Ted Hill

Finding the right digital services is today’s challenge for publishers


The era of digital change in publishing has given rise to a slew of service propositions to help publishers with their new infrastructure needs. This is both essential and also nothing new. It has always been necessary for publishers to execute on core needs by getting help at scale. There was a time when publishers owned their own printing presses or were started by printers. When my father was hired by Doubleday in 1951, his first job there involved oversight of printing facilities they had in Garden City, Long Island. I don’t know when they stopped owning presses, but they certainly did so into the 1970s.

Smaller publishers have leaned heavily on larger publishers or service companies for distribution for several decades. Even before that (and still today), independent commissioned sales reps were available to help publishers too small to have “house reps” get orders from bookstores scattered far and wide across the landscape.

In the era of digital change, there have risen a whole new crop of services. But unlike typesetting, printing, and sales representation, which were services to deliver processes that were relatively stable and well-understood by the publishers who were buying them, even what is needed to accommodate digital change is a constantly-shifting landscape.

And just like the smaller publishers were the ones who needed distribution deals and commissioned reps, it is the publishers below the Big Five level that can gain the biggest benefits from the various service providers solving the problems posed by the digital transition.

Publishing services, aside from marketing, fall into three buckets:

* Digital Asset Distribution: services that “warehouse” a publisher’s digital IP, push it out to customers or intermediaries, and account for the transactions that occur;

* Editorial/Production: services that help publishers and agents organize new digital workflows that make smart use of XML-coding for identification and production, put into electronic form what might now only exist in print, and store and manage “digital assets” so they can be recombined and reused as needed;

* Rights and Royalties: services that help publishers keep clear what rights they own and where they’re licensed, make sure the licensees account properly and pay on time, and provide the necessary data to inform the contractually-interested author of this activity. And digital is making permissions activity explode with publishers having more and more tiny transactions to keep track, both bringing things in and licensing things out.

There is the potential for overlap. Since the “DAD” (provider of digital asset distribution services) is putting IP into a database, some publishers have attempted to use the DAD database as a DAM (digital asset management) system, which we’re suggesting is a core element of the editorial/production function. The DAD might be shipping off a file to complete a rights transaction which could be tracked separately from a “sale”; we see sales as part of what a DAD does and rights as something separate. In an ideal world, which few companies are in yet, these talk to each other seamlessly.

As always in our industry, the lines between functions depend a bit on which publishing company you’re talking about.

Digital Asset Distribution

By this point, most publishers small and large have had to solve the challenge of finding a digital asset distributor. But even somebody who has been distributed for some time will be finding new questions arising constantly.

How does a DAM for your assets work with a DAD pushing out products?
Can you “do it yourself” instead of paying for services? What risks would that entail?
How does your DAD help maximize sales through metadata? Do you need to change metadata for a title over time?
How do you manage metadata across channels?
What metadata do you need for the supply chain, and what metadata makes your products more discoverable and desirable to the marketplace?
How do you future-proof your processes and technology?
How do you make sure you reach international markets?
How hard is it to switch DAD vendors?
What are the challenges to making bulk or individual sales direct?
How can you be sure that you’re getting the broadest possible distribution and reaching new sales channels?
How can you be sure that you’ll be able to manage new digital formats and product types as they arise?

Many houses got started with digital distribution without feeling an immediate need for changing their entire editorial and production workflow. After all, everybody had print workflows in place and probably started making and selling ebooks when they were a small fraction of their total sales, not the big chunk they are now, so changing the print workflow wouldn’t have seemed sensible when they started. But, increasingly, publishers are seeing the value in reconfiguring their whole editorial process, which in turn creates a new set of challenges. It has been about five years since we did our “StartWithXML” conferences and white papers with O’Reilly, but many houses are just getting familiar with XML: a markup language that, if used right, can make outputting both print and digital products faster and cheaper.

Editorial/Production

The service providers for editorial and production have gotten increasingly sophisticated along with the publishers, but even the more experienced publishers face difficult questions as they choose suppliers for these services.

With “born digital” content, how can you be sure to get good XML?
With “born digital” content, what’s the best way to get a print PDF?
What’s the best way to work when you’re starting with the print version?
How do the roles of editor and managing editor change in a digital workflow?
How can you get more mileage out of your investment?
Repurposing? Selling smaller chunks? Combining chunks to create new products?
Can you get more value out of your backlist?
What’s best outsourced? What’s best kept in house?
How can complex, illustrated, and reference content be digitized efficiently and effectively?
How can publishers be sure content works across platforms and devices?
What can trade pubs learn from textbook publishers about digital products?
How do you build the tagging you need into the workflow?
How far should you go with snazzy enhancements like interactivity and multimedia?
What are best practices for storing and managing assets for new format/product creation, reuse, and recombination?

Rights and Royalties

Publishers manage, produce, and distribute an increasingly complex range of products, challenging traditional contracts, permissions, rights licensing, and royalty practices. The management of rights and royalties with a digital database is not something that needed to wait for digital products to begin, and in some places the shift from paper in file cabinets to rights information accessible in the computer was done years ago. But, in most places it was not. And even in the places where it was, the shift in what rights are traded and under what circumstances has been driven by the changing digital marketplace and was often not anticipated, even by publishers far-sighted enough to database their contracts many years ago.

So the rights managers in publishing houses and the literary agents that sell publishers rights have their own questions.

How do you accommodate future rights usages in contracts and metadata?
How do you deal with legacy contracts?
What’s the best way to create a working rights database of legacy rights?
How granular do you get—just title rights, or rights for components (chapters, images)?
What’s the best way to database rights going forward?
What’s best practice for consistency of language in contracts around rights?
What’s the best way to maximize revenue from RROs worldwide?
How do you deal with an explosion of permission requests?
How do you deal with the mushrooming number of permissions you’ve secured to take content in?
How does staffing and training for rights change in a 21st century rights workflow?
What do you do when you don’t have digital rights to things (like images) in books you want to publish digitally?

As complex as all the challenges under each of these three headings are, they all still qualify as “parity” functions. A parity function is something you can’t gain much competitive advantage from doing better than the next guy, but which can really hurt your business if you fail at it. The wisdom about parity functions is that they are almost always best delegated to a specialist that will focus on doing them in a world-class way.

