At BEA last June, I unveiled a formulation I am going to reprise for you today, which is that General Trade Publishing Houses don’t “map” into the world we’re going to see develop in the 21st century.
We’re going to start with a view of what digital technology could mean to the overall world of communication over the next decade or two. What the history of the Internet seems to be telling us so far is that we will see a growth in niche organization — what people like to call “community” on the web — and a corresponding decline in horizontal media, which is much more threatening to magazines, newspapers, and broadcast than it is to us in the book business. But it will change us too.
I want to make the case to you today that the world is going to change in ways that are becoming increasingly clear. Media entities in the 20th century — particularly consumer media — were characterized by being horizontal in reach and format-specific. What’s horizontal? Random House. The New York Times. CBS. All three entities deliver content that satisfies the consumer across lines of interest. And all three have pretty much stuck to their formats with very limited exceptions.
The 21st century will see media entities which are the opposite: highly vertical in what they explore but format-agnostic in how they deliver information. If that’s true, and I hope by the end of today’s session I’ll have proved it to you, then general trade publishers don’t map into this future.
Because this is an emotional subject for those of us in the business, I want to enumerate a few things at the outset that I am not saying when I say General Trade Publishing Houses will decline.
I am not predicting the end of bookstores. There may be fewer of them, but they’ll still be here in a couple of decades.
I am not predicting that everybody will read on screens. You probably know that I’m a fan of the Kindle and perhaps you know that I’ve been an avid ebook reader on a Palm for almost 10 years. But I’ve learned that other people’s attachment to paper is greater than mine. And anyway, it would be a good thing for general trade publishers if there were more screen takeup; it would mean keeping the readers for their content and not necessarily any loss in margin.
I am not predicting that novels will be replaced by completely different forms, although I don? think any of us know how today? youth will feel about reading 100,000 words in a single work 20 years from now. To the extent that games and interactive pursuits increase, it probably comes more from disposable time not now spent reading. And while it is totally logical to assume that the text-messaging generation has less patience for a long form, we don? know that. Maybe in an attention-deficited world such as we are creating, the opportunity to escape into a long book will be even more welcomed. It doesn? change my view about general trade houses whichever way that comes out.
There? not a lot of mystery about what? happening right now. Every day a new device comes out that allows people to make more use of the Internet. The Kindle is just the latest, alongside the refrigerator that sends you an email when it sees you need more milk. The content just keeps piling up and the ways to access it only get more numerous.
At the same time, there are more and more tools for crowd-organizing of the content. Any of us can tag it, link it, edit it, or tout it. Wikipedia is the ultimate in ?verybody? a writer; everybody? an editor? but it is not alone. And you don? have to stop at being an author or editor; you can be a publisher, an aggregator, a reviewer. Anybody can play any role at any time.
In fact, the delivery of these capabilities puts us in a transitional period. The readers, the retailers, and the content forms are all adapting to these new realities. Right now, the tools are about finding, organizing, and annotating information. As the mass of information that has been reviewed and tagged by the various communities grows, we?l get to an entirely new place where we are making new products and learning in new ways because all that work was done. That? a few years off yet.
Here? a very important fact to take on board that I learned at the Google Unbound conference in New York just about a year ago. Experts forecast that the iPod of 2020 will be able to hold every book ever written, every movie or TV show ever produced, and every piece of recorded music that exists. That? what you? be able to have in the palm of your hand without connectivity to the net in a dozen years. That? what a book, which would actually be a bit bigger and heavier, will have to compete with.
The tools of today will, by then, have enabled the formation of communities of the interested for any imaginable subject. Think of Wikipedia entries as the top of the file. Add to the entry all of the interaction — conversation, teaching, participating in any way — mixed in with all of the content on the subject, largely tagged and rated by the community.
Every possible human obsession will be covered. In depth. And this deep choice across all subjects will take place alongside an erosion of what we have called ?ass media? Mass media are challenged by the great depth in the niches, but also because the mass media models — all horizontal and format-specific and, aside from books, most advertising driven — will have their own difficulties to overcome.
And an important additional effect here is that brand credibility becomes much more granular. When you can get your Washington news from one specialist and your financial news from another, those brands will matter more than ?he New York Times. There may be still be a horizontal aggregation for you to start your day with, but it will more likely be your uniquely-crafted one, not one chosen for you the way it is today.
So when we get to the point where this unfathomable amount of content of all kinds is organized according to community divisions and tagged and annotated by community “crowds”, the respected subject expertise will be within the community as well. The power of brands will move to “niche”. And the communities that have organized around citrus farming or baseball history or hip-hop will have respected members — that is: brands — that will attempt to extend their reach by generating information and products across all media. After all, a digital download doesn’t care if it is text, sound, pictures, animation, or a game.
