Authors

The big global publishers are integrating across both territories and languages


Since I posted this two days ago, one of the Big Five CEOs pointed out some things I missed that are important. These are addressed in a post-script at the bottom. Subscribers to the blog would have received the original post without the “correction”. My apologies.

The announcement this week that John Sargent has apparently moved up another notch in the global Holtzbrinck hierarchy reminds us that the cross-border and now cross-language integration of the publishing giants, a very complex undertaking, continues to develop. Sargent was already the global “trade” head for the company, which suggested that integration of the publishing strategy and operations across Macmillan (Holtzbrinck’s trade division) companies was already an important priority. Now he is EVP of the entire global entity.

This follows an announcement a few months ago by HarperCollins that it was appointing digital head Chantal Restivo-Alessi to be EVP, International, to oversee the publishing through Harper’s growing foreign language capabilities.

Until very recently, just publishing simultaneously in a coordinated way across English language companies located in different countries was a seldom-attempted challenge. HarperCollins and Holtzbrinck seem to be shooting right past that hurdle and are setting themselves up to publish in multiple languages in a coordinated way, which is a much heavier lift.

The publishers who are doing this are seeing at least two things that motivate them.

One is that selling books is considerably more profitable for publishers than selling rights. This fact has been behind the creation of the global trade publishing behemoths in the English language. Until things began to change in the 1970s, there really were no trans-national book publishing companies. Since then, acquisitions have given us five big global trade book publishing houses. The only American-owned one, Simon & Schuster, and the French-owned one, Hachette, seem to have the least integrated global English trade presences. Simon & Schuster just has less in the way of foreign-based assets. Both Hachette and Penguin Random House have a federated structure by which the local companies report up to the parent, not to a global trade head. Macmillan and HarperCollins have both been more aggressive about integrating their international English publishing efforts.

And now both of them appear to be interested in extending that integration beyond their English-language companies.

The logic behind this kind of integration is both clear and unassailable. In the Internet age, as we’ve seen for a long time, there really is no such thing as “local” publication anymore. Anything announced anywhere is heard everywhere. And it actually requires active controls to stop anything that is available anywhere from also being available everywhere. Because English is so widely known beyond native English-speakers, the English language editions of new high-profile books sell in many countries for which the first language is not English. This has become a new factor in placing non-English rights.

Until the Internet really “arrived” two decades ago, the rights-trading activity could take time and it didn’t matter, even within the English-speaking world. I remember about 20 years ago when my friend George Gibson discovered the bestseller phenomenon “Longitude” by Dava Sobel. He published it in the US and it became a big bestseller. But even though it was a story that took place in England, it took him a year or more to make a sale to a UK-based publisher. (When he did, “Longitude” went on to one of the longest-runs of all time on the UK bestseller lists.)

A story like that would be very unlikely today. Gibson owned those rights to sell. The chances are the search traffic numbers alone would have accelerated the process of finding a buyer. Or else the US publisher, even a tiny one like Walker, where Gibson was at the time, would have released the ebook for global distribution and made some sort of deal for print to be made available as well.

Because the marketing of each and every book starts with the enthusiasm of an acquiring editor, and because each new deal an agent can negotiate is a new opportunity to get a publisher to overpay, both agents and publishers were comfortable with the process as it has always been. Relatively few of the high-profile agented books are even sold for “world English”, let alone with rights beyond the English language. Just like publishers’ value is directly related to the number of accounts through which they find customers for a book, an agent’s value is directly related to the number of deals they can make for each property.

If an author can get the reach they need through Amazon alone, then it is hard to accept a royalty from a publisher of a third or less of what Amazon will pay directly. Amazon, the publishers, and the author community are all very aware of this. It is one of the two main reasons why publishers try so hard to shift share away from Amazon. (The other, of course, is that the bigger Amazon’s share of the market, the more leverage it gives them to push for a bigger share of each sale.)

And if we see a trend where one publishing deal gets an author just about all their revenue, it will also be harder for authors to accept paying a full 15 percent agent’s commission to get it, particularly once the author becomes a global brand. (And the big brand authors are precisely the ones whose books will benefit the most from a coordinated global publishing effort.)

The structural impediments to publishing this way are not trivial. It will be a very long time — not in the working careers of any of today’s executives — before coordinated global publishing is important for any but the biggest books on the list. Most titles that each of the local companies puts out will be territorially constrained, as they have always been.

But it will, indeed, be the biggest ones — probably fewer than five percent of the titles that could earn half the revenue — that the coordinated efforts will affect. These are the books that every big global house needs to sustain itself.

Nielsen, through its Books & Consumer data service, is able to create individual author profiles for approximately 350 authors: those with substantial enough sales to enable digging down into the demographics of their book buyers and getting useful information with granularity. I’d guess those profiles will make popular reading as the publishers develop their global capability, particularly since Nielsen is also tracking across both countries and languages. And those 350 authors are almost certainly among the 500 top candidates for this type of treatment.

Sargent and Restivo-Alessi are blazing a new trail. Integration of publishing efforts this way will affect advances, royalties, workflows, and marketing strategies. They will effectively create “new propositions” to put in front of the biggest authors in the world. Penguin Random House and Hachette, because of their internal structures and S&S, because of its relative US-centricity, will be challenged to keep up. (Until their internal structures change, of course, or until they make some other adjustment. Which they will.)

Agents for the biggest authors in the world will be hearing the new pitch. On the one hand, they’ll be looking at opportunities to do record-breaking contracts. On the other hand, they’ll be doing what used to be two, three, four, or more deals in one and, in the long run, probably making at least some of their authors wonder whether they should have to pay that same hefty commission the next time around. When an author in this category asks for a fee reduction to continue the relationship, I suspect that most of the time, they’ll get it.

Of course, working in multiple languages and territories is something Amazon can also do very well. But they will probably stay out of this competition, at least at the beginning, because it will be a high-advance environment and Amazon has shown no taste for that as a strategy.

Nonetheless, the signs are that the ecosystem at the top of the commercial pyramid is going to have some new distinguishing characteristics. It has been noted many times in many places by many people that the economy the Internet creates favors the winners and exacerbates power law distribution. This is about to become another example.

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And now the postscript.

In fact, the “structural” differences are not as dramatic as the post describes them, although there are differences and, indeed, HarperCollins and Macmillan are best-positioned to offer and execute on global multi-language and multi-territory deals than the others.

Markus Dohle is the CEO of Penguin Random House. He has the same “authority” as Murray and Sargent do. But Random House has always been highly “federated”, with a lot of power in the imprints. That makes coordination across territories that much more challenging, as does the fact that PRH is twice the size of HarperCollins and six times the size of the other three. Being of a “certain” size is necessary to make global publishing possible, but the larger you are beyond the minimum required, the harder is coordination. It could even be that smaller global publishers — there aren’t many, but Quarto is one example and Bloomsbury another — could execute on this concept even better than the Big Five. On the other hand, smaller publishers won’t compete for the massive books like those of the 350 authors that Nielsen tracks.

In Hachette’s case, Arnaud Nourry in France holds a position above all the companies as well. All the English-language Hachette publishers report to him, as well as others. But since the biggest books have their biggest share of sales in English, and because Hachette too has given great autonomy to the local companies, it is still likely that they would find it difficult to engineer the kind of coordination we’d expect to see from Harper and Macmillan in the relatively near future.

And, finally, Carolyn Reidy of Simon & Schuster is also a global head, but the company doesn’t have nearly the resources across languages and countries that the other four do.

Since I’m adding this post-script, I will also report that a couple of significant agents pushed back at me on Twitter, saying that they were very skeptical of the potential for big company coordinated synergy across the world. They’re saying they’ll be hard to convince. But, then, so did the original piece.

