of their favorite prime time programs. 1976 was the year of the Betamax wars and ultimately the passage of the Copyright Act of 1976 (and more recently the Copyright Term Extension Act of 1998, nicknamed the The Mickey Mouse Protection Act). This hurt the studios because now there was a greater supply of content available to the consumer (even though at a time shift), but there were the same number of advertisers competing for ad inventory. The power had shifted to the consumer and the advertiser and away from the content publisher.

The book publishing industry faces a very similar risk. Not only is Google about to unleash a tsunami of out-of-print and unavailble content. At the same time, high-quality inkjet printers can be found in most homes. Worse still, short run book publishing is an ever increasing and viable tool for defragmented distribution of physical content. Find a public domain book you like, print a hundred copies and offer them for sale at the local indie book store. You may be sceptical, but a search on Google for “short run book publishing” yields in excess of 52 million results.

So what should the book publishers do? Assume the position? No. More likely, a few upstarts will develop a market around all this new content,following the model outlined above. Given some time to mature, they will create an industry. Those upstarts will be forced to add value, perhaps by cross-pollinating content, custom publishing and interactive addendums.

The old school publishers will be busy prosecute their claims in court. Googel will be forced to defend (a cost that should rightly be borne by all democratic citizens) and will ultimately prevail. The entrepreneurs will fight, few will win. The industry wil consolidate. And book publishing will be never be the same again.