Publishing Technology

One thing I’ve heard often and dismissed is that we need print to preserve intellectual property. I figure that digital files are less destructible than paper and that, with any care at all, it should be possible to create more reliable preservation of bits than of atoms.

I still think that. However…

A month ago I was helping my sister clean out some of the old files of my father’s (now gone over eight years, but it takes a while to get around to this stuff.) Among his papers, I found the hard copy of a speech I had delivered at a VISTA Conference (VISTA is now a company called Publishing Technology) in November of 1995. As I started to read it, I realized I hadn’t seen it in a long time. I checked and it wasn’t on my web site. I checked further and it wasn’t in my hard drive.

So if Dad hadn’t saved this printed copy, I wouldn’t have had it to show you. I’m glad he did. Ironically, the speech was titled “How Quickly Things Change”.

The speech is too long (I’ve learned a thing or two about brevity in the past 15 years), for which I apologize. It is on the site without edits or corrections or updates (both because I’m honest and because I’m lazy). But I think many people of my generation and close to it will enjoy the refresher course about what the world of digital change looked like to book publishers in November of 1995. And the many people now thoroughly engaged in the issues that concern this blog and our industry who were still in school or in short pants at the time might be amazed at how little we knew at what was, at least for trade, the dawn of the digital publishing era.

At the time I made this speech, the obsession of most book publishers was to take advantage of the seemingly-vast amounts of data that could be packed on a CD-Rom. Several major publishers had formed “new media” divisions or departments to start creating what were, in effect, enhanced ebooks or apps out of their intellectual content. The industry was only on the verge of consciousness about how important connectivity was. In the speech’s opening sentences, I say “last year at this time, very few of us had heard of the World Wide Web” and I myself had been online since before the 1992 election. But “online” then meant, for most people, being connected within the walled gardens of America Online, Prodigy, and Compuserve.

I was happy to be reminded that I got a number of things pretty damn right at that early stage.

1. When most people in publishing didn’t believe it, I said that getting online was much more important than making fancy new products on CD-Roms.

2. I suggested resisting the trend to “new media divisions” because online communication was the key going forward and the move to exploit it should not be siloed.

3. I identified cell phones as (arguably) the fifth big new technology adoption of the past 20 years (the previous four being the VCR, the audio CD, the fax machine, and the personal computer.) But it is a time-capsule moment to recognize that the cell phone wasn’t ubiquitous yet.

4. I saw that professional publishing would shortly become mostly electronic, particularly directories.

5. I didn’t name it Wikipedia, but I did envision an encyclopedia online that is “dynamic, interactive, and perpetually being updated by organizing on-line tools to solve an age-old need.”

6. I said that we’d reach “universal connectivity”, defined as the point when just about everybody above the poverty line would be online, by the year 2000. At the time 16.6% of adults had internet access and only 10% had used the internet in the last month. By the way, those numbers constitute a reasonable approximation of where ebook uptake is today.

7. I said newspapers would be crushed first, magazines second, and that we’d be glad we’re in the book business as internet use grew.

8. At the time of the speech, there were 100,000 active domains and under a million home pages. In what I remember was an audience-gasp moment, I said that the small merchant on the corner would also have a presence on the Web. As I put it, Time Warner and MCI would be “joined, literally, by the butcher, the baker, the candlestick maker, and the local real estate agent.”

9. At a time when “several hundred” American publishers had web sites (“plus 38 British, 31 Canadian, and a handful of Australian”), I cautioned publishers against thinking that having web sites would substitute for having booksellers. Some people thought they might.

10. I said there should be a web page for every book, although I was somewhat over-ambitious in how I saw it developing organically and being part of the development and early marketing process.

11. When publishers were thinking of digital products almost exclusively as CD-Roms, which were “enhanced ebooks”, I saw the value of just delivering the text file to be read on a screen. (Of course, I thought we’d deliver them on diskettes, and I was wildy wrong about that!)

12. I concluded with a summary of all the ways online could be involved in our business, from agent submissions to marketing to make the case again that “new media divisions” were not the answer for publishers as they entered the digital age.

Of course, there’s a lot I didn’t see coming. No mention of iPods and iTunes and disaggregating the album into songs. (But I did see the impact of disaggregation on newspapers.) No mention of piracy or DRM. And although it had existed for a few months at that point, no mention of Amazon. (I did say that “it will be some time” before we’d be selling substantial numbers of books online, which turned out to be true. Amazon was still two or three years away from having a significant sales impact for most publishers.)

My job in these VISTA conferences was to deliver a message which was “way out there.” I was supposed to throw caution to the wind, to be the guy who could say things that most people wouldn’t say even if they believed it. In some ways, the greatest utility of the speech today is to show people where “way out there” was 15 years ago, in November of 1995.

So a belated thanks to my wonderful Dad for saving a hard copy of this speech. But I’m not changing my mind about the fact that usually, digital files will be more enduring than paper.

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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.

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This is the third year in a row that we’ve put together the Making Information Pay conference for the Book Industry Study Group, in conjunction with Ted Hill of THA Consulting. We’ve repeated the formula we’ve applied for the past two years, doing an industry survey on the conference theme to provide some additional insight.

