eBooks

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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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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Market research used to be a silly idea for publishers but it is not anymore


When my father, Leonard Shatzkin, was appointed Director of Research at Doubleday in the 1950s, it was a deliberate attempt to give him license to use analytical techniques to affect how business was done across the company. He had started out heading up manufacturing, with a real focus on streamlining the number of trim sizes the company manufactured. (They were way ahead of their time doing that. Pete McCarthy has told me about the heroic work Andrew Weber and his colleagues did at Random House doing the same thing in the last decade, about a half-century later!)

Len Shatzkin soon thereafter was using statistical techniques to predict pre-publication orders from the earliest ones received (there were far fewer major accounts back then so the pre-pub orders lacked the few sizable big pieces that comprise a huge chunk of the total today) to enable timely and efficient first printings. Later he took a statistically-based approach to figure out how many sales reps Doubleday needed and how to organize their territories. When the Dolphin Books paperback imprint was created (a commercial imprint to join the more academic Anchor Books line created a few years before by Jason Epstein), research and analytical techniques were used to decide which public domain classics to do first.

In the many years I’ve been around the book business, I have often heard experts from other businesses decry the lack of “market research” done by publishers. In any other business (recorded music might be an exception), market research is a prerequisite to launching any new product. Movies use it. Hotel chains use it. Clothing manufacturers use it. Software companies use it. Online “content producers” use it. Sports teams use it. Politicians use it. It is just considered common sense in most businesses to acquire some basic understandings of the market you’re launching a new product into before you craft messages, select media, and target consumers.

In the past, I’ve defended the lack of consumer market research by publishers. For one thing, publishers (until very recently) didn’t “touch” consumers. Their interaction was with intermediaries who did. The focus for publishers was on the trade, not the reader, and the trade was “known” without research. To the extent that research was necessary, it was accomplished by phone calls to key players in the trade. The national chain buyer’s opinion of the market was the market research that mattered. If the publisher “knew different”, it wouldn’t do them any good if the gatekeeper wouldn’t allow the publisher’s books on his shelves.

And there were other structural impediments to applying what worked for other consumer items. Publishers did lots of books; the market for each one was both small and largely unique. The top line revenue expected for most titles was tiny by other consumer good standards. The idea of funding any meaningful market research for the output of a general trade publisher was both inappropriate and impractical.

But over the past 20 years, because a very large percentage of the book business’s transaction base has moved online and an even larger part of book awareness has as well, consumers have also been leaving lots of bread crumbs in plain digital sight. So two things have shifted which really change everything.

Publishers are addressing the reader directly through publisher, book, and author websites; through social media, advertising, and direct marketing; and through their copy — whether or not they explicitly acknowledge that fact — because the publisher’s copy ends up being returned as a search result to many relevant queries.

The audience research itself is now much more accessible than it ever was: cheaper and easier to do in ways that are cost-effective and really could not be imagined as recently as ten years ago.

We’ve reached a point where no marketing copy for any book should be written without audience research having been done first. But no publisher is equipped to do that across the board. They don’t have the bodies; they don’t have the skill sets; and a process enabling that research doesn’t fit the current workflow and toolset.

So when the criticism was offered that publishers should be doing “market research” before 2005, just making that observation demonstrated a failure of understanding about the book business. But that changed in the past 10 years. Not recognizing the value of it now demonstrates a failure to understand how much the book business has changed.

What publishers need to do is to recognize “research” as a necessary activity, which, like Len Shatzkin’s work at Doubleday in the 1950s, needs to cut across functional lines. Publishers are moving in that direction, but mostly in a piecemeal way. One head of house pointed us to the fact that they’ve hired a data scientist for their team. We’ve seen new appointments with the word “audience” in their title or job description, as well as “consumer”, “data”, “analytics”, and “insight”, but “research” — while it does sometimes appear — is too often notable by its absence in the explicit description of their role.

Audience-centric research calls for a combination of an objective data-driven approach, the ability to use a large number of listening and analytical tools, and a methodology that examines keywords, terms, and topics looking to achieve particular goals or objectives. A similar frame of mind is required to perform other research tasks needed today: understanding the effect of price changes, or how the markets online and for brick stores vary by title or genre, or what impact digital promotion has on store sales.

The instincts to hire data scientists and to make the “audience” somebody’s job are good ones, but without changing the existing workflows around descriptive copy creation, they are practices that might create more distraction than enlightenment. Publishers need to develop the capability to understand what questions need to be asked and what insights need to be gained craft copy that will accomplish specific goals with identified audiences.

Perhaps they are moving faster on this in the UK than we are in the US. One high-ranking executive in a major house who has worked on both sides of the Atlantic told me a story of research the Audience Insight group at his house delivered that had significant impact. They wanted to sign a “celebrity” author. Research showed that the dedication of this author’s fans was not as large as they anticipated, but that there was among them a high degree of belief and faith in the author’s opinions about food. A food-oriented book by that author was the approach taken and a bestseller was the result. This is a great example of how useful research can be, but even this particular big company doesn’t have the same infrastructure to do this work on the west side of the Atlantic.

What most distinguishes our approach at Logical Marketing from other digital marketing agencies and from most publishers’ own efforts is our emphasis on research. We’ve seen clearly that it helps target markets more effectively, even if you don’t write the book to specs suggested by the research. But it also helps our clients skip the pain and cost of strategic assumptions or tactics that are highly unlikely to pay off: such as avoiding the attempt to compete on search terms a book could never rank high for; recognizing in advance a YouTube or Pinterest audience that might be large, but will be hard or impossible to convert to book sales; or trying to capture the sales directly from prospects that would be much more likely to convert through Amazon.

With the very high failure rate and enormous staff time suck that digital marketing campaigns are known for, research that avoids predictable failures pays for itself quickly in wasted effort not expended.

McCarthy tells me from his in-house experience that marketers — especially less-senior marketers — often know they’re working on a campaign that in all probability won’t work. We believe publishers often go through with these to show the agent and author — and sometimes their own editor — that they’re “trying” and that they are “supporting the book”. But good research is also something that can be shown to authors and agents to impress them, particularly in the months and years still left when not everybody will be doing it (and the further months and years when not everybody will be doing it well.) Good research will avoid inglorious failures as well as point to more likely paths to success.

Structural changes can happen in organic ways. Len Shatzkin became Director of Research at Doubleday by getting the budget to hire a mathematician (the term “data scientist” didn’t exist in 1953), using statistical knowledge to solve one problem (predicting advance sales from a small percentage of the orders), and then building on the company’s increasing recognition that analytical research “worked”.