The right answers to these questions are almost never universal. They depend on all sorts of circumstances local to the publishing operation seeking them.

So the challenge for book publishing operators is to understand the particular needs of their operation — different if you do more illustrated books; different if you sell more rights than the average publisher; different if you re-use and repackage material regularly — and to find the supplier combinations that cover their requirements efficiently.

With our partners at Digital Book World, Cader’s and my Publishers Launch Conferences has organized a Publishing Services Expo to take place on September 26 in NYC to address all these challenges. PSE will be three mini-conferences, one on each of the three areas discussed in this piece. We’ll have presentations from experts at publishing houses who are managing these functions addressing all the issues. Then we’ll have speed-dating: an opportunity for attendees to meet sponsoring service providers and the experts in 15-minute roundtable conversations where each attendee can get his or her own particular questions answered. Tickets to PSE are cheap so it will be worth it even if you only need help with one or two of the three service areas we’ll cover.

Our session captains: Ted Hill of THA Consulting for Digital Asset Distribution, Bill Kasdorf of Apex for Editorial/Production, and Ashley Mabbitt of Wiley for Rights and Royalties, are among the most knowledgeable operators in our industry. They will summarize the issues, moderate the publishers in conversation, and will be available themselves during the speed-dating sessions to answer questions. If any of the questions in this post are meaningful to you, circle the date, September 26, and come to PSE and get them answered. Register here. (It’s the second option.)

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Seven-and-a-half days of conference programming coming up during 4 days in January


Blog posts have been scarcer for the past couple of months because I’ve been so engaged with a major responsibility: putting together what amounts to 7-1/2 days of conference programming that will be presented on four days next month in New York City.

As most readers of this blog probably know, we’re responsible for the programming of the two-day extravaganza that is Digital Book World. DBW 2013 — taking place on January 16 and 17 at the Hilton New York Hotel — will be the fourth iteration of the event, which aims to explore the commercial challenges facing trade publishing in the digital transition. DBW is not about technology per se; it is about the business problems publishers must cope with in an age of technological change.

DBW’s main two days are divided between morning plenary programming — all 1500+ people in one big room — and afternoon breakouts. We’ll have up to five simultaneous breakout sessions in each of three slots each day. So we have what amounts to 4-1/2 days of programming in the breakouts plus one on the main stage.

Because people really do come from all over the world to attend DBW, we were delighted to agree when they asked us at Publishers Launch Conferences (the conference business I own with Michael Cader) to add a show on each side of theirs to build out a week of programming. (The team at DBW itself are also putting together some pre-conference workshops that will run on Tuesday.)

So on Tuesday, January 15, we’ll do our second annual “Children’s Publishing Goes Digital” conference at the McGraw-Hill Auditorium (put together with the invaluable assistance of our Conference Chair and close friend, Lorraine Shanley of Market Partners). And on Friday, January 18, we’re presenting (in conjunction with the DBW team) a new program called “Authors Launch“, a full day of marketing advice for publisher-published authors. (Self-published authors are welcome and will learn a lot, but the program is framed for authors who are working with publishers, not looking for ways to avoid them.)

Programming the “Children’s Publishing Goes Digital” show revealed what we think will be the most important theme in the children’s book space for the next few years: the development of  digital “platforms” that, like subscription offerings (which some, but not all of them, clearly are), will “capture” consumers and make them much less likely to get ebooks and other digital media from outside of it. The list of platform aspirants in this space is long and varied: Storia from Scholastic; RRKidz from Reading Rainbow (the TV show brand); Poptropica from Pearson (which launched Wimpy Kid before it was a book); Magic Town; Disney; Capstone; and Brain Hive. All of them are presenting, as well as NOOK, which, like Amazon Kindle, has announced parental controls on its platform that encourage parents to manage their kids’ reading experience there.

There are other big issues in children’s publishing, particularly the creation of original IP by publishers so they can better exploit the licensing opportunities that follow in the wake of successful kids’ books. We’ll have data presentations from Bowker and from Peter Hildick-Smith of Codex to help our audience understand how kids books are found and selected outside the bookstore in today’s environment.

But we know that the digital discovery and purchase routines will be markedly affected by the platforms as they establish themselves. Publishers are faced with an interesting conundrum. They can’t reach the audiences that are loyal to a platform without going through the platform. But it is the presence of many publishers’ books that strengthens the attraction of the platform and, once it gains critical mass, the value of the content to it (and probably what it will be willing to pay for the content) is reduced. So publishers licensing content to these platforms may be strengthening beasts that will ultimately eat them. I think the roundtable conversation Lorraine and I will lead at the end of the day, which will include publishers Karen Lotz of Candlewick, Barbara Marcus of Random House, and Kate Wilson of Nosy Crow, will have interesting things to say about that paradox.

We’ve developed some “traditions” in the four years we’ve been doing Digital Book World. As we’ve done the past two years, the plenary sessions will open on Tuesday with the “CEOs’ view of the future” panel organized and moderated by David Nussbaum, the CEO of DBW’s owner F+W Media and the man who really dreamed up the idea of this conference. David will be joined this year by Marcus Leaver of Quarto, Karen Lotz of Candlewick, and Gary Gentel of Houghton Mifflin Harcourt. And Michael Cader and I will — as we have every year at DBW — moderate a panel to close the plenaries, “looking back and looking forward” with agent Simon Lipskar of Writers House; Harper’s new Chief Digital Officer, Chantal Restivo-Alessi, and Osprey CEO Rebecca Smart.

Among the presenters on the main stage who will be unlike what our audiences usually hear at a digital publishing conference will be Teddy Goff, the digital director for the Obama campaign, who will talk about targeting and marketing techniques that might serve us well in the publishing world; Ben Evans of Enders Analysis in London, who will tell us how publishing fits into the strategies of the big tech companies (Amazon, Apple, Facebook, Google, and Microsoft) that he tracks regularly*; ex-Macmillan president and now private equity investor Brian Napack, talking with Michael Cader about the investment climate in publishing; and Michael D. Smith, Professor of Information Technology and Marketing from Carnegie-Mellon, talking about a study he and his colleagues have done on the real commercial impact of piracy.

(We’ve also scheduled a breakout session for Teddy Goff so he can talk more about the Obama campaign for those in attendance who want to learn more of its lessons to apply.)

