Sunday, May 30, 2010

The Changing Faces of the Publishing Industry


Following on the heels of last week’s “Book EXPO America (BEA) 2010” in New York City there are many publishing industry blogs, authors forums, and traditional media that are covering the trends of the book industry. It was interesting to attend the event and meet with so many people in the Publishing and Book Selling business.

I attended the convention with a team from New Year Publishing, including the publisher. We met with our book selling vendor, attended seminars, roamed the trade show floor, chatted with experts and even took in a Mets game with one of our authors.

The publishing and book selling industries are on the verge of a massive sea change. Much like the music and the newspaper/magazine industries, the changes ahead will leave the roadside littered with bodies. However, much like any business that is impacted by new technologies and changing customer trends, there is also a lot of opportunity for New Year Publishing (and other non-traditional publishers) who can embrace the new new things that are around the next corner.

The problem with the unknown is that it is unknown. While most agree that “Times, They Are A – Changin’”, nobody yet knows what will happen. We saw this in the music industry before Apple and iTunes took a dominant leadership position (some think Apple and the iPad will do the same thing for e-books that it did for electronic music).

What did I learn at Book EXPO? I learned a lot, but mostly it confirmed what we have believed at New Year Publishing since the beginning.... there are lots of ways to be successful with your book, and anyone who tells you their way is the ONLY way is just looking out for themselves!

Here are some things I learned, already knew, and observed:

*Too many publishers are concerned with their own needs and not the desires of the consumer (be that authors or book buyers). They are working to keep the old system in place, but we saw these changes happened in other industries, and the smart companies are getting ready to ride the wave of new trends.

*The consumer wants what he or she wants -- when he or she wants it in the medium they want it. Thus publishers cannot fight, or try to out-market, the move toward digital products. Even at lower prices, a publisher can make money..... and many consumers are not opposed to premium pricing for the products with demand.

*Consumers are part of a herd that can change direction at any time. While we are seeing the movement to Kindle and iPad, something else could pop up at any time and we best be looking for that too. Putting all the eggs in one basket in the publishing industry is to doom your future.


*People now have in a 7/24/365 mentality. The idea that they would hear about a book and then go to a bookstore a few days later to make their purchase is old school thinking. Everyone who sells anything is now competing for the attention of the same consumer, and if you do not close them on the purchase immediately they will be on to the next thing.

*1.5% of books sold last year were e-books. This year already up to 5% of all books in the early parts of 2010. The hockey stick sea-change is upon us. 2011 will have even higher numbers. This impacts not just sales, but the cost of producing books. This will effect prices.

*The misnomer is that e-books cost a lot less to produce than printed books. But the difference is only about $6.25 as you still have editing, layout, cover design, marketing, etc... that do not go away in e-formats. But currently the sales point for hard cover and e-books is a bigger delta. We need to move the prices up on e-books in the long run or the economics will not support the work.

*Meanwhile, digital sales are being driven by cheap price according to a study. I spoke with an employee at a Barnes & Noble who only buys digital books because they are less expensive. However, once a consumer starts using a ebook reader, they tend to go more and more in that direction. Some will still buy paper books for some reading, but some will NOT. 25% of e-book readers do not buy print any more. And once they start buying electronic books, they are more likely to buy their printed books online.

*Most first time e-books buyers are new to the format in the last 6 months. This is another trend that will not level off or go away. Digital books is a big growth segment.

*The publishing industry is about the author and the authors words. Authors must be compensated or they will abandon the traditional publishers and go with alternative options and non-traditional publishers (like New Year Publishing). More non-traditional options are popping up and authors are more interested in these options than ever before.

*A million ISBN numbers were issued last year. That is a big number which shows that the market is flooded with product and finding a way to stand out is harder than ever.

*Pressure is now on to find new ways to foster the "discovery" relationship. Book stores have always been key in discovery... people go in to a store to browse, touch and feel. They meet and talk with staff and other readers in book stores. Thus with fewer book stores, and declining numbers of books being bought this way... . how do authors and publishers enhance the discover process? This is the question that we look to solve.

*Publishers must be digital NOW to tie the books of today to the future of the book industry (even if they do not know what the future looks like). Just because the book industry and new books released today can live in the old model does not mean they can do this in a year or two. Those who are not looking for how to make the transition (authors and publishers) will be lost down the line.

*Authors are enamored with digital products, but are not sure where to start or what really works. Creating online communities, blogging, video, updated versions, etc... are all part of the answer, but not necessarily all of the parts that are necessary to find success and make money in the new world of books. Our goal all along at New Year Publishing has been to create a community of authors who can share best practices with each other. This is important to everyone.

*Publishers of the future will look very different from those of the past. They must rethink what is their core business. It is much more than printing and distributing books. Publishers and authors must see their success as a partnership or both will fail.

*E- books and other digital tools are here to stay.. Consumers want them, thus the debate about relevancy is past. It is now about finding the best ways to deliver content.

*Reaching new audiences is what many publishers over look. Digital customers are not always the same
people buying books, so this is not always a printed book vs. e-book discussion.

*Before the Kindle, book buyers (who now own a Kindle) bought 10 books a year. Those same people bought 31 books a year once they got a Kindle (printed and e-books combined).

