If the music industry is going down in a flaming digital holocaust like the dinosaurs, I think that its book-publishing cousin represents the crocodiles and feathered lizards that carried the torch through the dark times, and are still with us today. 

What's so great about books?
On the surface, it's easy to dismiss traditional publishing even faster than you toss aside the music labels. Digital information hoarders like Wikipedia, Google (NASDAQ:GOOG), and Yahoo! (NASDAQ:YHOO) News will kill magazines and printed newspapers, while BitTorrent and Amazon's (NASDAQ:AMZN) Kindle do the same to boring old books. Run far, far away from all of the publishing stocks!

  • The recording publishing system is a few decades old, but book publishing can be measured in centuries. The difference between recorded sound and the written word is orders of magnitude. If the music system is outdated, then publishing must be positively antediluvian.
  • It may be fairly easy to copy, rip, and burn music files from any old format -- but you could copy an entire digital book with a few keystrokes and email the full text to all your friends. This is piracy squared, dude!
  • Most digital music files can at least get slathered in layers of DRM protection, making it a little bit harder to distribute and copy the stuff illegally. Have you ever seen DRM on a text file? Password-protected Word and PDF documents are about the best we've got, and passwords are darn easy to send out, too.

In short, publishers are facing the same problems a music maker would, only more so and with fewer defensive tools at their disposal. They're obviously doomed! Right?

Not so fast, cowboy!
Actually, no. It's true that e-book sales are growing like the figurative toddler they still are, while print media is dropping like a lead weight. But reports of the old medium's death have been greatly exaggerated. Books and the businesses that publish them will survive for a couple of reasons.

  • The reading experience is unique and hard to copy even with the best digital tools of today. "Simply put, magazines and books are easy to get and easy to read," said publishing maven Bob Sacks in a recent duel over the digital future of books. "With ink printed on paper you're usually provided with a crisp, high-contrast, highly reflective substrate. And because it reflects light evenly in all directions, you can read it at almost any angle. Not bad for 600-year-old technology."
  • The kicker: Bob was arguing in favor of e-books like the Kindle and Sony (NYSE:SNE) Reader. With enemies like that, who needs friends? Even foldable screens like the ones Universal Display (NASDAQ:PANL) is developing for the U.S. Army may find it hard to replace the visceral thrills of ink on paper.
  • Big-time publishers like Encyclopedia Britannica and CBS' (NYSE:CBS) Simon & Schuster already understand how big of an impact the digital age will make on traditional publishing methods. They are fighting back with the appropriate tactics. Britannica's namesake encyclopedia used to charge big bucks for even casual use of its online material, but basic articles and searches are now free. A premium pass buys you access to a few more volumes, and drops the nag screens and advertising blurbs. Simon is big on e-books, audio books, and CD-ROM releases.

Old but progressive, kind of like Phish or Grateful Dead
Best of all, the most forward-thinking publishers make even open-minded record labels like Nettwerk look stale. Baen Books started giving away free e-book copies of its authors' works way back in 2000. Nowadays, the practice has grown to include the authors' entire back catalog on CD-ROMs stuffed into print editions. 

"That's insane!" you might scream, but then you're thinking like a music executive. The Baen dudes understood early on that electronic reading is a poor substitute for holding a real book, so the e-books and chapter excerpts serve as awesome marketing materials.

Download an entire book, read enough to get hooked, and then you'll eventually get tired of staring at a stupid screen for hours. So in the end, readers who really want to read these books tend to plunk down a few bucks for the real deal. This theory may not work quite so well for rockers and crooners, but authors seem to have a real revenue source secured for years to come. The Kindle and such gadgets will ultimately just make us buy more books.

Give me a call when someone starts selling an e-book reader that smells like ink on paper, folds like a paperback, and gives me an occasional paper cut. Until then, good old publishing stocks may have been unfairly punished for the digital shortcomings of other media. CBS and McGraw-Hill (NYSE:MHP) have been losing to a losing market for five years or more, and their publishing divisions deserve more respect than they're getting.

Swim along, sweet crocodiles. You're gonna make it.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.