19/01/07

A Period of Transition

What follows is a post I’ve had lined up for a while, which unapologetically asks a difficult question. My apologies in advance to all of you who have been offended by my improper language in the past - but I’m going to be swearing again in the bit that follows…

Is publishing fucked?

I’ve woken up this year believing that there is a big elephant in the publishing room in 2007, and I’m worried that we’re all ignoring it. I’m increasingly convinced that publishing is fucked, and everyone in the business knows it, but no-one is talking about it.

Why? Publishing is fucked because the high street is fucked, and yet despite this, publishing is still ploughing on in the hope that the high street - its only real outlet - is going to make it through OK. The high street is so not going to make it through OK, publishers - and you need to look for some emergency lifeboats very very fast.

As I write this, more reports of the high street being fucked filter through: HMV’s MD steps down after dire Christmas (HMV owns Waterstones); Borders has announced an OK Christmas - and Amazon announces amazing results for the same period. Meanwhile in unrelated news, AMS and PGW have gone into Chapter 11, like for like sales are down, shops won’t be able to sell the biggest title of the year (and maybe ever) without making a loss, and discounts are at an all-time high. Pearson is rumoured to be a target for private equity and this in itself raises the question of when are other publishers going to become targets or sold off by their parent companies?

So, selling books, and particularly through the high street, is fucked, and all the while publishers are chasing the market who make the vast majority of volume purchases. Meanwhile, best-ever results from Amazon suggest an online shopping trend (probably including books) in rude health.

As we all know, given the shredding of margin post NBA, publishers now depend on volume sales to make money. As a result, publishers now have to take more and more risks (and spend more money) on making a ‘hit’. And getting a hit relies on conjuring a perfect storm to act in your favour: subject, author, profile, Richard and Judy, price promotion, position in (or just presence in) store, stock level etc. Hence celeb biog and media tie-ins.

Yet for a product with a lead time in the years, the window of opportunity for a book to be a success is limited to weeks, or maybe a couple of months. (Incidentally, the obsession with the hit is very interesting in a post-Long Tail world; why is the only publishing-related company making money out of the long tail Amazon?)

So, how do we un-fuck publishing?
This is the other problem that I’ve got.

Publishers are throwing {subscription required for these next 4 links} money at what they perceive to be The Problem hoping it will yield The Solution. But The Problem they’ve identified isn’t what is actually most fucked about publishing. Right now, digitisation is what they’re throwing money at. Thing is, digitisation is not fucked in publishing. Retail sales, consumer interest, competition, price and distribution are what’s fucked. Digitisation is still incredibly nascent as a problem.

The digitisation position is understandable (god knows I’m sympathetic to the strategy). We’ve seen the problems that music and film (and increasingly TV and advertising) have suffered at the hands of too-little-too-late digitisation. Piracy, loss of market share and so on - publishers have looked to these industries to learn. And, last year in particular, we saw lots of publishers deciding that they’d learned enough to begin throwing huge sums of money at protecting themselves against these threats in the coming years, and to solve those problems before they become life-threatening problems.

All of which is smart, and which makes sense. But, the problem that is answered in part by ‘digitisation’ is not the most important problem facing publishers.

The most important problem - from where I sit - is that people aren’t reading enough of the kind of books that publishers publish. It’s a pretty basic problem, and one that isn’t going away. But it sure as hell isn’t going to be solved by eBooks, e-Ink, digital warehouses or any of the other very expensive ‘digitisation’ projects going on. OK, publishing has always been a pretty scatter-gun, and volatile, business, with the hits supporting the misses, but the costs associated with a ‘hit’ now up the stakes for everything else down the advance food chain.

[In other words, as was just pointed out to me, and to paraphrase Tim O’Reilly), ‘Obscurity is a far greater threat to authors than piracy.‘]

If we look at the last year or two, the safe growth area (ignoring the obligatory Profile slot of the year - and good on ‘em) is in highly discounted celebrity / media tie in books.

But what is it about this market that makes the ‘let’s put millions into digital warehouses’ idea so urgently relevant? People who read or buy 2-3 books a year (or just one) are not going to spend £3-500 on a Sony Reader: for them the paperback or a heavily discounted hardback is the perfect object. And, arguably, the number of people who may (should it ever become available) purchase a Reader won’t warrant the investment from the publishers.

