The Shatzkin Files


More on atomization: why the new publishers are coming


The most recent post here laid out a future for trade publishing that will be less and less about traditional publishers and more and more about non-traditional publishers delivering books into the marketplace without the financing or “approval” of a profit-seeking publisher. That’s a radical change from the industry we’ve seen grow over the past 100 years when book sales in retail stores of all kinds have been the primary revenue source for publishers and authors.

Obviously, the likelihood of what that post predicts coming to pass is dependent on the validity of the argument that a substantial amount of commercially viable publishing will take place without the funding of the commercial trade publishers. Of course, “commercial viability” is a function of the publisher’s objectives; the new book publishing entities have ways to win that aren’t just about the profit they make publishing their books.

Books have a mystique and symbolic power, for a reason. For three centuries, they have been at the center of high-value communication of stories, information, and ideas. The number of entities that generate content that fits that description is far larger than the number of book publishers, and includes entities that wouldn’t be thought of as publishers of any kind at all.

Because delivering a book requires managing a huge variety of details and because selling one effectively has always needed a multi-faceted organization and an investment in inventory, until recently only companies dedicated to the business of books could effectively publish them.

Not anymore.

Because of ebooks and digital distribution, it is now possible for any content packaged as an ebook — if marketed effectively to its target audience — to find its readers (or to be found by them). The big publishers of today are all grappling with how to re-connect with their readers in an information universe that has been redefined. Meanwhile, the networks by which they have always connected with readers in the past — bookstores and mass merchants and even libraries — are becoming less and less relevant as readers increasingly read on devices and find what they’ll read through their online interactions.

But where there are challenges and painful adjustments in store for the biggest publishers, there is vast new opportunity for just about every other enterprise that connects to a lot of people and knows something about what those people want to know. And companies are increasingly figuring that out.

Jeremy Greenfield is the editor of the Digital Book World website; we partner with DBW to deliver their annual conference. Long before the post last week “predicting” that entities that aren’t book publishers would become book publishers, Jeremy had been keeping a list of them. It’s impressive. When we asked Jeremy what was on his list, he sent us this note:

Most recently, Scientific American launched a series of ebooks. American Express Publishing launched an ebook line with Vook. The Atlantic began to publish its own ebooks. USA Today published USA Tomorrow, a collection of expert predictions about the future of America. Harlequin and Cosmopolitan magazine inked a deal to publish several ebooks a month together. Newsweek/Daily Beast entered into a partnership with Vook to publish ebooks. Playboy launched a series of shorts for the Kindle, the Washington Post announced an e-book program, and the Chronicle of Higher Education, a trade publication focused on the higher education field, launched an e-book business. Other notable companies to jump into the space are magazine publishers Conde Nast and Hearst and NBC News, a division of NBC Universal. And the Wall Street Journal has recently rejuvenated its e-book program.

In addition to these, we know of more: the New York Times, the Toronto Star, the Chicago Tribune, the Boston GlobeTED Books, Esquire, the Guardian, Wharton Business School, the US Army, Provincetown Public Library, the Saturday Evening Post, Xiamen Bluebird Cartoon Company of China, cartoon-producer Fred Seibert creating Frederator Books, and Scott Rudin and Barry Diller’s Brightline, and many others.

Of course, all of these are content-producing entities; many of them are even print-content producers. But it simply wasn’t in their power to decide to become book publishers until the world changed.

Three companies which started out with content-generation ideas of their own — Vook, Byliner, and Atavist — are frequent partners for these new publishers, as are existing publishers from Big Six players to Perseus’s Constellation, Ingram, new ebook publishers Open RoadDiversion and Rosetta, and other companies like INscribe and PressBooks. (Not all of these have gotten into this game yet, but they certainly all will.) These companies are serving the first wave of fledgling publishers and the aspirants so far have been content-generating companies.

Some of those we’ll soon see wouldn’t think of themselves as content creators. Before long, I’d expect to see every museum, every historical society, every consulting firm and law firm and accounting firm joining the party.

For example, a law firm of our acquaintance sent us a notice last year that key members of their team had put together a “White Paper” about changes in trademark law. I called the partner there that I knew and asked “why don’t you publish it as an ebook?” He said, “I don’t know.”

Another attorney to whom I told the story patiently explained to me that intellectual property like this was created to be given away to lure clients to the firm and impress them. Why, I was asked, should we publish it as ebook? What would we gain?

That’s pretty simple. Somebody will go to Amazon and search “trademark law”. You want to come up! And, in fact, you could price your White Paper at $100. It wouldn’t be great for sales, but you’d get the discovery benefit and you’d be putting a marketplace value on what you’re giving away for free. You win twice.

The next wave will be everybody else: every brand with a following, a meaning, a reputation, a website. The next group will need editorial services which presents a whole new set of opportunities for writers, agents, and, especially, packagers. And it will present an opportunity for me to elaborate more on atomization in another post.

