Last night Victoria Barnsley, Chief Executive and Publisher of HarperCollins UK and International, gave a talk at LSE entitled ‘Publishing: Media’s Last Diehard?’ This is a loose transcription based on my notes, which are a very rough rendition of what was said. May contain errors.
A theme of change, appropriate for the night. Publishing is “standing on the cusp of change: digitisation”. Barnsley “not the most digitally sound person” but “cares deeply about books.”
Jeff Bezos, Amazon, quoted on books vs. ebooks: before cars everyone rode horses, and “I’m sure people love their horses, too. But you’re not going to keep riding your horse to work just because you love your horse.”
Barnsley does not agree entirely with Bezos. “Is the printed book dead? I hope not.” However, there are clearly changing reading patterns among digital natives, and digital nomads in the upper reaches of publishing need to ask questions. Does business have to change? Yes. Not a time for hand-wringing. Industry needs to change and maintain its influence. Can’t assume print market will stay the same. Can’t predict future, so need to ask questions.
Late arrival of the publishing industry in the digital sphere might be an advantage. Radio took some time to be understood by its proponents – great images of FDR pointing at a map and the Basil Rathbone Players in elaborate costume for radio broadcasts (someone did a great job on Barnsley’s slides).
Look at where we’ve come from: Gutenberg, 1450. Slow progress since then. Only other radical change has been Allen Lane’s introduction of the paperback in 1935, opening up a new mass market. Thinks analogue/digital dichotomy is wrong (lecture prefaced by David Cameron’s accusation of Gordon Brown as being “an analogue politician in a digital age”). Books are pre-analogue. The death of the book has been predicted before, while publishers have turned advances in other media to their advantage. The book is resilient. It’s good technology: light, easy-to-read, no battery etc. Difficult to improve on.
Personal history: Barnsley founded 4th Estate in 1984. Still worked mostly with type- and manuscripts that came in the post. Publishing practice closer to William Collins and the 18th [19th?] Century than today.
2000 marked the beginning of a new age. DTP starting to have serious impact and Barnsley sold 4th Estate to HarperCollins and became CEO. HC launched PerfectBound, an ebook imprint aimed mostly at the Rocketbook device, which had just appeared and was selling for £100. The big questions were “Who was it for? Who’ll read on it?” Publishers got it wrong. Stephen King ebook-only edition of “Riding The Bullet” sold 400(0?) copies in 24 hours: then it was hacked and widely pirated. Publishers learned a lot in 48 hours.
Ebook fever. PWC predicted $5.4bn ebook market by 2004. Utterly wrong. Ebook market kept alve, just, by hardcore fans and reference. Devices largely to blame – just not good enough. Meanwhile, other industries in digital meltdown.
2001: the iPod. Huge impact, one of the key features being the emergence of iTunes as the core retailer.
There has already been a quiet revolution as publishers engage directly with their customers (direct sales, ECRM). Digital marketing has been the main thing – left sales to Amazon. Online accounts for 12% of HC’s sales. There hasn’t been an iPod moment for books – not yet.
The coming change is driven by two things: (1) E-ink, (2) Publishers and retailers investing in digital distribution infrastructure. The ebook reading experience is getting better, in the form of the Kindle, Iliad and Sony Reader. The iPhone is a strong contender, as are all next-generation smartphones.
Kindle has the huge advantage of its wireless connection. Barnsley sees this as enabling the one thing that’s really changed books in the last decade: impulse shopping, as seen in Tesco’s and Asda, and in bookstores’ 3 for 2 offers. That’s the future. Imagine watching Cranford on the TV, and immediately downloading the complete works of Elizabeth Gaskell – “instant bedtime reading”. This impulse buying is the most significant development in bookselling.
On Amazon, of the books which have both paper and Kindle editions available, Kindle sales account for 12% of the total. Extraordinary growth. Oprah endorsement means that ebooks will reach a new audience.
Ereaders are developing very quickly. Folding screens, colour, moving images, coming very soon. Barnsley predicts that Plastic Logic’s Reader will be next big thing.
Asking if ebooks are better than books is a bit like asking if a photo is better than an oil painting, or TV better than the movies. 40% of publishers believe ebook sales will overtake paper books. 30% believe this will never happen. Barnsely believes that ebooks are the future, but paper books still have value. The choice is down to the consumer, and its the publishers’ job to supply content in whatever form consumers want. Cites traditional bound books, paperbacks, ebooks, audiobooks, extracts – consumers will want all of these, and publishers need to repurpose their content to meet the demand.
Said she wouldn’t crystal-ball gaze, but prepared to make one prediction: downloads will overtake paper books within 10 years.
Benefits of this:
- No returns
- No books falling out of print
- No huge inventories of dead stock
- Granularisation (offering books piecemeal – very successful in STM)
- Copyright breaching / filesharing – thinks music industry’s attempts to stop it with DRM came too late, but has faith that technology will find a way to prevent it.
- Breakdown of territorial rights – impossible to police on the internet.
- Getting paid – what’s the pricing model? Google deal points to at least one way of money making its way back to publishers and authors.
- Conversion of categories. Sky is an example of a business that has converted its own categories, from a Network to a Content Provider to a Hardware manufacturer (Sky+ etc.). Publishers can’t convert, so must work with the other players to protect the value of their content.
- Disintermediation – cutting out the middle man. e.g. Madonna shifting emphasis to focus on touring revenue, Radiohead releasing their last album themselves – who needs a record label?
[Excellent slide that I can't repeat in full, showing how different players in the ebook supply chain derive their revenue from different parts of the value chain: content providers, platforms, networks and device manufacturers are all pulling in different directions. Price of content, which is publishers' slice of the pie, is being pushed down.]
