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24/06/06

The Future of Publishing

This is basically a bit of a brain-dump I wrote for one of my clients about the future of publishing. I’ve tried to remove anything too specific to them and to make it work on a more generic level.

My basic stance is that its not about threats, its about opportunities. But – publishers find anything to do with technology – hell anything to do with change – too hard to think about, wish it would go away and don’t want to / aren’t dealing with it.

Certainly that’s my experience with a lot of publishers throughout the business. The advantages the bigger, multinational companies have is that they have the resource to put some brains onto this and to start thinking it through. Of course, the logic is also that they have much more to lose – at this stage – than the smaller independents do, when the tide turns.

  • Background
  • Publisher’s customers used to be the retailers. Then came amazon, who discounted like mad to get market share. Then came the supermarkets, who discounted and leveraged their massive buying power. Very quickly, things got much more competitive in retailing, discounts inevitably increased (led by amazon but compounded by the supermarkets) and retail became a bloodbath.

    Publishers were the ones who really lost, losing margin to all of their customers, and finding it harder to get books into shops which were now focusing on the sure-fire big-selling hits. The outcome is that publishers now have to look at ways of getting more margin and more ‘value’ from each sale – which means looking outside of the established ways of selling. The natural conclusion of this is getting closer to readers and, in some cases, selling direct to them, going direct for at least a small percentage of sales.

    And the web is a great way to do that, if you can do it right. Talking directly to your customers allows you to create trust, dialogue and ultimately to build ‘brand values’ in you, looping readers into your outlook and your authors.

    Every visit to your site (or purchase of one of your books) is a chance to create a new loyal reader / customer and should be treated as such. When Amazon entered the market, publishers just saw it as another channel – great, but shortsighted. Amazon’s most valuable asset is the customer data it holds, and the trust those customers place in Amazon and its selling methods. Certainly, publishers missed a trick not to ask Amazon to let them have insight into how the customers were working as a payoff for working with Amazon in the early days.

    So from this first perspective, the future of publishing is with publishers getting much closer to readers, understanding them and making offers based on their preferences, and actrively engaging in valuable dialogue with them. And the web is the natural place for that to happen.

  • Google
  • Whatever happens with Google and the other players – Books will be available to search digitally from a number of providers. That is the future.

    Where Google went wrong was running in full of Californian gusto to a room full of dusty old publishers, and not understanding that publishing hasn’t even got its head around web 1.0 let alone web 2.0.

    To publishers, Google appeared to be accelerating the onset in publishing of what had shaken music, and the movie business (digitisation!) and doing it without any consulation with the copyright holders. It freaked them out.

    Ultimately book search should be fantastic. For non-fiction, particularly obscure non-fiction, it’s a godsend for authors and publishers. It is the perfect way of introducing readers to content, letting them know that a book exists on the subject they are researching.

    As (if it’s in copyright) the title will only be extracted, there is no danger of the reader just getting what they want from a Google search. Or at least, no more than they would from going into a book shop and flicking through the book. I often (mis) quote Tim O’Reilly:

    “The biggest threat most authors face isn’t piracy, it’s obscurity”.

    If publishers can jump into this value chain, by selling direct from the Google page, printing on demand, or whatever it is – then it’s a great opportunity. But, as with many of these opportunities, you can help but feel that it’s something that will get put in the ‘too hard’ box and get forgotten about while someone else reaps the benefits. And no, suing is not going to help.

    For fiction, on the other hand, its use is less defined. It may offer some fun novel uses of content, but the copyright issues behind doing the more exciting stuff (such as using book search to compile and create your own anthology, poetry or short story collection, being printed on demand) are surely too big to compute. Still, if Google opened up the Print API in the way they have with maps, you could see a lot of fun mashups occuring.

    However, what is outrageous is the fact that, for Google, this endeavour is proprietary. The formats they are using are proprietary. The files are not returned to the pubilshers for their use (digitisation of an entire backlist at a quality sufficient to allow the publisher to reprint on demand or even offset from the files, would be a major incentive to involvement. Why isn’t Google offering that?). Google will own the formatted content of all the books in the current model. This lack of reciprocation from Google is staggering and, ultimately, may prove to be their downfall.

  • Digitisation
  • The music industry couldn’t stop digitisation in in the face of Napster / iPod and publishing won’t be able to do it whenever a tipping point comes along, probably in the form of a sexy and competent device. But publishing has LOTS to learn from the music business.

