In the latest sign that the need for information about digital change in publishing has undergone a sea change in the past few years, it was announced today that Nielsen will not stage an independent conference in London this April, but will instead join forces with the London Book Fair to do an event there in March.
This reminds me that the best salesperson I ever worked with had a mantra 40 years ago that is proven over and over again to be true. “I never sell with logic,” he said, “unless I find no way to sell with fear.” Nothing demonstrates that more clearly than the rapid ups and now apparent downs of the digital change conference business in our industry.
We had done conferences intended to be profitable about digital change in the early 1990s in conjunction with other consultants and sponsored by industry publications, first Publishers Weekly and then Knowledge Industry Publications. (KIPI published the newsletter BP Reports, back when you could make money selling printed newsletters!) Then we worked on a series of conferences sponsored by VISTA Computer Services, now part of Ingenta. Those were free events which VISTA staged to promote their services. Before the enterprise giant SAP entered the publishing space in the late 1990s, VISTA was the dominant provider of enterprise software to book publishers in the US and UK. They decided they needed to learn about digital change, driven by fear.
As their then-chairman Denis Bennett said at the time, “we sell software to help publishers keep track of books in warehouses. What if there are no books? What if there are no warehouses?” He decided his customers needed to explore the same questions, so he funded a team led by Mark Bide of the UK and me to do research on digital change. First the findings benefited VISTA’s strategic planning and then they were turned into conference presentations to help publishers.
Meanwhile, Amazon grew, Barnes & Noble — first with Bertelsmann and then on their own — competed for online sales and ebooks reared their head through initiatives by Sony, Palm, and Microsoft. It became evident to many people that the industry might change a lot. And the era of digital conferences throughout the publishing calendar began. We did a conference at Frankfurt in conjunction with the Frankfurt Book Fair in 2001. Soon every industry gathering had to have some sort of digital show. Tim O’Reilly, a publisher of computer books, launched the Tools of Change conference in 2007. It was geeky, but opened the door to discuss business change, not just tech change.
Then in 2009, David Nussbaum and Sara Domville of F+W Media conceived Digital Book World and recruited me and then Michael Cader of Publishers Lunch to program and market it. That began a run of seven years for us, which had a bit of a bell curve. The first few years we were up and the last few years it got increasingly difficult to maintain the level of success we’d reached.
And that was because publishers lost the fear. This was for a variety of reasons. One is all to their credit: they hired in people who knew digital even if they didn’t (yet) know publishing. But it was also that circumstances changed. The surge in ebook sales taking share from print slowed down, then apparently stopped. New marketing procedures, still driven by major accounts but also now using new tools like NetGalley and ever-improving techniques and software assistance to find the right keywords for discovery, were developed to address the new marketplace.
What had been been a disruptive and frightening pace of change became a much slower boil. As the metaphorical frog in boiling water demonstrated, not feeling a change doesn’t mean one isn’t happening. But feeling the change drove the fear and fear drove the need for education and validation.
Now the challenges are more subtle. Amazon is past 50 percent of the sales for many publishers. That’s comprised of a lion’s share of online print sales and almost as much of the ebook sales. Not only does Amazon have a multiple of the biggest share of the book business any prior account had ever achieved, they aren’t shy about using their clout to claw back margin.
(Old joke of mine from a few years ago, but still true. “Amazon is every publisher’s most profitable account. That was never their intention and they’ll be inclined to change that fact as fast as they can.”)
If Amazon has consolidated the path to reaching half the US domestic market, Ingram has done very much the same thing for the global market. But while Amazon’s build-out has been largely at the expense of an ecosystem US publishers already reached (the most notable fatality being the Borders chain, which expired in 2011), Ingram has created a market expansion for many publishers by providing ready access to offshore sales opportunities that were previously very hard to access.
Global marketing channels — which is any way you use the Internet — and ubiquitous use of English means that the potential customer base for English-language books extends far beyond what US (or UK or any other English-language) publishers consider their home territory. Ingram has long been a supplier to bookstores and libraries all over the world. They distribute ebooks globally. They’ve complemented their capabilities with a growing print-on-demand network, making it even more efficient for them to put the books of their vending publishers anywhere there’s demand.
So, in 2016 publishers can literally reach most of the customers in the world through two intermediaries, Amazon and Ingram. Obviously, a publisher who calls on stores locally and around the world will stimulate sales that the best relationship in the world with Ingram can’t deliver entirely on its own. It still definitely “pays” for a publisher to push to get books in stores in the US and around the world on their own. And it is likely that books on display and selling in brick-and-mortar stores in the US and elsewhere actually stimulate sales at Amazon as well. But a publisher with no more organization than relationships with Amazon, Ingram, and a talented digital marketing team can publish successfully in today’s world.
One example is Diversion Publishing Corp., created by Scott Waxman, composed of Diversion Books, EverAfter Romance and Radius Book Group, which has developed a real business and marketplace presence working closely with Ingram’s organization for its brick and mortar distribution reach and Amazon for online sales. And it is worth noting that O’Reilly Media is among the companies that has for years reduced its fixed overhead by publishing its books leaning on Ingram.
The fear that is left in the marketplace can’t really be addressed by a conference. That would be the fear many publishers have about what Amazon will do to claw back margin in the future. Probably the greatest comfort publishers have is that they will be “even-handed” about it; looking for pretty much the same concessions from everybody. At the same time, there is fear around the other biggest domestic account for most publishers, Barnes & Noble, which is experimenting with ways to turn around their declining business but also has its hand out looking for more support. New independent stores continue to open, but others also close and, anyway, all of the indies apparently amount to about 8 percent of the total business, according to anecdata provided to us by a number of publishers.
So Amazon and Ingram, for different reasons, are the most reliable accounts of any in a publisher’s account base to grow. Increasing their understanding of how to make the most of the opportunities those two accounts present is the most important commercial task for publishers for the foreseeable future. That should be driven both by logic and fear.
Maximizing Your Potential With Amazon and Ingram. Now, THAT is a good topic for a conference!