The book industry is in better shape than the music industry, and publishing is a complex and skilled business. But what is publisher’s role in this new world? Publishers must adapt their model. Just producing ebooks is not enough. Interactivity and engagement are very important. The linear publishing model is becoming circular. The internet has socialised the previously personal and unengaged reading experience. Publishers will capitalise on this.
Socialisation of reading not for all, but is key for a new generation of digital natives. Publishers need to expand their model to take this into account. There are now two publishing models:
- Traditional: the value is in the content
- Social: the value add is around the book
HC is in the process of launching a number of new initiatives in this area, here’s a flavour:
The Golden Notebook. Partnered with if:book [and, I'll just add, Apt - more on this later] to create online, annotatable edition of Doris Lessing work. “Purely a marketing exercise” to introduce work to a new generation. Example of adding value by facilitating conversation.
Authonomy: recognising that readers are writers too. Using wisdom of crowds to select top 5 stories every month. Places HC at the centre of a hub of readers and writers. A new business model for publishers: created a community that has grown so quickly that the ad revenue alone justifies it. Coming soon: print-on-demand of Authonomy works direct from the site. Nice point about born-digital works producing physical editions.
Bookarmy: social book site. Uses “a very sophisticated algorithm” to generate book recommendations. Long list of features: reviews, forums, friending. Revenue is initially advertising “but soon print-on-demand and ecommerce”. Bookarmy is the future.
Rounding up, Barnsley disagrees with Bezos. Printed books will survive alongside ebooks as movies have survived alongside TV. The key to longterm success for the industry is in expanding its role and facilitating reader engagement. Publishers should be participating and engaging.
[The chair, LSE Director Howard Davies opens it up to questions, starting with his own.]
Q (Chair). A sony/BMG executive speaking at the LSE recently talked about different behaviors of different sectors of the market, e.g. Country music fans the most ‘ethical’ when it comes to paying for CDs and downloads. Does Barnsley see different types of readers?
A. Too early to say. Cory Doctorow believes that the web has its own morality, and everything should be put up for free and will find a balance. Barnsley thinks some segments will gravitate to ebooks faster. Everybody used to think that non-fiction would be the hot ticket for ebooks, but actually it’s volume readers, eg. Romance, reading 3-5 books per week.
Q (Nico Macdonald). Questioner is former DTP proponent, has worked with if:book also, read Heart of Darkness on an Apple Newton. (1) Experience as an author very bad, believes publishers don’t understand technology. (2) Publishing is actually several industries in one (STM, journals, etc.) (3) At HC, how do you understand your readers, and how do you understand innovation?
A. Re (2): the talk has been about trade publishing, not any of the other branches. Publiushers have huge assets in the form of their backlists, but the digitisation process is long and costly. HC has digitised 17,000 titles so far, but has barely scratched the surface. HC has a consumer insight department which “tries to be in touch” but “is not very formal”. “Employ young people!”
Q. Do you see different ways in which people read ebooks versus how they read paper books?
A. Too early. People (publishers) expect that reading will be done in smaller chunks, but Barnsley not sure that’s true. Example is Japan, where full-length novels are being read on mobile phones by a huge number of people.
Q. Has HC considered print-on-demand?
Yes – there are huge possibilities here. Will change things enormously. Customisation, long tail. But how profitable is the long tail? Long, but shallow. Downloading is far more profitable for publishers. POD really only worth it in niches where consumers willing to pay more.
Q. Will digitisation affect quality of published works?
A. Depends on whether editors are important or not – asks the audience what they think. Definite increase in self-publishing: in the US, 40% of all titles are self-published, but this needn’t degrade the quality of the work put out by traditional publishers.
Q (Audiobook publisher). Does Barnsley agree that agents don’t understand the new paradigm? They’re still trying to chop up rights to a work too narrowly.
A. Any agents here? (No.) This is a problem, but everyone is on a learning curve. One thing that will be important is owing all the rights to a work so that bundles are possible, e.g. audiobook and paper book together.
Q. Territoriality. Will ebooks and digitisation turn publishers into global players by default?
A. It’s one possible outcome. HC already global company, but Barnsley thinks there’ll be room for little, local publishers. Would be a shame to lose as Barnsley believes they produce some of the best content for small, niche markets.
Q. Thoughts on Lulu?
A. Similar to Authonomy. Self-publishing company, POD. Very successful. Difference (to Authonomy) is that HC considers the work that makes it to the top of the pile, giving writers the chance to be published by a “real” publishing company (said with a smile).
Q. Any difference between customers of paper books and ebooks? And are paper book customers subsidising all this ebook stuff?
A. Too early to judge how segmentation is occurring. General browsers are more likely to go for something free if it is available.
Q. Is there a conversation in publishing about piracy?
A. Yes, a very serious one. Mentions “cloudstreaming”, where no one actually possesses the book they’re reading, as possible solution HC is looking at. Says she doesn’t really understand the issues, and has techies to advise her. Believes technology will ultimately provide an answer, but it’s a big issue.
Q. Will publishers come up with a product that is of the network, not just distributed over it? Not just downloading books, but networked applications?
Q. With respect to Bookarmy, is Barnsley serious about encouraging other publishers to use it?
A. Very much so, yes. Wants other publishers to get involved, and believes it’s the only route to success. Uses Authonomy as an example: totally open, and other publishers can come along and read stuff there too. Publishers must stop seeing each other as competitors. Will have to think about partnerships and sharing information.
And there it ends. Please note again, these are my notes and may contain many errors. Should not be used as a source. – James