Protection Won’t Save You For Good

When Amazon released its numbers for the last quarter of 2010 last week, it was a small surprise for me that in the US e-books are already ourselling paperback books, after they have already done that with hardcovers last summer.

In the country considered the origin of press printing it’s easy to forget that the book market is not a free one in terms of pricing. Every vendor of new books is bound to the price the publisher sets, and this applies to e-books as well, there’s just a little catch: Print books are being sold with a VAT of 7%, whereas e-books have the regular VAT of 19%, making them even more expensive than their physical cousins. Not only has this regulated protection served the publishers, it’s also the reason Ye Olde Bookstore hasn’t yet had to surrender to discount retailers.

If you’ve being living in the real world for the last decade, it won’t be too hard for you to guess that this model is not set up to endure the future we’re heading to. What we have learned from the desastrous decline of the coal and steel industry in the last century is that a country can’t protect its perceived vital industries for good, because sooner or later global competition will have taken over, and you’re an anachronism, far behind the pack.

What not only Germany’s politicians and leaders of protected industries (let’s coin the term LOPIs now) need to understand:

  • trying to protect anything from competition does more harm than help in the long run
  • the business of physical products is steadily decreasing, at least in consumer markets
  • you need the courage to sacrifice your sacred cow in favour of a new not-yet-beyond-risk one or you’re going down
  • what’s more important: you need to have people you can encourage to come up with fresh ideas that take your business to the future, even better if they do it by themselves.

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