Remaking an Industry: What publishers need to be thinking about in 2012
To kick off the 3rd annual Digital Book World extravaganza, I wanted to do a quick review of what I think are the things publishers need to be thinking about in 2012. This is a checklist; I’m not going to take much time with any of the points. These are the things we’ve been thinking about as we organized this year’s conference, and you’ll find just about all of these topics coming up over the next two days.
These topics fell into five broader areas of enormous change for publishers. I doubt there are any surprises here: technology (the tools and systems publishers need to function); sales channels (the paths to market); marketing (fostering the relationship between publishers and readers); the products themselves (what book publishers are actually creating); and your new relationship to competitors (who sometimes until just recently were your collaborators).
Technology was once the province of a publisher’s production department. Now it affects every part of the business.
The Amazon lesson (what you make for yourself can be sold to others)
Almost all the big publishing companies, and some of the smaller ones, are creating tech solutions to the challenges they face. Remember what Amazon has demonstrated pretty much since their inception: what you make for yourself can often be sold to somebody else, and that somebody might be a competitor!
Metadata creation and dissemination
One of the challenges amenable to technological assistance is delivering better metadata to help your books sell better. In fact, one of the best examples tying together this point and the last one is from Cookstr, which has developed a taxonomy for cookbooks using techniques and technology that other publishers or web sites might find useful to create taxonomies for other verticals. They’re presenting at a Publishers Launchpad session here.
Price research, analysis, and adjustment
Pricing used to be a “set it and forget it” exercise for publishers. It isn’t anymore. Constant monitoring and adjusting is called for in our digital marketplace. Publishers need to be at least as adventurous and experimental about pricing as authors are on their own.
Digital workflows and XML
XML workflows have been introduced in many houses to create efficiencies, particularly in creating print and electronic outputs. But there’s a lot more than can be done with XML, starting with using it to store links to sources and resources. A lot of useful information is routinely lost between an author’s research and a publisher’s output. In 2012, publishers have to start figuring out how to capture more of that value in the XML document.
SaaS (software as a service)
SaaS means software as a service and it also means software you access through the web rather than having all loaded on your machines. In general, SaaS means systems have a lighter footprint and more use of them might mean IT departments get smaller. This suggests a radical change in technology at publishing houses that everybody needs to be aware of.
Managing in-house resources (people, storage, bandwidth)
Technology must be used to manage the technology, but also to manage people. I have seen some stunning state-of-the-art reporting systems for tracking all of this in some publishing environments. To be competitive, everybody is going to have to master this.
And that’s the technology checklist.
Channels to the consumer and monetization
Channels to the consumer and monetization; they’re changing. The challenge of matching resources to opportunities was once as simple as redrawing the lines defining reps’ sales territories. It has gotten a lot more complicated than that.
Redistribution of print placement opportunities
The biggest channel challenge for publishers is keeping display and sales alive in brick-and-mortar stores. We’ve already seen that a closing chain (Borders) can put wind in the sales of independents, which seemed to have a good Christmas. The guess here is that book sales in other physical retail shops (like mass merchants and specialty stores) will also benefit from a reduction in bookstores, although mass merchants are also a threat to reduce shelf space in the near term. Publishers are shrinking their sales forces just when they need to be on the ground finding new accounts to replace the ones that are disappearing.
Evolving multi-vendor and global paths to consumers
The ebook business is still diversifying. Kindle has lost share to Nook, Apple, and Kobo. In some other parts of the world, Kindle does not start with the dominant position it had in the US (although it has the money to market and promote in a major way, so they might still get it.) Publishers need to cover all the ebook accounts and learn how to maximize sales in each of them.
Platform plays (apps)
Apps can be much more than a book or a product; an app can be a store. And as HTML5 develops, robust apps can be delivered through the web without paying 30% to Apple, or anybody else, for the sales made through it. Particularly for publishers that frequently do books for the same audience, getting a decent installed base of apps can be a growth channel, and a proprietary one that gives its owner competitive advantage.
Big publishers have tended to resist direct selling, but it is getting harder and harder to defend avoiding it. Direct sales not only provide additional margin, customers are increasingly the coin of the realm for publishers. They are certainly the coin Amazon uses to compete with them for authors. We think direct selling is something all publishers need to do, increasingly.
For non-fiction publishers, particularly in how-to, there could be opportunities to license content to other players. Retailers, manufacturers, and service providers in crafts, gardening, and travel (to take some obvious examples) need content to attract and keep consumers at their web sites and to interest them in their wares and they really have no expertise to create it. Random House and Wiley have had substantial revenues for travel content through this means for nearly a decade. It is time for other publishers to find their way to this money.
And then there’s marketing. In this era of increasing self-publishing, it is increasingly recognized that marketing is a critical value add for the publisher to justify its place in the value chain.
Still the most important thing to take on board about marketing is “verticalization”. The days of efficiently marketing one book at a time are over. Publishers need to be “audience-centric”, not “book-centric”. For the big publishers, this has (so far) meant “genre” rather than “topic”, for the most part. But it should mean both and we have sessions on both over the next two days.