What will secure the position of these niche brands will be the extent to which they really do satisfy communities, and that will be measured by how successfully they get user-generated content and user-generated tagging and organization. They will ward off threats by providing as much “completeness” as possible within the niche. We have an example of this evolving in our own industry. Publishers Marketplace is vying with legacy entities like Publishers Weekly and Bowker and Neilsen to be the central gathering point for our community in book publishing. Publishers Marketplace is an upstart, challenging long-established niche entities. Why? Because Publishers Marketplace has generated databases of information from the community that are critical to doing business. Once they became the aggregator of deal information volunteered by agents and editors, it became difficult even for established organizations to challenge them, and both Publishers Weekly and Neilsen tried.
Another thing that is very hard to imagine is how taxonomies will work. How will a community of interest in, say, “military uniforms” aggregate across other communities: those interested in a particular war, a particular country’s military, the fashion of various times, the history of fabric or clothing? How will the farming and gardening communities, which obviously have very different interests, pool relevant information about pest control?
The answers will develop in an evolutionary way. Individuals and entities, acting as interested volunteers or as entrepreneurs, will cull, tag, and edit. Some aggregations will catch on in a big way and others won’t. Whether crochet is a sub-set of knitting or is its own community alongside of knitting will be determined over time by the people who know about these things and do them.
None of this has to mean the end of books. Of course, we’ll always have them, or at least we will well beyond the lifetime of anybody living today. For one thing, even if we stopped making books tomorrow, we’d have the many millions of them that already exist around for hundreds of years. But print-on-demand technology assures that books will continue to be made even if society shifted so radically that the industry that we have now were no longer possible. POD assures that anybody who wants one can have material presented to them in a book, even if everybody else is getting the same content in a file for a screen. Or for a brain implant.
Nonetheless, book people are wise to consider the facts about other format-specific media.
The “album” — or the concept of selling music in blocks of 10 or 15 songs, usually by the same artist — is nearly dead.
Television networks, which shared 95% of the vieweing audience among three leading players forty years ago, now shares far fewer than half the viewers among five or six players. The concept of the mass TV audience is nearly gone, except for shows like the Super Bowl or the Academy Awards.
Newspapers are the most obviously desperate of the 20th century media. Their classified advertising is a fraction of what it was 10 years ago and, as rapidly as they are moving their audiences to net versions of their content, they are finding that the revenue on the net isn’t sufficient to replace what they’re losing in print.
The movie business is being transformed by changed delivery. As the number of 50 inch high def screens in people’s living rooms go up, the attendance in movie theaters almost certainly will go down even further. And that weakens the advantage of the big players who can do the biggest budget, most mass market kind of movies.
Disruptive technologies have gotten almost common. The iPod and YouTube have shown that things can change overnight. We didn’t have either of them at the turn of the current century.
I saw an article last year in Advertising Age called “Change 2.0” by Robert Garfield. In it, he posits that mass advertising — what fuels TV and newspapers and magazines — is a dead man walking. Garfield foresees a massive shift to Internet advertising, which, by its nature, is much more targeted. Although more recent punditry from others is anticipating that the growth of new Internet businesses dependent on advertising has been so great that the shift won’t be rapid enough to avoid a new dotcom crash this year, there is still no good news for legacy media in this, because it suggests a surplus of Internet ad opportunities, which will drive down prices and accelerate the flight from old media.
In fact, Garfield, writing a year ago, thought there wouldn’t be enough page views to absorb all the demand that advertisers would want to shift over from mass media.
In fact, mass media has always depended on very high production values to attract and please the enormous audiences the advertisers require. Reductions in revenue threaten a downward spiral for the whole proposition. This is evident among many media. Newspapers are shrinking their newsrooms and the newspapers themselves. Network TV can’t afford to do many original comedies and dramas anymore; they’re too expensive compared to “reality” programming.
Now, of course, it is possible that the forces that have levelled newspapers, challenged magazines, shrunk TV, changed the economics of radio, and generated a constant increase in screen-reading by the public worldwide, won’t have much impact on the book business. But how foolhardy would it be to count on that?
If we accept as a given that the change in media consumption habits and the arrival of community organization must change the landscape for all media, we want to try to predict what that change looks like to book publishers. To do that, we need to think about what we know about the world of the future and look at how that “maps” against what we know about book publishing.
