The publishing industry faces some mammoth challenges that it will be very hard for any one publisher, even the biggest, to address.
Costs have to be cut dramatically over the next few years. New technology is going to enable upstarts to compete in the marketplace with far less overhead and infrastructure than legacy publishers have built. The legacy cost structure will be competitively unsustainable and, at the same time, investments are needed to create whole new infrastructures for marketing and new processes for product creation. What the products themselves will turn out to be is something that will only become clear through experimentation, trial-and-error, and an iterative exchange between publishers and their markets.
There are some challenges that are simply awesome. The big publishers are sitting on rights they can’t exploit because they don’t know what they own. The typical “rights database” in a major house is an ocean of filing cabinets containing hard copy contracts that could be 20, 40, or 80 years old and still in effect. The biggest emerging market might be the use of publishers’ material on web sites that do, indeed, need to “buy licenses” to use the material, but the granularity of potentially millions of very low-value transactions would defeat any attempt in the current environment to make this business profitable.
In fact, transaction costs are going to be one of the closely-watched metrics distinguishing publishers in the 21st century from publishers in the 20th. Everybody is going to have to be paying attention to cutting them to enable those low-value transactions to be profitable.
We’re going to need concerted and focused efforts to enable today’s publishing companies, particularly in trade but really in all areas except a few professional niches that have already made the transition, to do what’s necessary to reconfigure and rebuild for new paradigms that are still being invented.
All of this leads me to introduce an organization I hadn’t heard of a month ago which could well be the White Knight riding to the rescue of publishing. I don’t know them well — I’m still in the process of getting introduced — but a publishing systems veteran who has been my client twice before has just taken an important position with them. We’ll be working with them to hone their approach to the publishing community, which I’m sure will have a profound impact over the next few years.
The company is the Tata Group, and more specifically, the unit within it called Tata Consulting Services, or TCS. The executive is John Wicker, with whom I worked in the 1990s when he was at Vista Computer Services (now Publishing Technology) and more recently when he was at Klopotek. (We did the Digital Asset Distribution project together three years ago.) Tata is extraordinary.
The company was founded in 1868 and today the Tata Group comprises 96 different companies with over $70 billion in annual revenues (not far off the annual revenues of the entire book publishing industry, worldwide.) The consulting group is about 10% of the company, with annual revenues of about $7 billion, growing at about 20% a year. TCS has 160,000 associates worldwide, with more than 14,000 in the United States. All of them, of course, have a technology background. Hundreds have experience with publishing and thousands have experience with other media.
Wicker’s new job is to head up the Publishing Segment for TCS’s Global Consulting Practice (GCP), but he is building on a substantial existing base. There’s a major media company of great importance to the publishing community that has been having TCS handle its back office functions for years. Another major publisher was halfway through an Oracle system implementation that was over budget and behind its schedule working with a big brand consulting firm. TCS took over the project and delivered the implementation within the original timetable and budget.
And a substantial portion of the apps on sale for the iPad were developed by TCS. They have dealt with publishing’s legacy challenges and they’ve got experience at the things publishers are just learning that are critical to our future.
In the 1990s, Wicker helped us pioneer a new fusion between envisioning publishing’s future and educating the industry by organizing Vista’s “Publishing in the 21st Century” program, which I co-chaired with Mark Bide of Rightscom in the UK. The White Papers and conferences we did then were really groundbreaking. We can read what we said was publishing’s future more than a decade ago with pride. (Most of the speeches on this web site that are from before the year 2001 were delivered at Vista conferences.) We tapped the thinking of a lot of smart people to develop our understanding of the challenges publishing faced and to feed our imaginations about where things were going.
But the degree to which we could address the challenges directly was limited. Vista was the biggest provider of ERP (that’s “enterprise resource planning”) systems to publishers, but they were a tiny company, far less than half a percent of the size of TCS. What we learned influenced Vista’s systems development but we really couldn’t help much with a lot of the challenges we saw.
We didn’t have the resources to boil the ocean. TCS does. TCS can’t stop change (nor would they want to try) but they really have the capabilities to help publishers do what’s necessary to adapt to it. From the perspective of guys like Wicker and me, who for years have been contemplating issues so large they were more frustrating than enlightening to consider, being able to help steer such a massive rescue flotilla into publishing waters looks like the opportunity of a lifetime.