The Shatzkin Files

Atomization: publishing as a function rather than an industry

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The announcement of what amounts to the first book publishing program spawned by Google demonstrates a paradigm we’re seeing repeatedly. It suggests a sweeping change in publishing from how we’ve known it. The bottom line is that most people employed publishing books perhaps as soon as 10 years from now won’t be working for publishing companies.

The trade publishing business over the past twenty years has been transitioning from what it was for a century. The Internet, which so many of us said two decades ago “changes everything” is ultimately responsible. has been the primary catalyst, with print on demand technology (especially Ingram’s Lightning Source) and ebooks (mostly Amazon, but others too) as supporting players. With so many more books to choose from and really available than there ever were before, the function of gatekeepers, which trade publishers and booksellers clearly and proudly were, becomes an anachronism.

The big question — at least for me — is what is trade publishing transitioning to? What does the trade publishing world look like when it doesn’t primarily reach readers through bookstores anymore, a day which one could say has already come in the past five years.

Overall trade sales today outside of special outlets, catalogs, and what remain of book clubs divide into three big chunks: one is printed books sold in stores, one is printed books sold online, and one is ebooks. The latter two are sold without stores, and far more than half of that is sold by Amazon. And that is the way it is most helpful to think about sales because it is only print-in-stores that requires (or benefits from) a big publishing organization.

What the latest Bowker information has to say, lumping ebooks into “online commerce”, is that 44% of sales are online, 32% through physical retail, and the remainder through book clubs and warehouse clubs (physical retail to me!) and “all other channels”. But they also report that 30% of sales are ebooks, which would mean that they’re only calling 14% of the remaining 70% online. There are a lot of ways to count these things, and the resulting calculation of 20% of print sales being online feels very low to me.

It all depends on what kind of book we’re talking about, of course. I visualize the market breaking into thirds among the three chunks. Certainly, one-third ebooks is an understatement for fiction.

However we view the current division of sales, the trade book business was built in a completely different environment. Indeed, the central proposition that all publishers offered all authors is ” we put books on shelves.” The companion reality was “you can’t do this by yourself”.

As recently as 2007, before Kindle, there were no ebook sales and upwards of 85% of print was sold in stores.

The requirements to deliver on the promise “to put books on shelves” included the capital to invest and specialized knowledge to turn a manuscript into inventory, a physical plant to manage the warehousing and shipping of those books, and a network of relationships with the owners of the shelves (in the bookstores) to get the right to put your books on those shelves. These were the minimum requirements to be a publisher. If you had them, you could move on to being smart about selecting books (in the case of non-fiction, almost always before they were were completely written), being skilled at developing them, being capable of packaging them attractively, and being managers of another network — of reviewers and broadcast conversation producers and, more recently, bloggers and social megaphones — to bring word of them to the public.

All of this together gave a publisher the capability to pay authors advances against what amounts, for all but the very biggest authors, to a minority share of the revenue the book generated. But, in fact, the central proposition has lost its power. Only a quarter to a half of the sales now — far less for fiction and far more for illustrated books — require a publisher to “put books on shelves”. And that number is going down. For the balance, no inventory investment is actually necessary. Nor is a physical plant or a vast network of sales relationships.

And, without that requirement, the barriers to entry to becoming a “book publisher” have collapsed, particularly if you’re willing to start with ebooks and think of print as an ancillary opportunity. Google is becoming one. Amazon became one a long time ago. NBC has become one. The Toronto Star and The New York Times have become ebook publishers. And, of course, so have many tens of thousands of individual authors, a few of whom are achieving startling success.

Soon — in the next 5 or 10 years — every university (perhaps most departments within a university), every law firm and accounting firm and consulting firm, certainly every content creator in other media, as well as most manufacturers and retailers will become book publishers too.

Why not? Without the requirement of an organization to reach the public through bookstores and without the requirements of capital or knowledge to create printed books, any organization that is routinely reaching people interested in a common topic — whether or not they are creating content around that topic now, but especially if they do — will find it constructive to publish, and well within their reach and means to do so.