We’re also delighted to have gotten Robert Oeste, Senior Programmer and Analyst from Johns Hopkins University Press, to deliver his wonderfully insightful, entertaining, and informative presentation on XML, the subject so many of us in publishing need to understand better than we do. And we will after he’s done. (We’re also giving Oeste a break-out slot to talk about metadata which I’ll bet a lot of our audience will choose to attend after they’ve heard him on XML.)

(*Late edit: Ben Evans had to cancel.)

Some authors have had remarkable success without help from publishers in the past year, but few or none more than Hugh Howey, the author of “Wool”, who has just signed a groundbreaking print-only deal for the US with Simon & Schuster. His dystopian futurist novel has sold hundreds of thousands of self-published ebook copies and rights all over the world and to Hollywood. We’ll have a chat with Howey about how he did it and we’ll be joined by his agent, Kristin Nelson, for that dialogue. Kristin will stick around to join a panel of other agents (Jay Mandel of William Morris Endeavor, Steve Axelrod, and Jane Dystel from Dystel & Goderich) to talk about “Straddling the Models”: authors who work with publishers but are also doing some things on their own.

We will have several panels addressing the challenges of discovery and discoverability from different angles. One called “Closing the New Book Discovery Gap” teams Patrick Brown of Goodreads with three publishing marketers — Matt Baldacci of Macmillan, Angela Tribelli of HarperCollins, and Rachel Chou of Open Road — and is chaired by Peter Hildick-Smith. That will focus on what publishers can do with metadata and digital marketing to make it more likely their titles will get “found”. Barbara Genco of Library Journal will share data on library patron behaviors and then helm a panel discussion with Baker & Taylor, 3M, Darien Public Library, and Random House exploring the role of libraries in driving book discovery and sales. Another session called “Making Content Searchable, Findable, and Shareable” introduces three new propositions from Matt MacInnis of Inkling, Linda Holliday of Citia, and Patricia Payton of Bowker, along with SEO expert Gary Price of INFODocket. Publishing veteran Neal Goff (who is also the proud father of Obama’s digital director) will moderate that one. MacInnis, Holliday, and Payton offer services that will help publishers improve the search for their books. Price will talk knowledgeably about how the search engines will react to these stimuli.

We’re covering new business model experimentation (with Evan Ratliff of The Atavist, Brendan Cahill of Nature Share, Todd McGarity of Hachette, and Chris Bauerle of Sourcebooks) where publishers discuss ways to generate revenue that are not the old-fashioned ones. We’ll underscore the point that we’re about changes caused by technology rather than being about technology with our “Changing Retail Marketplace” panel, featuring publishers and wholesalers talking about the growth of special sales (through retailers that aren’t bookstores and other non-retail channels).

The future for illustrated books will be discussed by a panel with a big stake in how it goes: John Donatich of Yale University Press, Michael Jacobs of Abrams, Marcus Leaver of Quarto, and JP Leventhal of Black Dog & Leventhal. Two publishers who have invested in Hollywood — Brendan Dineen of Macmillan and Pete Harris of Penguin — will talk about the synergies between publishing and the movies with consultant Swanna McNair of Creative Conduit.

We will have major US publishers and Ingram talking about exports: developments in the export market for books — print and digital. And we’ll have some non-US publishers joining Tina Pohlman of Open Road and Patricia Arancibia of Barnes & Noble talking about imports: non-US publishers using the digital transition to get a foothold in the US market.

One session I think has been needed but never done before is called “Clearing the Path” and it is about eliminating the obstacles to global ebook sales. That one will start with a presentation by Nathan Maharaj and Ashleigh Gardner of Kobo where they will enumerate all the contractual and procedural reasons why ebooks are just not available for sale in markets they could reach. And then Kobo will join a panel conversation with Joe Mangan of Perseus and agent Brian Defiore to talk about why those barriers exist and what might be done in the future to remove them.

Oh, yes, there’s much much more: audience-centric (what I call “vertical”) publishing; the changing role of editors; the evolving author-publisher relationship; and a conversation about the “gamification” of children’s books. David Houle, the futurist and Sourcebook author who wowed the DBW 2012 audience, will return with his Sourcebooks editor, Stephanie Bowen, to discuss their version of “agile” publishing: getting audience feedback to chunks before publishing a whole book.

We will also do some stuff that is more purely “tech”. We have a panel on “Evolving Standards and Formats” discussing the costs and benefits of EPUB3 adoption, which will be moderated by Bill McCoy of IDPF. Our frequent collaborator Ted Hill will lead a discussion about “The New Publishing IT Department”. Bill Kasdorf of Apex will moderate a discussion about “Cross-Platform Challenges and Opportunities” which is about delivering content to new channels.

But purely tech is the exception at Digital Book World, not the rule.

And purely tech won’t show up at all at Authors Launch on Friday, January 18, the day after Digital Book World.

Authors Launch is what we think is the first all-day marketing seminar aimed squarely at authors with a publisher, not authors trying to work without one. It is pretty universally taken as a given that authors can do more than they ever have before to promote themselves and their books and that publishers should expect and encourage them to do that. But, beyond that, there is very little consensus. What should the publisher do and what should the author do? That question is going to be addressed, in many different ways, throughout the day.

The Authors Launch program covers developing an author brand, author involvement and support for their book’s launch, basic information about keyword search and SEO, use of metrics and analysis, a primer on media training, when and how to hire a publicist or other help, and a special session on making the best use of Goodreads. We’ll cover “audience-centric” marketing, teaching authors to think about their “vertical” — their market — and understand it.

The faculty for Authors Launch includes the most talented marketers and publicists helping authors today: Dan Blank, co-authors MJ Rose and Randy Susan Meyers, journalist Porter Anderson, David Wilk, Meryl Moss, Lucinda Blumenfeld, agent Jason Allen Ashlock, and former Random House digital marketer Pete McCarthy.

We have assembled a group of publishers and an agent to discuss how an author should select the best places to invest their time from the staggering array of choices. (Facebook, Twitter, YouTube, Pinterest, etcetera.) That panel will include agent Jennifer Weltz of The Naggar Agency as well as Matt Baldacci of Macmillan, Rachel Chou of Open Road, Rick Joyce of Perseus, and Kate Stark of Penguin. Matt Schwartz, VP, Director of Digital Marketing and Strategy for the Random House Publishing Group, will conduct the session on metrics.