If the research function were acknowledged at every publisher, it would be usefully employed to inform acquisition decisions (whether to bring in a title and how much it is worth), list development, pricing, backlist marketing strategies, physical book laydowns to retailers, geographical emphasis in marketing, and the timing of paperback edition release.

Perhaps the Director of Research — with a department that serves the whole publishing company — is an idea whose time has come again.

But, in the meantime, Logical Marketing can help.

Remember, you can help us choose the topics for Digital Book World 2016 by responding to our survey at this link.

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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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My personal list of what should be top-of-mind for publishers around digital change today


What are the most important digital change issues publishers face?

To prepare for DBW 2016, we need to decide what publishers need to be thinking about and learning about next March, when the seventh annual DBW will take place. It would be extremely limiting for that selection to be based on my thoughts and opinions alone, and we have a process in place to make sure that it isn’t. (More on that to come in the next post here.) But if we were relying on me alone, here’s what we’d be focused on.

1. Ebook pricing. Publishers get anywhere from 50-to-70 percent of the retail price from most ebook retailers. Unlike the print world, where price-setting must take place before the book comes out and is, because the price is printed on the book, very hard to adjust, ebook prices can be changed quickly and frequently.

Pricing variation has historically been the province of the retailer. In the physical world, markdowns were almost never shared: the retailer voluntarily gave away part of their margin to gain market share or to build customer loyalty.

In the agency world that four of the Big Five have now created (with Penguin Random House almost certain to follow on), pricing is not only mostly controlled by publishers, they are the direct beneficiaries of higher prices and lose margin if prices are lowered.

It is true — and the indie authors who like it better when Amazon is in control rather than the publishers often point this out — that publishers have almost no experience with pricing and the impact of changes. But it is also true that the retailers, who do have more experience with it, have different objectives than publishers. Retailers want a competitive advantage against other retailers and, as part of that, they want to build customer loyalty. Publishers want to maximize revenue for each SKU, build awareness of authors, and use one book by an author or in a series to sell other titles under the same brand.

Publishers are starting very near zero on knowledge. How does discounting one title in a series affect the audience’s likelihood of getting started with it and then buying other titles at higher prices? If a book is in the news, is the right strategy to raise the price (to maximize revenue) or to lower the price (to get better market penetration on the back of the news). And is the strategy the same if the story is about the book, rather than the book being about the story? Do pricing strategies need seasonality rules, and how is that different across genres or topics?

All of these are things publishers will have to learn by a combination of experimentation, archiving of information, and analysis. A complicating aspect of this is that the market itself is still changing: a person’s ebook purchasing habits today, when they’re new to it, may change over the next couple of years, as they become more sophisticated consumers. This is a moving target but a very important one. And there is one person who stands out as having looked at this more closely than anyone: Dan Lubart, who owns Iobyte Solutions, and who previously worked for HarperCollins and now is at Hachette.

2. Building direct customer knowledge. What is knowable about audiences through listening and analytical tools today is stunning. It is critical to do audience research on a constant and ongoing basis. Publishers need to keep formulating theses about who their audiences are, then doing research to find where they hang out online and what words they use when they talk about the things the publisher wants to engage them about.

The customer knowledge is essential to do first-class search engine optimization, but it is even more important for a publisher that wants to do any kind of “campaign”. Buying keyword exposure is an exercise in constant experimentation, measurement, and management no matter what you do, but starting a campaign without doing the core audience research is simply wasteful. And what is true of ad campaigns is also true of earned media and traditional marketing campaigns. This is the marketing equivalent of “measure twice, cut once”. Don’t waste time, money, and effort doing something that research could have told you in advance wouldn’t work.

3. Building direct customer contact. Near as we can tell, the big publishers have been building email lists for years. There’s a Shatzkin Files post from the Fall of 2011 citing Tor.com’s having mailed to hundreds of thousands of people the month before, with a very high open rate and getting an extraordinary percentage of those to “take an action”.

But building lists and managing them for maximum effectiveness are two quite different things. And even more complicated is a next-generation challenge: getting publisher lists and author lists working in tandem. It would seem like a win all around for publishers to organize authors whose audiences are similar to email across their lists to everybody’s benefit. But it is easy to see why authors (or their agents or business advisors) would be reluctant to dive into something like that, or to want some control over their use in ways that effectively forestalls collective action.

Even for lists publishers entirely own and control, there is enormous work to do segment them properly and test, test, test to find the most effective ways to use them. And engagement with customers also includes branding and interaction with them in social media and targeted web sites or landing pages that can engage potential customers (and, of course, capture their email addresses as well).

4. New protocols for author collaboration around marketing. We’ve made the point in this space before that the author’s digital presence is an important component of any book’s SEO. A publisher extending its own efforts to make its books discoverable that is not including the author web sites in their analysis is missing a component essential to the success of their efforts.

This is a complicated question that will ultimately back right up to the author’s contract, but where each publisher needs to start is with an understanding of what they want from an author’s digital presence and web site. There needs to be a best practice “ask” and there needs to be analysis of what exists to pinpoint the ways it should be improved. One very alert Big Five house we know has at least an executive or two at a high level who sees the virtue in our suggestion that a graded analysis of an author’s online presence, together with specific recommendations for improvement, should be both a standard and promoted feature for authors of being published by that house. It is hard to imagine that this won’t be normal operating procedure in a couple of years but the time to start working on it, for everybody, is now.

5. Maximizing global sales: distribution and discovery. Publishers, coaxed by global ebook distributors like Ingram, Vearsa, and others, are increasingly aware that English-language ebooks have a global market. But maximizing those sales requires both having distribution to the retailers serving each market and optimizing the title description metadata so that search “works” at many places around the world.

Part of what is required there is — say it again — more research. The search terms that work best for any book may well be different in India or Australia than they are in the US. But the challenges in getting differentiated copy posted correctly in the right places are not trivial, and things don’t work the same in Amazon and Google, let alone in local retailers in each market. We figure that the sophistication of the global ebook distributors will be increasingly useful here, but it will also be necessary for each global publisher to understand their most important markets and retailers for their books to sell most effectively.

6. Building a company-wide understanding of SEO (editorial, marketing, and sales). The understanding of SEO at most publishing houses, from our experience, is both insufficient among the most knowledgeable in the house and grasped at all by far too few people. For the most part, SEO is the province of the “marketers”, but, in fact, it might even be as important that editors and salespeople understand it. The S in SEO stands for “search” but it might as well stand for “sales” or “shelved”.