It is essential that all publishers be managing consumer names: collecting them, understanding them, using them. When we talked to Macmillan in November, they were able to tell us that 650,000 emails had been sent to the Tor.com community in the past month, that more than 200,000 of them were opened and more than 40,000 had clicked on the link provided. The numbers are impressive but the knowledge is essential. Every publisher needs to have it.
Metadata is so important that it gets mentioned twice: once earlier under technology and here under marketing. Metadata tags promote discoverability. You often can’t sit on what you put together when you launched the book. Reviews matter. So do news events that point back at your book, even if they occurred after you published it. Every book needs effort expended on metadata enhancement for as long as you expect to sell it.
Influencer databases and relationships
Collecting names of end consumers is one thing; developing relationships with a growing and shifting batch of intermediary influencers is also critical. Your databases are important; having access to consumers through other people’s databases expands your reach enormously. For every subject you publish often, you need instant access to influencers who know you and take you seriously and will promote you to their circle.
Although the jury is still out on how effective social network marketing is, we know that it is something anybody can do and which everybody should. Publishers ultimately need to help authors be effective in this sphere but, for now, many publishers have as much to learn from many authors as they have to teach them.
The book as the beginning of engagement
Until very recently, when we’d sold the customer the book, our job was complete. Not anymore. Every book sold can be the beginning of a conversation that can lead to more engagement and ultimately more sales. Do you have something in every printed and digital book you sell inviting the reader to connect with you? Do you have a plan as to what you’ll do with that connection when you get it? You should!
The products themselves
Digital change also has us at the cutting edge of rethinking the products themselves. It has always been true that making a single book can be an endless process of decision-making. This challenge has been compounded by the dizzying array of choices for what a digital product can be.
Quality control of vanilla ebooks
Although immersive reading ebooks are selling very well and are largely incorporated into the workflow of many publishers, we still are seeing lots of less-than-perfect ebooks. By now, every publisher should have quality assurance for their plain vanilla ebooks that guarantees that links work for TOCs and footnotes, that there are no “funny characters” left over from conversion glitches, and that any maps or charts render as intended.
Illustrated books still present a challenge. Publishers with large backlists of illustrated books will have to experiment with rendering them to learn what sells and on what kind of devices the books can really be read. Publishers who don’t have large backlists of illustrated books should be very cautious about doing them for a while, unless they are sure they have a slam dunk for print sales.
Enhanced ebooks and apps
The new epub3 format promises that the gap between an enhanced ebook and an app will be narrowed. Perhaps there will ultimately be almost no difference at all. App-making tools are being developed that make it easier and cheaper for publishers to make them themselves. There is still a wide-open question around what enhancements people will pay for, but at least the cost of experimentation is going down.
One question for the future is whether audio becomes part of an enhanced ebook, or even part of a regular ebook, rather than a separate product. Obviously, publishers and agents would prefer to keep them separate as a profit center, but the market will decide this and publishers will have to watch the market.
ISBNs beget ISBNs (combine and separate)
We’re at the front edge of recognition that books need not be published in one form only; they can be sliced and diced and recombined into new products. Many non-fiction books have chapters and chunks that can stand alone, sometimes big enough to be marketed as a short book. Publishers should think hard about every configuration in which content can be sold. I just saw a recent Guardian story saying Random House UK is breaking out short stories from its anthologies into separate ebooks, like singles being sold from an album. Good idea, but why isn’t it being systematically and universally employed?
Events are products too. You are attending one that is being staged by a company that is, primarily, a book publisher. My clients at 6th and Spring Books, a pretty tiny book publisher, hosted a mammoth knitting event weekend before last with thousands of attendees on which they make a profit it would require many books to match. Events help sell books, but they also help develop audiences and generate names and engagement. More and more publishers will need to be involved in creating them.
New competitors (or collaborators)
Finally, here’s the trickiest aspect of being a publisher these days. The barriers to entry are much lower in an ebook and online world than they were in a print and bricks world. The core functions of publishing — packaging up the product and making it available for sale — no longer require an organization at scale to deliver. Scale still helps, but it isn’t a prerequisite the way it once was.
So authors can publish on their own; we’re well aware of that.
And agents can become publishers, which some of them are.
Magazines and newspapers are finding that the content they create for their own purposes can find new life in ebook distribution, and that they can do it themselves if they want.
So far Amazon is the only ebook retailer to invest seriously in publishing, but all the big ebook retailers make it easy for people to work with them directly and it would be a relatively simple matter for any of them to follow Amazon’s example at any time.
Other IP creators (movie and TV studios, animators, game creators)
We’ve already seen companies from the games and animation space look at the opportunities in publishers’ territory. We’ve also seen publishers recognize the challenge and respond, such as Random House’s purchase of the digital studio Smashing Ideas.
Other consumer-facing brands
And, ultimately, we can probably expect that any site with a lot of traffic and access to content could be a partner or a competitor for publishers as well.
Living in a world of rapid and constant change, as all of us in publishing are, requires that we keep learning from the efforts of those around us. And that, in a nutshell, is what the program here at Digital Book World is all about. For the next two days, you will hear, mostly from your peers, about the possibilities, the challenges, and the opportunities before all of us during these times. There were easier times to be in publishing, but there were never more exciting or stimulating times. And exciting and stimulating is exactly what you can count on this year’s Digital Book World to be.