    First of all – it was an outsider (Apple) who saw the opportunity, exploited it and now owns the digital music market. If that had been led by the music industry – which was well within their means – the 3 billion tracks sold would have fed right back into the industry. Instead, they spent 4 years trying to shut it down and then playing catch up.

    Secondly, the adoption of the iPod (and to a certain degree, the incentive of getting free music through piracy) taught millions of consumers how to use this new technology. How to get a tune from the web, onto their PCs, and onto their iPods. And this is what lead the market to have a hunger for the content, which was ultimately fed by iTunes, who used the same technology route. Very low barriers to entry at that point. And DRM didn’t even come into it.

    The questions in books aren’t if, but when – and publishing really needs to be equipped for the moment it comes. At the moment, many publishers don’t even know if they own the digital rights to the books they publish, which exposes them to a massive threat from an external agency going straight to the authors, or their agents, and leading a wholesale migration where the authors are selling digital content direct to readers, cutting publishers out of the loop entirely. And then publishers would be really fucked.

    The other big questions – pricing, royalty rates, DRM [digital rights management / protection against piracy] and other standards etc – are equally important and still haven’t been debated at an industry level and really need to be. Publishers need to realise that they are not competing against each other on this question and should work together to solve the problems before they arise. Publishing is facing the biggest change in its history and there is a real opportunity to harness the new technologies across the board.

    Having said that, at the same time, it would be great to see new, young, fresh blood coming into publishing and shaking it up without the rules of the game applying. And if the industry doesn’t shake itself up, you can be sure that sooner or later, someone else will – and the publishing industry will be playing catch up with someone else.

  • Web / internet / self-publishing
  • Blogging is a fantastic way for publishers to find new talent. And the networked peer-review system that is blogs and the web means that the good voices will rise to the top. It’s great for publishers, if they know where to look, which is beginning to happen.

    But the technology itself isn’t a threat to publishers any more than the word processor, typewriter or anything else was. Blogging is also a great way to market books – either through the authors blogging themselves (see the success of the Long Tail and Freakonomics blogs) or through publishing houses providing a blog for its authors, staff and management to use to communicate with the outside world with whom they have traditionally had very little contact.

    Personally, I actually think that publishers / CEOs of publishing houses should blog [Charkin is the only one who does] and get in touch with readers who are desperately hungry to find out more what happens behind the walls of a publishing house. And there’s LOADS of readers out there. Canongate effectively had a blog on its site (the old site, when I wrote up anything and everything) and it was fantastic at building interest in its books, building brand loyalty and positioning ourselves to readers. But it has let it slip and I think this has had a detrimental affect on its brand and values with its readers.

    But in terms of threatening publishers? I don’t think so. The same goes for Lulu.com [a site that allows authors to upload and design their books, and make them available for print on-demand]. There may well be a break out, where an established author uses the channel to sell their next book. But I think that the value that publishers bring to the relationship will, conversely, be increased rather than diminished. A publisher’s editorial, sales, marketing, design and general ‘publishing’ approach will become much more transparent to authors, and to readers.

    There may be some modifications that need to be adopted into the publishing process, but this would be a good thing – such as making sure a book is online on your site from the point of acquisition, and that an author can blog for you, or offering readers the chance to have input into the books, or customize their editions. But these don’t shake the business to the core, just make it much more exciting.

  • The future of publishers
  • In terms of selling more books, everything points towards, at the independent or non-corporate, end of publishing, getting better at understanding your readers, and getting closer to publishing what they want to read, and getting better at communicating directly with them.

    The joy of the web is the way it connects people – communities – and interest groups and the way it allows people to talk within that group – on a level. There is no big secret about what publishers do – although it sometimes feels like that – so why shouldn’t publishers ask a community of readers, via a blog, what they think about a book on This or That Subject before they acquire or publish a book?

    In terms of fiction, in fact any kind of book but particularly in breaking new voices, it has to be about trust, and how that trust in the mind of the reader ultimately feeds into your brand or that of the author.

    You need to carve out a niche for yourself as a publisher, to identify what it is that makes you singular as a house, without painting yourself into a corner or ghettoising your authors. And that’s something I think can be communicated very well as a house, not just to readers, to authors and agents, but also internationally in the way you sell rights to foreign publishers – many of whom we increasingly see as copublishers.

    However I think that publishers need to think very hard about who they are, what is a Canongate book, and how this singularity is communicated to readers beyond just through the books you publish.