Of course, we’ve got this subject covered at our upcoming Publishers Launch Conference at BEA on May 29. The program is starting to take shape, and we’ll have a panel called “Outsiders: New Book Publishing Operations from Media and Content Companies”. Steve Kobrin of Wharton Digital Press, Alison Uncles of the Toronto Star, and David Wilk, just appointed the publisher of Frederator Books, will be speaking on it. Each of their programs is quite different from the others, as are their objectives. But all of them are heading up businesses that would scarcely have been conceivable five years ago.

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  • http://www.thefutureofpublishing.com/ Thad McIlroy

    Mike,

    I think you’re conflating two separate book publishing trends here.

    The first is the discovery by newspaper and periodical publishers that they can “extend their brand” by repackaging existing content (or with modifications) into objects called “ebooks” which are promoted and sold through a somewhat different channel than periodicals. I see this as the next step from:

    (i) Print publication
    (ii) Online
    (iii) Zinio-style repackaging
    (iv) Apps

    Ebooks are probably the final repackaged content container, or perhaps it’s the coffee mug.

    Separately, owing in large part to the diligent efforts of Joe Pulizzi at the Content Marketing Institute (hhttp://contentmarketinginstitute.com/about/), brands are exhorted to create new content around their sales message in order to engage customers intellectually and emotionally, beyond what Kraft Dinner or a new credit card might otherwise accomplish. This has officially become a trend, as Joe’s website ably proves.

    Who said we don’t have enough ebooks? Problem solved.

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

      Well, I could be “conflating two trends” or the phenomenon I’m identifying at what I think is an early stage of impact equivalent to, say, where internet bookselling was in 1997, has manifested itself in the two ways you’ve identified. So far.

      And the media brands aren’t just repackaging old content. That’s part of it. I don’t think it is even most of it.

      So does that make three manifestations so far?

      Mike

  • http://twitter.com/PeterTurner Peter Turner

    I don’t know. I tend to see this atomization through a different lense. If the volume of books (ebooks, digital content, etc.) continue to increase dramatically and the number of eye balls willing to pay for said content remain relatively static then the key dynamic is about how best to capture the limited market of paying readers in a cost efficient way. That “solution” is lagging (profoundly, in my view) behind the challenge: the volume of content wanting payment. Even the likes of Google and Amazon struggle with the implications of this dynamic; how to return search results that will translate into sales conversions when they’re searching in an algorithmically growing ocean of content. I guess the way I see it is that the volume of content flattens search results, directly effecting engagement and sales conversion for any particular book or piece of digital content wanting payment.

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

      First of all, payment can vary by amount. And cheaper sells better.

      More and more “books” are going to be fostered for motivations other than the revenue they can yield. That’s a challenge to people who want to make money publishing books. All the “entity-publishing” is winning in ways that are not just about the revenue.

      As for “discovery”, the harder it gets, the more it makes sense for promotion to migrate to where the attention is. That’s the idea behind Random House’s “bookshelf” concept (with Politco and Bookateria) and other schemes to curate a selection of books for an audience that is already there. (Zola is on to this concept.)

      That’s atomization of bookselling. Which will happen too.

      Mike

      • http://twitter.com/PeterTurner Peter Turner

        I’m not sure I’m being unclear or you’re taking my point on board (or both!). More “books” published not for payment but for compensation via reputation or some other benefit is a key problem but taking bookshops to where the “attention is” only works if that attention is around book discovery and sales conversion. Politico.com is a perfect example: look at how weally tied the bookshop and title pages are to the content on the site that drives traffic. Just putting a “bookshelf” on a site doesn’t necessarily do much on it’s own. I could be wrong–my views are based on past experience not current data. But I’d be shocked if such experiments are turning conversions.

      • Guest

        P.S. Have you looked at the traffic volume at bookateria.com?

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

        You must be a direct response guy. Because you are focused on the response rate. Or the hits.

        But focus instead on the times at bat.

        The results from Politico and Bookateria are yet to be known, but I think both web sites benefit from having the “store” far beyond the revenue they reap. I know it scratched an enormous itch for MIchael Cader to be able to make it easy for people to “shop” the enormous number of lists of books he publishes all the time. WHATEVER the response rates, more and more web sites are going to find this an attractive thing to do.

        Bookshop owners aren’t the only people on earth that like to direct people to what they want them to read. Make it easy and lots of people will do it. That process has begun.

        But that’s retail atomization. Publishing atomization will be much more powerful.

        Mike

      • http://twitter.com/PeterTurner Peter Turner

        Sorry for the rat-a-tat-tat but if the [sales] results are not yet know, how can you tout this approach as some meaningful approach. It may turn into something that generates valuable customer data and revenue but I find it very hard to believe it’ll happen under this model. I definitely *get* that publishing will be increasingly atomized but doesn’t it matter if there’s revenue there as well?