Editors who don’t understand SEO lack an important tool to direct authors, particularly of non-fiction books, to address what the audience wants. Without SEO understanding, they can’t instantly tell a “bad” title (one that won’t work for SEO) from a useful one.

Salespeople, whether they are covering brick stores or online ones, need that understanding too.

The key to optimizing for search is knowing how the audience searches. This can only be accomplished by research, and it changes with time so the research for a similar book on last season’s list can’t reliably be re-used. That will become clear as we consider the next point.

7. Allocating effort across a large backlist. The biggest opportunity and the biggest challenge for publishers, as they have historically operated and as they are currently structured, is maximizing their opportunities across their backlists. The big houses are dealing with many tens of thousands of titles. We advocate techniques that require some human application so scale techniques have to be used to pinpoint the titles worth an effort.

Although we are developing tools to help digest the external cues that might affect where the focus should be — cues from the news and social graph — each publisher has to start with a combination of knowledge of the list, intuition, and a sense that sales can be improved to pick those titles worth reviewing for better audience understanding and descriptive copy improvement. Almost certainly, titles that are more than a couple of years old will need work for several reasons: the house knew so little about SEO when copy was written; time will have changed the search terms that matter; and reviews and awards and other things from the book’s experience in the marketplace might need to be incorporated.

8. Make sure you ignore what is not important. My Logical Marketing partner Pete McCarthy has worked inside big companies and he urged me to add this eighth point. No company has the people or bandwidth or resources to spend time on things that are not very important. Whether you use this list of mine or make your own, be very wary of expending any energy or capital or bandwidth on anything else.

Of course, DBW itself won’t be relying just on me to make the choices of what to cover and what to ignore. I have already created a much longer list of topics than this for our Conference Council to review. We have them express themselves on how useful each potential topic is in a Survey Monkey poll. We will give our readers the opportunity to take that same poll when we describe the larger list of topics in our next post.

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Four of the big five have new deals with Amazon and only the biggest is still to negotiate one


A reporter called earlier this week focused on what he figures are the upcoming negotiations over trading terms between Amazon and Penguin Random House. I had observed when Amazon was throwing sharp elbows at Hachette during their contractual dispute that Amazon wouldn’t try similar tactics with PRH.

Since then, with HarperCollins and Amazon having announced they’ve reached new terms, deals have been done with all the Following Four US publishers. It would appear that the DoJ’s and Judge Cote’s work to stop publisher-controlled pricing across retailers has been very largely undone by the deals independently arrived at. So it is a sensible question for a reporter to ask, as this one was: can Penguin Random House do better than the others did in these negotiations?

I don’t know the answer to that. And even after a deal is announced, none of us will necessarily know the answer. But this is an appropriate time to consider the power of Penguin Random House’s position in the marketplace. It is very strong. If I were any of the other four major publishers, I would fear PRH more than Amazon as a potential disruptor of my business. When I put that proposition to a UK-based executive of one of those companies at the London Book Fair last week, he readily agreed with me.

When one considers what a segmented business publishing is, the Penguin Random House combination becomes that much more eye-catching. These five companies — PRH, HarperCollins, Simon & Schuster, Hachette, and Macmillan — compete much more with each other than they do with anybody else. Cambridge competes with Oxford and other university presses. Quarto competes with Chronicle and Abrams and Running Press and outside the US with Egmont and other illustrated book publishers. Yes, a bestseller might come from anywhere: Harry Potter came to the US market from Scholastic and the UK market from Bloomsbury. But the publishers who compete for the bestselling authors and the front-of-store slots repeatedly are the Big Five, which were formerly the Big Six.

And when Penguin merged with Random House, that was not just any old merger of the Big Six. It was a merger between Number One and Number Two. It has created a single company that is, in the US market, about twice the size of its next competitor (about $2.5 billion in sales for PRH against about $1.2 billion for HarperCollins). And HarperCollins, in turn, is about double the size of each of the other three.

What that means is that PRH, like Amazon, can make its commercial decisions independently from the rest of the industry. They can take risks that would be very challenging for anybody else. Amazon could afford to get into a dust-up with Hachette that affected the supply of books in ways its customers could clearly see and make it public to try to make a point. Random House, even before the merger, could afford to stay out of the new iBookstore (they wouldn’t play ball with agency terms in the beginning) for a while, which would have seemed a big risk to the others. (Of course, the DoJ and Judge Cote didn’t see it as individually-discernible risk. Their explanation was “collusion”.) That decision by Random House paid off in big ways in 2010 with higher sales per ebook title (because they didn’t go to agency, which reduced the per-title take) and higher unit sales (because agency would have forbidden discounting, and Amazon went to town discounting Random House books against their agency competitors).

In the past year, Scribd and Oyster announced ebook subscription programs. Pretty quickly, HarperCollins and Simon & Schuster announced varying degrees of participation in the services. And then Macmillan followed. But Penguin Random House and Hachette stayed out. Hachette is the most author- and bestseller-driven of the major houses and author brands are the most likely long run casualties if subscription services succeed. But, if they succeed, Hachette will have to go back to them hat in hand. Penguin Random House won’t, necessarily.

Because if subscriptions are actually the wave of the future and the title rosters from Scribd and Oyster are sufficient to make that happen, then PRH could compete with them entirely on their own. They would have as many prominent commercial books from their own reservoir as the other services have aggregated. And they wouldn’t be sharing with a third party vendor.

It is worth noting that PRH has gone into the Scribd service with audiobooks.

When Oyster announced last month that they would now sell ebooks a la carte as well as in subscription bundles, some of the press saw more significance to the move than it warranted. Scribd started out as an a la carte document access site. Amazon itself formed a subscription service (Kindle Unlimited) the minute Scribd and Oyster announced what they were doing. If you have the capability to sell ebooks, why not sell them by whatever commercial arrangement the customer wants?

By the same token, the distinction between publishers and retailers is melting away. Amazon went into publishing very quickly after ebooks enabled self-publishing. Barnes & Noble published proprietary books for years, even before they bought Sterling in 2002. HarperCollins built a retailing capability for themselves in the past year. (The Tor.com imprint of Macmillan said they’d be selling DRM-free ebooks directly from their own site, but we have seen no evidence that they actually ever did.)

So, the reporter trying to understand the possibly-occurring Amazon-PRH negotiations wondered, would PRH become a retailer?

I don’t think so (at least not anytime soon), but I still believe — as I did when I first speculated about all this 2-1/2 years ago — that a store could have a competitive selection of books with titles exclusively from PRH. No other publisher could serve a general interest audience at retail without other people’s books as well.

