Traditional Bookstores and Libraries are Doomed by the Internet, and so too are Many Other Ways to Distribute Content to Consumers-Becker

 

It has been recognized for at least a decade that traditional bookstores and newspapers are essentially doomed by the growth of the Internet and digitization. Doomed also are postal systems, record albums, movie theatres, and most other traditional ways of providing information, entertainment, and other content to consumers. To take the US postal system as an example, after growing for many decades, the number of pieces of first class mail declined by 25% in past few years alone.

Even hard copies of books, newspapers, and films are beginning to go the way of bookstores and theatres. Millions of books and thousands of films are available online or in other digital forms, where they can be read or watched by almost unlimited numbers of consumers. Reading a book in digital form has a few disadvantages, such as it is more difficult to make notations in margins, although developments in software are making digital notations much easier. Moreover, with digitization one can have access to many books in a very light Kindle, or in an IPad that weighs only a few pounds, and also has many other uses.

One may lament the closing of many local bookstores, post offices, and movie theatres, and the sharp decline of giants in the newspaper business like the Washington Post, but the reasons for these changes are both clear and irreversible. Anyone with access to the Internet, and this access is rapidly growing worldwide, can much more readily order a book online than by going to buy it in a bookstore. Similarly, constant updates on the weather, sports, and news are more readily available online than from newspapers, or even from television.

Revealed preference clearly indicates that increasing majorities of men and women prefer gaining access to books, news, music, films, and other information and entertainment online through the Internet and in other digital forms. This is why they are shifting away from traditional hardcover books, movie theatres, and even DVDs, itself a new form of providing movies. Older persons who grew up reading books and newspapers often continue to do so, although even they are shifting to digital forms. However, the real trends are seen in the behavior of young persons, such as teenagers and the college students mentioned by Posner. They almost never read hardcopy books and newspapers, or listen to music through CDs because they increasingly read fiction and non-fiction, and listen to music, on the Internet and through other digital forms.

The effect of Schumpeter’s “creative destruction” mentioned by Posner is not to preserve traditional products or services, but to add to consumer welfare. Online services and other digitization have certainly helped consumers a lot, even if the passing of bookstores is lamented by those of us old enough to have the pleasure of discovering great books on some dingy bookstore shelves (One of the first books I discovered this way while a teenager was Henry George’s classic statement of the case for a single tax on land, “Progress and Poverty”).

But hardly anyone would lament the decline of the US postal system, which traditionally has provided surly service by overpaid employees, introduced few innovations in mail delivery, and frequently failed to deliver mail on time. Email is much more efficient than the appropriately called snail mail, which explains why email communication has grown so rapidly, even among older persons.

Piracy and copying of the digital content paid for by someone else is the most significant problem posed by digital provision of entertainment and other content. Piracy and copying generally reduces demand for the works of writers, filmmakers, singers, and other groups who depend for their livelihood on sales of their materials. The song and movie industries, for example, are in the doldrums partly because they are unable to collect much of the revenues on their works that are quickly pirated and copied. The IPod is an innovative technology that uses itunes to sell single songs cheaply, and thereby reduces copying and raises the revenue received by singers and writers of songs. Perhaps other innovations will help producers of movies, books, and newspapers, although so far newspapers have mainly tried unsuccessfully to collect considerable advertising and other revenue from their online editions and articles.

 

Comments

[farmland investment]

You know, I see the point overall about efficiency, but beg to differ regarding bookstores. I am British living in the US, and remember fondly many a trip to tattered bookstores in both London and Oxford whilst growing up. Here in the States, it still strikes me as a bit of a tragedy that Borders has disappeared. Yes, I can order on Amazon, but nothing beats as a human experience going to the bookstore and just sorting through hundreds of books, scanning and scanning, and finally choosing. Call me sentimental, but we do lose something here.

[TANSTAAFL]

After spending hours daily reading online media and email, a hardcover book is a refuge.

[Dave]

When I was a kid, my two favorite stores were the record store and the book store, both gone today. Thank God they will never replace the Pub!

[Mitchell K.]

"But hardly anyone would lament the decline of the US postal system, which traditionally has provided surly service by overpaid employees, introduced few innovations in mail delivery, and frequently failed to deliver mail on time."

Hilarious! I hope that members of the APWU do not follow this blog. I wonder what kinds of experiences Becker has had with the United States Postal Service.

"Email is much more efficient than the appropriately called snail mail, which explains why email communication has grown so rapidly, even among older persons."