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The publishing world is changing, but there is one big dog that has not yet barked


Recent data seem to show that, for the publishers, the growth in the retail ebook market has slowed down or stopped (at least for the moment), while Amazon’s ebook sales apparently continue to grow. The share of the market controlled by the publishing establishment — the Big Five publishers and others — is starting to be slowly eroded. This does not yet suggest that an author’s best bet is to go out on his/her own and we may be a very long way from that. But it does suggest that life may get increasingly difficult for publishers.

The headline data we saw last week is that Hachette’s ebook sales went down last year. All their sales declined, but ebooks fell faster and the percentage of their business in ebooks is diminishing. How much that has to do with their war last year with Amazon over terms is not clear.

What we’re also seeing and hearing is that publishers might have boxed themselves in with their return to agency pricing. When publishers first “raised prices” by instituting agency pricing for ebooks in 2010, they saw no reduction in ebook sales, which continued to grow. Michael Cader’s analysis (can’t find it in print, but he told it to me) was that publishers may have misread the real impact of price increases because they raised them in a growing market. The number of ebook readers was increasing every day, so those who were put off by the high prices were outnumbered by the new entrants who just wanted to read their books digitally on their shiny new devices.

Whatever is the reason, the anecdotal reports I’m getting suggest that the price increases aren’t being so easily swallowed in the current round of Agency pricing. Amazon may not care about ending discounting from those prices because they don’t need to or want to, but it would appear that the new deals won’t let them. They certainly don’t have the flexibility to do so that they did before Agency came to the marketplace. So the sometimes startlingly high publisher-set prices are prevailing. And, aside from the Hachette numbers that were reported, we’re hearing widespread but totally unofficial reports that big publisher ebook sales are dropping noticeably when their new higher agency prices are activated.

Hugh Howey told me this was happening in a private exchange three months ago. I didn’t believe him. I do now.

We continue to see a shift in market share. Amazon’s share continues to grow, as does Apple’s. Nook’s share continues to shrink. Google and Kobo are harder to read, but both are smaller than the others anyway.

But this is not a zero-sum game and it isn’t simple. It’s Rubik’s Cube complicated.

Some of the change in the market could be due to subscription services taking a chunk of ebook consumption out of the by-the-book retail market. Although Scribd and Oyster appear to have very small market shares, Scribd was so “successful” with some readers that they had to cut back their romance offering; it was apparently costing them too much to provide all the books their romance subscribers could read.

Amazon’s Kindle Unlimited may be having a bigger impact on the overall market. In all these cases, it is the public understanding that the subscription services are “purchasing” the ebooks from the established publishers. (Kindle’s own authors are compensated with a “by the page read” division of a pot that Amazon arbitrarily decides.) But the Big Five aren’t participating in KU and they aren’t putting their new books — the biggest sellers with the highest prices — into the subscription services. So all the reader bandwidth and revenue going through those services might be coming out of the big players’ and big books’ share.

Our friends at Ingram told me another piece of anecdata which may also be at play. They keep track of the number of SKUs that sell 100 copies or fewer and those that sell 10,000 copies or more. The aggregate sales of the former group is growing; the aggregate sales of the latter group is not. What that suggests is that the sales of books that are not really commercial are taking share away from those that are, whether those that are come from publishers or indie authors like Hugh Howey. Whether that particular change is yet impactful, it is inexorable.

The reduction in ebook sales of hot new titles could be starting to affect future deals — one agent told me unambiguously that it is visible — which would be the next step in the indie vision of how publishers disappear. Publishers base their advances on revenue expectations, which, for ebooks, might now be diminishing. If authors can’t get the same big advance as they did before, might they prefer to go it alone and take the bigger share of ebook revenues they can (still) get with a do-it-yourself approach? Obviously, for some, as the equation shifts, that could happen.

But, at the same time, we’re seeing print book sales, and — at least for the moment — print book retail shelf space, holding their own. As long as that’s true, publishers still have a vital role to play. As long as the proposition “we put books on shelves” has value, so do publishers.

In fact, Ingram (not Amazon) offers the complete suite of services a publisher needs to provide, as does Perseus, whose distribution business Ingram tried to acquire in the 3-way deal with Hachette that went sour about a year ago. Both of them can get a book printed, offset in a print run or on-demand. They warehouse and bill and collect. They have a sales force. They do business with all the retail outlets that every publisher does. And they offer all those capabilities on a marginal cost basis. (The big publishers offer a similar suite of services, but generally are less interested in smaller players that Ingram and Perseus are happy to serve.) Whether you publish one book, 100 books, or have a long list, all you need is the rights to the book and the cash to pay your costs and you can buy the logistical capability to match any publisher.

But you won’t have two things that really matter:

the capability to coordinate the many marketing activities that go into maximizing a book’s success in the marketplace, and;

the “brand” that tells retailers they should believe your hype and stock your book before they know for sure it will sell.

For big author brands, the “sure to sell” component might well be in place, but the marketing complications, and the risk (because a lot of inventory could be involved) would not be trivial.

What this means for the future of publishers, or for what will constitute the best business decision for authors, is not obvious. Everybody trying to make money in the future from the books they write will suffer from the problem the data Ingram cites points to: the increasing share of the readers’ attention that will be taken by books not published with serious commercial intent. If publishers lower their prices to compete more effectively with indie-published books and the subscription offers, their revenue will go down but so will the indies’, who will lose some of the benefits they now gain from their pricing advantage.

It is sometimes suggested that publishers need to move out of Manhattan to be competitive, but, in fact, there are many ways to reconfigure aside from that. The service offerings from Ingram and Perseus (and others: one example is that Donnelley also offers publishers the ability to convert manufacturing management and warehousing overheads to variable costs) allow publishers to get leaner and more focused on their core missions of identifying, developing, and marketing content.

What is definitely true is that the share of the reading market held by commercially-minded publishers (not just commercial “for profits”, but also university presses) will diminish as both successful self-published authors and hundreds of thousands of others who don’t succeed (and maybe don’t even care) take their content to market on their own.

The university and academic presses, of course, have a defining characteristic that might well protect them. They require certified knowledge to underpin their books. (Whether you’re publishing about accounting or brain surgery, you need validated authority that will be an insuperable barrier for independent publishing.)

This is not a death-knell for anybody. This is a changing world for everybody. Of the current household names, only Amazon and Ingram are structurally positioned to grow quite naturally in a shrinking overall market. (The publishers can grow by acquiring each other, and PRH and HarperCollins would seem to be in the best position to take advantage of that.) Amazon will sell an increasing share of the books; Ingram will provide more and more services to more and more publishers while they remain the biggest supplier to everybody besides Amazon that sells books. (Perseus can also expand its distribution business.) The roster of publishers will continue to consolidate, as it has been doing pretty relentlessly (except for a recent decade of relative stability which seems to have now unleashed a more recent stage of more extreme consolidation) for at least 40 years. But as long as print is sold in stores and, after that, as long as half of the books are sold by somebody other than Amazon, there will be a need for publishers that most authors will be delighted to allow compensation for.

Let’s remember that there is a very big dog that has not barked. No major author of recurring bestsellers has stepped up to take charge of his or her own output. It is bound to happen someday, and if you’d asked me five years ago, I would have been sure it would have happened by now. Five years ago I would also have figured that one of the big publishers by 2025 would be a version of United Artists, several major authors organized to share an organization and create their own brand. There have been no signs of that yet either. Indie publishing is still growing and it seems that established publishing is at a standstill. But we’re still many years — most likely a decade or more — from any real changing of the guard.

I don’t see myself as a sophisticated reader or analyst of fiction. But I want to offer the opinion that “Go Set A Watchman”, the controversial new release from “To Kill A Mockingbird” author Harper Lee, is a very worthwhile book. And, by my reading, both the story and the Atticus Finch character fit perfectly well with what we read in “Mockingbird”. What changed most between the two books was the circumstances of the south. “Mockingbird” takes place in a time of unquestioned white dominance. “Watchman” takes place in a time when white dominance is under serious threat. It is a more complex time and deals with more complex issues. It is easy to see why a commercial editor in the late 1950s would find “Watchman” a very uncomfortable book to sell and “Mockingbird” much easier to place in the market.