How else could PRH be disruptive? They could offer a license to schools for their titles. If a school bought one of those to load its students’ digital devices with content, they wouldn’t have everything they might want but they could conceivably have all they need. How hard would it be to sell a competing license with less good stuff in it? How hard would it be to build an aggregation so that a competing license had as much good stuff in it?

The executives I’ve spoken with at PRH — and I have high personal and professional opinions of all of them — have consistently disclaimed any interest in most of what I’m suggesting. And, indeed, they haven’t started a subscription service and they’ve shown no signs of rolling out a program to create PRH-only bookstores. There are reasons, aside from altruism or short-sightedness, why they might resist these solutions. After all, PRH publishes about half the most commercial titles in the US book trade. Subscription services and retail competition would weaken the existing bookstore network, and PRH benefits from its existence in proportion to its relative size, which is to say “much more than anybody else”.

In fact, I’ve discussed the possibility that they could be so disruptive with the CEOs of two of the other Big Five, and neither executive (unlike the one I met with in London last week) expressed much concern. One said “they don’t want to do that”, meaning “they don’t want to destroy the competition in the trade” (which is a point of view that is actually supported by what the executives at PRH have said to me, as counter-intuitive as it seems). And the other one believes that having PRH in the game to negotiate with Amazon and B&N helps keep the terms of trade in check for everybody else as well. That executive likes having PRH there, with all its size and clout.

I had the conversation with the reporter that was the catalyst for this post on Wednesday morning and it was mostly drafted on Wednesday afternoon. Penguin Random House’s new consumer-centric web site was unveiled Thursday morning and underscores their support of the trade (they’re trying to push sales to retailers, not sell directly themselves). The site appears to give a page for every book they’ve got, which could well prove very useful as they build embellishments.

They refer the sales over to a robust choice of retailers for all formats. One thing I noticed was that a particular ebook I looked for — Napoleon, A Life by Andrew Roberts — is $45 in cloth, $20 in paperback, and the ebook is listed at $29.99! Running through the list of retailers to which PRH links directly, we can see that Amazon and Google Play discount the book down to an identical approximately 14.4% off $25.65 (with Amazon touting the massive saving over the hardcover price!) but the others listed — Apple, B&N Nook, Books-a-Million, and Kobo — offer it at the $29.99 list price. Close observers of the changing state of agency pricing will be watching whether the pricing or the discounting profile changes when PRH concludes that next round of negotiations.

And, incidentally, this also jibes with something we were told very recently by an ex-Nook employee, who said that the DoJ and Judge Cote effectively stopped B&N’s ability to compete with Amazon in its tracks when they opened up discounting of agency. Not only did they strip out margin that B&N desperately needed to compete, competing then effectively required price-monitoring capability to keep up with Amazon that was beyond their capabilities. Google has no problem doing that and maybe nobody else can keep up, but it would take looking at a lot more than one title to prove that.

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More thinking about how author and publisher marketing collaboration should change


Because of our Logical Marketing work and our interest in author websites (admittedly just a corner of the author-marketing world, even if we think it is a cornerstone), I did a couple of recent posts, the basic thrust of which was that publishers needed to rethink marketing and the author interaction around it.

Now, British author Harry Bingham and American consultant and indie-publishing expert Jane Friedman have published the results of a survey they did asking authors what they think of their publishers. What Bingham and Friedman found suggests strongly that the topic of the author-publisher relationship around marketing will be the subject of attention from a lot more people in the months and years to come.

Bingham and Friedman corralled a really significant sample in response to their survey: over 800 authors, of whom nearly half had published six or more books, more than half said their last book was published by a Big Five or other large trade publisher, and more than 60 percent of whom had an agent. Fewer than 10 percent said their most recent book was self-published, so it is likely that the survey captures the views of the published author more reliably than the views of the self-published author.

But, in fact, these published authors are not strangers to self-publishing. Although about a third of the respondents said they had never considered self-publishing, well over 40 percent have done it and nearly a quarter say they’ve “seriously considered it”.

On the other hand, later in the survey 36 percent of the respondents were “horrified” at the idea of controlling every aspect of the publishing process while only 24 percent were “excited” by that idea.

The point to the exercise was to find out how authors felt about their publishers. There’s a lot of encouraging news in here for publishers around that. The authors are generally pleased with their editing, their cover designs, and the consultation with them around flap copy. But they’re much less satisfied with the interaction around marketing. Significantly more felt their books “weren’t really marketed at all” (28 percent) than felt that the publisher made “full use of” their “skills, passion, contacts, and digital presence” (17 percent).

Although half of the respondents were satisfied with the communication they got from publishers, only 20 percent thought they got the “systematic guidance” they needed so they could “add most value” to the overall effort. It is precisely that challenge that my prior posts, in perhaps an unneccesarily roundabout way, sought to address.

But what Bingham cites as most startling to him among the results was the publishers’ almost total lack of expressed desire for author feedback. About three-quarters of the authors say they weren’t asked for feedback at all from publishers and only 16 percent of the authors said feedback was solicited and they were able to communicate freely.

To me, the most telling questions were those that probed whether the author would leave their publisher or their agent if they had the chance. For the publishers: more would leave than would stay if they got an equivalent offer elsewhere. For the agents: by more than 6-to-1 authors who now have agents would stay with their representative even if they could get another. That’s powerful.

At the end of last week, we conducted a survey of our own among agents and editors, trying to discern whether self-publishing is a useful tool to get a deal. Much to my surprise, the consensus is that it is not useful. We got far more answers from agents than we did from editors, but the clear prevailing opinion is that publishers don’t know how to interpret independent publishing efforts and, most of the time, trying it does an author’s chances of selling that book to a publisher much more harm than good. Most agents responding said they really don’t want to try to peddle a book that has already been self-published unless it has achieved pretty extraordinary success.

(What’s “extraordinary”? One UK agent suggested that it would take at least 50,000 sales to get the attention of a British publisher. An American agent said in that market the number is about 100,000.)

Agents are less negative about whether self-publishing might be helpful selling a next or different book to a publisher, but, even there, they are far less than enthusiastic about the help it provides. One agent said that publishers care about the quality of the writing and very little about the author platform. (To me, this reflects the same lack of grasp of the importance of the author’s online presence that I was writing about in those recent posts. And whatever failures of understanding there are, they are more widespread among editors in publishing houses than they are among marketers.)

What the agents and editors seem to be saying to us is that they don’t think about self-publishing very much. There are definitely exceptions, but most seem content to ignore it unless an author has achieved outlandish success doing it.

