Posted by Christopher Stevenson
Sometimes business models are forced to change, often because of disruptive technologies. Today I heard that The Wylie Agency, a leading international literary agency, will be acting as its own publisher and releasing a number of its authors' older books--like Fear and Loathing in Las Vegas, The Invisible Man, and Lolita--exclusively as e-books on the Amazon Kindle.
Not surprisingly, Wylie's decision has the publishing houses in a froth because it effectively cuts them out of the loop. Random House is taking a hardline stance, issuing a statement that Wylie's decision "undermines longstanding commitments to and investments in [Random House's] authors, and it establishes this agency as [Random House's] direct competitor." The publisher says it will not enter into any new English-language business agreements with Wylie "until this situation is resolved" (i.e. Wylie changes its mind).
While the back-and-forth, give-and-take business negotiations between Wylie and Random House are interesting, what really caught my attention is that Wylie realized that they may not need the middle man anymore. Publishers lay out, print, and distribute hard-copy books, but recently e-books have outsold hardbound books (1.43 e-books for every hardbound book sold) on Amazon.com. E-books eliminate the need for printing and distribution, which means a literary agency (whose client is the author, not the publisher) can e-publish, distribute electronically, and earn a larger piece of the pie for its client and itself. If Wylie stands firm against the onslaught of the publishers, I believe they'll be the vanguard of the new, simpler, more profitable publishing business.
In recent years, FIs and FI-wannabes have been looking at the existing model and have been trying to figure out how to do what Wylie is trying to do--simplify and become more profitable. There have been a few tries at peer-to-peer lending that never quite gained traction. BankSimple, which provides financial services through "partner banks," actually seems to make things more complicated by adding a layer of middlemen rather than taking one away. I've heard a few blue-sky ideas about how to reduce the number of players in the credit card interchange process, but as far as I know, nothing has emerged. Ironically, the groups that seem to be most successful at simplifying are the check cashers--customers know what to expect and what they'll pay to cash a paycheck or wire money, and the check casher makes a bundle on a very simple business model. What if credit unions could do the same?
It's time to play the Wylie Agency game. If you dream big, without regard for pragmatism or ease of execution, which processes in the credit union would you simplify and streamline? What's most in need of fixin' in order to make your CU more profitable? Which middlemen would you eliminate?