A feature of both our Kids show on Tuesday and the Author show on Friday are opportunities for the audience to interact with the presenters in smaller groups so each person can get his or her own questions answered. At Kids we’ll do that at lunchtime, seating many of our presenters at tables with a sign carrying their name so our attendees can sit with them and engage. At Authors Launch, we’ll be conducting rounds of workshops, crafted so that the authors can get help in their own vertical (genre fiction, literary fiction, topical non-fiction, juvies, and so forth), and on the topics of greatest need for them.

We are sure the week of January 15-18 will prove to be an energizing and stimulating one for all of us living in the book publishing world. We hope you’ll join us.

Digital Book World Week | January 15-18, 2013

Children’s Publishing Goes Digital | Tuesday, January 15, McGraw-Hill Auditorium
DBW Pre-Conference Workshops | Tuesday, January 15, Hilton New York Hotel
Digital Book World Conference + Expo | January 16-17, Hilton New York Hotel
Authors Launch | Friday, January 18, Hilton New York Hotel

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Publishing in the Cloud is the next big important subject


Much of the change we are living through in publishing is plain as day to see. The shift from print to digital, like the shift from stores to online purchasing, is evident to all of us, inside the industry and out.

But there’s another aspect of the change that is not nearly as visible and that’s around systems and workflows. Publishing, even in the pre-digital age, was a systems-driven business. The big companies are producing 3,000 to 5,000 titles a year: each one with its own unique contract, metadata, editing requirements, and (in most cases) market. I like to observe that “each book published presents the opportunity to make an unlimited number of decisions, which must be resisted.” Most of the time the systems don’t help so much in making the decisions, but it takes a lot of support just to keep track of them all and report them to each person who needs to know!

Over the years, the companies with stronger systems have tended to acquire the companies with weaker ones. It doesn’t always work out that way, but it has most of the time. And over the years there have been stories about when publishers almost lost their business because systems broke down. The original Macmillan (now a division of Simon & Schuster) almost died in the 1960s when they fell so far behind on returns processing that they couldn’t properly dun bookstores to pay their bills. In the late 1980s or early 90s, Penguin had a warehouse crisis that was a similar existential threat. A friend of mine with a process-oriented consulting practice really made his year working on that problem.

In the digital age, systems are once again front and center. Every publisher is facing new requirements and seeing the parameters change for the old ones. Most of a trade publisher’s revenue, for at least a while longer, comes from print but the digital side is where the growth is. Systems have to support both.

Until recently, publishers ran on systems that were, primarily, housed on their own computers, either created or heavily customized by their own IT departments, and the operators in the publishing house (editors, production people, marketers, salespeople) were at the mercy of their IT department queues. If they wanted something done, they had to get on line for tech support.

And smaller publishers doing 50 titles or 100 titles or 200 titles a year had to make do with less robust, less customized, and often less capable systems even though their outputs also required thousands of decisions to be tracked and they are no less affected by the shift from print to digital.

But this is changing. Or maybe we should say it has changed. The new systems in publishing are Cloud-based. They are frequently referred to as SaaS: software as a service. They don’t live on a company’s own computers but are hosted by the service provider. They often don’t require an IT department to customize them and they certainly don’t require an IT department to keep them up to date. And the best news of all is that they are cheaper to acquire and faster to install in a company’s workflow than the systems of the past.

Within this change, there is enormous opportunity. Big publishers can sidestep the tricky question of scaling down their print-based systems and scaling up their digital ones. Small publishers can now use systems and workflows that give them capabilities equivalent to their much larger competitors.

But nothing comes pain- or hassle-free and neither do Cloud systems. Executives in big companies find their IT-led systems configuration challenged. When an operator in the production department decides they need a Cloud service like Dropbox to move files around, they don’t need to get IT support to put it in. But IT departments are still responsible for providing support and integrating all of a house’s technology. So “unsanctioned technology” starts to abound and IT departments don’t like that.

They might also not like the fact that Cloud systems could result in cuts to their budget and headcount. Can non-technical executives feel comfortable that their IT departments will look at cost-reducing Cloud systems the same way the CEO or CFO would?

In smaller companies, Cloud systems are a much less ambiguous benefit providing, as they often do, capabilities a smaller house would never be able to afford as a stand-alone system. But without an IT department, how do you know which Cloud offering is best? And how does a company without much in the way of inside tech knowledge and almost no surplus labor cope with implementation?

It was these questions that moved us to stage our first technology-centric Publishers Launch Conference. It is called “Publishing in the Cloud” and it will take place at Baruch College on 25th Street and Lexington Avenue on July 26.

Our conference really has three groups of resources for attendees: big publishers, smaller publishers, and suppliers of Cloud services. For the most part, the publishers will speak from the stage and the suppliers will be available at breaks and during a 2-hour “conversations with the experts” session when both the suppliers and the speakers will be available to talk in small enough groups so that all the conference attendees can get their own specific questions answered.

Some context and stage-setting will come from my Publishers Launch Conferences partner Michael Cader, whose Publishers Lunch and Publishers Marketplace enterprise has been a heavy user of Cloud services, which he will explain. Ted Hill of THA Consulting, who was the one who first clued me to this topic, will sketch out the landscape, segmenting the service offerings, spelling out the suppliers in the various niches, and providing a “checklist” for publishers looking into these services. And our Platinum sponsor TCS, Tata Consulting Services, did a survey of hundreds of companies using Cloud services from which they will deliver useful insights.

Looking at this from the perspective of big publishers, we have Ken Michaels of Hachette and Yuvi Kochar of The Washington Post. Michaels will kick off the day with his take on why Cloud services are critical to publishers at this time. Michaels is the Chair of Book Industry Study Group, so he speaks from an industry-wide perspective. In fact, he was instrumental in persuading us that the overall topic of Cloud services for publishing was worthy of an all-day conference, which it never had before.

Michaels will also talk about tools that Hachette developed because they needed them and they didn’t exist which they are now able to offer to other publishers on a Cloud model.

Kochar is the CTO of The Washington Post companies. He uses a Cloud model to distribute both internally-developed and outside services to his constituent companies, which include the newspaper and Kaplan Publishing. Kochar will talk about his company’s service model and the organizational structure it takes to make sure things will all work a level removed from the solution provider.