That is: publishing will become a function of many entities, not a capability reserved to a few insiders who can call themselves an industry. Think about it this way. If you had told every museum and law firm in 1995 that they needed a web page, many would have wondered “what for?” If you had told them in 2005 that they needed a Facebook presence or in 2008 that they needed a Twitter stream, they would have wondered why. We’ve reached the moment when they all need a publishing strategy, and that will be as obvious to all these entities in a year or two as web pages, Facebook pages, and Twitter streams look now.

This is the atomization of publishing, the dispersal of publishing decisions and the origination of published material from far and wide. In a pretty short time, we will see an industry with a completely different profile than it has had for the past couple of hundred years.

Atomization is verticalization taken to a newly conceivable logical extreme. The self-publishing of authors is already affecting the marketplace. But the introduction of self-publishing by entities will be much more disruptive.

Publishing is not immune to the laws of supply and demand and the price of books is tumbling. Most self-published fiction is crap, but a small percentage of a very large number of self-published novels constitutes a significant range of good cheap choices for fiction readers, particularly in genres. That “diamonds in the dirt” effect has been becoming more and more evident with the passage of time. Recently, the Digital Book World bestseller list (compiled by ioByte’s Dan Lubart in conjunction with our friends at DBW) had a self-published book in the top slot for the first time. It won’t be the last time.

Publishers still have plenty of capabilities that are enticing to authors. There are still stores with shelves on which to put books. And big publishers can build on that increased presence very impressively; it is hard to believe that “Fifty Shades of Grey” would have sold the tens of millions of copies that it has as a self-published book. Random House made a quantum difference.

But perhaps we shouldn’t read too much into that. The publishers’ power to use that capability to command a share of the “easy” (no inventory investment or sales force required) money from ebooks, which was a sine qua non for them until very recently, is evaporating.

When Hugh Howey was in the early stages of what has turned into his eye-popping success with the novel WOOL, publishers would only offer him a deal to publish print if he also gave them ebook rights. Howey and his agent, Kristin Nelson, found those offers easy to resist, since he was making so much money on ebooks and publishers would have wanted a healthy share of it. A few months later, Simon & Schuster (wisely, in my opinion) agreed to give Howey a print-only deal for US rights.

How far away can it be for the NBC News book on a national election or the Whole Foods book on cooking the organic way or the Home Depot book on how to build a shelf or the Boston Celtics’ own book on the history of their team to get the same treatment? (Or, of course, the “brand” can handle the whole job themselves, using services offered by many — most prominently Ingram, Perseus, and Random House — to handle the decreasing percentage of the business that is “books in stores.”)

Of course, there is, or at least there can be, a lot more to publishing than just making good content available and making the people you know already aware that it is there. (Although, increasingly, that will be seen as “enough”, along with ancillary benefits, to make it worth the effort to many entities.) There are rights to be sold. There are ways to market to “known book buyers” that are increasingly going to be the property of entities that have developed lists and techniques at scale.

So there will continue to be a trade book business and it is likely that the machinery of the biggest book publishing organization (or two) will be required for a very long time to maximize the biggest commercial potential, like “Fifty Shades of Grey”. But, without a robust “book trade”, from which trade publishing gets its name, there cannot be commercially robust trade publishing, at least not as we have known it.

I reflect on a pithy bit of wisdom offered to me in conversation a few years ago by David Worlock, who might be thought of as one of the originators of digital publishing, and who, in any case, is a wise observer of the publishing scene and by a few years my senior. Well before we thought of any self-published bestsellers — this must have been about 2005 — David said, to me, “surely, in time, the number of books created within the network must exceed the number of books created outside the network.”

The “network”, of course, was the Internet. He was envisioning direct-to-ebook publishing and automated blogs-to-books publishing as well as a lot of customization. He was right.

And the atomization I think may be the overarching trend of the next decade or two fits right in.

Once the concept of the atomization and dispersal of the publishing function becomes understood, you see it everywhere. Aside from the Google-spawned publishing program — which is built around their massive multi-player game activity, but there are many other applications once they get used to this idea — we had a library announce a new digital press last week.