There are dueling opinions on this. I agree with novelist Ursula Le Guin (you’ll have to click on “newest post” if you go there before she publishes her next one; not sure how you’ll navigate after that), not with the bookseller who thinks the book is so bad that the store is compelled to offer refunds to disappointed readers.

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No post here today, but one on BookMachine


I’m trying something new today, having posted about the basics of an online strategy for authors over at BookMachine. As usual, I focus at the end on how publishers could be abetting such a strategy. I’m not the guy to write a manual for the self-published (although I think there are some helpful ideas in the post for them as well).

This is, obviously, an outreach to find readers who haven’t found The Shatzkin Files. It is a shorter post than you usually find here.

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Another wake-up call from Amazon as they serve author interests better than publishers have


The Authors Guild and its allies have recently appealed to the Department of Justice to investigate Amazon’s possible monopoly control of the book business. It is hard to quarrel with the fact that Amazon delivers more of the publishing output to consumers than any single account ever has and that they are, inevitably, changing the economics of the business as a result.

Although those fighting Amazon can and will point to what they consider to be situations where Amazon takes unfair advantage of its marketplace position, there are two aspects of what has transpired over the past 20 years that the critics who plead for government intervention will almost certainly ignore.

Most of Amazon’s success is due to their own stellar performance: innovating, investing, executing, and having a vision of what could happen as they grew.

Most of what Amazon has done to build their business — almost all of what they’ve done until the past few years of Kindle dominance — benefited most publishers and helped them grow their sales and their profitability. (In fact, book publishing uniquely among media businesses didn’t fall off a cliff in the decade surrounding the millenium and a strong case could be made that Amazon actually saved them.)

This has not stopped. The most recent example was announced yesterday. Amazon is now enabling readers to sign up on their favorite authors’ pages for notification of forthcoming books. This once again demonstrates Amazon’s willingness to innovate. And by doing this they also will deliver benefits to the publishers — an increase in out-of-the-box sales of new books to the authors’ sign-up lists. But the chances are that authors will be more appreciative than publishers will. That aspect of this initiative then feeds into the meme that “Amazon is taking over!”

In our digital marketing business, we often point out to publishers and authors that creating a robust and complete author page at Amazon should be a key element of any author’s digital footprint. It gets seen by a lot of people and it gets crawled by Google, enhancing Google’s understanding of who an author is and increasing the likelihood that they’ll be found through search, even searches that don’t include their name or their book titles. Looking at things from the publishers’ perspective as we tend to do on this blog, we’ve made the point that publishers need to encourage — or create — competent and well-SEOd author websites or risk having the Amazon author page. or even the book’s Amazon title page, become the highest-ranking return for a search for that author’s name.

When we talk about author websites, we stress the importance of building the fan base in size and intensity. Among the big literary agencies investing in helping authors with their digital presence (and many are), we helped one figure out the techniques to teach to help their authors gather mailing list names (or what Seth Godin called “permissions” for the first time about two decades ago when he was among the first to see the value in building email lists).

Now Amazon has, in their typical way (simple and self-serving) made this incredibly easy. We’ve met publishers who wonder why an author would need a website of their own rather than just a page on the publisher’s site. There are a lot of reasons that might be true, including many publishers’ apparent reluctance to “promote” the books an author has done with a prior publisher. But now publishers might hear authors asking the question a different way. Why do they need any author page on the Web besides the one they get from Amazon?

This topic is not new. Goodreads, which was bought by Amazon, has enabled fans to sign up with authors for years, a feature that was recently updated. So have some publishers, but too seldom in an effective way. They often put their author pages in silos — like a “catalogue” — that won’t get much traffic and less engagement. The author pages are incomplete. They don’t promote interactivity.

So there is still an answer to the author’s question: what else might they need? What Amazon has created doesn’t deliver true direct connection between authors and fans. In effect, the fans are signing up with Amazon — through the author’s branded page — for notifications that will come from Amazon. There is scant indication that there will be any further sharing of that author mailing list, or any other opportunities created for the author and the fan base to communicate (although “invited authors” may be able to create a personalized message to go with the announcement). But the single most important thing an author would want to tell his/her fans is “I’ve got a new book coming” and Amazon has handled that.

And in so doing, they have increased the control they have of the book marketplace and highlighted once again that part of the ground they take is ground the publishers simply cede to them. Any publisher that is not helping authors engage with their readers and actively create their own email lists to alert the interested to new books is put on notice now that they are quite late. But one thing is still true: better late than never.

Helping authors with their digital footprint needs to move up every publisher’s priority list.

An unrelated topic but another one in the news that is important is that the German ebook market seems to be going DRM-free. The latest announcement is that Holtzbrinck will take DRM off their ebooks in Germany. The last big holdout in that market is Random House, but one wonders for how much longer. Since two of the Big Five — Macmillan and Random House — are German-owned, it is fair to ask how long it will be before the experience there is reflected in what happens here. We’ll be watching closely to see whether there is any noticeable impact on sales as a result of DRM’s removal. Although Amazon permits DRM-free distribution to those who want it, we probably won’t see them pushing this option. There’s a case to be made that one of the principal effects of DRM today is that it protects Amazon’s ability to monopolize sales to the Kindle ecosystem they created.

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A 10-point strategy for mini-vertical creation


The last post here, where I suggested that publishers should reconsider how they handle first serials, begs a number of follow-up questions. Two people commenting on the post raised the concern that HarperCollins wouldn’t have been able to handle the traffic the “Go Set A Watchman” excerpt would generate. My IT advisors say that is actually a trivial concern. In fact, if News Corp has the capacity in any of its businesses, that capacity could have been “lent” to HarperCollins for the purpose. Or it could have been leased from someplace outside. All it would take is a modicum of advance notice.

But if the challenge of getting the necessary bandwidth is really a trivial one, it is a bit more complicated to come up with a strategy that addresses this new reality. It is fine and dandy to know you’ll “self-publish” book excerpts and drive links and traffic to them to get visibility for the books and engagement with their audiences, but those are tactics, not strategies, and they need to live within a bigger context.

Here’s the overall point. Any business that makes money by selling content must have a direct marketing component to their strategy. For some, including trade book publishers, that should be about having marketing platforms that they own and control, not primarily about controlling the sales transactions. But content can be used to foster audience engagement and the set of engaged potential customers that can be generated is an asset that will become a necessary component of every publisher’s toolkit.

This post is essentially about creating verticals. It should be emphasized that verticals are not an “all or nothing” proposition. You can build out audience-centric interest to highly varying degrees and gain benefits even with an effort as small as where these suggestions start: a landing page.

With that in mind, here’s a battle plan every large publisher should adopt. The strategic approach suggested here can be configured to work for fiction, but it is best to start with non-fiction topics.

1. Look at every topic, subject, or category for which the house has 20 or more backlist titles and which define audiences to which you intend to publish in the future. Identify all the relevant titles you have for each audience. (Here is a hint that no publisher should need: ask your special sales department.)

2. Select three-to-five categories to start. Make your choices based on which ones have the most active backlists and/or the most new titles being planned. The more focused you can be, the better. That is, “baseball history” is better than “sports history”; “knitting” is better than “crafts”; “adventure travel” is better than “travel”. Everything we will suggest will work best if you have a “tentpole”: a title or author that is very famous and popular so definitely include any categories for which that is true for you.

3. Create landing pages for each of those categories under the publisher domain. So those pages would be called something like “publisher.com/baseballhistory” (which doesn’t exist). We’re recommending this approach initially to exploit (and over time to build) the domain authority of the publisher site, which will be reflected in better SEO for each component and, in fact, for everything the publisher posts.