Another presentation from a large company discussing an implementation will be from Alfredo Santana of John Wiley. They have just put in the RightsLink capability offered by our global sponsor, Copyright Clearance Center, to automate the licensing of permission requests directly from the publisher’s website. RightsLink, which is used by many top publishers, can be a big labor-saver and revenue-producer, but it takes planning and work to do a proper implementation, particularly at a company like Wiley that has such a range of markets to serve.

And we’ll have a panel of big publishers, including Ralph Munsen of Hachette, Rick Schwartz of HarperCollins, Bruce Marcus of McGraw-Hill, and Chris Hart of Random House discussing “The Changing Role of the IT Department”, addressing the many issues I referred to earlier in this piece.

We have two speakers who have a broad view of the challenges smaller publishers face. Rick Joyce of our global sponsor Constellation serves the needs of more than 300 publishers who use their services and, among other things, rely on them to vet Cloud offerings for them.

Michael Covington will call on his previous role with the Evangelical Christian Publishers Association where he was responsible for vetting and inking partnerships with various cloud-based service companies such as Firebrand Technologies, Metacomet, and Bowker.  Now serving as the Director of Digital Content for David C Cook, an international non-profit which publishes trade books, music and curriculum for the Christian church worldwide, Covington will also discuss the opportunities and challenges publishers face in moving from legacy systems and “tribal knowledge” to a “Service Oriented Architecture”.

Andrea Fleck-Nesbit of Workman has an interesting case history to talk about. Workman is taking the Title Management capabilities developed as an in-house system by its Canadian distributor and helping turn it into a hosted offering so they can use it too.

Covington and Fleck-Nesbit will be joined by Patricia Gallagher of Liberty Fund and Bonnie Russell of Wayne State University Press, both of which have just completed their own switchover to a Cloud service for core functions. As a panel they will extend the discussion about smaller publishers finding and implementing Cloud services.

For two hours in the afternoon, our attendees will be able to meet with our expert speakers and our sponsors in small groups to facilitate more focused discussions, In addition to CCC, Constellation, and TCS, event sponsors for “Publishing in the Cloud” include Firebrand Technologies, IBM, Klopotek, and Virtusales.

Cloud computing for publishing is a big subject and an important one that has gotten no focused attention before now. We think our conference will give our attendees, and the industry, a quick start getting a handle on the opportunities and how to take advantage of them.

On this coming Wednesday, July 11, we will have a FREE 1-hour webinar on this subject. Michael Cader and I will be joined by conference speakers Ken Michaels of Hachette, Rick Joyce of Perseus, and Ted Hill of THA Consulting as well as by John Wicker of TCS. The webinar will touch the high spots of this very important topic. And, as I said, the webinar is free!

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A brilliant Conference Council helps make a great Digital Book World


We had a very successful debut annual conference for Digital Book World last January, even though we didn’t conceive the idea until June, put together a group of helpers (which we now call our Conference Council) until July, or draft the initial program until August. This year we’re way ahead of that schedule. We’ve put together a fabulous Council to advise us this year and we’re having a meeting of many of them next week to discuss the agenda and to start getting suggestions for speakers.

The Council gives us wide exposure and connections to the trade publishing industry. That way we make sure we don’t miss any ideas and we don’t miss knowing about any talented people whom our audience would want to hear.

We have several publishing company presidents and CEOs (Sara Domville of F+W, Marcus Leaver of Sterling, Maureen McMahon of Kaplan, Brian Napack of Macmillan, Dominique Raccah of Sourcebooks) and some presidents and CEOs from other companies and support organizations in the industry (Kristen McLean of the Association of Booksellers for Children, Tracey Armstrong of Copyright Clearance Center, Peter Clifton of Filedby, David Cully of Baker & Taylor, Joe Esposito of GiantChair, John Ingram of Ingram Content Companies, Scott Lubeck of The Book Industry Study Group, and Steve Potash of Overdrive Systems.)

We have other senior level executives, many with specific digital responsibilities (Peter Balis of Wiley, Ken Brooks of Cengage, Mark Gompertz of Simon & Schuster, Madeline McIntosh of Random House, Thomas Minkus of the Frankfurt Book Fair, Larry Norton of Borders, Kate Rados of F+W Media, Charlie Redmayne of HarperCollins, Adam Salomone of Harvard Common Press, John Schline of Penguin, Evan Schnittman of Oxford University Press, Michael Tamblyn of Kobo, Maja Thomas of Hachette, and Tom Turvey of Google.)

We have agents (Sloan Harris of ICM, Simon Lipskar of Writer’s House, and Scott Waxman of the Waxman Agency) and industry consultants and commentators (Michael Cairns of Persona Non Data, Ted Hill of THA Consulting, and Lorraine Shanley of Market Partners International.) And because he is our media partner, we have help from Michael Cader of Publishers Marketplace as well. And we also get great input from others on the F+W team: David Nussbaum, David Blansfield, Cory Smith, Guy Gonzalez, and Matt Mullin.

So we have all the Big Six represented, as well as small publishers, industry-wide associations and service providers, wholesalers, digital distribution partners, retailers, and agents. All of these people have real input into the topic list and speakers. Many of them are joining us for a meeting next week to review our ideas for the program, which we previewed on this blog about a month ago.

Because Digital Book World tries to be at the cutting edge of trade publishing and digital change, we often face one or both of two challenges. Sometimes we believe something should be happening, or be about to happen, but we may not know where or whether the publishers leading the charge will talk about it. Several topics come to mind that fit that description: vertical efforts inside general trade houses; what houses are doing to adjust to reduced expectations for print sales in bookstores; how houses are gearing up or changing their sales efforts to compete in and serve a growing list of digital intermediaries; how enhanced ebook and ebook first creation change the traditional order of things in product development.

The other challenge we have to work around is when people can say things privately but not publicly. One topic that is very tough to talk about is ebook royalties, which is a major point of contention between publishers and leading agents at the moment. The big houses are pretty adamantly trying to hold the line (publicly) at a royalty of 25% of net receipts. But upstart publishers like Jane Friedman’s Open Road appear to be willing to pay 50%; publishing through Smashwords yields 85% (but sells the books without DRM, which would frequently scare the copyright owners of valuable properties); and self-publishing through a distributor would deliver a yield somewhere in between. (Remember: self-publishing ebooks carries no inventory risk.) In that environment, some agents are able to wring some concessions from some publishers. But the agent can’t talk about that without jeopardizing her ability to get concessions for her clients and no publisher will volunteer to reveal the isolated concession and start turning that into a policy.