We’d already been putting together a panel of new entrants to book  publishing for our Publishers Launch BEA conference on May 29. Of course, the atomization we talk about here is enabled by the scale being provided by others, including service providers. And the major houses are trying their hardest to build marketing at scale. Ken Michaels, the President and COO of Hachette, and David Nussbaum, the Chair of F+W Media, are our first two confirmed speakers about that. We’ll have a panel of literary agents talking about how they’re tackling the need for scale to help clients with an increasingly broad range of choices for publishing.

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  • Agencies depend on publishers but the changing relationship is missing in this essay.

    • There are a LOT of implications missing from this piece. I’m just trying to introduce the thought. There will be more to say on this topic for sure.

    • There’s a LOT missing from this essay! This is the start of a conversation about the idea of atomization, not a book exploring every angle. Although I have thought about that…


  • Robert Ross

    I certainly hope this “atomization” gives us readers content in formats like PDF, ePub, and Mobi, which can be “freely” used on all our computing devices, instead of the mishmash of proprietary formats and devices we have to deal with today.

    It would be “nice” if authors would empower us to find their wonderful works across the Web from any publishing site we visit by providing their works with API’s via the semantic web’s resource descriptive framework (RDF). Will authors ever realize content aggregators are not necessary part of an “atomized” publishing world?

    And I long for the day authors permit us to demonstrate our support for their creative contributions by directly licensing their works to us instead of locking them, and us, into digital-rights-managed systems.

    All these capabilities are available today in open-publishing-platforms developed with micro-licensing capabilities using freely accessible computing formats. Unfortunately, many of today’s struggling authors, journalists and creators are looking for quick-fix solutions; not long-term viability.

    “Atomization” is a reality, but will it also compel writers to embrace new technologies and publishing approaches that benefit those of us who are their readers as well? I hope so. Time will tell.

    • I don’t think atomization will diminish the power of the big ebook-sellers: Amazon and Apple primarily and then Kobo and Google when you think globally. (B&N’s global reach has yet to be demonstrated and none of the other players has made a big enough dent to matter.) It will probably increase it. And the multi-device functionality is fully available within the platforms, so I think that’s a poor justification for eliminating DRM. In fact, platforms use DRM to their customers’ advantage by synching across devices which is not something you’d achieve with your solution.


      • John Andrews

        I can’t make up my mind about DRM and would welcome a full post from Mike on the subject.

      • Meanwhile my wife has a household full of print books she did not buy. Loaners. Yard sale giveaways. Church fairs. Pirated books are everywhere. I like the museum idea. Those who can pay do, those who cannot do not. On the honor system knowing it costs money to develop and distribute books of all kinds. But owners tend to think more people want to steal from them than actually do. It is never good to set policy around the crooked few, who cost us so much more in the end. Even developing a “screen door” for software helps but it does not need to be a full bunker with nuclear warheads that also keep the good people locked out.

      • I generally think there is too much conversation about DRM, a subject that attracts more interest from the commentariat than it does from the people who are the book business’s customers. I actually have a post buried in the archive about it that I did a couple of years ago.


      • Robert Ross

        One doesn’t need DRM for syncing across platforms. There are plenty of apps for that, any one of them can be embedded into most any platform. People I know even use DropBox as their central content repository. It’s very effective and easy to use.

      • Thanks for the correction. But the central point is that the reading across devices is really NOT an issue, either!


      • Robert Ross

        hmmm… reading across devices has been an issue for me, as well as archiving, printing, annotating, etc. It’s just my opinion, but the technologies to control digitally distributed content still aren’t as consumer friendly as they need be.

      • Well, synching — and, more fundamentally, accesing — across devices shouldn’t be an issue with any of the leading retail platforms.

        You’re right that the other capabilities are being much more slow to arrive. But I think most of them will. Printing can be a copyright issue. Annotating and archiving are things the platforms will build over time.

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  • A_Writer_of_History

    Hitting the nail on the head as always, Mike. Your post illuminates the way for writers.