But if people stop patronizing the USPS then who will answer all those letters that are addressed to the North Pole in November and December? I'm not sure if Santa has made the switch to email just yet.

[Lisawhite]

You either have got quality knowledge of what your discussing or you did some great research. Thanks for this excellent post.

[Wido Incognitus]

I do not share your pessimism about the USPS. It clearly has a diminished role, but it still has a role in delivering packages and in the past was also a reasonably reliable and reasonably cheap way of delivering letters compared to the alternatives.

You are using a broader approach than Judge Posner, which I am not sure is justified. The disinterest of young people in hardcopy books is more limited compared to the disinterest of almost all people in buying books from a physical location. There are benefits for reading from hardcopy books, or in a different way from ereader technology, that reading large amounts of text from a computer screen does not have. It is easier to read without losing track of where you have been, which makes it easier to focus over large amounts of text. It does not have problems with computer crashes. You can take notes. They are easier to share then ebooks that have some piracy controls. Of course, printed out pages of paper from an ebook on the computer are good too.

[Jack]

Yes....Wido.. the USPS will be there for a while. While UPS takes a fair share of the online purchasing biz, it cherry picks and does not serve everywhere.

BTW in the record biz LP's ( you know those old black disks?) set a recent sales record this year..... I think 2 million; mostly to those not liking the digitized music on CD's ...... much less the even more truncated MP3 files.

[Mike Hunter]

I agree with Beckers comments. Bookstores, movie theatres, etc are all slowly fading away. I won't miss buying my media though a physical medium, but what I will miss is the human interaction.

Although not so much of a problem for people living in cities with a lot of walkable space; Chicago for instance, places that served as a kind of defacto town square are quickly disappearing from suburbia. Where are you suppose to meet someone who's already outside of your social circle? We'll still have cafes' I suppose, but that's little confort.

[Jill Minor]

What about people who can't afford books OR ebooks? Public libraries are the nation's information commons and a bedrock of democracy. Please don't lose sight of the fact that many Americans rely on the library to provide information that they could not access otherwise. Many Americans lack computers and internet access as well.

[TANSTAAFL]

Public libraries also will prove an essential repository of survival information in apocalyptic times, for example, if Iran succeeds in writing a nuclear sequel to 9/11 and EMP knocks out all the ebook readers, either directly or by denying their users the ability to recharge the batteries.

[Jack]

Mike -- When Anchorage was smaller and had mainly a "downtown" and a couple of other places to shop, in addition to meeting new people it was nice to have the chance encounter with folks you knew but who were not exactly in your circle of friends. Going out "on the town" was often the same experience, you might on a restless eve go out alone and run into an acquaintance and meet a whole new group.

There must be something about "critical size" as when I moved to Anchorage folks passing on the sidewalk, young or old, would meet your glance and give you a greeting. Visiting back in So Cal it was worse than when I left. Two lone walkers on the beachside "strand" being in view of each other for a hundred yards or more pass w/o the slightest acknowledgement of their being another human in the area and a sense that any display of a greeting or friendliness had an agenda like an attempt at a pick-up or worse.

Ha! there is something about mass, as in LA its just another person "in the way" blocking traffic, making the line too long, their existence a disadvantage, while on a wilderness trail of some isolation it's "Hey! a fellow traveler" and likely at least a moment to share experiences.

I've spent time in Chicago and downtown seemed friendly, with, for a mega city with it's great architecture to have enjoyable walk spaces. But suburbia? perhaps everywhere? seems like mission oriented power shopping spaces that mostly dampens the mood for casual conversation.

Kurt Vonnegut, who thought that much of what we should do is screw around and enjoy ourselves used to purposely take his drafts and correspondence down to the PO, buy stamps and mail them even though he knew there were more efficient means just for the tradition or connecting in a way with community.

Jill........ on those who can't afford: I keep hearing that on the net "info "wants" to be free" yet broadband is $60/mo or more and more should one dare to download a nearly "free" movie, with Iphone access $75 or so? plus keeping up with the electronics and MSFT's cut.

I'm just now reminded that TV/radio USED to come to us free over OUR airwaves courtesy of the advertisers. Now we pay for cable with most of the channels still having advertisers.

Worse..... in the "free" internet we pay for access while Google, Facebook etc grosses billions all of which comes down to advertising and selling product. Yet the very essence of news, the costly investigative reporting and foreign correspondent function is being starved out by the "failure" of print journalism.