    In the future, this singularity will become increasingly important, and more valuable. There has been a tendency in publishing to chase after the mid-market, led by the high street, but as it becomes clear that this is an untenable strategy, publishers will revert to publishing unique authors with more confidence, and publishing them well. The web doesn’t have a shortage of voices, but what it does have is a shortage of authority for these voices. And it’s that authority that publishers bring.

    So, so long as publishers continue to publish with their hearts, their future is assured.

  • The future of the industry
  • It’s hard not to see this becoming more polarized on every level.

    On the High St, I see more specialist retailers offering service and range, whilst chains offer discounts and celebrity / blockbusters. And customers will choose whichever suits them, probably a combination of both. In the same way that people mix and match organic, locally sourced food with the monthly shop at Tescos.
    Publishers: big corporates will be forced into going increasingly for slots and celeb / media tie-ins; there will be more agglomeratization among the corporates to gain economies of scale to fuel the fight for the high street sales. Independents will continue their agile publishing and publishing big books smartly. Paradoxically, we will continue to see the growth of smaller ‘independent’ divisions within conglomerates with (potentially loss-leading) remits to acquire quirky, riskier titles and to compete with independents for the ‘break-out’ hits (such as Life of Pi, Eats, Shoots and Leaves etc). And there will inevitably be purchases of the successful independents or their editors by the multinationals.
    Digitisation: EBooks will become a fact, but will not kill the book. In fact, books as objects will become valued more than at the moment. Consumers will, to a point, come to appreciate higher production values, design and this will lead to the emergence of brand values around quality. Look at vinyl sales in the music industry – LPs are highly desired, consumers pay premium prices , and they offer great quality. Ironically, LPs have outlived CDs! Vitally, LPs, like books, show kudos for collectors who want to display them.

  • Innovation in publishing
  • Rights. Exploiting rights internationally is something that independents have always been great at. And in many ways (in my opinion) it’s where a lot of publishers are losing out. I think one future is in commissioned titles with world rights acquired at the outset (and by commissioned I mean dreamt up rather than purchased), offsetting all risk before a title is published. Referring to Canongate, where I used to work, and where my wife now works, their series such as The Myths and The Pocket Canons – as well as ficiton such as James Meeks’ The People’s Act of Love, or all of Michel Faber – the rights value of these titles has been exploited to the point where most of the risk is deferred by the time the books come to be published, simply through rights deals.
    Backlist. The backlist is such a massive topic that I’ll post my thoughts on the backlist here very soon. But the overview is that publishers are missing a major opportunity.

    What Else? In no particular order:

    Web 2.0 (basically user-generated content): publishers haven’t caught up with web 1.0!

    New distribution models: clearly going to happen, if it isn’t already. It was a new distribution model that revolutionised the music industry. At the moment publishing is waiting for the tipping point / chicken and egg scenario of whether it is eBooks or an eBook device which will tip. For all we know (and as Damian Horner points out) it could just as easily be the explosion of audiobooks through someone like Audible.
    Books as objects. Publishers really need to think about adding value rather than what they have done in the past few years – stripping out all value in a book through insane discounts. We don’t know for a fact that price is what drives purchases. Look at high-value, limited edition, highly collectible titles.

    Web sites. Obviously Web 2.0 is all about networked conversations. Anyone who uses the web a lot experiences a terrifying speed of interest and excitement leading to instant gratification. If I read a review of an album, I can go out and find it – instantly. If an article is referred in a blog or piece of journalism, I take five minutes to go and read it and return to it. If I hear about a film, I can go and download it. The biggest issue is – still – that publishers have got to introduce books to readers rather than expecting readers to just buy because they publish – and putting the onus on the introductions to the booksellers.

    Communities. My old Canongate site used to be a blog, for want of a better term. I wrote three or four posts a day, built up readers who would return to the site regularly, and Canongate enjoyed many of the benefits talked about in the new wave of blogging books: cluetrain manifesto, naked converations etc.

    EBooks / Piracy

    There may be an emergence of new generation of ebook readers for digital content [although it doesn't look like Sony is going to release the Reader in the UK], but I think these are unlikely to cannibalize sales of printed books. In fact, Amazon has idenitfied that customers are likely to pay for physical and digital copies of the same book through it’s ‘upgrade’ plan, recently announced. I hope to get my hands on a competitor to the Sony Reader for a couple of weeks and to test it out.