4. While the “landing page” will contain links to all the relevant books that led to its creation, it is best to have rich and unique title-specific copy created specifically for that page, rather than the “canned” marketing copy that already exists. Aiming the copy at people who probably found the landing page through a search will work better both for SEO and to better engage those who come to it.

5. The excerpts offered for each book should not be “first chapters”. Those already live all over the web. Duplicated content is bad for everybody’s SEO. Different excerpts should be posted for this mini-vertical. And every time you post an excerpt to the vertical, promoting that excerpt through press contacts and social media effectively promotes the entire little enterprise.

6. Authors should be offered the opportunity to post relevant content here, to promote themselves.

7. The appeal and power of the mini-vertical will be enhanced if relevant books from other publishers are included as well. This is not necessary but it would add value.

8. Each mini-vertical needs an “editor-in-chief” who will post something relevant on a regular (weekly) basis. But one EIC could handle several of these sites. Certainly one person can handle the 3-to-5 we suggest as the starting group.

9. The mini-vertical landing pages will develop their own SEO juice over time, in direct proportion to how much new content is posted — which can be a lot if there are lots of new books from which to post excerpts, let alone author Q&As or promo videos or other material — and how much what is posted is promoted, which generates inbound links.

10. The point to this whole exercise is engagement. The site EIC should respond to all queries and comments. If excerpts are offered frequently, signing up for free subscriptions to that content should be enabled. Purchasing should be made as easy as possible, preferably with links to all of the top retail vendors. (Offering a direct purchase from the publisher is the least important sales option.)

Starting and managing a handful of these mini-verticals should be quite doable for less than six figures, a trivial investment for any publisher doing $50 million or more in sales and a manageable one for publishers doing much less than that. At the very least, the publisher who does this will build a network of engaged consumers that can be reached for nearly zero incremental cost, reducing marketing spending and multiplying marketing efficiency for new books far into the future. The publisher’s “domain authority” will be substantially enhanced, adding SEO juice and audience for every piece of content they ever post.

But the payoff could actually end up being a site that becomes a world of its own, worth spinning off to its own domain, and capable of being a self-sustaining (or even profitable) business in its own right.

This is a low-risk, high-reward strategy. Some publishers are already pursuing a variant of it. Any publisher without the capabilities it can deliver will increasingly be challenged to be competitive with those who have it.

I don’t mean to imply that there is no “content marketing” among publishers today. The Content Marketing Institute did a profile on Rodale which, being a vertical publisher, has a more obvious path to thinking this way. But Simon & Schuster has vertical sites —  TipsOnHealthyLiving.com and TipsOnLifeandLove.com — and has tried others. Peter McCarthy was in on the building of a number of verticals at Random House. And the genre fiction publishers — perhaps, most notably, Tor — have really tried to talk directly to their readers. But the opportunities to build marketing platforms for publishers that have access to content and to self-interested author labor have hardly begun to be explored.

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Publisher strategies around first serials pretty obviously need to be rethought


This Friday, newspapers on both sides of the Atlantic — the Wall Street Journal in the US and the Guardian in the UK — will publish the first chapter of the much-awaited Harper Lee novel, “Go Set A Watchman”. The licensors who authorized these excerpts are HarperCollins in the US (and they are, of course, News Corp cousins of WSJ) and Heinemann, a division of PRH, in the UK.

I have not seen any reports detailing whether any money changed hands for the rights to publish these excerpts. But, unless it was a lot of money — an amount worth reporting — doing first serial this way of such a newsworthy and anticipated book seems like an anachronism, a mistake.

In the pre-internet days, first serialization to magazines or newspapers was both a way to get substantial revenue (which in most standard contracts was largely delivered to the author) and, certainly more important to the publisher, a way to jump-start awareness of the book and add some firepower to propel the first week of sales that is so important to bestseller list positioning.

But what was true in a print world is not true in an Internet world.

Most people who read the first chapter of “Go Set A Watchman” on either newspaper site will almost certainly not be a regular reader of either newspaper! They will have gotten to the excerpt some other way, through some other link or discovery point. So the “contribution” of awareness and readers from the Guardian or WSJ is likely to be far less than the additional traffic sent to them by the power of the publisher’s content. That’s a hint. It’s backwards!

Just think about what the publishers are giving up by doing these deals. All that traffic and a slew of Google-juicing inbound links could have been coming to their site. Competitors to the Guardian and WSJ, who will probably be reluctant to drive up traffic at a rival, might not link to it, but almost certainly would have if the excerpt were on a book publisher’s or author’s site. The publishers have given up the potential to get email names — perhaps hundreds of thousands of them or more — in exchange for the privilege of reading a bit beyond the first chapter or some other perk. The publisher hosting the content could aggressively upsell the book or ebook, and be driving traffic to their retailer partners, which gets them both goodwill and affiliate revenue. (How far would that affiliate revenue go toward covering any licensing fee they collected?)

Excerpts of major book releases are, in and of themselves, news events that many entities would want to “cover” and would happily link to. In the world of the web, the hosting brand is often of trivial importance, particularly when they aren’t the “source” of the content itself. Sure, people factor the Guardian brand’s credibility into their evaluation of a political story or the Wall Street Journal’s expertise for a financial or business story. But for this book excerpt? The only name that counts is Harper Lee! And the most authentic place to get her content is either from her publisher or her own branded website.

This example writes large that publishers need to reconsider their strategy and tactics around serialization. This is “content marketing” in its purest form. Penguin Random House and HarperCollins are both forward-thinking companies with a lot of digital chops. But, on this one, they’ve underscored that book publishers are often stuck in old models that need to be rethought.

It should be acknowledged that the simple purity of this lesson is muddied a bit because the Wall Street Journal excerpt might well live behind a pay wall. On the one hand, that means fewer people will see it from outside their normal base. (But it’s a weak pay wall; if you Google any WSJ headline, you can see that story without the pay wall.) But the point remains. The appearance of this excerpt will be big news that should generate all sorts of ancillary benefits to the publisher and author. Those benefits will be lost, or at least substantially reduced, by sticking to this 20th century strategy.

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The establishment seems very unworried about being toppled by indies, and 5 other learnings


Programming Digital Book World and the kind of consulting we do require that we spend a lot of time in our office trying to figure out what the industry should be thinking more about. On that topic, there was this recent post with my thoughts about what should be top-of-mind for publishers these days  as well as others laying out topics for next March’s Digital Book World.

A recent DBW agenda planning meeting, which had participation from most of the ten biggest trade publishers, some literary agents, and service providers ranging from marketing services to digital distribution providers, yielded a lode of really interesting ideas that we’re going to act on.

1. One thing that came through loud and clear was big publishing’s interest in hearing how books fit in the greater landscape of digital change. They want to hear from curators of other media and online retailers from other businesses about how they learn about their customers, position a variety of products, and work with search and social media.

2. One participant, whose business provides digital sales data and analytics to a variety of clients, posited that there are four “stages” of behavior that we want to watch around consumer interaction with books. His paradigm is that we want to know:

How they find out about the book
How they purchase the book
How they read, or navigate, the book
How they talk about the book

All of these things are visible in the digital world and this was a helpful frame. In a conversation with my Logical Marketing partner Pete McCarthy afterwards, we reckoned this could elide a very important component: how you get from “find” to “purchase”. That’s what Pete would call “middle of the funnel” or “in the funnel” activity.

In fact, a great deal of what is important about understanding and influencing customer behavior occurs in the middle of the funnel. One of the tempting fallacies of analyzing digital purchase behavior is “last click attribution” of sales. That is, just because the cash register rang in a particular place doesn’t prove that the customer was sold on the book there. Publishers want to concentrate marketing efforts where the decision is made, not necessarily where the transaction occurs. And, in fact, we’re figuring that as time goes by, more and more ebook readers will buy on the particular platform they most favor regardless of where they learned about the book. So there is a fifth activity — how they get from knowledge to purchase — which could be called “the consideration phase” which needs to be thought about separately. This was a very helpful paradigm for understanding customers that will find its way to the program.