  • Excellent article. I know you know I like to draw upon the Kodak and Polaroid analogies when I read these sort of predictions, and realize many in trade publishing don’t think it is apples to apples. But as someone who worked for the third largest photo company in the world in the mid-1990s (Konica — who no longer exists in any form of consumer photo other than copiers and high-end imaging), no one, absolutely no one, in the industry saw the loss of billions of dollars of retail business and the complete overthrow of photo capturing and sharing via phones and Facebook. The printed photo was once sacrosanct yet how many do you see today? Konica was smart enough to sell 4,300 Fotomats in 1992 and then sell many of their digital imaging patents to Sony while they still had some value. (Some of your younger readers may never have heard of Sony and possibly think I have confused them with Samsung.)

    • The world has changed a lot in the past 20 years. I think the world of photography may have changed more than any other aspect of content or communication. But there aren’t any more record stores, or stores selling recorded music, to speak of. Bookstores are going to. Printed books will take a long time to disappear as thoroughly as printed pictures have, but if I stick around another 20 or 25 years (as I hope to), I expect to see the day when printed books will be slightly exotic. Note I don’t say I *hope * for that day; only that I *expect* it.


      • Mike: maybe the bookshelf is to the printed book what the display photo frame was to the photo? I recently sold my home, which had built-in bookcases all over the place. They ended up being a negative to potential sales, like a swimming pool can be. My record crates are gone. But I sure do love buying individual songs immediately from Apple. In the end the user experience changes and gets better. Guess I believe progress is a bit like S&M — it hurts but sure feels good in the end! (I will leave that unintended pun where I flung it.)

      • John Andrews

        But compare the fortunes of Konica and Kodak with those of Fujifilm – which is still a successful company because it responded to unfolding events.

        Then think about the profession of scribe.The halcyon days were before the birth of Christ and yet, because of population growth, there may be more scribes in the world today than ever before (in absolute terms only, in countries with low literacy rates). This may be a good indicator of the longevity of the printed book, and of its decline in relative terms. Gutenberg must have given scribes the kind of knock the web is delivering to the book trade. Its always best to take a long view!

      • Hi John. Again I wonder if publishing can learn from Fuji. I left that industry for the early days of digital mapping and GPS but felt like Fuji transitioned their large in-store contracts with Walmart, Walgreens , CVS and others by inventing the long-life high quality photo printing from digital media done in a self-assisted way. But those volumes are like going from Barnes & Noble in 1995 to the Espresso on-demand systems. Fuji also can battle in the low-end of digital cameras although that is not a great space either.

        Mike: off-color is my primary color. It just seems to slip out. Did you see we “installed” a pope today? Really? Installed. As in put in a stall. Anyway some of my tech wag friends had some clever comments about installing a pope. In the Cloud? Cheerio…on we go.

      • The fact that something “survives” doesn’t mean it is still as lucrative an industry as it was before. In fact, most things survive in some form or another. Maybe even film!


      • I think you’ve just posted the first off-color joke ever on this bog.

        Bookshelves need to be ripped out as part of “staging” a house for sale! Wow, those aren’t the times I grew up in!


  • Fascinating way to describe the on-going change in publishing: atomization! It parallels what is happening at a political and social level: ethnic groups are getting stronger everywhere, more individual and demanding (we feel this in Europe very strongly with the Basques, Lombards, Flemish etc). Also consumer products are getting customized to suit the tastes of varying groups of customers. So why not publishing? I belong to a group of painters here in Italy (yes I paint in addition to writing!) – the Premio Celeste organization – and they’ve just launched their own e-book imprint, asking all of us members to contribute with our work! I have no idea who will ever get interested in the art they plan to publish, but since this is a group encompassing over 200,000 members worldwide, I guess a publishing enterprise makes some sort of economic sense!

    Atomization is another way to say that content creators are close to their natural audience and it probably describes the situation very well in the case of non-fiction (for example, the painters I mention above). But for fiction? I fear that’s a different world. A fiction writer may not know where his/her audience is hiding, the only and well-tried way to find readers is to write in a well-specified genre.

    And this is the rub.