Some things are just hard to discuss. Do booksellers, or even the publishers and wholesalers who supply them, want to talk about the possibility of their impending demise? But how can one plan for the future and ignore that elephant in the room? If a publisher suddenly sees the necessity of developing direct selling relationships with end users, after years of telling booksellers he was against it, does that publisher want to talk about those efforts in public?

When competitors participate in industry education initiatives, they must draw lines around what they will reveal and what they won’t. One ebook-responsible executive we know at a major house is persistently reluctant to reveal what he’s doing or what he’s thinking. But he has a boss, one who is proud of what he does and what their house does, who pushes him forward as a speaker.

Frankly, I think these challenges are greater for us than they are for other conferences on digital change that focus more on technology than they do on business practices. Very few publishers are masters of tech; usually they’re working with outside suppliers who are happy to share best practices. But business practices are different; they’re more sensitive. Sometimes the reluctance to share them is sound. Sometimes constraints are even legally required. Since our job is to focus on business practices, we’re glad to have relationships with very knowledgable players who will candidly engage with us on these challenges so we can figure out the best way to protect true proprietary knowledge but still disseminate valuable information.

We’re really proud of the illustrious group we have gotten to advise our efforts, and we get great value from them even though their first responsibility is to the company they work for. We feel confident that this group helps us cast a net that is wide and broad enough to assure us that any major development in the trade book world will hit our radar screen and that we’ll know if there are informed people willing to talk about it.

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Points of No Return: Making Information Pay for 2010


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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Serious disruption just over the near horizon


The monthly release of ebook sales figures by the IDPF provides a regular reminder about how fast this market is growing and it always provokes me to project the curve into the future and think about the implications. It was an IDPF data release that triggered the thought that we needed a “Tipping Points” panel at Digital Book World last January which turned out to be one of the highest-rated presentations by the attendees of the conference. And it was another release of that data that made me say on this blog on March 22 that I thought ebook sales would reach 20-25 percent of the sales for new works of narrative writing by the time of Obama’s reelection in November 2012.

Then last week, The Economist had a story quoting Carolyn Reidy, the CEO of Simon & Schuster, forecasting S&S ebook sales in that range in “3 to 5 years.” This is the first time that I’m aware of that a Big Six CEO has been willing to put their name on a forecast that is just about as aggressive as my own. Another conversation with the head of another one of the Big Six companies captured a forecast that is in the same ballpark.

So I think it is worth a few moments to contemplate what it means if this forecast is accurate, or even close to accurate.

If by the end of 2012, 25% of sales for a new book are digital, then about half of new book sales will be made through online purchases if we count the print book sales made through online retailers (mostly Amazon.)

Online print sales can be served through inventory generated on demand. So, if these estimates are right, we are less than three years away from a publisher (or author) being able to reach half the market for a book without inventory risk!

Having half the market reachable without print-run risk or inventory storage; having half the customers connecting with their reading through online paths that make them at least theoretically identifiable; and having a quarter of those customers reading through a medium that enables interactivity will make all the changes we’ve seen so far in trade publishing appear trivial. And if the very perspicacious Carolyn Reidy, her unnamed counterpart, and I are right, that disruption is going to take place before many books now under contract reach their publication date.

The immediately disruptive effects of this, for which every major publisher should be preparing right now, include:

1. Publishers are going to really have to rethink the development process for their ebooks. Right now, publishers put their creative energy into optimizing print books; ebooks are an afterthought.  The most forward-thinking houses are going to XML workflows which will reduce the costs of conversion to ebook formats. But are any of them fundamentally rethinking how the editor and author shape the project to optimize the ebook experience? That working relationship is going to have to undergo fundamental change.

2. It will be eminently sensible to launch books with a no-inventory strategy and move to press runs with returns allowable when reviews or sales have proven that it makes sense. Of course, publishers will be happy to sell anytime on a no-returns basis and for some books launched “digital first” there could be enough no-returns demand to generate a printing, but the idea of printing and distributing speculatively will make less and less sense as the potential market to be reached by that tactic diminishes as a share of the whole. By the way, this reality would give B&N, the only retailer with its own DC resupply infrastructure, an additional competitive advantage.

3. A non-US publisher will be able to reach half the US market without needing an operation of any kind in the States. This is a sea-change that could even encourage our UK counterparts to reconsider their staunch defense of territorial rights. We already know that the greatest part of marketing value beyond the display and positioning in a bookstore is generated online. That means it can be done from anywhere without a local nexus. By the end of 2012, we’re saying half of all the sales potential can also be reached with the product without a local nexus: no requirement of local inventory or any shipping or revenue collection facility beyond your digital distribution and print-on-demand partner.

4. Because books or ebooks will be purchased by half of their customers electronically, the potential exists to know exactly who those are and to establish interaction with them. Obviously, the intermediaries have both selfish and customer-oriented reasons not to share data, but for ebooks, at least, publishers will find hooks to get readers to check in with the publisher and establish contact. (Of course, they will also be selling more and more units direct to consumers, without any intermediary at all.) This opportunity presents a new battleground for competitive advantage that publishers will have to pursue both for marketing and for author relations.

5. Publishers will have to start devoting the bandwidth and resources to direct sales that they devote to intermediary sales today. The notional 50-50 split of sales between terrestrial and online means that half the sales are actually direct sales. Publishers will increasingly find ways to influence those sales decisions, but the companies that devote management attention and resources to the challenge will find those ways faster, to their competitive advantage.

6. There’s an inevitable concurrent downward spiral of brick-and-mortar retail inherent in this forecast that sales are moving online. The nearly-limitless online selection has been an increasingly powerful magnet since the day Amazon opened and in the new paradigm there will be a growing body of talked-about content not visible on store shelves. It is beyond the scope of today’s speculation to consider what this means for the strategy and survival of bookstores and wholesalers and for publishers’ expectations for them, but it’s not likely to be pretty.