3. A very smart independent publisher in the room said “we need a new industry conversation about apps”. When the iPad first happened, quite a few publishers lost quite a bit of money trying to build and sell ebooks as apps. The merchandising environment was all wrong, including that so many apps are free or cheap. But apps can do things ebooks cannot, and they provide a method for ongoing communication with a user, if they use the app. So I think that publisher is probably right.

4. I brought up a complaint I had picked up from a major publisher in the UK. This CEO thought that getting publishers to cooperate around marketing an author when they shared the author’s output was very hard. But the gang I had in the room for the DBW meeting didn’t agree. Big publishers felt that marketing cooperation when one publisher had part of an author’s list and another had another part was entirely possible. And that it was being done. With the help of agents, we’re going to look for instances of that and try to get a DBW panel put together on it. It begs a lot of “next questions” about ownership and allocation of marketing efforts on the author’s website and the use of mailing lists that might be developed through those marketing efforts.

5. Another topic that came out of the meeting was sparked by a discussion of TBR (to-be-read) lists. As one publisher put it, that used to be the stack of books on your bedside table. We were well aware for a few years that January was a very hot month for ebook sales because people got new devices (often, their first device for ereading) for Christmas and were “loading up” in January. But with fewer and fewer readers — particularly heavy readers — now getting “new devices”, that phenomenon (which one participant identified as a close cousin to the sales growth publishers saw 20 years ago when new big box bookstores were opening regularly: “filling the pipeline”) has perhaps waned, or even ended. Understanding how much of what ebook readers buy they read, how much they have sitting on their devices, and whether what is “bought and not read” tends to be low-priced, are all things that should be find-outable and worth knowing.

6. I’d be a lousy blogger if I didn’t save best — or most proactive — for last (except in the post titling, of course). I told the assembled group that I wanted to do a panel on “the future for indie- and self-publishing.” There was remarkably little interest in the subject from those in the room. One literary agent said, “four years ago, indie publishing had us quaking in our boots. We really wondered whether our whole business model would be upended. We don’t worry about that anymore.” Another said “we counsel our authors about self-publishing, but there is less interest in it and less of a rush to it than there was a couple of years ago.” The publishers were similarly relaxed about whatever “competition” self-publishing offers.

So, from the perspective of the publishing establishment, the whirlwind of change has slowed down, we are in a “new normal” and there is absolutely no shortage of writers pining to be published for the deals the industry is offering and the output from those willing writers continue to deliver sales that keep big trade companies profitable. If self-publishing is constituting some mortal threat to everybody’s existence, that appears less evident today than it did a few years ago. And, of course, every big publisher is set for the next X years (unknown numbers that might be different for every big publisher, but almost certainly three or more for all of them) with their single biggest intermediary relationship since they’ve all just done deals with Amazon. One big variable in their commercial calculus that had been highly problematic in the recent past is now stable for a while into the future.

I’ve been making the case that the trade publishing establishment is not in any danger of disappearing anytime soon but the indie world still seems to harbor a fervent contrary belief, which is completely evident in the comment string of the linked post.

The question, “is indie publishing an imminent threat to the establishment?” is one where there is great but contradicting certainty on the two sides of the debate. It looks like the establishment side has largely lost interest in the discussion. I’d love to see if we could “prove” something at Digital Book World, but with so much of the relevant data entirely within the walls of Amazon, which has no apparent interest in sharing it (nor can I make the case that they should), that might be very hard to do.

We are still very much interested in feedback from readers about the topics for the DBW Conference. Feel free to chime in here. And if you have thoughts to contribute about the program for Publishers Launch Kids, that survey is here. If it would be easier for you to just email suggestions, send them to [email protected]

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Things to discuss


The planning process for the main Digital Book World program — about 40 discrete programming elements using about 150 speakers over two days — has always benefited from a “Conference Council” brainstorming meeting. This year’s iteration is later this week. We’ll have attendees from all of the Big Five, several other publishers, agents, and assorted industry players who can help us understand the concerns and initiatives across the waterfront of industry interest.

Sometime after we started doing this in 2009, we added a pre-meeting survey component, asking our Council members to register their opinion about the topics we knew we wanted to consider. That survey was primarily a tool to guide the very fast-moving conversation we have at the Council meeting.

This year we have added a “public” version of the survey. That turned out to be a really good idea. This post is a list of programming ideas that either came directly from the public survey or were inspired by suggestions made there which are very likely to become important parts of Digital Book World 2016.

I’m excited about the idea of doing an entire track on “Making Investments Pay Off”, which is a persistent concern in the world we live in where new business models and new initiatives are being tested all the time. After years with basically the same business model and workflow, publishers are trying new things all the time now without knowing exactly how to make them commercially beneficial. We can see at least four areas where publishers are putting in a lot of effort, but could probably benefit from a discussion about how to measure, monetize, and manage their efforts.

End-user databases (collecting names)
Digital marketing campaigns (publishers are hiring the talent; now, how to make effective use of it)
Building author brands (aligning interests; knowing what you want; making it pay)
Research (it is cheaper and more effective than ever, but how does it pay off)

With all the discussion that persistently takes place around how much of a threat self-publishing does or doesn’t constitute to the establishment (a conversation into which I waded last week), we should host a discussion on the future of self-publishing. I know I’d want Amazon on such a panel, if they’d join. Some other players who could shed light on self-publishing’s future are Kobo, Smashwords, Ingram, a literary agent, and a self-published authors. (This panel has Jane Friedman’s name written all over it as the moderator!)

We’ve never convened a panel of Human Resources people to discuss how what they look for has changed across job functions. That would be an interesting discussion.

With all the new topics, ideas, and startups that seem to arrive on a daily basis, big companies must exercise discipline around what to spend time on and what to avoid. That’s another topic that could be a very important one, if we can find executives willing to speak to it. What are the rabbit holes? What are the things a company should not spend time discussing or exploring in the current environment?

As publishers adjust to a commercial environment where intermediaries are more problematic (partly because they become fewer in number and partly because those that remain become increasingly powerful) but direct sales opportunities become easier to develop and manage, new things are possible. Publishers can now develop online courses and proprietary subscriptions, if they have the right content for them. Tools — like Aer.io — are being put in place for them to sell digital content or hard goods direct with minimal investments in tech. Two publishers, Sourcebooks with “Put Me In the Story”, and Quarto with “This is Your Cookbook”, have recently created custom book lines — using technology to personalize existing content —  that are largely made possible by direct selling. Direct selling is a leading edge of change that enables product types and customer relationships that would never have been possible in the past. More and more publishers will want to know what’s being done and how it might apply to them.

And as the far-flung world becomes reachable from anywhere, English-language publishers in each English territory have unprecedented capability to sell to all the other territories. Getting the Most out of the English-Speaking World — what you need to do, or do differently, to optimize sales in US, UK, Australia, S Africa, India, etc. — is now a topic that just about every English-language publisher can benefit from.

All my readers are invited to participate in the DBW topic survey. Thanks to all of you who have already contributed your thoughts and ideas. As you can see, we’re paying attention.

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The publishing business as we have known it is not going away anytime soon


Regular readers, please pardon me for the unusual length of this post, but it covers a lot of ground that I think is necessary to make the point.

A friend who has actually been working fulltime in the book business since I was still in college and who remains active was speculating at BEA about the “next big disruption” in our business. He’s expecting it sometime pretty soon.

I don’t think I am.

Gareth Cuddy is one of the most practical service providers in the industry. His Vearsa ebook distribution company is providing global services to publishers large and small and he is a pioneer in reading and sales analytics. He recently wrote a piece that concludes “whatever emerges from this next phase will surely be a complete departure from what we understand today as an industry” with timetables around it wondering whether 2016 will be too late to respond and whether we’ll have an unrecognizable industry in 2020.