    How do you define genre, how many genres do you need in an increasingly complex world such as ours, where people develop different tastes and interests? Historically, genres have tended to be theme-related (mysteries, romance etc) rather than audience-centric, with the only big exception being YA lit aimed at teenagers (it emerged in the 1970s). Now new audience-centric genres are appearing: New Adult (in 2009) and most recently Boomer lit (in 2012). The latter has emerged along with the wave of baby boomers headed for retirement over the next 20 years at the rate of 10,000/day in the US alone. Boomer lit is basically a genre featuring fictional characters aging boomers can identify with.

    My point is that, along with atomization of publishing, one may expect increasing “atomization” of book marketing and multiplication of genres, no longer defined as theme-related but also audience-centric. If I am right about this, then there is still a role for traditional publishers: they know how to market genres, they have experience and networks of journalists and critics to use to promote books. They can still use these well-tried capabilities to engineer best sellers, provided that they become better aware of readers’ tastes and more adept at identifying emerging genres/types of books/content that fit the changing needs and tastes of (atomized) audiences.

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  • When Xist Publishing entered the industry in 2010, we made many of the choices you articulately describe here. Digital-first? Check. Focused on a vertical? Children’s books for ages baby-8. Check. Providing a service that most author’s can’t do on their own? Formatting a picture book is still tricky. Check.

    As you point out, most illustrated books are still being sold in stores.But from looking at growth and adoption rates, it feels like children’s ebook publishing is about where trade publishing was in 2008 or 2009. We’re seeing tablet and color ereader growth drive sales and more importantly for our long game, we’re seeing an entire generation of children who are comfortable moving between digital devices, and happily shift from print to screen and back again.

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  • Philip Turner

    Good analysis, Mike–a lot of cogent points that help me see more clearly what I’ve actually been gazing at for a while. I hope/imagine that the atomization will continue to provide varied kinds of employment for pub professionals–I have found that to be largely true over the past 4 + years of self-employment, even while it does call forth a dramatically altered approach to one’s work life.

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  • Yes, but if you make publishing a function of all these different entities, which is obviously viable, you run into a couple of things that I, as an Author, Publisher AND Network Engineer, expect to see. Most computer users use a few things, and have no interest in doing more. Most eBook publishers are very limited in what they do, and perfectly happy that way because it takes time, energy, creativity, and – did I say time? – to do it right. Print publishing, even with print on demand, is even harder and more demanding in the design phases, and requires skills that I just don’t see becoming skill sets of all these different entities. What happens instead, I think, is splinters of various sizes…depending on personal and group investment in this process – where new groups take over being the “publishing function” more like a plug-in- and the new middle man is created. I hope (and I strive to emulate this in my own publishing endeavors) that the new middle-ground will prove less greedy and more in line with creators.

    • The atomization of publishing will mean an explosion in title-creation and a huge amount of variation in quality. The skill sets of editing and design will be employed by many and ignored by many others. The curation required * aft*er* *publication will be substantial. I suspect crowd-sourced curation by vertical will become important.

      Of course, that is sorta happening now. I read the self-published fiction that has sold extremely well: John Locke’s books, for example. Now I’m reading “Wait for You”, which just got a deal for its author after she’d been turned down by a myriad of agents and publishers. I can see the flaws in “Wait for You” — some of which could have been fixed by a college sophomore double-checking the copy before they published it — but it isn’t boring. The story involves you and moves along. Selling hundreds of thousands of copies is pretty much a guarantee against “unreadable”.


      • Mike, I completely agree with your point here. A lot of what you are seeing in trade publishing is happening in higher ed publishing as well, just slightly more subtle. Traditional models of higher ed, which are under a fair amount of scrutiny themselves with the rising cost of higher education, are keeping traditional publishing models alive, but more and more I am seeing the atomization of content drive publishers away from models of “content as a product” into more “content as a service.” With the “bottling company” model of publishing eroding before our feet, I believe that content curation that traditionally occurs during production will move to post-launch. The editorial process will slowly morph into marketing/discoverability strategies. With self-pubs and publishing “functions” alike both skipping the editorial phase and opting for a quick to market strategy, the question then becomes who is responsible for curating this massive amount of content? Is it the responsibility of the “publisher” or the consumer to filter out what is both relevant and high quality? Software startups are already developing ways to map and curate atomized content repositories (Ace Learning comes to mind) using search engine like technology and crowd-sourced data inputs. With the modern-day consumer’s expectation that all answers are just “a Google click away” (and free) how do publishers make their content stands out? What responsibilities do we as consumers have to vet content in a world unprotected by editorial review?