7. Self-publishing strategies for entities that can do the marketing become much more compelling. It is no secret that an author can make more money on each copy sold managing her own publication through Lulu or Author Solutions or Bookmasters. If half the market is directly available without regard to the effectiveness of a field sales force then we can be sure, at the very least, new title acquisition will be more challenging for established publishers. The big players will still be the only big bankrolls in town, but that’s a two-edged sword that can lead to overspending and losses as well as to securing desirable projects.

8. If the infrastructure for direct sales management at most publishers will be woefully lacking, the infrastructure for print warehousing and delivering print orders at most houses is likely to be heavily underutilized. That should lead to a reduction in the charges for distribution services, adding pressure to a business that will already suffer from the growing viability of no-inventory publishing. And publishers with volume-related pricing contracts with their printers will find they don’t need as much capacity as they contracted for a year or two before.

For the past three years, Ted Hill and I have conceived and organized the program for the Book Industry Study Group’s Making Information Pay conference, coming up on May 6. Our theme this year — Points of No Return — addresses precisely this issue from the perspective of how functions will be organized, what the changing skill sets will be, and how secure people doing jobs today can feel about having a job they can do tomorrow. If you found that this post gave you something to think about, you’ll find MIP a morning very well spent.

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Literary agents and the changing world of trade publishing


who can see the digital book possibilities in every idea before you peddle it.

I had a lunch conversation this week with three successful literary agents, who will remain anonymous for this post. They wanted to talk about the panel we’re having at Digital Book World called “The Changing Author-Agent Relationship: How Will It Affect the Business Model?”

That panel was born when I engaged an agent last summer with my observations about digital change and tried to recruit her to join a panel discussion about it. “Suppose you work with an author to develop her manuscript so your creative input becomes part of the work. Then you can’t sell it, or you get only a token offer for it, and the author wants to self-publish. Shouldn’t you, or any agent in that spot, be entitled to something in that case?”

The agent, sensing quickly that I was going to a model of “author pays agent for consulting help” said, “I can’t participate in a conversation like that. We have a canon of ethics in the AAR, and that might well run afoul of it.”

As it turns out, the canon of ethics of the AAR only explicitly prohibits agents from charging “reading fees” to prospective clients. Other charges are explictly permitted, such as for xeroxing and messengers. And others, such as consulting on self-publishing options, aren’t mentioned.

But, still, the question of whether the business model needs to change remains. The kind of book advances that agents have made a living on for years are diminishing in number. And now that self-publishing is legitimately part of the commercial continuum, authors have a right to expect that their career business manager, which an agent is, will employ it, or suggest that they do, when it makes sense. And agents will have a right to expect to be paid for that.

Of course, that’s not what these three successful working agents do. Their business assets are their personal knowledge of and relationships with acquiring editors; their ability to shape a writer’s concept and proposal into a commercial book; their knowledge of the ins and outs of book contracts and publishers’ accounting procedures. Exploring and keeping up with the various print and electronic self-publishing options: starting with Author Solutions and Smashwords, but including many others including our client Bookmasters, lulu.com, and many others, is a fulltime job in itself. (There’s a string started on Brantley’s list today by Joe Esposito who noticed announcements for four new self-publishing startups in his email in the past few days.) And searching out the authors with the money to self-publish, let alone to pay for advice on how to do it effectively, is also not what the successful agent in the current marketplace does.

I had spoken at a Writer’s Digest conference two months ago and told aspiring writers “get an agent” but also, “make sure the agent knows about the self-publishing options.” These very professional and desirable agents did not. But they agreed that when ten or thirty or fifty times a year a project they’d developed goes off for self-publishing, they’ll want to have a way to monetize that. We agreed that the likely solution will be an alliance with somebody who perhaps positioned themselves more as a “consultant” to aspiring authors. There is no shortage of such people.

The conversation turned to contract terms, particularly regarding ebooks. The agents asked me: “don’t the big trade publishers see that the strategy of paying authors half or less of what many ebook publishers will pay on digital book royalties isn’t sustainable? that we’ll end up splitting those deals?” I told them that I had raised this point with Big Six CEOs and they all said, “we won’t buy print-only; never happen.” The big publishers are counting on the authors’ (and agents’) desire for the advance to keep them locked into the current model. (Richard Curtis made this same point in a recent eReads post.) It is clear that the idea of splitting off ebooks from print contracts is one that these agents have been thinking about for a while. The relative attraction of the advance goes down as the level of ebook sales on which you’re taking half or less of what you could get goes up.

We also spent a little time discussing “verticals” and my theory that power is moving from “control of IP to control of eyeballs.” In the past week, I’ve had two conversations with Hay House executives (they’re on the Digital Book World program too) about their business. To somebody with a trade orientation, it’s pretty phenomenal. They run between 30 and 100 live events a year for their community. They have over 1 million email addresses that drive the sales of all their books. One of the agents said he had an author for whom he sold a book to one of the Big Six houses and they sold twelve thousand copies. He sold the next title to Hay House and they sold two hundred thousand. How long will the Big Six houses be able to compete for big-potential books in Hay House’s sweet spot (mind-body-spirit), advances or no advances?

One of the agents at lunch does a lot with juveniles. “Do I have to worry about this ebook thing much?” that agent asked. Soon you will, I said. After lunch I was working with my frequent collaborator Ted Hill on a proposal we’re making for another conference on digital tipping points. One we were talking about is “when does the publishing house have editors shift their focus from developing a print book with an author, with the ebook as afterthought, to developing the best possible digital product, with the print book coming out of it?” That gave me an answer for that agent: you better have somebody on your team now who can see the digital book possibilities in every idea before you peddle it. Now that you’ve made me think about it, I realize that if you’re not fully exploring the creative possibilities for digital products for every kids book you develop, you’re already missing the boat.

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The publisher’s evolving role


Michael Cairns has a really good post today that distills a lot of thoughts I have had over the last several years into a clear formulation: that the publisher needs to serve as a “digital concierge” for its author.

Three years ago, Brian O’Leary, Ted Hill, and I did a study of marketing spend for a mid-sized trade house. At that time we articulated the notion of a “new marketing partnership” between publishers and authors. We urged then that publishers do what is necessary to make it easy for authors to promote themselves on the web because, in the modern world, that marketing energy would be indispensible.