I don’t see it.

One of the disruptor-authors, one who studies the industry trends closely with special attention to indie author growth, told me he “is pegging 2019 as the year that major media outlets cover the collapse of the major publishing houses the same way they started reporting on newspaper declines last decade”.

I wouldn’t be surprised to see a merger or two by then, but “collapse”? I don’t see that either.

The industry has a myriad of sales stats that are not rationalized in any way and don’t talk to each other:

BookScan (print sales, reported by select retailers)

BookScan data is compiled from reports of print sales by most, but not all, retailers. That data includes all the ISBNs (but perhaps not retailer- or indie-published books that don’t have ISBNs), but not all the sales. BookScan covers an estimated 85% of the print retail market in the US and 90% in the UK. (See the “About Nielsen Book” section.)

PubTrack Digital (ebook sales, reported by select publishers)

The PubTrack Digital data, compiled from reports by publishers, doesn’t include all the ISBNs — only those from reporting publishers — but they do include all the sales of those publishers’ ebooks.

AAP (cross-format sales, reported by select publishers)

The AAP tracks sales across all major channels and formats. Like PubTrack, AAP stats are based on reports by participating publishers. (Though all of the Big Five houses report in both cases, other publisher and distributor participation varies.)

Consumer survey data (purchases, attitudes, and behaviors, reported by consumers)

Market research firms and consumer panel surveys (Nielsen Market ResearchCodex Group, and PlayCollective among others) provide another look at how book sales are shifting.

Other survey data

Additional surveys, particularly of authors (e.g. DBW’s author surveyHarry Bingham and Jane Friedman’s author survey) help fill in some of the blanks. But as the survey organizers frequently note, these are not representative samples, so the conclusions that can be drawn from these surveys are limited and primarily directional in nature.

Proprietary data (publisher and retailer-specific)

We also get regular reports from publicly-traded companies and whatever data accounts happen to reveal to the public, which can provide useful benchmarks and comparison points. (The sales data from the accounts themselves includes self-published or retailer-published books that other two sources don’t, but no by-book sales numbers told to the public.)

Bestseller lists and scraped data

Author Earnings tries to translate ebook sales rankings (which are publicly visible at retail, and therefore “scrapeable”) into actual sales numbers. (The now defunct DBW Ebook Bestseller List, powered by Dan Lubart’s Iobyte Solutions, was based on similar principles.) And the major bestsellers lists (like USA Today and NYT) provide at least some context for relative sales performance.

And as a sign of how complicated it all is, the DBW Ebook Bestseller List was discontinued at least partly because the “noise” from Amazon reporting “sales” on ebooks distributed and read through their subscription service was making the bestseller status of many titles a bit contentious.

Despite and because of all the sources, the data is incomplete and scattered. There is inevitable ambiguity in interpretation so that a variety of conclusions can be reasonably drawn. From the big publisher perspective, it would appear that sales are about flat and that the ratio of print and digital sales has become pretty stable. This is true in an environment where publishers have experimented with even higher ebook prices and, for a variety of contractual and commercial reasons, discounting of ebooks has diminished. But that’s been true for a relatively short period of time, and the ebook reporting is routinely delayed by three months, so we don’t have enough evidence to know for sure that higher ebook prices are sustainable in this marketplace. And even if they are sustainable today, that doesn’t prove they will be in three months or a year.

On the print side, Amazon continues to be the largest single customer for almost every publisher. And even though they have managed to increase their discounts and various marketing fees and their returns have creeped up, they are still the most profitable large account for many, if not most, publishers. Since Borders went down several years ago, Amazon has, indeed, grown, but independent stores have also thrived and become more numerous. And although Barnes & Noble still slowly shrinks in sales, it remains the most important account for “breaking” many new titles and still provides more sales to most publishers than all the indie bookstores combined.

While I’ve been working on this piece, the AAP data has been being worked through. Nate Hoffelder (whose blog has been renamed “Ink, Bits, and Pixels”) scoffed at the Nielsen claim that their hard numbers constitute 85 percent of the book market. The AAP, which like Author Earnings, uses modeling and guesstimating to get from the data they have to a bigger industry picture, sees a much bigger trade industry. The point Nate wanted to make, using the AAP data (echoed by an indie author friend of mine who believes that the indies are toppling the establishment and we’d all know that if we knew the “real” numbers that didn’t leave out all the indie success stories) is that the ebook market is not shrinking or flattening.

But if you want to use AAP figures to prove that point you have to use this year’s AAP data. Because last year the AAP said the ebook market had shrunk. By the way, the AAP data was the first to offer some insight on how much ebook subscription offerings are changing the market. The answer, so far, is not very much so far. They account for about 2 million ebook units out of a market of 500 million!

I asked my knowledgeable indie author friend what he thought the consumer dollar volume was for indies last year. He reckoned it at $459 million (I love the presumption of precision: not $450 million or $475 million, but $459 million!) Since the AAP figures adult trade fiction and non-fiction at about $10 billion (and the juvie numbers, another $5 billion, actually have some big “adult” sales in them), he is implicitly acknowledging (but would never say explicitly) that indies are 5 percent of the adult business at retail, using what I’m sure is the most ambitious estimate of indie sales you’ll see anywhere.

The reality is that the business has been actually pretty stable for the past few years, after a period — about 2008 to 2012 — when the shifts away from print and from stores were dizzying and immediately disruptive.

That’s not to say we haven’t seen a lot of change or that change doesn’t continue to be much faster than it was in the period before 2008. But not all of that change is bad for publishers.

More sales at Amazon, less inventory in the physical store supply chain, more ebooks, and the outsized impact of ebooks on the inefficient mass market channel means that returns are lower and less capital is tied up in inventory, which makes publishers more profitable.

The promise that offshore markets can be reached efficiently with ebooks (which, indeed, might be masking a reduction in ebook sales domestically in the overall publisher-reported numbers) is increasingly being realized, partly through the growth in capabilities of the service offerings from old standbys like Ingram and new entrants like Cuddy’s Vearsa.

New tools and workflows are enabling publishers to package their content for both print and digital delivery much more efficiently than they did when ebooks were in their infancy.

Techniques that make it possible for books to be “discovered” through online means — search, social referrals, and growing book- and topic-based communities — are being mastered by publishers.

And a number of factors — consolidation of the accounts, more efficient wholesalers, consolidation of the publishers’ shipping through growing distributors — have reduced costs on the back end for most publishers as well.

So the publishers have, thus far, dealt with massive changes in sales, marketing, and distribution pretty effectively. They’re selling as many books as they used to despite growing competition from both indie authors (a million titles a year or more) and from Amazon itself, whose own publishing operation reportedly intends to issue 2,000 titles in 2016.

Trying to view things from the author perspective requires one to divide them into at least three big “buckets”: successful authors who know where their next totally-acceptable contract that pays them a living wage in advance to write a book is coming from; aspiring authors who either can’t get an agent or a deal or have decided that with self-publishing working as it does that they simply don’t want one; and the ones in the middle, who might have an agent or have had a deal or two, but aren’t really making a commercial success of authorship.

For those authors who find it hard or impossible to get an agent or a deal, self-publishing is a godsend. It gives them a way to really reach the global public at minimal cost and, as we’ve seen repeatedly over the past decade, they can, indeed, break through and achieve commercial success. This is only a good thing for everybody. Even publishers benefit because they get to discover new talent that is surfaced by self-publishing.

For those authors who are working steadily and profitably for publishers, self-publishing has offered the possibility of greater control and bigger margins: more profit if they can achieve the same level of sale. This is not an opportunity very many authors in this category have pursued. That has surprised me a little bit, but probably it shouldn’t have. Being a publisher is a lot of work and no small risk. If an author is making a living doing the writing and letting a publisher handle the rest, that’s damn near nirvana. Very few in that position want to abandon it.

