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Consumers most often benefit from churn of marketplace innovation

by The Oklahoman Editorial Board Published: July 29, 2013
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IDW Publishing produces hardcover collected editions of old comic strips, such as Li'l Abner and Dick Tracy, as well as material of a more recent vintage. In short, IDW's products target a niche market. Therefore, one might think IDW officials would bemoan the declining number of bookstores because it lessens the opportunity to place product in front of buyers.

Not so, says Ted Adams, CEO for the publishing company, in an interview with the online industry news site ICv2. Asked about the collapse of Borders bookstores, Adams said, “Our business is significantly better because Borders is no longer around.”

IDW's book sales are “up an astonishing amount from what it was two years ago,” he said, due in part to Amazon.com becoming a major seller “and they buy in a very efficient way. They don't purchase the way Borders used to purchase.” In other words, closure of an inefficient book seller improved the overall market, allowing publishers to efficiently allocate resources and increase sales.

The greatness of the American system of free enterprise is that people are free to succeed — and to fail. The opportunities that arise from failure are often greater than what would happen otherwise.

In Oklahoma City, the “creative destruction” of the free market can be clearly seen among local bookstores. Aladdin Book Shoppe, a longtime favorite of used book buyers, is closing its doors. Yet other stores are adapting and surviving. Wayne Stephens, owner of Stephens' Archives Books in Edmond, once operated four stores. Today, he has just one. But Stephens has become a major online seller and moves as much product from one site today as he did operating those four stores in the past.

Examples of creative destruction abound in our economy. Since the 2011 model year, no manufacturer selling cars in the United States has offered a cassette tape player as an option on a new vehicle. CD sales have plummeted in recent years. This doesn't mean that people no longer listen to, or buy, music.

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by The Oklahoman Editorial Board
The Oklahoman Editorial Board consists of Gary Pierson, President and CEO of The Oklahoma Publishing Company; Christopher P. Reen, president and publisher of The Oklahoman; Kelly Dyer Fry, editor and vice president of news; Christy Gaylord...
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