Ha! for all that Google and Facebook income we get a search engine of which there are dozens, and a few cheap pages to park our family pictures and gossip. Great?

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[Janos]

1. Thre are other successful compromises that were efeective in solving somewhat similar issues with copyright. One is the current status of performance rights for music: if I throw a private party with a band, I do not have to secure permission to perform copyrighted songs, instead there are standard fees to be paid to organizations. Another compromise happened when reasonable quality recording technology became a consumer product: a tax was imposed on the equipment to compensate music copyright holders for their presumed loss. Similar compromises could be found to charge for copyrighted materials downloaded from the internet, instead of making delivery cumbersome for all, and encouraging illegal activities.

2. Copyright for 75 years after the death of the author does seem a bit excessive. The strategy of making laws more rigid because it is easy to break them is not a good idea.

3. Technologies deliver not only products, but situations. Eating at a restaurant may be only a way to sate hunger, or it may be an enjoyable entertainment, an opportunity to discover exquisite new dishes, a date, or a business opportunity. Television delivers a much more complete view of a football game than a seat in the stadium, yet people pay thousands of dollars to see the Superbowl in person. Libraries and bookstores will continue to be successful to the extent that they can deliver added value in a similar fashion, at reasonable cost. There is a serious problem that such added value is the least appreciated exactly by the segment of the population who most needs it and has had the least experience enjoying its benefits.

[Peter Sage]

The USPS works very well. When I get a bill in the mail, I write a check, put it in an envelope, add a stamp for about 45 cents, put it in the mail stream, and about two days later it is received and paid. I have visited Mexico and China, where the mail systems do not work reliably and the process of paying for things is very cumbersome. People stand in lines to pay bills, which never happens in the USA.

Just for fun, as an experiment, try hand delivering, just to your own home city, five or ten messages--Holiday cards, maybe. You will discover it is several hour's work. Tedious and expensive. It costs you about 50 cents a mile to drive your car. Drop off s check to a merchant a half mile away and drive back home-- the cost exceeded the USPS stamp. The USPS is an extraordinary bargain: reliable and dirt cheap and convenient. If you don't believe it just actually do my challenge and deliver your own local mall for a week.

Peter Sage

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[Jack]

Peter: Yep! And if you bought something from rural Alaska the same "forever stamp" would deliver your check!

[Moving Homes]

Digital technology doesn't mean the end of books, it means the end of traditional books but I am sure books will remain a prime source for information!

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[alanc230]

I love my NOOK, but I hope digitization never completely replaces real books. The NOOK is very convenient, but it's just not the same experience. Also, I'm sure that many, many out of print books will never make it to the digital world, for lack of demand.

[stella@raplica handbags]

i agree with you there is a lot of ways for communicating cause this age is the age of internet and digital media just take hold over the entire world

[Thomas]

I find it discouraging that Becker uses the tired and worn out argument that piracy decreases demand for a product or service.

Take the case of Eli Whitney and the Cotton Gin. Whitney is perhaps best known for his invention of the Cotton Gin, but it was not what he made his fortune on. In fact, Whitney lost money on the Cotton Gin because people stole his idea. At this point, the typical defender of copyright laws makes this argument: we need people like Eli Whitney to continue to invent things like the cotton gin, so to ensure that they continue to invent, we need to incentivize them by ensuring that they do not lose profits to those who would steal their idea. To that end, they introduced the copyright.

Whitney's Cotton Gin was protected by copyright, but as it turns out it was not much protection at all: fighting copyright suits cost him most of his profits. Now, the advocate of copyrights would warn that this would cause Whitney to stop inventing. After all, why should he if people take away his profit motive? But that is not what Whitney did. Whitney invented something else, a machine that bore rifle barrels. He made a fortune off of it, despite the fact that people stole that idea as well: he remained the lead innovator in his field, and was always one step ahead of his competition.

The argument you make for copyrights is simply not supported by the data. You assume that people will not create more without copyright, yet that has proven not to be the case. You assume that people will not see a profit without copyright, yet that has proven not to be the case.

From my perspective, it seems that copyright doesn't encourage innovation; it discourages innovation. It tempts people to rest on previous accomplishments. No need to create the rifle-boring machine if your cotton gin is raking in the dough.

Furthermore, in every other area of creative life we encourage borrowing/stealing: art, literature, philosophy, science... the list goes on. Does Posner have to pay Scalia when he borrows an argument? No. He need only credit Scalia. Value is created when we allow a process of borrowing and innovating.

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