*Enhanced products and updating products (free updates) are the wave of the future. But this is more than just adding random video.... Enhanced must provide real value to the consumer. Who will come up with the killer ap first? It is going to happen, and the smart publishers will be experimenting to get there first.

*Piracy is an issue that scares publishers. But we learned from music industry to make product available
how customers want the product (at the price they think is fair) and you can control piracy. You cannot let piracy scare you off... some publishers are cutting off their future by making this too high of a priority. There will always be some theft in digital products.

*Editorial and marketing are the most important services publishers offer. Good writers need good editors who challenge them. They also they need guidance to market their book and promote their image and brand. Here is where New Year Publishing has always tried to help our authors, and the creation of a community allows them all to share ideas regularly.

*Authors must be entrepreneurs from this day forward. Any author who does not see the promotion of their book as a long-term business will fail.

*Authors must look beyond the old way of selling books and partner with publishers (and others, including other authors) as a means to creating the buzz and the long-tail of sales. This means investing time, effort and their own money. Authors are now in business with their publishers. Thinking the publisher has magic powers to drive the success of their book will lead them to failure.

*Marketing is key. How you market gets you the power. If you have a platform, you will have sales. Creating interest and demand is not easy, but if the consumers want your product, how the changes to the industry shake out will not matter. If there is a market demand for your book, there will be sales.

*Coop advertising in book stores was how big publishers of yesterday kept their power. They got their books to the front of the store by paying for that placement. With traditional bookstores going away, publishers do not know how to market to the consumer. That is one reason some have their head in the sand and hope that change will not come. They do not know how else to drive demand for their books. Many keep throwing more money at coop ads and placement.... and yet more than half the books sold are not bought through traditional channels. They must find other ways to invest marketing dollars.

*What is the author’s platform? This is key question that publishers are now asking. Big publishers now want those already famous - those with established fame, giant Twitter followings, or other visibility are what most publishers are seeking today . They are using the famous as their answer to not knowing how to do anything else to promote books. This is bad for the publishing business as a whole as it makes it a tool for those already famous and provides no value to authors or readers in the mass of society.

New Year Publishing is working to become a marketing conduit, trainer, partner, and guide for authors who want to write a book as part of their overall business structure. With the continuing changes happening all around the publishing business, we choose to work with authors who are excited about not just having a book, but creating a series of products that can have a real impact on spreading their message. For more information, visit www.newyearpublishing.com.

Have A Great Day

thom

6 comments:

Terry said...

Good article on the hurdles facing authors and the publishing industry as they move into the “e” age. Readers have multiple options competing for their attention and these options are changing their reading habits.

Industries always encounter turbulence as they move from one era to the next. The “First Help Desk Service Call” is an example.
http://www.youtube.com/watch?v=0eIFoz-Tjf8

Cara said...

Very interesting post. I got an ipad recently and my book buying has already increased dramatically. Just yesterday I was remarking to Will about how wonderful it is to think about how I would like a book and then be able to have it in my hands within a minute. E-books are certainly here to stay.

It will be very difficult though to retrain people to pay higher prices than ebooks currently run though. The population has been trained to think that hardback = expensive, paperback = less expensive, and ebook should be even less than that. A demand based model may be successful in the long run, but it will be a difficult adjsutment for consumers.

That is part of the reason that the author needs to be more up-front-and-center. It is obviously vital for an author to market books so that he can sell more of them, but I also believe that an author who reaches out to and connects with his audience will have an audience that is more willing to pay higher prices for his books. By showing yourself as a real person, the consumer thinks more about the money going into your pocket rather than just a faceless publishing house. That is why people like Wil Wheaton are able to be successful publishing completely indepedently. His audience from his blog is connected to and a fan of him, not just his work. So when he comes out with a new product his fans (myself included) go buy it if at all possible not just to consume it, but to show apprecitation and support him as an artist. I like to call it the patron model of publishing (when the fans feel like they are the patrons of an artist by supporting his lifestyle).

Thanks for the unique insight from your trip. It will be interesting to see how the industry adapts and what new players become successful by doing it better.

Juli Monroe said...

Thom, I was very glad to see the statistic of 25% of e-book readers do not buy paper anymore. I am one of those 25%. Any chance you can give an attribution for that statistic?

Thom Singer said...

Juli... that stat was shared with me by a woman in the hallway after she had come from a session in an informal discussion of "what interesting things did you learn today". I did not get her name. I did not hear it from "the source", but there were many such numbers from a study by BISG that were shared in a couple of other break out sessions I attended.

On a non-scientific basis, I hear this from many of my friends who own Kindles that they only (or mostly) buy books for Kindle now that they own one.

Kristin said...

Thanks for posting this. I really appreciate how generous people are being by posting their notes from BEA. On the "a million served" ISBN point, that's the total individual numbers and not the total purchase transactions, right? I suspect many people buy ISBNs in bulk, because that can be more cost effective. My company bought a "pack" of ten and have used three, at the pace of one a year.

Thom Singer said...

Kristin-

Yes, i think you are correct. But there was a number tossed around that the number of books last year was around 300K (I cannot find the actual statistic). But even if it is 200K, still lots of books being published via lots of publishing channels.

thom