What was a fairly forward-thinking suggestion in 2006 has become a common understanding by 2009. Harper has launched several author-centric initiatives. Sourcebooks just unveiled a suite of tools and advice for authors to promote themselves effectively. And, of course, I’m a co-founder of Filedby, Inc., and the filedby web site is all about delivering web promotion capabilities to book authors, photographers, and illustrators at scale.

I guess it won’t surprise any frequent readers to hear that I believe that the success of this concept depends on…verticalization!

The swingeing volume of detail that Michael points out is impossible for authors to navigate (Twitter, Facebook, and Friendfeed are just the start, really) is also really impossible for publishers to navigate as well. I believe that is becoming increasingly obvious in many houses. The web worlds of knitting and beading are quite distinct, even if books on either subject would go into the crafts section at Barnes & Noble. The web world of parenting is one thing; the web world of parenting an autistic child would be quite another. Publishers who don’t specialize, focus their specialization, and learn the web world for the fields they are in are trapped in marketing that is massively labor-intensive and yielding no advantages of scale.

Publishers (anybody, really…) gains expertise by repeated use, involvement, familiarity. Publishers have had credibility telling authors what will work with a B&N buyer, a NY Times book critic, or the booker for Oprah or Today. They’ve worked with these outlets many times before and the author hasn’t. The digital concierge, in order to really help me, has to be able to tell me which of the sites for my book on summer night stargazing will take my posts, link to my blog, generate followers on Twitter. Otherwise they’re just giving me general advice a bit more easily, but no more personalized, than I could get from a web site dispensing advice. Or a book.

This is very much a transitional need. Ten years from now, most authors will have arisen from the ranks of the digital community for their subject. We’re very much in a transitional time (one very important point that will be made in my “Stay Ahead of the Shift” talk next Thursday), and the concierge will be characteristic of the transition.

I’m working hard at BEA. Please join me. “Stay Ahead of the Shift”: Thursday 5/28 at Javits Center at 11. “StartWithXML for Editors”: Thursday at 3. And “Digital Debut Tool Time” Friday morning 5/29 at 9:30.

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Shifting Sales Channels, and What Publishers Are Doing About Them


We (Ted Hill of THA Consulting and I) are working with BISG again this year on their Making Information Pay conference. Last year we did a project on “Experimentation and Innovation” where we used both an online survey and interviews to surface the issues we captured in a research paper and then formed the backbone of the program at the MIP conference itself.

This year’s theme, taking the same approach, is “Shifting Sales Channels: How the Sources of Revenue are Changing and What Publishers Are Doing About It.” We’re trying to find the outlying practices: the things a few people are learning or doing that could be of great benefit if more widely employed. The big question going into something this is “will people talk? Will people tell us anything that might benefit a competitor?” The answer, after the first few interviews (just completed) and the first 100 survey results is, clearly, yes.

We really want everybody in consumer publishing to participate in our survey. More than 100 people have done so already but if you’re not one of them, please do so after you finish reading this piece.

Here is a preliminary list of things we have learned already. We have a lot of survey results and further interviews coming to add to this. It looks pretty certain that we’ll have a Making Information Pay conference on May 7 that will be packed with useful information.

1. Opportunity arises when competitors cut back. One publisher told us a story about a direct competitor of theirs cutting back the staff covering a major account. Our interviewee responded to this by stepping up their efforts with the same account with the result that their sales are up at that account when sales elsewhere are declining.

2. Strong brands matter more to consumers and buyers in a downturn. Despite the fact they are pretty challenged at creating consumer brands themselves, publishers have always appreciated the marketing lift that comes from a brand that validates a book to an audience. It turns out that in the recession, the branded material seems to hold up better, particularly in challenged areas like cooking and gardening.

3. Publishers should constantly reshuffle sales resources to pursue opportunity. One publisher we spoke to said they re-evaluate their sales personnel deployment every 12 to 18 months. They have created dedicated efforts where they didn’t have them before and they have reduced the sales hours dedicated to declining areas. The idea that sales deployment should be under constant review is one that more companies should take on board.

4. Reps in the field need to cover more than bookstores. We first got this thought from a niche publisher that has a focused list and therefore a focused batch of non-book accounts to go after. But then we heard again from a larger publisher, which is now in certain territories experimenting with having reps cover accounts beyond bookstores, particularly specialty retailers and libraries. It just makes sense to us that the product and company knowledge a rep has, once “loaded” and deployed in the field, should be directed at any opportunity to produce sales, not just a particular kind of store. This observation has challenging implications for publishers still relying primarily on commission reps to cover bookstores.

5. There are lots of online sales accounts besides Amazon and BN.com and Borders.com that are worth a publisher’s sales effort to cover. This one came out of left field to us. One publisher said with total confidence that there are many online booksellers, some effectively operating as extensions of Amazon, that can be built into significant accounts with attention from a publisher’s sales organization.

6. The right subjects still matter more than the economic circumstances: books with timely appeal will sell. “Gardening” might be troubled, but “growing your own organic food” is a book subject that will work in these green and economically troubled times. Business might be a softening category, but books about job hunting or creating cash flow from a new business are perfect for the moment that we’re in.  The converse is also true, so it could be that overall book sales, which actually aren’t doing so badly compared to other things, will further strengthen as titles and subjects which pretty suddenly became inappropriate over the past 12 months cycle out of the system in favor of books aimed at the new times we’re in. Maybe books are recession-proof.

7. Direct mail still works, but the sales come online. This was another one that was a big surprise to us. One publisher reported that sending out printed niche catalogs still worked well in professional markets, but the orders don’t come back with stamps. They say it is really fascinating to watch the direct online orders spike after they put a piece into the mail.

8. Catalogs and sales conferences are being aggressively rethought. We have found three publishers so far that only hold one full company sales conference a year, and they’re always reviewing whether that one — largely about company morale — is worth it. The first few publishers we spoke with all are looking for ways to cut back, if not eliminate, the full-line print catalog. The new wisdom is that PDFs should be the catalog format of choice, enabling targeted groups of books to be printed as leave-behinds customized to the account.

9. Custom publishing is a growth area. This one was good to hear  me because it confirms the “end of trade” idea, which says that publishers have to (and can) create new channels to replace the time-honored ones that are fading away. One publisher reported to us that they had started a custom publishing operation three years ago with one person and that group now has six! Custom publishing can be about selling in bulk to a corporation, but it also can be about creating a special package for a book chain or mass merchant.

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