Pottermore Introduces the Publishing Industry to the Joys of Fragmentation

The front page of today’s Wall Street Journal Marketplace section is an overview of the J.K. Rowling’s new ebook store Pottermore. Pottermore will exclusively sell Harry Potter e-books directly to fans, rather than via the traditional publisher-retailer model. Ms. Rowling will bypass publishers Bloomsbury (UK) and Scholastic (USA) as well Amazon.com and Barnes and Noble.*

The article foreshadows how Pottermore will change the publishing industry, ushering in an era of authors selling direct to their fans making publishers and retailers obsolete. This is nonsense. The article ignores a fundamental challenge of the media industry’s digital transformation – fragmentation and the consumer exhaustion that follows. When every popular author demands that a consumer go to their webstore to buy their ebook, consumers end up having to navigate hundreds, if not thousands, of individual stores with individual accounts. Rather than go to Amazon, you must go to Pottermore, than to Stephen King’s webstore, than to Dan Brown’s webstore, etc., etc.

For anyone that has worked in the music or film industry over the last ten years, this story will sound very familiar. When digital music came about, all people could talk about was that labels and record stores were doomed as every artist would now sell direct to their fans. Labels and record stores were doomed, but for a different reason. Ten years later, instead of millions of individual artist-owned webstores, iTunes controls 70% of the market. After pure direct-to-consumer music sales fizzled out, the thought was that consumers just needed a large scale platform from which to purchase music directly from artists. MySpace Music and a host of other well intentioned services popped up to enable direct-to-consumer sales on a large scale and none of them held up.

There will always be marquee artists/authors/musicians that have the brand power to pull consumers out of their established habits in order to purchase their content. Radiohead and Nine Inch Nails have been able to do it (to a small extent) and certainly J.K. Rowling has the power to do so. But there are only so many J.K. Rowlings out there, let alone the millions of up-and-coming authors scraping for their own share of mind. The more and more that fight for a direct relationship, the more overwhelming it becomes for a consumer and the more likely they are to return to the Amazons and iTunes of the world.

In the meantime, Pottermore will most likely inspire a host of similar direct to consumer sites. Those in turn will usher in a world of fragmentation and confusion for publishers, retailers and consumers as the industry slowly sorts itself out. Eventually all but the most prominent titles will end up back on large-scale established retail platforms. Enjoy the ride.

*Her publishers will still receive a small cut of e-book sales and formats will be compatible with Amazon’s Kindle and Banes and Noble’s Nook reading devices.