Tag Archives: technology

Why Are Publishers Happy About Missing Out on the Digital Revolution?

The chart you see above is from Gallup and Pew measuring the percentage of adults in the U.S. who have not read a single book in the year measured.

It was 8% in 1978 and has been hovering at 23-27% in recent years. This is not a trend one associates with a growth industry. Meanwhile, I see newspaper editors, authors, and book publishers celebrating the death of the ebook without looking at this long-term trend of reading decline.  Are they dancing on their own graves?

It seems likely that print book reading has been in decline since around the time the Internet came on the scene because of new entertainment choices.  We know from many studies that people are spending more and more time engaged with content provided on a networked screen: Netflix, Amazon Prime, Facebook, Instagram, streaming sports, and so on.

Yet in the traditional book publishing industry, the collective decision was made to raise ebook prices to about what paperbacks sell for to save the old industry. And in the process kill the only networked screen innovation the book industry could participate in, the digital book for Smartphone and tablet reading. Vested interests across the supply chain published stories about the inferiority of reading books on a screen. How people remember less when reading digitally. An active campaign was undertaken to ward off innovation by The Establishment. (Them again!)

The inclination in the face of change is to duck one’s head in the sand and hope you can make it though the storm.  Maybe YOU can make it, but what about future generations who want a viable book industry? This is analogous to the old wooden ship builders deciding not to enter the iron age. Or the suits at Kodak who smugly looked at industry-funded Photo Marketing Association research, ignoring what was happening in the larger world. Just as with AAP research, the photo industry research ignored the emerging players and their market growth quietly occurring outside the normal competitive landscape.  Do you remember when supermarkets sold food but didn’t make it available to eat in the store? Someone smart decided competition was happening all around them at restaurants so along came Whole Foods, where people now eat right next to where others pay.  Brilliant!

We know from looking at traditional publishing financial results that publishers gave up easy profits when they chose to ignore the future of the ebook and hide in the print past. The only way the old business models have survived is through continued consolidation, which means pumping through more titles in lower volumes to fewer readers to just about stay even. For now. When the next recession comes, that will change again. Those higher number of titles coming from fewer traditional publishers with less staff  has to translate into a poorer experience for authors as a byproduct.

Crossing the chasm from the old, which provides most of the current income, to the new is nearly impossible. This is why competition almost always comes from the outside, from new players who have no investment in the old ways so are free to seize opportunities while the old plays a difficult balancing game. I experienced this firsthand when the 35mm photo industry had huge investments in obsolescent technology and equipment, while needing to  also invest in the digital new, the sum being a very expensive, unsustainable business model, which was too much weight for the likes of Sony, Konica, Kodak, and Polaroid.

The publishing industry seems to have throttled back the digital new more than was needed. No one I speak with in the book industry can answer the important question: “How many sales did you lose when you raised your ebook prices to the same as paperback?”  If you apply the strategic thinking of dividing customers into clusters of Most Engaged, Somewhat Engaged, and Not Engaged, I would expect many in the Somewhat Engaged group bought fewer books once ebook prices went up to the current high (I would say absurd) levels.  Yes, the Most Engaged are stepping up as they always will in continuing to support the old print business and indie booksellers, but can publishers survive well into the digital future in a highly competitive screen-based entertainment marketplace with just the Most Engaged?  I doubt it.

A possible better way to straddle the change would be to launch the hardcover edition that all publishers currently offer for those Most Engaged customers, and hold off on both the ebook and paperback editions until a year later when released simultaneously.  Price the ebook at $9.95 intended for the Somewhat Engaged shoppers. The $16-$20 paperback sales should not be hurt much by this change, as those who prefer to read in paperback will pay $10 more. And the net margins should be higher, without returns and printing costs. Bookstore sales should stay flat, especially when Barnes & Noble is out of the mix. The smart indie booksellers can do well in this overall environment that allows publishers to play a new game, as well as an old one.