So that leaves the authors “in the middle”: getting deals or capable of getting deals, but not really making the living they want to make with those deals. Among those authors, if they have the skills to manage an enterprise and the personality to put themselves out there for promotion, self-publishing offers a real alternative to the legacy system. Particularly for those authors who have a backlist they can claw back rights to and use as a foundation for their efforts, this new opportunity has real possibilities.

And writing in genres, being able to deliver several books a year, and writing in a way that allows pieces of big books to “work” as self-contained smaller chunks, are all attributes that enhance the likelihood of self-publishing success. It is worth noting that, so far, publishers haven’t developed the techniques to make the most effective use of chunked stories or a voluminous output (unless you’re James Patterson!).

So another source of potential disruption — authors abandoning publishers to do it themselves to make more money per unit and claim greater control of their work and career — has also not really happened. I was among those who expected, during the era of dizzying change we experienced for a few years until a couple of years ago, that publishers could have a big problem holding on to their biggest stars.

Both the supply (authors) and demand (sales channels) sides of the equation appear more stable than they’ve been in recent memory. But there’s no guarantee they’ll stay that way. The number of self-published titles keep growing by a million titles a year or more. They sell a paltry average per title, and a very small percentage sell a measurable amount at all, but cumulatively, their sales add up. Most of the revenue from that growing market segment goes to Amazon and a very small share of it goes to print or brick-and-mortar. Amazon’s growth in any way fuels their ability to be tough on terms, reducing publishers’ margins. (One big potential wild card is Amazon’s pressuring publishers to allow them to manufacture more and more of the inventory; that could be a paradigm-shifter if they succeed in making it widespread.) And more ebooks, particularly indie ebooks, and the subscription services for ebooks also tend to force down retail prices, which puts further pressure on publishers’ margins.

One other source of potential disruption — and this is one that I think many have in mind when they predict real danger for the establishment is around the next bend — would be some sort of disruptive product innovation. What if book readers suddenly demand video in books, or that stories be turned into games, or that books be enhanced by the margin notes made by prior readers? Would today’s publishers be able to compete? What would that do to margins?

There are areas of publishing outside trade where the “book” has either already become obsolete or could well be in a few years. As we have pointed out repeatedly over the years, ebooks have only really “worked” as substitutes for print books that one reads from beginning to end, narrative reading. The additional “functionality” that might be employed, such as those described above, has been pretty consistently and over a long period of time rejected — or, at least, not widely embraced — by the book-reading public.

But that’s not true in professional publishing, where books have often already been replaced by websites, online tutorials, and other uses of digital interactivity. (John Wiley, one of the biggest professional and trade publishers in the world, is largely exiting the business of “books”. O’Reilly Safari demonstrated over a decade ago that a subscription service was a great commercial proposition for professional books, long before it was even tried for consumer.) It is likely not to remain true in school and college textbook publishing, where the value of integrating testing and then adjusting what’s presented in the content delivery has enormous value and where institutions, rather than individual consumers, are in control. Predicting big disruption in these markets over the next few years seems like a much safer bet than in trade. Of course, those parts of the trade markets that look similar to those — cookbooks and travel in particular — have already seen wide-scale disruption.

Frequently, those who say they’re expecting disruptive change also promote the expectation that there will be some really substantial shift in consumer behavior. Quoting Cuddy:

So what is a book? What is reading? How will the millennials and children of the future consume stories? Will they even want to? I don’t think any of us know.

This is the big bugaboo: the death of long-form reading. That’s a reasonable thing to conjecture about, but not in the next three years or five years or even ten. In 2025, most of the books being read on the planet will be read by people who are reading them now. The most recent serious study about “designing books for millennials” (from Publishing Technology) seemed to conclude that millennials aren’t much different than the generations that preceded them when it comes to their book-reading habits.

Over the long run, things will almost certainly change in very big ways because of the inexorable forces eroding publisher margins described above. I wouldn’t be surprised to see only two or three big trade publishers as soon as ten years from now. I’d expect that the two recent plateaus we’ve reached, with ebook sales stabilizing in relation to print and with bookstores holding their own, will prove temporary. I wouldn’t expect ebook sales or online purchasing to grow by the leaps and bounds they did a few years ago, but it would surprise me if we’ve reached any long-term limit, particularly in ebook use. (The devices keep proliferating and people get increasingly comfortable reading for a long time on screens.)

More and more entities of all kinds will be using books, and particularly ebooks, to further their own missions through education or content marketing. They may not “flood” the market, but they’ll add a lot of product not necessarily priced with commercial intent that will steal sales and reader time from what publishers are trying to peddle.

For some time, I have figured that book reading might grow but that the industry that delivers books for profit might shrink. That would still be my expectation.

The biggest threat to publishers as we have known them would be consolidation among the intermediaries who sell their books. My hunch today would be that Amazon sells more than 40 percent of the books in the US. Indeed, their own publishing operation is growing despite the fact that they face continued resistance from their competing retailers to carrying their books. That suggests that books can be profitable, and authors made happy, on sales made to the Amazon audience alone. The bigger their share gets, the more that presents a real danger to publishers.

The whole point of publishers is “many to many”. They handle the output of multiple authors to give them the scale necessary to provide services to multiple sources of revenue for both books and rights. Amazon consolidated a big enough share of the audience that what they alone could sell constituted a viable market. That, combined with the elimination of inventory investment enabled by ebooks, created a robust indie publishing business. (Yes: iBooks and Nook and Google and Smashwords and others are part of it, but Amazon created it, and it might not be much of anything yet if they hadn’t!) Amazon could afford to pay a higher share of the consumer price than any publisher selling through them could and that created the marketplace in which indie authors could thrive financially and have a logical basis to express incredulity that other authors would take a publisher’s deal. During the days when both Amazon’s share and the ebook market were growing without any obvious limits, predicting that they would one day soon put a bullet in the heart of the publishing business might have been an overambitious projection, but it wasn’t entirely illogical.

But those days have passed. In retrospect, the big threat to publishers probably ended when Larry Kirshbaum’s efforts to get big name mainstream authors to leave legacy publishing in some numbers for Amazon failed, largely (I’d conjecture, we’ll never really know) because the competing retailers refused to play ball. Their outspoken refusal to carry Amazon books escalated the risk to an author’s career if they took any amount of money to be Amazon-published. That was not necessarily a deal-killer to a genre author who could reach a big share of their market with Amazon alone, but it made it just about impossible for Kirshbaum (or anybody else who might have occupied that seat) to use a checkbook to persuade an author already successful with legacy publishers to, essentially, risk their career.

Since then, despite Amazon Publishing’s continued growth (primarily in genres, not general trade) and what appears to be the continued growth in self-publishing have not really threatened the legacy publishing business. As long as the big authors don’t abandon the publishers, they’re safe. And as long as there is a complex demand chain for publishers to manage and service to pull in the revenue, they probably won’t.

So figuring out whether or when the industry turns upside down depends on figuring out whether or when the demand consolidates at Amazon to such an extent that the rest of the market can be lived without.

There will be fewer bookstores. There will be more titles competing from outside the commercial publishers. There will be continued downward pressure on prices. There will be diminishing interest in having a narrative book in printed form. And despite publishers’ efforts to add value by reaching distant markets and learning how to do digital marketing at scale, the publishing industry will, indeed, shrink.

But an apocalypse is probably not around the corner. And the book business as we see it today will still be recognizable in 2020 and even in 2025. I suspect that the business environments for all other media — music, movies, TV, and games — will change more than the business for narrative trade books over the next ten years.

Remember that we are conducting two surveys of industry opinion to inform the programming we’re doing for next March. Click here if you want to express yourself on the topics for Digital Book World 2016 and here if you want to register opinions on the program ideas for Publishers Launch Kids. 