This year’s conference is called “Points of No Return.” It looks at things from the perspective of publishing’s employees and seeks to discover when the markets, technologies, and process changes make things so different that old skills don’t map, old organizational structures have to be completely revamped, and people really have to develop new capabilities, accept new roles, or be forced to move on.

Our survey this year tried to gauge the feelings of publishing’s labor force about the changes they’re seeing in their company and throughout the industry. We also asked for a reaction to a number of industry “buzzwords” (like “Twitter” and “vertical”.) A report on the survey results will be distributed at the conference, but here are three little nuggets:

1. The preponderant majority of workers in all parts of publishing — editorial, marketing, sales, IT, distribution — believe that significant changes caused by technology either have occurred or are occurring now. No surprise there, but the surprise will be that there is one function people think is changing much less than everything else. And wouldn’t you know it is one that I think will likely change more than any other over the next few years?

2. Half of our respondents think publishing will become a more profitable business in the future, but they split down the middle as to whether the business will be smaller and more profitable or larger and more profitable. There’s a similar split on expectations about whether there will be more jobs or fewer. (Half of those expressing an opinion think there will be more jobs! Stop the presses!!)

3. What I found to be a startling percentage of our respondents think Twitter is a fad, soon to fade away.

Making Information Pay delivers a concise program: two 90-minute sessions surrounding a 30-minute networking break that starts at 9 and concludes at 12:30. We designed the program so that the first 90 minutes delivers facts and insights about the industry and the second half features reports from the front lines of change.

After BISG Executive Director Scott Lubeck opens the program and I deliver a very short keynote, Kelly Gallagher of Bowker will begin the morning segment talking about what Bowker PubTrack Consumer has discovered consumers are saying that is relevant to publishers thinking about points of no return. PubTrack has delivered some great insights over the past year, from demonstrating how important in-store display is to book sales to quantifying consumer attitudes about ebooks in a special study done jointly with BISG. He will highlight the Bowker findings most relevant to our program’s theme.

The Gilbane Group is also working with BISG, doing research on the seven “essential processes” (which I still call “systems”) that publishers need to keep up to date in order to stay viable as their businesses change. Do your production processes support tagging chunks of content that you might want to sell separately from the whole book? If not, you will lose revenue as the market for fragments develops. Does your royalty accounting process enable you to report to authors on sales of this kind and divide revenues appropriately? If not, then you’ll have a different set of problems exploiting those new opportunities. David Guenette of Gilbane will tell the MIP audience what the seven essential processes are, why they’re critical, and what pitfalls await if they are not ready for what’s coming.

George Lossius of Publishing Technology will tackle one of the paralyzing challenges of our current environment: how can publishers make substantial investments in technology when the business climate is changing so quickly around them? Lossius maintains that there are things we do know that can guide us; he’ll be helping publishers see what truths are stable and reliable to guide their investment decisions, even when a lot is not.

Jabin White of Wolters Kluwer has worked through some major process changes within his own company. We’ve asked him to focus on the people-centered challenges of those changes. How do you bring people along when change might be making them uncomfortable or unhappy? And how does an organization deal with the changes in job skills required, which could mean changes in the particular people required, in the least disruptive way?

The second half of the program will start with Bruce Shaw and Adam Salamone of Harvard Common Press who will present an eye-opening view of how the strategy for new title acquisition changes when a publisher becomes sensitive to its role as a vertical player. They demonstrate convincingly that decisions change when an editor sees they are acquiring content for a database rather than simply publishing a book.

Phil Madans is deeply involved in Hachette’s move to a digital workflow for book development. This requires a shift from an “assembly line” way of working to a “collaborative” one. Editors no longer finish their work before they engage with design and production; there’s a lot more being done simultaneously rather than consecutively. Hachette is well along in building this new process; Madans will offer insights that will be very useful to other publishers still contemplating this switch

Matt Baldacci of Macmillan, who oversees all the marketing spending at his company, is covering the challenge of changes in where marketing dollars are allocated, and the processes and skill sets necessary to do successful marketing in today’s marketplace.

Maureen McMahon of Kaplan draws on her prior experience directing sales at Random House to analyze the changes in sales, which she sees as having moved from requring “closing” to requiring “connecting”, all of which leads to different hiring criteria than she would have applied only a few years ago.

And on top of that, BISG has two sponsors with useful messages. Steve Walker of SBS Worldwide offers his Electronic Distribution Center, which gives publishers completely new supply chain capabilities and a web-based tracking mechanism that cuts administration and communication costs at the same time. And John Konczal of Sterling Commerce has tools to enable new business models, such as those that the Gilbane analysis points out as requirements earlier in the conference.

We’re very excited about this program; we think people at every publishing house will have something to take home and apply that very afternoon, which is always our objective. As readers of this blog well know, I’ve been speaking at, running, and going to digital change conferences for almost two full decades. To my knowledge, there has never been one before that focused on people in their jobs. How will mine change? Will I still be able to do it? Will it still be here for me? And what do I have to do to make sure I can stay employed in publishing?

We think these are questions a lot of people are thinking about. If you’re one of them, join us at Making Information Pay on May 6!

I am interrupting the “What I Would Have Said in London” series to bring you this time-sensitive post. We’ll resume WIWHSIL with Part 2 tomorrow.

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