      • You’ve put your finger on a challenge that will be across-the-board. Curation occurred naturally when it required a substantial investment to deliver a piece of content into the marketplace. With that barrier eliminated, and Google searching clearly not designed for such a task, something else will have to take its place. I suspect this will emerge by vertical and, even for college and school material, on a subject-by-subject basis.


  • I can’t help but wonder if atomization isn’t a secondary dynamic. Delivering sales to authors and quality readers to consumers is fundamental and more likely the outcome of vertical marketing and publishing based on direct user/customer data.

    • Not to get too metaphysical about it, I think the two are different and fit together. Verticalization imples aggregation at some level. That doesn’t preclude distributed publishing decisions or origination.


      • Thanks, Mike, I agree. I’m more just pointing to the effect on what authors and readers want and need. Atomization feels more like an effect than much of a solution. Interesting conversation on this over at Ether with Porter Anderson et al.

      • I am not sure where the dichotomy is here. Both are happening. And in some ways they interact. And chances are that any entity focused on — or illustrative of — one will find themselves also taking advantage of the other.


  • Yes. Agree entirely. I’ve been watching this coming on for quite some time now; Mike, we actually brushed on this topic briefly when we Skyped, a while back.

    Already, 40-60% of the top hundred sellers in most Kindle categories are NOT sold by what we would have considered a “publisher” just five years ago. That trend has been slowly inching up since early 2012, when self publishing exploded onto ebook bestseller lists in the wake of the KDP Select program’s introduction.

    That’s half the ebook market, or darned close, which is no longer held by publishers. (And incidentally, no longer tracked by the AAP or Bowker, which means all their estimates for ebook market share are too low.)

    So we’re heading toward a time when “publishing” really IS a “button”, as Shirky pointed out last year (and whose line I unabashedly borrowed when speaking on this topic in Boston a couple of months ago). When people and businesses will publish like they now have webpages or social network accounts – as a natural part of doing business. Producing ebooks is simple – quite literally, my six year old was able to make them two years ago when she was four, and the tools have gotten better since then. And now there are expert book designers selling Word templates for $37 that make darned-near-perfect POD books, so producing a POD edition is now easily within most peoples’ reach.

    The question for current publishers then becomes: how do they remain something more than companies which take a manuscript and make it into print books, paying the writer a share of the proceeds from sales to dwindling print bookstores?

    I have a few answers, but most of them involve publishers taking on new competencies, doing things that they’re not used to doing. Publishers are used to vetting books for the market; that role is now crowdsourced. They are used to providing editorial input; that role is atomized. They are used to performing book and cover design; also atomized. They are used to selling books to a limited number of key gatekeepers and bookbuyers in the distribution chain; that role is increasingly irrelevant. Publishers will need to become experts at selling to the consumers of books directly, building relationships with both producers and consumers of product alike to quickly and easily connect them.

    And they’ll have to do it better than Amazon, which has made that the core of their business model.

    • Thanks for this data point and analysis, Kevin.

      I suspect that most of the ebooks you’re pointing to now are really self-published by authors. The entity effect hasn’t really kicked in yet. It would be hard for me to believe that entities won’t make a much bigger impact than authors when they discover the button you and the esteemed Mr. Shirky refer to.


      • That’s my feeling as well. I was recently speaking with some writers and publishers who were expressing the hope that things would begin to “equalize” soon, to tone down and get back to some sort of new normal.

        I warned that what we’ve seen so far is the tip of a very large iceberg.

      • I think Churchill got it right…”this may not be the beginning of the end, but it is the end of the beginning.”


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