Wu (2006) is right on Google Books Search

by on October 4, 2009 · 4 comments

bookscanner.jpgIn his latest Slate column, Tim Wu endorses a modified Google Books Search settlement because he fears that without such a deal–through which a giant like Google gets a de facto monopoly–we will never see an online library that includes orphan works and out-of-print books. He writes:

Books in strong demand, whether old (Dracula) or contemporary (Never Let Me Go), are in print and available no matter what happens. … The Google Book Search settlement makes it easier to get books few people want, like the Windows 95 Quick Reference Guide, whose current Amazon sales rank is 7,811,396, or The Wired Nation, which in 1972 predicted a utopian age centered on cable television. These are titles of enormous value for research and that appeal to a certain type of obsessive. Yet they are also unlikely to be worth much money.

And this, I hope, makes clear my point. A delivery system for books that few people want is not a business one builds for financial reasons. Over history, such projects are usually built not by the market but by mad emperors. No bean counter would have approved the Library of Alexandria or the Taj Mahal.

I’m curious how Prof. Wu can square that with what he wrote in his Slate review of Chris Anderson’s The Long Tail in 2006:

The products in the Long Tail are less popular in a mass sense, but still popular in a niche sense. What that means is that some businesses, like Amazon and Google, can make money not just on big hits, but by eating the Long Tail. They can live like a blue whale, growing fat by eating millions of tiny shrimp. …

What are the Long Tail’s limits? As a business model, it matters most 1) where the price of carrying additional inventory approaches zero and 2) where consumers have strong and heterogeneous preferences. When these two conditions are satisfied, a company can radically enlarge its inventory and make money raking in the niche demand. This is the lifeblood of a handful of products and companies, Apple’s iTunes, Netflix, and Google among them, all of which are basically in the business of aggregating content. It doesn’t cost much to add another song to iTunes—having 10,000 songs available costs about the same as having 1 million. Moreover, people’s music preferences are intense—fans of Tchaikovsky aren’t usually into Lordi.

Scanning books is expensive, but not so expensive that we need the government or a regulated utility provider (as Wu suggests) to do it. If a fair use exemption or other workaround was available, I’m sure we’d see more than one competitor jump into the space. Like Prof. Wu understood in 2006, and as Google knows now, there is lots of money to be made in hyper-narrow niches.

Cross-posted from Surprisingly Free. Leave a comment on the original article.

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