The Shatzkin Files


The most important problem for publishers to solve over the next ten years


On Thursday, our clients at the Book Industry Study Group are running a “NEXT” conference which is tackling the question of what publishers (and publishing) should be doing now to be prepared for the world that we’ll be living in 10 years from now. (I love this subject and actually believe Mark Bide and I invented this idea for modern times in 2000 when we staged our Publishing 2010 conference in London on the day after that year’s London Book Fair.)

As it happens, I’m speaking in Ljubljana that day at the World Book Summit in the beautiful Slovenian capital, but I couldn’t resist trying to answer the question posed in Publishing Perspectives in its promotional piece on Monday for the event, which is: “What is the Key Problem for Publishing to Solve by 2020?”

And the reason I can’t resist is that The Idea Logical Company (that’s my team!) and Copyright Clearance Center (our client) are hard at work on it right now…in conjunction with BISG!

I see that my occasional collaborator and office-mate, Brian O’Leary, is delivering the opening remarks. Brian has been introducing a paradigm with some success to publishers: that they should think of content in a larger context than the “container” (Brian’s word: a good one) they generally sell it in, which for us is “the book.” Brian makes a whole host of points — his is a big thought — and I won’t attempt to summarize because he goes in many directions I’m not addressing here. But there is a point central to his (I’m sure evolving) presentation that is central to this post and to what we’re doing with CCC and BISG.

The hard fact is that it has been, is, and will be, progressively more difficult to monetize content as “a book”. And there also has been, is, and will be proliferating opportunity to monetize content that is in a book in bits and pieces within other projects that follow. Publishers have so far addressed the reality of the increasingly difficult book market by cutting. They cut lists; they cut staff; they cut warehouse space; and, more cheerfully, they improve processes to eliminate waste. This addresses the fact in the first sentence of this graf. It does nothing and, in fact sometimes undercuts, the fact in the second sentence.

I’ve heard Brian express the insight for many years that publishers need to learn how to grow revenue sources for their content. And the thrust of the particular “container” presentation I heard was around how publishers have to think differently and act differently so that their efforts to create and sell content enable unforseen opportunities, both in terms of control of costs and so the publisher knows what they have (and other people can too).

That’s precisely right. And that leads to the answer to Publishing Perspective’s question and to the project we’re working on, which we will report on more fully at Making Information Pay, another BISG conference, on May 5.

What publishers are seeing writ large, as enhanced ebook, new media, and app developers suddenly hit their licensing radar trying to make deals to put some of that old book wine in some new bottles, will be even more powerful writ small, if we let it. The number of web sites and apps and enhanced ebooks that could and would make use of a reservoir of book content, if there were one large enough and if the bits and pieces they needed were priced sensibly and didn’t require bureaucracy and negotiation, will, over time, be in the millions.

But the business that I believe will one day catch fire: a repository of content for just about any purpose which can be subscribed to for a fee based on use and scope (fill in the blanks in the online form) without rights ambiguity and requiring no negotiation, is several steps away. In fact, CCC is on the road to it. But what they can see from the steps they’ve already taken, which are all about aggregating and simplifying rights and permissions transactions in multiple ways, is that too many publishers can’t take full advantage of the services they offer already.

Because the publishers have a huge problem. With very few exceptions, they don’t have the rights they control in a relational database.

In the best situations we’re aware of (except one, frankly), which are rare, publishers have just about all the rights from their most recent contracts in a database and they’re putting all the rights they acquire to new contracts in a database. But even those publishers have research to do to respond to rights requests. And in many companies the function of responding to requests for pieces of books, let alone fragments, is not seen as strategic. It is often seen as a nuisance.

But CCC knows that pre-clearing rights makes content sell better. They also knew, and our research working with BISG confirmed, that simply responding to requests more quickly can make rights sales grow dramatically.

But CCC, or anybody else who might try, is handicapped opening up the mother lode of revenue that a collective licensing solution to meeting the market opportunity in content for web sites (and apps and enhanced mash-ups yet to be invented) could enable. Publishers simply do not have the metadata to put the rights they own and control on sale. I personally see this as an enormous opportunity for big publishers, because it is one of the descriptions and visions of the future that shows a role for the scale that publishers can provide.

Having rights databases that can support the emerging business opportunities is each publisher’s and the industry’s most important challenge. It is definitely the “key problem to solve between now and 2020.” I hope the NEXT conference makes progress on this (and other) issues, but I know the work we’ve done has, and I think we’ll be able to propose some great follow-up steps at MIP.

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  • Chris

    Mike, where does this stand in relation to your 'content to context' thoughts?

    Will CCC become the place for eyeballs that you suggested publisher's needed to be?

    This all seems to suggest that content is still king.

    Or am I just confused here?!

    • /blog Mike Shatzkin

      Content isn't necessarily “king”. In fact, the proposition is to help

      publishers monetize content as it declines from its prior position as

      “king.”

