The Shatzkin Files


Epiphanies come and go


I was talking to one of the smart C-level people from a major house at a party last June at BEA in Los Angeles. He was very excited about what his company had accomplished.

“We’ve set up a database and CMS so we can deliver a web page for every book a web page for every author, and a web page for every subject showing all the books we have on that subject.”

Wow. Good.

“The very first morning we had the site up, we got our first direct order from a consumer at 11 am. We were able to see that this woman had googled for “crochet” and gotten delivered to our selection of crochet books. She bought two — full price plus postage and handling. She apparently never thought about the fact that she could have bought them cheaper by clicking over to Amazon.” Or to BN.com.

Readers of this blog know where I went with that right away. I figured: this will teach them about niche, about verticals. They’ll see over time that their crochet page and their cooking page (or whatever…) are getting a lot of traffic and, after a while, somebody will say “hey, let’s put some content up there for that traffic.” And, over time (I wish I could say “before you know it”, but that would be too much to expect), they’d develop verticals. Just the mere fact of setting up this capability for their web site would lead them into the future.

Nice thought. But there was more.

“So, we thought, why stop with just our books! Ingram is our partner for other activities. We can just use them and sell everybody’s books. As long as we have that buyer on our site with their order book open, why not sell them anything we can?”

Better, I thought. Using everybody’s books will teach you about niche even faster! In fact, depending on how you merchandise it, you could learn about niches for which you don’t (yet) have any books! Cash-flow positive market research! What could be better than that?

Over the next couple of months, I thought about this some more. After a while I realized, hey, this will happen to all the publishers. They’re all setting up databases of their own catalogs so that they’ll be able to deliver web pages on the fly to suit any search. They’ll all start selling direct to consumer; digital downloads sort of force them to start and then it’s just silly not to offer your own books. They’ll all learn about niche in an orderly and organic way.

And once you start doing that, as this executive surmised, why not sell everybody’s books. You have a customer, they’re buying. You want margin and you want information. You get more of both if you can take orders for everybody’s books!

Then the epiphanic part: this would be the “Amazon antidote.” Publishers worried about Amazon hegemony online (and all the big ones, and many of the small ones, are) would all be participating in a “solution”. If a dozen or a score or a hundred publishers were all selling the books of all the publishers, and each one was merchandising according to what worked best for them — free content with this one, a free audio download with that one, a copy of the author’s last book for a dollar with another one — then price comparison gets difficult. All of these publishers, each grabbing its own sliver of the market (for everybody) would chip away at the giant aggregator whose ability to call so many of the online sales shots right now is making its suppliers nervous. (What do I mean? Think ebook pricing…)

Obviously Amazon would remain the biggest part of the online sales market, but at least publishers would have some leverage (where now they have none.) 

What an insight! What a game-changer! I had visions of publishing a piece on this in both Publishers Weekly and  The Bookseller to emphasize what a brilliant insight this was: one that needed to be shared on both sides of the Atlantic simultaneously for maximum impact. I was drafting; I was thinking; I was talking to editors.

Then I told this to a friend who has run big distribution operations and worked at a couple of major publishers. He laughed. Forget it, he said. The publishers’ web sites have no traffic. They don’t have anybody on their staffs that can handle the merchandising. This is an idea that will never happen, never work. 

He’s right, of course. The publisher that had the idea in the first place hasn’t gotten hooked up yet to sell everybody’s books nearly a year later. Every big publisher I talk to is disappointed with their own direct sales. And I’m the one who keeps saying that these big “catalog on steroids” web sites can’t garner much in the way of consumer traffic.

Publishers do need to establish direct relationships with customers because they have to market directly, regardless of how the sales is consummated. But they need to leave the horizontal work to the aggregators: Amazon, Barnes & Noble, BN.com, Borders, Borders.com, and all the chains, independents, and online booksellers they can possibly find. They need to help rewrite the rules of engagement, particularly on how names and customers can be shared constructively between publishers and intermediaries in the digital world. But they need to focus their customer contact on people with whom they can establish a relationship. And that surely isn’t every person that stumbles into a horizontal web offering.