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

        Peter, NOTHING works yet. The friggin ROADS aren’t BUILT yet. EVERYTHING is a guess, or an experiment. When all this stuff is known and understood, I will retire and you’ll become a rich man doing things right.

        Mike

      • http://www.thefutureofpublishing.com/ Thad McIlroy

        A part of the problem is that many of the ebooks being published today are little more than a handful of HTML5 pages bound together with DRM. The “content creator” (née author) has the choice of publishing those pages on a web site and monetizing with Google AdSense, or offering an ebook for $2.99 on Amazon. The earn-out for both methods is about ten bucks for fair to middling content.

        Either way it will show up somewhere in Google’s search engine, near the bottom of “related searches”. Getting a steep $2.99 off the punters is becoming problematic, even in Prime paradise. Better to take your slim chances with AdSense.

        So the onslaught of bad books will eventually dry up, leaving us with a few hundred thousand more middling web pages, not enough to tip the needle.

        Welcome to publishing paradise.

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

        The “onslaught” will not dry up. It will change forms.

        People will ultimately “find” what they buy (which I would distinguish from what they “want”) by encountering it where they are.

        Having said that, I refer to the statement in the other string: “the roads aren’t built yet.” To which, I’d add, we’re still hacking our way through the jungle. It might seem like a long way to town now, but trust me that in a little while it’ll be a lot easier. And a lot different.

        Mike

    • http://www.thefutureofpublishing.com/ Thad McIlroy

      I agree with you on the basic math. We’ve brought in new readers, but clearly the great leveling off of new eyeballs is upon us (with some growth left abroad). The content continues to explode: a search for “new in the last 30 days” at the Kindle store rewards you with 55,354 results.

      Google’s algorithms reward merit; Amazon’s reward sales. Neither can cope with the onslaught.

      Guy Gonzalez says this is more a challenge for “content creators” than it is for readers. Perhaps, but finding the best needle in the haystack, at any price, is an ever-increasing problem.

      In the last week I’ve been studying search engines, recommender systems, semantic enrichment and new content algorithms. Perhaps the truth is out there. I’m still searching.

      • http://twitter.com/PeterTurner Peter Turner

        My two cents (granted from a publishing dude not a tech guy) is that smart filters and human curation offered up to niche markets in a community centered/value added way might save content creators bacon while solving a problem that readers don’t know they have.

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

        Smart filters and human curation (precisely the Random House formula) will be applied with increasing capability to niche after niche after niche. But it won’t save a very large part of what is, today, commercial publishing. Unfortunately. Supply will overwhelm demand.

        Mike

      • http://twitter.com/PeterTurner Peter Turner

        I don’t see the human curation and the robust content marketing in these efforts. Politicos need to separate editorial from anything that looks like eCommerce is understandable but it means you could spend a month on theire website and not even know they had a “bookshelf.”

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

        Peter, we are in the first 50 feet of what will be 20,000 miles in just a few years. I don’t think any of this detail adds or subtracts from the point. Or at least, from MY point.

        Mike

  • http://www.facebook.com/people/David-Wilson/100002273565449 David Wilson

    I am hoping that eventually it will be noticed that Crossroad Press has a wide variety of authors from best-sellers, literary estates, the Stargate novels, etc., and is becoming a player in this game… We have over 130 authors and 650 plus titles. That said… The only thing preventing what you suggest here at this point in time is what I call “the gap”. As more of the top-seeded authors drop their hat into the ring, taking a chance that – for instance – 80 percent of what Crossroad Press can make on one of their titles is as viable, or even MORE viable- than the 10 percent and advance traditional publishing has made so comfortable for them, that gap will narrow. If a King and Koontz or would jump the net, it could be over pretty quickly.

    There’s risk in it for authors, of course. If you have already convinced the industry you are worth a set amount of money, and they are willing to keep paying it – even if it’s a fraction of what is possible – why risk putting yourself out there and then finding that it really IS the NYC promotional machine that makes people love and buy your books, and that you have to prove yourself all over again?

    Time will allow the dust to settle, and as those of us growing in this new environment evolve and continue to bring new methods, innovation, and energy to the table, I’m fairly certain the world of huge, greedy publishers who can’t even seem to understand that they ARE greedy, will wear away and crumble.

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

      Well, you certainly put The Crossroads Press on my personal radar screen, where it hadn’t yet been. We’ll check you out.

      The higher-royalty formula you appear to employ is not unique. That’s how Open Road first got into the game and it is also, as I understand it, part of the strategy for Premier, a Hollywood-based ebook publisher that may also pay 80% (they pay SOME big number.)

      My problem with that is that it isn’t really a sustainable strategy. Ultimately, the “cost” of ebook publication is so low that it commoditizes. There’s always gonna be a guy across the street who will do it for one point less.