It would seem that the level of concern among the establishment about the temptations of self-publishing at any particular time is directly proportional to the apparent health of bookstores and the growth, or lack of it, in the ebook market share at that time. Since, in the U.S., bookstores seem to be doing well right now (which I’d argue is still at least partially due to the subtraction of Borders’s shelf-space and the diminution in Barnes & Noble’s) and the ebook market share has appeared stable for some time, that level of concern is currently pretty low.

So, here are a few conclusions from all of this.

1. Agents are driving the bus. They control the authors; the publishers don’t. That’s not to say that publishers don’t know this; most of them surely do. But this reality — that publisher behavior is channeled by trading partners more powerful than they are — is definitely not appreciated by indie authors and it appeared not to have entered the DoJ’s calculations when they saw collusion in the marketplace a few years ago.

2. Publishers are missing a big opportunity by not simply soliciting author feedback on their experience with the house. Just asking for it would be a win and the chances are that ideas would surface that would be easily executed and could bend that author loyalty curve a bit more in favor of the house. And it would almost certainly also add marketing value with trivial additional cost.

3. Authors are starved for guidance to direct their efforts on their own behalf. They are looking to publishers for this, although they might also look to agents. Thinking through and then spelling out more clearly what authors should be doing to help themselves is a critical task the industry seems to have collectively avoided. Agents are good at providing career guidance. (What book to write? Which house to choose?) But they’re not marketers. They generally know little or nothing about SEO, mailing lists, accessing media and events and all the rest of it. Those things are squarely the publishers’ job and (with few exceptions) publishers have always preferred to avoid much author involvement

4. There are really simple things a publisher could do that would be very evident to authors and helpful to sales. Why aren’t publishers putting some lower-level marketing staff on the task of “retweeting” and “liking” author efforts online? At a slightly higher level of effort, why aren’t publishers evaluating author websites that already exist to make SEO suggestions? The author survey results suggest that doing even little things like this would help a publisher with author loyalty, which should be an objective for every publisher. Publishers should see virtue in the idea that providing authors with knowhow would make them more effective advocates for their own work. It would be very cheap to transfer that knowhow (once it was thought through) and publishers would effectively acquire enthusiastic, energetic and FREE marketing resources.

The two key assets publishers have are their network of authors and their network of accounts. The account side has been substantially disrupted in the past two decades by Amazon’s growth and knock-on effects that have included Borders’s demise and B&N’s increased power in the brick-and-mortar world. Part of the reason we are so emphatic about the importance of author websites is that their absence, or their weakness, creates a vacuum that strengthens Amazon’s grip.

But what the Bingham-Friedman survey reveals is that publishers are vulnerable on the author side as well. The agent world is consolidating too so each powerful agent is just getting more powerful. Every time a publisher signs a book, they get a crack at developing loyalty from that book’s author. Getting ahead of what are really pretty obvious and predictable developments, including the growth of digital discovery and reading and an increased interest from authors in being involved in their own marketing, would seem like an imperative which is escaping most publishers today.

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Asking whether Amazon is friend or foe is a simple question that is complicated to answer


I’ve been invited to join a discussion entitled “Amazon: Friend or Foe” (meaning “for publishers”) sponsored by the Digital Media Group of the Worshipful Company of Stationers (only in England!) and taking place in London next month. I think the answer must be “both”, and I suspect that my discussion-mates — Fionnuala Duggan, formerly of Random House and CourseSmart; Michael Ross from Encyclopedia Britannica; and Philip Walters, the moderator for the conversation, will agree. This is a simple question with many complicated answers. I am sure that Fionnuala, Michael, and Philip will introduce some perspectives I’m not addressing here.

The first thoughts the question triggers for me are three ways I think Amazon has profoundly changed the industry.

Although just about every publisher has headaches dealing with Amazon, very few could deny that Amazon is their most profitable account, if they take sales volume, returns, and the cost of servicing into consideration. This fact is almost never acknowledged and therefore qualifies as one of the industry’s dirty little secrets. Because they’ve consolidated the book-buying audience online and deliver to it with extraordinary efficiency, Amazon must feel totally justified in clawing back margin; it wasn’t their idea to be every publisher’s most profitable account! But since they are effectively replacing so many other robust accounts, the profitability they add comes at a big price in the stability and reliability of a publisher’s business, which feels much more comfortable coming from a spread of accounts. Publishers strongly resist Amazon’s demands for more margin, partly because they don’t know where they’ll stop.

It is also true that Amazon just about singlehandedly created the ebook business. Yes, there had been one before Kindle was introduced in November, 2007, but it was paltry. It took the combination that only Amazon could put together to make an ebook marketplace really happen. They made an ereading device with built-in connectivity for direct downloading (which, in that pre-wifi time, required taking the real risk that connection charges would be a margin-killer). They had the clout to persuade publishers to make more books, particularly new titles, available as ebooks. And they had the attention and loyalty of a significant percentage of book readers to make the pitch for ebooks. With all those assets and the willingness to invest in a market that didn’t exist, Amazon created something out of nothing. Everything that has happened since — Nook and Apple and Google and Kobo — might not have worked at all without Amazon having blazed the trail. In fact, they might not have been tried! Steve Jobs was openly dismissive of ebooks as a business before Amazon demonstrated that those were downloads a lot of people would pay for.

The other big change in the industry that is significant but might not have been without Amazon is self-publishing. The success of the Kindle spawned it by making it easy and cheap to reach a significant portion of the book-buying audience with low prices and high margins. Amazon added its skill at creating an easy-to-use interface and efficient self-service. Again, others have followed, including Smashwords. But almost all the self-publishers achieving commercial success have primarily Amazon to thank. It appears that, in the ebook space at least, self-publishers among them move as many units as a Big Five house and, in fiction, they punch even above that weight. Without Amazon, this might not have happened yet.

So, in the three ways Amazon has really changed the industry — consolidating the bulk of online book buyers, creating the ebook business, and enabling commercially-viable self-publishing, publishers would really have to say the first two are much to their benefit (friend) and the last one they could have done without (foe).

The second big heading for this Amazon discussion is around the asymmetry between what Amazon knows about the industry and what the industry knows about Amazon. Data about the publishing industry is notoriously scattered and because of the large number of audiences and commercial models in the “book business”, very hard to interpret intelligently. Amazon, on the other hand, has its own way of making things opaque by not sharing information.

The first indication of this is that Amazon doesn’t employ the industry’s standard ISBN number; they have their own number called an ASIN. So whereas the industry had a total title count through ISBN agencies that required its own degree of interpretation, the titles published exclusively by Amazon, which only have ASINs and not ISBNs, are a total “black hole”. Nobody except Amazon knows how many there are or into what categories they fall.

