Chief Executive Of Random House To Step Down -- Are Pirate Booksites To Blame?

From International Herald Tribune:

FRANKFURT: Peter Olson, the chief executive of Random House and one of the most powerful figures in U.S. book publishing, will step down in the next few weeks, according to two executives at Bertelsmann, the German media conglomerate that owns the division.

Olson, who has run Random House, the world's largest consumer publisher, since 1998, has come under mounting pressure in recent months as Bertelsmann's financial results have been damaged by lower profit at Random House and steep losses in its American book clubs, which he also oversees.

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My Comment: In a nutshell, Random House is beginning to realize that the business models that they have been using for the past few decades are not producing the revenues and profits that they had expected. As many readers of this blog know, I have been waving the flag for the past 7 years (that is also when we started Bookyards The Library) predicting that the internet would impact the book publishing industry as it has the music and video/movie industries. The first signs would be lower revenues and profits .... a decline that would be directly proportional to the rise and availability of books on the web. While studies have not been done on this development, I can confidently say that as Bookyards and other online libraries have increased their traffic over the past few years, I have naturally noticed that book sales as announced by companies such as Random House have also proportionally decreased.

As I have stated before, why buy music when you can get it for free. The same applies for books, why buy a book when you can read it on the web for free. The expansion of pirate book sites on the web has completely changed the reading and book buying habits of the public. Even myself ..... for example three years ago I would always 2 or 3 books a week to read, plus the New York Times, Wall Street Journal, and maybe a magazine or two. Today .... well ..... the last time I bought a book was this past Christmas. And as for newspapers .... I now read everything online.

The culture of reading is changing. The public is now not only expecting to have immediate access to information, but they are also demanding and expecting that the cost of this information be very low. Book publishers, like the newspaper industry, have not accepted these changes ..... and I doubt that they will.

New business models for book publishing will come from the many start-ups on the web that are now actively becoming involved in this field. My hope is that Bookyards will contribute to this development.