      Mike

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  • http://www.ericgarland.co ericgarland

    We’re no more in the world of Digital Publishing than we were in the Industrial Revolution when the first cotton gins appeared. In other words – you ain’t seen nothin’ yet. This trend will probably be inexorable once the paper-book generation leaves the marketplace and the all-digital crowd comes to significance. It feels like a whole world has collapsed and nothing has replaced it, but that won’t be forever. I remain hopeful.

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

      I agree that most of the change in the industry we’ve known is in front of us.

      Whether to be “hopeful” or despairing really depends on what you do and what you want.

      Mike

  • A_Writer_of_History

    I’m just a simple gal .. and what Mike says makes so much sense to me. Those who produce content (in my case novels and blog posts) or aggregate useful stuff will be found by those in need if that content or stuff is in places people visit. On the fiction front, people cruise blogs, communities like Goodreads, retailers, the tweets and status updates of friends, discussion boards, Pinterest and so on. They trust the ‘friends’ and experts or authorities on these sites. Pretty straightforward when it comes down to it. A question for you, Mike … did you imagine such incredible change five years ago?

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

      You be the judge of how prescient I was. Here’s a speech I gave at BookExpo six years ago.
      http://www.idealog.com/speeches/2007/05/end-of-general-trade-publishing-houses/
      Mike

      • A_Writer_of_History

        All I can say is WOW … I hope you received excellent compensation for that advice. I’ve printed it to read with yellow marker in hand but here’s one notion that grabbed me: “our audiences are going to be organizing what we do create, and organizing themselves to discuss it, add to it, and mash it up in various ways”.

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

        I have received excellent *psychic* compensation!

        I am a consultant. Although I have never been a drug dealer, I believe the sales technique for consulting is the same as for drugs. You give it away until your potential client can’t live without it, then you can charge them for it.

        The blog comes under that heading too. No pay for this, but it’s my billboard.

        Mike

      • A_Writer_of_History

        As a former consultant, we called consulting ‘paid marketing’ and marketing ‘unpaid consulting’. Right now, I’m writing and blogging – have rarely worked this hard and all of it unpaid :)

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

        Ah, but the *psychic *rewards!!!

        Mike

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  • http://www.sellingselling.com Alan J. Zell

    Left off this article and the comments that follow is that the cost of creating awareness the book exists is of prime importance. To publish a book, pBook or eBook, only creates a product that will sit unread other than by the author, the author’s family and friends.

    So, the question becomes “are we creating products that have no market or not enough market to make the author’s and publishers’ time, effort, money worthwhile. Interesting, in communist countries in order to keep people busy they made things just to make them. Does this also relate to writing books?

    I hope that at the upcoming PLConference, creating awareness i.e. marketing books will be the PRIME topic of discussion.

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

      I’m not sure that actually belongs in *this* article, which is not primarily about a new breed of publishers that will be putting books and ebooks out because they* already* are in touch with the audience. I agree with that marketing is increasingly challenging for publishers with a real commercial motivation, but that’s not what this piece is really about.
      As for what we cover at our conferences. marketing is not a particularly prominent feature of the Pub Launch at BEA, except that some of the speakers about “scale” will certainly touch on it. However, we are planning a dedicated marketing conference — the date might be announced shortly — which would address your concerns in great detail.

      Mike

  • Peter McCarthy

    I agree completely that this atomization will take place. Just as many years ago seemingly every institution had a magazine (and many still do), and now most have blogs, most will aslo likely find that longer form content is within their reach in the form of eBooks or a variant thereof. These may take the form of collections of articles, speciality niche books (“NorthEast Hillside Edible Gardens!”), etc. The market will definitely be flooded with titles/SKUs. For me there is a key distinction to made between types of titles/SKUs before I wade into the discovery question. I could make many points. I’m going to limit myself to one.

    Some types of titles (say, non-genre fiction) are intended to reach a somewhat amorphous general readership. Lots of SKUs in that arena muddies consumer discovery and probably favors the top of the head of the curve as opposed to the tail. But, some titles (and I think a lot of the types that Mike is tipping to in this post) are likely to be purpose-built for highly-targeted audiences and often with different publishing goals in mind (eg. “free/discounted for members” or “free with registration for further emails on this topic”). In other words, my suspicion is that many of these audiences will often have self-identified and are already looking where these SKUs will be found. So, I don’t see these types titles muddying the discovery waters to a great a degree. Basically, for me, “more books” does not necessarily always mean “harder to find.”

  • http://twitter.com/x2far Chris Bates

    I’m late to the party here, Mike, but this post is very interesting. Lots of opportunity out there thinking along your lines. Especially locally. And if not locally, definitely in a really tight niche markets.

    Certainly has my brain working on how to grab some of that market.

    I’m not sure where the best bet is though – niche digital services or niche curation.