      And the suggestion here isn't that CCC would be the destination for consumer

      eyeballs. CCC would facilitate relicensing the content to web sites and apps

      and other kinds of mash-ups and *they* will deliver eyeballs to it in ways

      the originating publisher could not.

      Mike

      • Chris

        Thanks for the further explanation.

  • http://claudenougat.blogspot.com Claude Nougat

    Great post as always! I love the concept of “content bigger than the container” and in that perspective, the CCC has a big role to play (in relicensing) as you so ably describe.

    • /blog Mike Shatzkin

      Credit where it is due. The “container” metaphor was coined by Brian O'Leary

      (although “bigger than” is mine…)

      Mike

  • http://claudenougat.blogspot.com Claude Nougat

    Sorry, that got posted before I could finish!

    My question is this: if only the big publishers can maintain the necessary database, does that spell out the end of small and medium publishers? What about indies (self-publishing writers – like Barry Eisler )?

    • /blog Mike Shatzkin

      Ultimately, big publishers are in a position to give writers access to

      broader markets than they can get themselves. That is: they are now. And

      that it is true for Eisler now. But Eisler believes that, in the current

      marketplace, the additional sales the publisher through broader market

      access don't compensate him adequately for the extra margin they'll take.

      And so will it ever be, but publishers need to find new ways to add value.

      What I'm suggesting here is one of them.

      Mike

      • Peter Turner

        A couple of additional thoughts on this, Mike. As the volume of content goes up in the digital space the signal-to-noise ratio (to use an old audio term) goes down for both authors and publishers. For almost all but the most popular authors (and the occasional outlier), I think markets won't be broad, but deep. Publishers will need to create direct-to-consumer marketing and sales ecosystems that readers want to be part of. These ecosystems will have to be more vibrant and populated than authors believe they can create themselves because publishers to be delivering sufficient value to offset the smaller margins for authors.

      • /blog Mike Shatzkin

        Right. And that's why publishers have to be vertical. And can't “just be”

        publishers: they have to be commercially involved with every community they

        choose in every way they can, starting from being able to use their current

        asset base and skill sets (which means a lot of content and the continuing

        ability to make and sell books) as their first set of tools to work with.

        Mike

  • http://profiles.google.com/amanda.rooker17 Amanda Rooker

    Here's what I find most exciting about monetizing bits of content: it can help put publishers and authors on the same page. (So to speak.) Coming from the other direction (bits to books, rather than books to bits), the previous technology/business model inherently forced many who produce “bits” of content (poems, short fiction, even novellas) into a starving artist mentality – they had to accumulate a huge number of bits (at little to no profit) to sell even one profitable product (the printed book). This requires a superhuman amount of fortitude and self-confidence. Of course, this was a container problem, not an author vs. publisher problem – but it's hard for the “starving artist” not to take it personally when publishing jobs abound but no “fiction writing jobs.” Now that shorter pieces can be instantly monetized and acquiring short pieces can make more business sense for publishers, short-piece authors can become working writers a lot sooner. Which is good for everyone.

    Also, I think it's good to recognize in this time of rapid change in communication technologies (of which this is just one of many instances in history), people who came well before us have fully articulated that content is different from container, and medium is different from message – not sure this is a new idea. I appreciate the impulse to give credit where credit's due, but no need to create jargon and gurus, right? For this particular idea, to give proper credit would require a very long list.

    All very thought-provoking.

    • /blog Mike Shatzkin

      Short fiction can be monetized again, yes. What was done by magazines fifty

      years ago can now be done as ebooks. It will be interesting to see when the

      big publishers will see virtue getting into this game; they haven't yet.

      Their proposition is still primarily about putting books on shelves.

      Mike

  • marytod

    Gosh it's a complex world we live in! What scares me is your comment that publishers have no databases (or perhaps incomplete ones) tracking all the rights they have. If that's the case, authors should be worried too.

    • /blog Mike Shatzkin

      The big problem with the lack of good rights databases is that there are

      whole businesses that could provide revenue that can't begin to develop

      without them. So nobody knows what they're missing. It's not a happy

      situation.

      Mike

  • http://twitter.com/altpublisher AlternativePublisher

    first understand your product – what is a book, then understand your customer and demand, then put price up and quit the heavy discounting. We need to improve value perceived for our product. Oh and stop publishing crap, focus on talent. If we do all that publishing will make money if we fail to do that we'll continue with current momentum going south….

    • /blog Mike Shatzkin

      Doesn't read like the right formula to me, but good luck with it!

      Mike

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  • http://wowgu.ru Marazm Z

    Of course, this was a container problem, not an author vs. publisher problem – but it's hard for the “starving artist” not to take it personally when publishing jobs abound but no “fiction writing jobs.” It will be interesting to see when the
    big publishers will see virtue getting into this game; they haven't yet.

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