Another piece of Amazon’s business that has critical relevance to the rest of the industry but is totally concealed from view is their used book business. There is an argument to be made that the used book marketplace Amazon fosters actually helps publishers sell their new books at higher prices by giving consumers a way to get some of their money back. But it is also pretty certain that people are buying used copies of books they otherwise would have bought new, with the cheaper used choice being offered to them from about the first moment a book comes out. One would intuitively assume that the effect becomes increasingly corrosive as a title ages and the supply of used copies keeps rising as the demand for the book is falling, inexorably bringing the price of the used books down. But none of us outside Amazon know anything about this at all, including how large the market is.

And, by the same token, we have no idea how big Amazon’s proprietary book business is: the titles they sell that are published by them exclusively. Beyond not knowing how many there are or what categories they’re in, the rest of us can’t interpret how the sales of Amazon-published titles might affect the prospects for titles a publisher might be signing up. Amazon has that perspective to inform their title acquisition, their merchandising, and to gauge the extent of their leverage in negotiations with publishers.

Going back to the original question, except for the possibility that some new book sales occur because the purchaser is confident of a resale, this is all foe!

In retrospect, it is clear that Amazon’s big advantage was that they always intended to use the book business as a springboard to a larger play; they never saw it as a stand-alone. This was an anticipation of the future that nobody inside the book business grasped when it was happening, nor was it imitated by book business pure players. But it was the key to Amazon’s economics. They didn’t need to make much margin on books; they were focused on “lifetime customer value” and they saw lots of ways to get it. Google and Apple have the same reality: books for them are in service to larger purposes. But they started with the larger purposes and, for that and other reasons, have never gotten as good as Amazon is with books. (One big deficiency of the Google and Apple offers is that they are digital only; they don’t do print books.) And B&N and Waterstone’s never thought beyond books; it appears that Waterstone’s scarcely thought beyond physical stores!

But it could well be that Amazon is approaching its limits in market share in the book business. What they did worked in the English-speaking world — for printed books two decades ago and for ebooks almost a decade ago — because they were first and able to aggregate an enormous customer base before they got any serious challengers. They will not find it as easy to dominate new markets today, particularly those that have rules that make price competition harder to employ. Language differences mean book markets will remain “local” for a long time and strong local players will be hard for Amazon to dislodge.

Amazon has powerful tools to keep their customers locked in. PRIME is the most effective one: once customers have paid a substantial fee for free shipping, they’re disinclined to buy elsewhere. Kindle is another one. The devices and the apps have broad distribution and, because of self-publishing, Kindle remains the ebook retailer with the biggest selection.

The marketplace is changing, of course. Amazon’s big edge is having the biggest selection of printed and digital books in one place. That’s been known for decades to be the best magnet to attract book buyers. But now a lot of book reading is done without the title-by-title shopping in a bookstore that it always used to require. We are at the beginning of an age of “distributed distribution”. Many different tech offerings — Aerbook, Bluefire, De Marque, Page Foundry, and Tizra among them — can make it easy for publishers to sell ebooks directly (and Aerbook enables that and promotion in the social stream). The subscription services Scribd, Oyster, 24Symbols, and Bookmate (as well as Amazon’s own Kindle Unlimited) are pulling customers away from a la carte ebook buying and Finitiv and Impelsys make it easy for any entity to offer digital reading by subscription. All of these sales except Kindle Unlimited come primarily out of Amazon’s hide, since they are the dominant online retailer for books. Publishers mostly see this dispersal of the market as a good thing for them, even though some of the same opacity issues arise and, indeed, the big general subscription services are a new group of potentially disruptive intermediaries now being empowered.

For the foreseeable future — years to come — Amazon will remain dominant in most of the world as the central location where one shops online for books a la carte because they have the best service, the biggest selection, and they sell both print and digital books. But they now have their own new challenge dealing with the next round of marketplace changes, as what they dominate becomes a smaller portion of the overall book business in the years to come. Publishers face the same challenge presented a somewhat different way.

The event that gave rise to this post takes place the night before the London Book Fair opens. The entry fee is nominal. If you’ll be at LBF and want to attend, please do! I will, typically, have no real base of operations at LBF, but I’ll be there all three days with some time available to meet old friends and new. Email to [email protected] if you want to set something up. 

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Better book marketing in the future depends a bit on unlearning the best practices of the past


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A few years ago, publishers invented the position of Chief Digital Officer and many of the big houses hired one. The creation of a position with that title, reporting to the CEO, explicitly acknowledged the need to address digital change at the highest levels of the company.

Now we’re seeing new hires being put in charge of “audiences” or “audience development”. I don’t know exactly what that means (a good topic for Digital Book World 2016), but some conversations in the past couple of weeks are making clearer to me what marketing and content development in book publishing is going to have to look like. And audiences are, indeed, at the heart of it.

I’ve written before about Pete McCarthy’s conviction that unique research is needed into the audiences for every book and every author and that the flow of data about a book that’s in the marketplace provides continuing opportunities to sharpen the understandings of how to sell to those audiences. Applying this philosophy bumps up against two realities so long-standing in the trade book business that they’re very hard to change:

How the book descriptions which are the basis for all marketing copy get written
A generic lack of by-title attention to the backlist

The new skill set that is needed to address both of these is, indeed, the capability to do research, act on it, and, as Pete says, rinse and repeat. Research, analysis, action, observation. Rinse and repeat.

I had a conversation over lunch last week with an imprint-level executive at a Big House. S/he got my attention by expressing doubt about the value of “landing pages”, which are (I’ve learned through my work with Logical Marketing; I wouldn’t have known this a year ago) one of the most useful tools to improve discovery for books and authors. I have related one particularly persuasive anecdote about that here. This was a demonstration to me of how much basic knowledge about discovery and SEO is lacking in publishing. (The case for how widespread the ignorance of SEO in publishing has been made persuasively in an ebook by British marketer Chris McVeigh of Fourfiftyone, a marketing consultancy in the UK that seems to share a lot of the philosophy we employ at Logical Marketing.)

But then, my lunch companion made an important operational point. I was advocating research as a tool to decide what to acquire, or what projects might work. “But I could never get money to do research on a book we hadn’t signed,” s/he said, “except perhaps to use going after a big author who is with another house.” (Indeed, we’ve done extensive audits at Logical Marketing for big publishers who had exactly that purpose in mind.) “But, routinely? impossible!”