So why are they doing it? Some thoughts.

• Maybe a digital warehouse interfacing with Google Book Search (et al) makes sense to direct people searching about their favourite sleb to a publisher’s site - but it’s like cracking a walnut with a steamroller. Particularly when most/all publishers sites are pretty awful.
• Maybe a digitisation strategy makes sense in the context of reducing costs for a print on demand model; maybe it makes sense for reducing other overheads in the form of warehousing, inventory and distribution - but these are still embryonic (and worthy of another post). And how to grow a market for digital content that isn’t interested in it?
• Maybe a digitisation strategy makes sense in anticipation of a viable digital distribution channel opening up for books (like iTunes), and maybe a digitisation and piracy-protecting DRM strategy in advance of that makes a lot of sense as well, but it’s hardly the most pressing issue or the squeakiest cog.
• Maybe a digitsation strategy makes sense if you want to extract (and protect) your publications on your website - but I’d have thought that making your website a must-visit destination to interested visitors should be a higher priority.

No. Publishers should be spending their energies, and money, (1) trying to publish books that readers want to read, and (2) making sure readers know about the books that may interest them. Publishers need to focus equally urgently on making it easy for readers to buy such books when they want, at a price they are happy to pay for it, with all the service that book shoppers have come to expect. Even better - they should be looking at ways of adding value back into the book - value that has been torn out of books by deep discounting (this is another post).

So, presuming that publishers know how to do (1) above - i.e. publish books that readers want to read - publishers need to spend more energy and cash creating a consistent, intelligent, effective, sensitive, joined-up, digital marketing process to attract readers and communicate effectively with them. They need to begin to hire people across their companies who understand and can operate in an internet medium and age. And people they hire should expect that to be a standard way to do business in 2007.

Publishers need to invest in better websites themselves, and also to hedge their bets by promoting their products on other sites: Google, Froogle, Amazon, etc. Consistently, without drama, but with an understanding of it as good, sensible, solid marketing.

The net results - a distibution channel (i.e. direct to consumer) of which a publisher is in control; an independent sales channel (ecommerce) that doesn’t depend on the mercy of the high street; a marketing, research, and communication channel (the ‘CRM’ side of such a site, plus recommendation engines) with target audiences - surely these goals must be attractive to the point of being a no-brainer?

But, why, is no-one doing this? In light of a throttled and dying sales channel, a consumer base increasingly prone to buy online, it is a no-brainer to create a sustainable and higher value direct sales outlet! The cost of doing this well may be equivalent to one or two big advances for a book that may only sell 3,000 copies. The problem is, the ongoing costs and effort in sustaining it are much bigger than most publishers have appetites for: publishing is an industry currently obsessed with the next and the new (and that’s another post).

So why is no publisher’s site any good? Why do most publishing faces go blank and racked with panic at the idea of digital marketing? Why is it that only the odd title gets any online marketing - which even then tends to be executed by an external company and then forgotten about rather than sustained?

I don’t know whether the separate ‘web departments’ publishers used to have are a good or a bad idea - but publishers definitely need to include web communications in all of their strategies for making more (and losing less) money.

At the same time, in these desperate times, and at the risk of another tangent, why have not all the (large) publishers got together and come up with an alliance in the way that the airline industry did with Opodo - and collaborate to meet the problems facing them? For all of these questions, and for the life of me, I can’t come up with a good reason other than ignorance, inertia, and inexperience. Surely not fear?

Publishers, this has to change. Until your departments - from rights to editorial, sales to marketing to publicity - are all, independently and as a whole, staffed and focused on the digital value chain, until it is policy (and standard practice) to deliver a systematic B2B and B2C online presence for each title, until your lists, titles, and authors are coherently and consistently communicated online in an effortless part of the publishing process - you are and will remain, I am very sorry to say, fucked.

See also: The Publishing Contrarian on the future of bookselling (summary: Publishers are fucked, books aren’t)

Posted by Peter Collingridge in Future of the book, Google print, Publishing, Web.