I hear authors and industry insiders blaming Amazon for lowering book prices and reducing everyone’s profits as a result. (Same thing they said about Barnes & Noble back in 1986.) They claim this is now (ironically) why Barnes & Noble is on the ropes. I disagree. Barnes & Noble is on the ropes because they are caught in the middle, too large to compete with indie bookstores and too small to compete with Amazon. The core issue is not Amazon and lower book prices, but an overall shrinking market for book reading. That is the challenge people should be focusing on, not whining about how the shrinking pie is being affected by unfair competition. Ebooks were that path forward, as a new competition for other forms of digital entertainment, but pricing ebooks at $14.95 will never attract those less engaged potential book buyers. Duck and cover is not a winnable long-term strategy. You can’t go home again. You can be progressive or regressive.

It’s the same old question: do you see digital as a threat or an opportunity? It is in fact both, so don’t forget about the opportunities.

Missing out on the digital revolution is not an option for book publishers who want to operate well into the future. Actively promoting and celebrating the decline of the one new good thing that has come along to make the industry competitive with all other entertainment options, strikes me as self-defeating strategy.

New Ways for Authors

(This first appeared on Book Business, under a different title.)

One of the most fascinating aspects of new technologies is how they open doors for new business models. And this is very true in the evolving world of book publishing.

The book publishing model has many challenges, most notably how the established system of author advances, large superstore pre-orders, and returns limits what will be published. Consolidation has made it more difficult to gamble on new authors, so a significant portion of publishing has become about pumping out more of the same from the well-known writers with celebrity status.

Let’s face it. The best authors throughout history were not celebrity personality types! Writers and readers tend to be people eager for the contemplative life. I have been cringing while reading recent audience-driven articles about producing shorter works to feed increasingly distracted tastes. Great works have not been created to feed reader tastes. They have been written because the author had something important to add to our understanding of human existence.

I’m basically an optimistic pessimist, which means when all hope seems lost, mankind rises to the occasion with something better. And for many authors, publishers, and readers, I think print-on-demand is that meaningful, lasting innovation (along with ebooks).

I recently had an email from a reader who bought a Publerati novel through the Espresso POD network and the feedback was revealing to me. “I was surprised how high-quality the book is. I thought it would be a comb-bound pamphlet.” Wow! This reminded me of when digital photo first came on the scene and was just assumed to be inferior. (Side note: I am fascinated by the twenty-somethings I meet who are reviving vinyl records. They will pay more for what they perceive to be better quality. Innovations always confront a nostalgic backlash, I suppose. Or said another way, it’s cool to be retro and “not popular.”)

So maybe we need to overcome some consumer concerns around the quality of print-on-demand editions. That will take a more concerted industry campaign. The first thing I did was make a new page on the Publerati website with a quality statement along with a list of locations offering our titles. You can see it here and I welcome comments on how to make this better.

But the big opportunity of POD is to save the many excellent writers whose books will never sell in the huge quantities that the consolidated publishing industry needs. And in the POD model, these authors don’t necessarily require an advance. Why should they? Let’s get paid for what we produce, not what we have the potential to produce. Publishers have been burned time and time again with that hyped second novel that was a dud.

By only printing what each local market will support, we have a more responsible and sustainable business model. There is no need to prematurely mark an author’s book out-of-print to stem unexpectedly high returns. Now, the author’s book can be available for as long as the publisher wants and for as long as the reader wants. Isn’t that a much better system? Is that not a benefit publishers can offer mid-list and potential breakout authors?

When I see HarperCollins providing front list titles through the Espresso Book Network, I know change is underway. Change is always underway, but we can only see it after it has happened. The benefits to those on the front-edge of change are disproportionately high. Customers remember “who did it first” and their loyalty can be an immense barrier to entry from imitators slow to the new game.

POD publishing is already opening many new doors. What we cannot see from here is how fast this change will occur and who the early winners will be. I’m hoping many of these winners will be authors who can take more control of their publishing destiny. Enjoy the ride!