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Considering the very wide range of digital change topics that should be candidates for discussion at DBW 2016


The challenge for the book business for the past decade has been rapid and less-than-predictable changes in the ecosystem because of digital. There are two underlying shifts that fundamentally alter the ecosystem: people substituting ebook consumption for print book consumption and people substituting online purchase of printed books for buying them in stores.

These two shifts, and a host of corollaries around product type, product creation, and marketing, are what people come to Digital Book World to be enlightened about and to discuss. Our job for the past seven years has been planning the program and booking all the speakers for that 3-day conference. The whole process takes months; there are about 35 or 40 discrete “sessions” and as many as 150 speakers and moderators involved.

Creating a timely and relevant program when we’re leading the target by several months — deciding on topics and recruiting speakers starting now for an event that will take place March 7-9, 2016 — is a challenge. More perspectives on the task add real value; we structure things so we can get a lot of help. We recruit a “Conference Council” — volunteers from publishing companies and their service providers and trading partners — to help advise me in shaping the event. This year we’re going to broaden the outreach for opinions about this and anybody reading this blog can be involved.

Here are the main topic headings we’re considering with a brief description of what we see as the current issues around each. The Survey linked to again at the end of this post allows you to express yourself on how important you think each topic will be to the publishing community next March when we hold the conference.

1. Data. This is a wide-ranging topic. We look for original data about what’s going on in the ecosystem wherever we can find it and we have done sessions in the past (and could again) about “Big Data” and what publishers need to understand about it. With pricing of ebooks becoming an increasingly important financial consideration for publishers and data being such a crucial component of doing that well, this is bound to remain a top-of-mind subject.

2. Global. Publishers used to be pretty much limited to their home market for marketing and sales. That’s why there is a robust international business in territorial and language rights. In the digital world, that limitation is not nearly as confining. US and UK publishers are learning there are big markets for their books all over the world, and global ebook distribution and print-on-demand make it possible for them to work those markets far more effectively than ever before from their offices, wherever they are.

3 Marketing and discovery. This is the topic that cuts across books regardless of topic or format. For fiction or art books or anything in between, whether delivered in print or as ebooks, publishers are embarked on a long journey of learning about how discovery and SEO works in the most complicated consumer product marketplace imaginable. There are a variety of topics that we entertain under this heading and, you could tell from my own checklist in my last post, I could probably build the whole conference around discovery and figure the audience was getting a large percentage of what is most important.

4. Authors and self-publishing. Authors didn’t used to have much alternative to publishers; now they do. As a result, authors have developed marketing capabilities and support services have grown up to help them. This all raises a host of issues for publishers. They have to learn how to capitalize effectively on what authors can do on their own, but they also need to provide great marketing support to authors and be seen as collaborative and as adding real marketing value.

5. M&A and investment. Most publishers, and all big publishers, are looking to acquiring smaller publishers with complementary lists (and, of course, there are different ideas about what that means). And there are a host of start-ups with capabilities publishers want to see available which are also tempting investments. Quite aside from publishing, we live in a moment with a lot of investment capital available for start-ups and acquisition and publishers certainly need to stay aware of investment flows.

6. Is the book morphing into something else? With each new cycle of Moore’s law and each new delivery mechanism — whether hardware or platform — the question of what the “product” should be gets called for reconsideration again. The history of ebooks has been commercially discouraging for those who want see the book concept rethought from the ground up, but the topic never dies and never will as long as capabilities to present stories and information and to interact with content in new ways are put in front of publishers.

7. Managing and exploiting rights. The rights marketplace for books has changed dramatically in the past two decades. In the 20th century, book clubs and paperbacks were the big-revenue rights opportunities, with serialization to print periodicals also very important. Those markets are all dramatically diminished and the rights action today mostly is about foreign languages and territories. Now, even those rights are being rethought as we see the beginings of publishers thinking about controlling multiple languages for the books they acquire themselves.

8. Agents and editors, how they relate in a mutually-supportive way. They share ownership of each author’s personal loyalty, they both might shape the book editorially, and they both will hear the author’s career ambitions and influence him or her about self-publishing and their publishers’ efforts. If publishers are going to start collaborating meaningfully with authors about marketing, that suggests agents and editors are going to be working together differently.

9. Libraries. Aside from being important customers for publishers, libraries are increasingly being seen as a venue for discovery and perhaps even for book retailing. Whatever they will be in the future, it is likely their role will be different than what Andrew Carnegie envisioned a century ago.

10. Bookstores. Since the collapse of Borders, Barnes & Noble has continued to shrink and independent bookstores have appeared to grow. Books-a-Million and Walmart have become mainstays of the US trade, but they don’t replace Borders. The UK bookstore picture is even less diverse. The ebook market seems to be consolidating in the US with Amazon and Apple leading the pack and independents not really in the ebook game at all, at least at the moment. The key skill set of a publisher is to manage a diverse system of retail intermediaries that gets their books to customers. How the intermediary ecosystem will change in the months and years to come is therefore of existential importance to publishers.

11. Standards. There are evolving tech standards around content that live outside the book business. The question for publishers, particularly big publishers, is how much effort they should expend on standards-creation efforts which are, mostly, the domain of other media and tech interests. Can they let industry bodies like IDPF and BISG handle this, or do publishers have to involve themselves in these issues?

12. Outsiders coming in. We are seeing publishing coming from non-publishers and we see non-book retailers starting to peddle books online. These are trends that industry incumbents need to monitor and understand.

13. Millennials. Some believe that the human propensity to be a book reader is changing in fundamental ways as people born into the internet age become an increasing part of the market. There are other data points suggesting that the millennials aren’t so different from their predecessors. How should publishers approach marketing differently to different age groups?

14. Digital production tech and operations. Is there already a “new normal” for integrated print and digital publishing? Do publishers need to continue thinking about investing in technology for creation and delivery?

15. Audio. Audio publishing has gone all-downloads much faster than print. An even bigger technological disruptor may be coming as TTS (text-to-speech) technology gets better and better. What the linkage will be between audiobooks and ebooks in the future is something else every publisher needs to consider.

16. Publishing automation. From content management to product generation, automation has been part of every publisher’s life for the past several years. It might be fruitful to explore how people in publishing houses feel about the automation that has taken place — has it helped? — and get a sense of what needs to be automated in the future.

17. Mobile. Because of mobile, there are shifts in consumption and an impact on search and discovery and where the transactions take place. Many publishers have worked to optimize their websites for mobile use but there’s a lot more to know about the mobile shift that could affect what they publish and how they market it.

18. Video. This topic runs a gamut. Publishers can be tempted by YouTube stars with big audiences as potential bestselling authors. But how reliably can those audience be converted to buy books or ebooks? What do publishers need to know about video production? Do videos really help with book marketing?

19. Privacy. Should publishers or booksellers be doing anything to address potential compromises to reader privacy in the digital age?

And then we have six questions for all publishers that could inform or suggest additional topics.

* What growth opportunities do you see for today’s publishers?

* What potential change in the landscape are you most worried about?

* What “problems” are you trying to solve?

* Where are you investing your capital?

* When you hire today, what skills are you looking for that you might not have ten years ago?

* Can you tell us any topic you think is important that isn’t mentioned here?

This link to our survey is intended to allow you to participate in helping us decide what’s important for DBW to cover. Even a program as extensive as ours has to make choices and your input will help us do that more wisely. In case you’re interested, here is my personal list of what publishers should be thinking about, which is a very-much-abridged version of this post.

Under the direction of our Conference Chair, Lorraine Shanley, and co-Chair Jess Johns, we are following a parallel process for our Publishers Launch Kids show which will kick of DBW on March 7. If you are kids book publishing interests you, the survey for that show is here and you’re welcome to participate in that one as well.

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