It is getting harder and harder for a general trade publisher to do the right thing.

And, note to self: it’s great to be an out-of-the-box thinker and creative enough to see what isn’t there and maybe ought to be. But you can’t beat having smart friends who won’t hesitate to put the pin in an overinflated idea.

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  • http://www.fictionmatters.com Bradley Robb

    I’ve often wondered why publishers don’t sell directly to customers. If half of a book’s cover price is going directly to the retailer, they publisher could easily undercut and still make a better profit.

    The problem lies in most publishers and imprints being brandless to consumers. The solution would require a good bit of marketing and social awareness on the part of said imprints to make them matter not to avid readers, but to casual ones.

    Would be a smart move, similar to the way indie labels court music fans.

  • http://www.idealog.com/ Mike Shatzkin

    As I’m sure you know, it can get complicated. The publisher would be unwise to undercut the retailers because they depend on the retailers to reach most of their customers. And the “better profit” is a bit illusory too because the cost of shipping one book to one person (and then, sometimes, dealing with the fact that we want to send it back for a refund) eats up a lot of margin. It takes scale like Amazon’s or BN’s to make shipping single-copies efficient and to negotiate freight rates that bring those costs down.
    And I agree with you about the necessity of having meaningful brands for direct consumer contact, but that’s not entirely a marketing problem. For many publishers, the bigger problem is content-focus, subject-focus, niche-focus. No amount of marketing can turn HarperCollins or Simon & Schuster (or any other major publisher) into a meaningful consumer brand with the mix of titles they have.
    But your reference to the indie labels is right on because there are smaller publishers that do specialize and can make their brand work for consumers. Two outstanding examples are Chelsea Green and Hay House. On a larger scale, Harlequin also means something clear to its readers.

  • http://www.fictionmatters.com Bradley Robb

    I think you’re spot on with Harlquin, which just turned 60 I believe.

    I think what HarperCollins or S&S would need to do is establish a rather rigid and diverse imprint system, with each imprint covering a well-defined niche. To some extent HarperCollins is already doing this, with Angry Robots covering SciFi, HarperStudio covering the more intelligent infotainment books.

    As far shipping goes, I spent several years after getting out of the Army as an international shipping supervisor at a mid-Atlantic UPS hub. Cutting deals with a shipper, even outsourcing the warehousing is wholly feasible, and only gets cheaper as the scale increases. But, that could all easily be avoided if publishers start by cutting around the current big names in the eBook market.

    I’m still stewing on a business plan for a digital era publisher. But, I think I’ve got a lot of the kinks worked out.

  • http://www.idealog.com/ Mike Shatzkin

    The key is “well-defined” niche. I would argue that HarperStudio is not “well-defined.” They aren’t about niche from a content point of view at all.

    The problem Harper and everybody else will have with sci-fi is that all the publishers are doing it, forming silos. That doesn’t serve the community. Either the publishers will band together somehow or a 3rd party aggregator will take it away from all of them.

  • http://www.worthyshorts.com Eugene G. Schwartz

    Mike-

    Great insights —

    With the great Google information aggregator as a gateway to verticals, there isnt a publisher around who shouldn’t have verticals for their subject categories and author sites, and associate selling links or widgets to related titles with other publishers — this is especially true for niche independents.

    From a bottoms up point of view, the consumer Googling crochet sees every publisher’s citation on Google in the same blue type. When they land on the link, the fortuinate publisher to get the eyeballs should be able to hold them there — all page views are on a level playing field – the publisher can provide the interest value to keep the searcher there.

  • http://www.idealog.com/ Mike Shatzkin

    The publisher should be able to “hold them there” by involving them somehow. Connecting with them. Only possible if the publisher is committed to the vertical. Can’t be done by a publisher doing one or three books on the subject.

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