The scenario we have presented for The Book Trade in 2010 differs almost entirely from the The Book Trade of 2000 that we know. We prepared the scenario over a considerable period of time, and included the thoughts of dozens of people. I think my colleagues Mark and Hugh would agree with me that, while we are humble about our ability to predict all the particulars of change, we are very comfortable that the magnitude of the change we are predicting is entirely reasonable within the next ten years.
In the few weeks since we prepared the scenario, one thing I think we may have been a little conservative about, frankly, is the amount of change we predict among the ranks of “top publishers”, and the extent to which new entrants will enter the top ranks. Some recent opportunities have brought me closer to the strategic challenge facing today’s publishing companies in meeting the dual agenda of continuing to wrest profit from today’s business models while envisioning and building new ones. It’s not easy. And it is obvious from the results so far that a similar problem faces book retailers. Amazon has been much more successful at the online book business than have the brick-and-mortar stores which have challenged them, and the potential clicks-and-mortar synergies have not become apparent yet.
Their own version of this strategic dilemma faces agents and authors. Their roles, too, are completely different in The Book Trade of 2010. Agents, to us, look somewhat more like publishers. So do some authors. But we try to avoid being too facile about how easily they will do this on the grandest scale, because we still see enormous opportunities for publishers to add value from the cumulative capability developed by marketing a lot of content.
We all have the same problem: publishers, booksellers, authors and agents. We have a way of doing business that, despite an accelerating rate of change over our entire lives in the business, has a certain comfortable form with historical antecedents to shape our understanding. We all have investments in that form: knowledge of the rules and the players, an infrastructure of relationships, at least, and sometimes a physical infrastructure as well. All of us have legacy expectations: publishers, authors, and agents from our backlists, and booksellers from an ever-expanding base of individual and institutional customers that buy books they need and books they want for years and years until death, liquidation, or, in the old days, a change in geography took them away.
But that investment is under assault. Our assets are being undermined by new ways of doing things: today we have new ways to make and sell the books we make; tomorrow we’ll have new ways to deliver the book’s value to what is today’s book customer.
Even the most secure assets, the copyrights in intellectual properties — which, of course, is a part of the value that the bookseller does not share in today — are not secure in their value as the technology changes. Publishers are already “leaking” value by relinquishing rights on properties that have are not perceived to be viable in today’s book economics but which actually still are margin-producing today, and will very shortly be able to produce much more with no additional investment because of the new forms. I have some extensive personal experience with all of this, in effect enabling me to migrate from being an author and an agent to a web site proprietor and content developer with content that publishers were apparently happy to throw away.
But I only benefitted because I knew things that no author or agent would have needed to know to function five years ago. And, frankly, what I know is still not as important to today’s agent as knowing which three people to call to get a six-figure bidding war started for a movie star’s memoirs. But now the things I am learning in cyberspace are taking me to Web sites that pay serious money for content; I can see the day is not far off when I’ll be able to get more from somebody I know in the Web world than from anybody in what we call publishing. It is clear that Web sites have more to spend all the time; it seems that publishers have less.
All of us have a dual challenge. We have to use the technology today to help us with cope with the world we are already in. That means writing, representing, publishing, and selling books “like we always have”: proposals presented, advances against royalties, delivering an attractively- and efficiently-printed book, dealing with the historical retailing logistics including selling new titles in advance, accepting returns, having authors and books meet at promotional appearances, pushing the right media buttons with TV, radio, and print. There are all sorts of tools being developed to help us do this, including PubEasy and BookTrack on the grand scale, and scores of other systems and Web sites in somewhat less ambitious ways.
But “being modern” in the ways one conducts the business we’ve always known will not be an adequate solution for very much longer. A new infrastructure for the delivery of what we’ve delivered in books is being built by the world around us. It will send what we now call books through cyberspace to be printed locally or read on a device. It will send the information that once was gotten from books to handheld digital assistants and telephones. It enables things that were once sourced from books: the name of a restaurant in Paris or a map of the Tokyo subway, to be derived some other way, so that the owner of a Paris restaurant directory or a local Japanese cartographic company will have to find different ways to derive compensation for the value they provide.
We will be slowly, but surely, dismantling our existing infrastructure. There will be fewer bookstores, printing plants, warehouses, and reps on the road every year from now on. In no case will shedding these costs be cost-free. It will cost us to cut back and dispose of what we have built over time. It will eat into margin.
At the same time, the author, agent, publisher, and bookseller of the future — we believe the author, agent, publisher, and bookseller of 2010 — will be building a new infrastructure to exploit the broader new technology infrastructure growing up all around us.
The successful author today knows how to write a snappy book proposal that will produce a big enough advance to enable her to write the book.
The successful author of tomorrow will probably have a business plan for a book, which relates to existing Web sites and which enables her to produce revenues beyond her royalties for the intellectual property she produces or through the fame and recognition it produces for her.
The successful agent today knows the editors at all the publishers, stays in touch with their needs, interests, and internal procedures, knows how to get their attention and to make them pay, and can negotiate a book contract, playing off knowledge of what one publisher will do against another, confident that the important points are known when the contract is negotiated.
The successful agent of tomorrow will know how to get money from Web sites, perhaps in smaller or more incremental chunks than we’re used to seeing today. That agent will also know how to launch a book without a publisher on the Web and in ebook form, often getting sponsorship from a commercial or informational Web site. And the agent and author are going to need a more sophisticated financial arrangement than they have today, reflecting the increased importance of agent’s investment in an author’s success.
The successful publisher today knows how to maintain relationships with sources of supply, which usually has meant agents, identify the right books, pay advances that match eventual sales achievements, and manage the complex logistics of delivering a good physical product at an efficient price and then gaining placement and making delivery to a wide variety of points of distribution while, at the same time, marketing through media to the book’s audience.
The successful publisher tomorrow will deal with an exploding range of intermediaries, but they will be on the Web. The publisher of tomorrow will have a much more complicated business proposition as well. The price for shedding the large capital investment of a big centralized printing will be the requirement to understand proliferating distribution forms: centralized and local print-on-demand and various ebook and delivery-to-handheld formats. The much larger number of intermediaries for books themselves and exploiters of rights for various fragments will require marketing savvy and command of systems, no matter how much heavy lifting is outsourced.
The successful bookseller today knows the books and knows his customers. Knowing the books includes knowing how to get them, but at least we know what the books are: the books deemed in-print by an authority like Whitaker, BookData, or Bowker. Knowing the books also includes having staff that knows what is inside the books, able to direct a customer to the right book by getting a picture of the entertainment or informational need.
The successful bookseller of tomorrow will probably choose between a focus on the front end, directing customers to what they want, or a focus on the back end, delivering them what they have chosen. The two will work together, with a lot more of the former than of the latter. And neither of them will know the comfortable boundaries of today’s in-print authorities. When most books are delivered electronically, whether for ebook reading or for print-on-demand, chunks of what we now call a book will be delivered with chunks from other places. That will escalate the challenge at both the ends of the booksellers’ business.
The trick for all of us, no matter of which of these we are, is to get from what makes us successful to day to what is required to succeed tomorrow. The paths to survival over the next 10 years are not easy and they are not clear. We have assembled a bunch of very bright people here today who are already inventing the future from their particular vantage point in our business. We hope to start shedding a little light on the journey we have before us so we all have a little bit better idea of what have to look forward to in the decade to come.