The team Pete leads can do what would constitute useful research which would really inform an acquisition decision, for $1000 a title. If the capability to do what we do — which probably requires the command of about two dozen analytical tools — were inhouse, it would cost much less than that.

Park that thought.

I also had an exchange last week with Hugh Howey, my friend the incredibly successful indie author with whom I generally agree on very little concerning big publishers and their value to authors. But Hugh made a point that is absolutely fundamental, one which I learned and absorbed so long ago that I haven’t dusted it off for the modern era. And it is profoundly important.

Hugh says there are new authors he’s encountering every day who are achieving success after publishers failed with them. It is when he described the sales curve of the successful indie — “steadily growing sales” — that a penny dropped for me. An old penny.

We recognize in our business that “word of mouth” is the most effective means of growing the market for a book. If that were the way things really worked, books would tend to have a sales curve that was a relatively gentle upward slope to a peak and then a relatively gentle downward slope.

Of course, very few books have ever had that sales curve. Nothing about the way big publishers routinely market and sell would enable it to happen. Everything publishers do tries to impose a different sales curve on their books.

A gentle upward slope followed by a gentle downward slope would, in the physical world, require a broad and very shallow distribution with rapid replenishment where the first copy or two put at an outlet had sold. But widespread coordination of rapid replenishment of this kind for books selling at low volumes at any particular outlet (let alone most outlets) is, for the most part, a practical impossibility in the world of distributed retail.

In fact, distributed retail demands a completely out-of-synch sales curve. It wants a big sale the first week a book is out to give it the best chance of making the bestseller list and, even failing that, the best chance of being worthy of continuing attention by a publisher’s sales staff, and therefore, the marketing team. Books in retail distribution are seen as failures if they don’t catch on pretty quickly, if not in days or weeks, certainly within a couple of months. And if a store sells two copies, say, of a new book in the first three months, it probably doesn’t make the cut as a book to be retained. If they bought two, they’re glad they’re gone and not likely to re-order without some push by the publisher or attention-grabbing other circumstance. If they bought ten, they’ll want to get their dollars back by making returns so they can invest in the next potentially big thing.

But that’s not the case online, where there is no need for distributed inventory (especially of ebooks!) If the first copies sold lead to word of mouth recommendations, the book will still be available to the online shopper. And there will be nothing in the way it is presented — it won’t have a torn cover hidden and be hidden in the back of the store, say — to indicate it isn’t successful. People can buy it and the chain can continue, building over time. Three months later, six months later, it really doesn’t matter; the book can keep selling. And, by the way, this will be true at any online retailer with an open account at Ingram (including for print-on-demand books), not just at Amazon.

But, in the brick and mortar world, the book will effectively be dead if it doesn’t catch on in the first three months. And the reality of staffing, focus, and the sales philosophy of most publishers means it won’t be getting any attention from the house’s digital marketers either.

If you live in the world of indie success like Hugh Howey does, you are repeatedly seeing authors breaking through months after a book’s publication, at a time when an experienced author knows a house would have given up on them.

Now park that.

I also had a chat last week with a former colleague of mine now at a periodical. He was explaining that one major conceptual challenge for his publication in the digital age was to see their readership as many pretty small and discrete audiences, not one big one at the level of the “subscriber”. No story in his publication is intended for “everybody”; what is important is for a newspaper or magazine to know whether particular stories are satisfying the needs of the particular niche of their audience that wants that topic, that kind of story. Talking to this former colleague about digital marketing and publishing was a variation on the themes that are topics with Pete.

One thing I learned in this conversation made another penny drop. Let’s say you have a story on any particular topic, from theater to rugby, my friend posited. Your total “theoretical market” within the publication’s readership is every person who ever read a single story on that subject. But your “core market” is every person who has read two stories on it. If a high percentage of those read it, the story succeeded. If not, the story failed.

And a further implication of this analysis is that seeing your audiences that way, and growing them that way, will also ultimately allow monetizing them more effectively. This wouldn’t be advertising-led, so much as harvesting the benefits of audience-informed content creation, but it is totally outside the way editorial creation at newspapers and magazines has always occurred.

And now park that.

We had a meeting two weeks ago with a fledgling publisher whose owner has a great deal of direct marketing expertise. As he heard Pete explaining what he did, looking for search terms that suggested opportunity (lots of use of the term and relatively few particularly good answers), he wondered if we could tell him through research what book to write. We’ve gotten some publishers in some circumstances to do marketing research early enough to influence titling and sub-titling. McVeigh in his ebook makes the same point under the rubric that SEO should be employed before titling any book.

Of course, we don’t sell that kind of help very often or we haven’t so far. It would require getting marketing money invoked early to pay for research like that. But we know it is useful.

And all of this together brings into sharper focus for me where trade publishing has to go, and how the marketing function, indeed, the whole publishing enterprise, needs to be about a constant process of audience segmentation, research, tweaks, analysis, and repeat. A persistently enhanced understanding of multiple audiences can productively inform title selection and creation. And systems and workflows need to be built to systematically apply what is being learned every day to every title which might benefit. Audience segmentation and constant research are really at the heart of the successful trade publishing enterprise of the future, even if we are only lurching toward them now with a primitive understanding of SEO, the occasional A-B test for a Facebook ad, and the gathering of some odd web traffic and email lists that don’t relate to any overall plan.

A publisher operating at scale ought to have the ability to provide those authors that want to build their audiences one reader at a time better analysis and tools than they would have to do it on their own.  Publishers have always depended on the energy of authors to sell their books; the techniques just have to change. Instead of footing the bill for expensive and wasteful author tours, publishers should be providing tools, data, and helpful coaching to be force multipliers for the efforts authors are happy to extend on their own behalf. The publisher’s goal should be have their authors saying “I don’t know how I could possibly be so effective without the help I get from my publisher.”

Publishers should also be doing the necessary research to examine the market for each book they might do before they bid on it. They should have audience groups with whom they’re in constant contact, and they also need the ability to quickly segment and analyze audiences “in the wild”. The dedicated research capabilities need to be applied to the opportunities surfaced by constant monitoring of both the sales of and the chatter about the backlist.

Size, scale, and a large number of titles about which a lot is known should give any publisher advantages over both indie authors and dominant retailers in building the biggest possible audience for the books it publishes. But getting there will require both learning the techniques of the future and unlearning the concepts and freeing themselves of the discipline of “pub date” timing that have always driven effective trade publishing.

The publishers creating new management positions with the word “audience” in the title would seem to be very much on the right track. It is worth recalling that my father, Leonard Shatzkin, carried the title of Director of Research at Doubleday in the 1950s. Research would be another function to glorify with a title and a budget assigned and monitored from the top of each company. Note to the CEOs: a budget for “research” for marketing and to inform acquisition should be explicit and it should be the job of somebody extremely capable to make sure it is productively invested.

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Kids book publishers need to massage their data to understand where their books are really going


The day before Digital Book World (which this year was last Tuesday, January 13th), we organize a conference about publishing for young people called Publishers Launch Kids. Because my involvement with juvie publishing over my half century in the business has been relatively cursory, we are fortunate to have recruited our friend, Lorraine Shanley of Market Partners International, to be the Conference Chair and program the show. She invites me to join a wrap-up session at the end of the day. I bring a “fresh perspective” because I am relatively lightly burdened with prior knowledge before I hear all the speakers.

Lorraine delivered a consistent theme, which was that kids’ publishers are finding new revenue streams. Subscription is one of them. Tapping big brand promotional dollars was another. And some of the new-style digital publishers who are creating their own IP are turning books into a subsidiary right, licensing back that IP to more pure-play book publishers.

I was delighted that I found myself able to offer comments in the wrap-up that the audience seemed to think added insight to their day, so I’m repeating those observations here and adding another in hopes that it will do the same for yours.

The first point is around the general consensus, widely reported and commented upon, that kids publishing is the one big bright spot in the industry, carrying all of the Big Five publishers to expanding margins and profits. But when the facts are examined a little more closely, it is clear that there are real limits to the conclusions that should be drawn from the data that lead people to that belief.

Publishing revenues are credited based on the BISAC codes associated with each book published. The phenomenon of the past few years, really going back almost two decades to the launch of the first Harry Potter book, is the massive adult audiences for books intended, and tagged, for YA audiences (and sometimes, as in the case of a book called “Wonder” — or Harry Potter itself for that matter — books that are tagged for even younger readers).

Well, the stat-masters from Nielsen Book made it clear how distorting those sales can be in their presentation, where they showed that 80 percent of the sales of YA novels are made to adults for their own reading! Since one of the core challenges we acknowledge for juvie publishing is how to overcome the teacher and parent gatekeepers between the books and their intended audience, that data would make it appear that the gatekeeper question is not nearly as consequential as we might have thought. Or, at the very least, for a big chunk of their list, it isn’t the most relevant marketing challenge.

And that raises a second point. It is clear that juvie publishing, like all trade publishing, needs to clearly separate the titles and attributable revenues that are straight text from those which are not. We have long advocated this perspective for adult publishing because of the clear and consistent evidence that straight text books port successfully to digital and other books do not. Of course, that would be true regardless of the age level of the books. But aside from the differences in performance based on format, YA has a divide that is also based on audiences.

In a whole day’s conversation, there was never any indication from any publisher that they clearly delineate their businesses that way. That is, even if you accept the idea that 80 percent of your YA straight text sales are to adults for adults, it does not facilitate an easy recalculation of how much of your total audience and sales are for adult consumption as opposed to being for youth consumption unless you have already separated out the YA and middle-grade chapter books from your other output. (I include the middle-grade chapter books here because of my awareness of the book “Wonder”, aimed at 9-year-olds but a rewarding read for kids of all ages.)

Without making that distinction, meaningful analysis of sales data to inform marketing becomes nigh on impossible.

There is an analogy here to a different dichotomy. We have said for years on this blog that looking at the division between print book sales and ebook sales by genre or category or publisher is much less meaningful for analysis or business decisions than looking at the sales made online versus those made in stores. Obviously, about 100 percent of the ebook sales are made online but that only tells a part of the story. As publishers consider resource allocations from marketing and sales staffing to where promotional efforts should be focused, the more meaningful distinction is how people buy than in what format they read.

And the meaningful distinction for publishers looking at sales to figure out how to get more of them is who buys and reads their books, not what reading level they were theoretically aiming for.

There are some other implications of this matching of books and actual audiences. One is that it certainly possible, and perhaps even likely, that the ability of the kids’ divisions of Big Five houses are better positioned to go after those adult audiences than a kids-only house would be. To the extent that adult-division marketers get involved in pushing the books that come from the kids books editors, they press that advantage.

I also came into Pub Launch Kids with an old idea that the discussion that day only reinforced. I can’t understand why each of the Big Five publishers isn’t operating its own subscription program for juvies: all of them across grade levels, picture books and chapter books. Here’s my logic. Just about every parent would love to be able to hand a kid the tablet or phone they could read on and let them do their own “shopping” for books. But they don’t want to give them the ability to spend money. Subscription is a simple answer for that.

Lorraine had put together a great panel of companies for Launch Kids with subscription offerings: MeeGenius, Speakaboos, and Smarty Pal. All of these companies had more to offer than just subscriptions, including enhancement (read-along narration), curation, and data that could be useful to parents and teachers. But they also had both a limited number of titles (in all cases, fewer than any one of the Big Five publishers could deliver on its own) and a commercial model challenged both by the operational cost of content acquisition and the need to have their own share of the revenue in addition to what the publisher takes (to share with the author).

Meanwhile, the Big Five publishers have digital files of all their books and the ability to promote a subscription service to their target audience by the very simple device of promoting it on the covers of all the print books they sell and within all their ebooks. Unlike a third party subscription service, they could live with a relatively small and slowly-growing subscription base to keep the cost of subscriber acquisition low. They’d learn a lot by observing the behavior of their readers. They could find that a subscriber who looked at a picture book 27 times might be enticed to buy a print copy, so the subscription activity could also be lead-generating.

And this kind of intel could really drive sales through another of the new revenue streams discussed in some detail at Launch Kids: personalized books.

Subscriptions from the owners of juvie book IP for digital versions of their content also have another massive potential market: schools. All of the subscription sellers recognize that. Any publisher who had such an offering would have that market to chase as well. One publisher I discussed this with sees the institutional market as the first one to pursue but agreed after we discussed it that the ability to pursue an opportunistic single subscriber strategy, rather than needing to get enough of them to build a free-standing business, made a real difference in how profitable those single subscribers could be and how low the acquisition cost might be driven.

I have been waiting expectantly for Penguin Random House to offer its content to schools on a subscription basis, which could give them a huge structural advantage over everybody else in that marketplace. I say this despite PRH consistently reporting back to me (in only the nicest ways) that my speculation about what’s best for them doesn’t square with their own thoughts on that matter.

But were they to do that, the most sensible response from the other four big houses would be a combined offering to schools, since it would pretty much take all four of them to present a comparable alternative. One wonders what the DoJ would think about that.

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