As we’ve seen, the world of the future will make a vast amount of content on every subject available to everybody through various devices that can be held in your hand. The day will come when almost all this legacy content will have been sorted through, evaluated, aggregated, and tagged by the community of the interested. Internet 2.0 (let alone 3.0) makes it easy for the communities to do all these things and organize themselves along whatever lines make sense to the members of the community themselves. And, while all this is happening, the mass media is getting less and less attractive.
So expecting a world where the most powerful media has its roots in niches and is highly dependent on a community of users to generate content, aggregation, and value, is consistent with the direction we have seen things moving for the entire Net era of more than a decade. And you could say it is longer than that if you date it to the proliferation of Cable TV channels more than two decades ago, which is really where the niching of consumer content first became evident.
Let’s de-construct what book publishing is all about so we can look with some specificity at how what we’re doing now is likely to work in a changed world.
A book publisher has always been a sentient member of a community. No publisher, and especially no editor, will publish a book on any subject. They need to know what a community of readers wants to read or have collected or archived for them in book form.
They need to know who can write it and who will be accepted by the potential market of readers as a trustworthy source on the subject.
They need to know how to manage the process of editorial development and then the conversion of the raw intellectual property into a deliverable form, which, for us in the 20th century, has meant a printable form.
Of course, the key to success for the book publisher is its skill at reaching the potential audience with the work, which are the functions of marketing and sales.
And the most effective and forward-thinking book publishers also see themselves as organizations “in service to” authors.
Since we’re most concerned here — in this speech and in this room — with general trade publishers, let’s consider how those publishers particularly stack up against these functions.
The subject-specific discipline of a trade publisher is the most relaxed of all book publishers. Academic, professional, and educational publishers all have market-imposed boundaries around what might work for them that are much more rigorous than for trade. Generally speaking, if a bookstore or public library would stock it, a general trade publisher would feel they could do it.
The primary author recruitment tool for trade publishers is literary agents. Whereas a math editor in a professional house or college publisher would likely find their authors by networking at conclaves of mathematicians, trade publishers have authors they may not even know of presented to them by agents whom they do business with regularly.
In fact, this kind of leverage is characteristic of trade publishing. Agents consolidate the huge author base into fewer points of contact. The marketing and sales efforts have similar leverage. Promotion has, historically, depended heavily on book review pages in daily newspapers or, in recently bygone days, promotional appearances on local radio and TV talk shows. Note that these channels are very 20th century: they are “horizontal.” They can handle a biography today, a novel tomorrow, and a memoir the day after. So can the primary sales channel publishers have depended on for about 100 years: the general trade bookstore. All of these have given the trade publisher ways to touch many customers through relatively efficient mechanisms. It has allowed their publicity departments and sales organizations to focus their efforts without it being necessary for the house to focus its list.
In fact, “vertical” thinking in general trade publishing houses has been pretty much confined to the special sales department. I don’t know how Random House functions at a fine level of detail, but if I’m right that your pubicists and marketers would find it hard to work across imprints on behalf of all your knitting books or all your business books at the same time, then your special sales department may be the only in-house entity which is thinking about your total content opportunities in the ways that will be increasingly important in the years to come.
So the general trade publisher lives in a community, but it is not a subject niche community. It’s a community of trading partners, not of individuals chosen by specific topic interests. It gives the general trade publisher critical leverage to compete in the horizontal format-specific world it has developed in.
The publisher reaches great masses of readers, but reaches them for marketing largely through mass media and reaches them for sales through bookstores and, increasingly, other retailers. The publisher doesn’t “know” these customers in any personal way, nor do they know the publisher.
The publisher keeps in touch with a very large writer community through aggregators known as “agents”. The publisher gets to know the writers it publishes, but it typically doesn’t find and develop them itself. The agents provide that service.
The publisher creates, produces, and delivers physical goods, leveraging both capital and expertise. Both the capital- and expertise-requirements have served as effective barriers to entry to competition. So has the capital-intensive physical distribution system, which is why smaller publishers have gone to larger ones or distributors to handle that challenge for them.
And that leads us to consider the value of publishing brands. The payoff to a “brand” is that it is a shortcut by which the customer knows something about the offer before the offer is even made. The brand conjures up an expectation, based on the customer’s understanding, and the most successful brands are trusted to deliver a consistent experience.
The way general trade publishing has always worked, the brand was really a B2B tool. All those intermediaries: agents, the book press, and the trade customers, understand very well that Random House isn’t Sourcebooks and that Abrams isn’t Workman. They would interpret a book’s title and format and price in the context of the meaning of the house’s brand.
But to the consumer, these brands are mostly meaningless. Of course, the author isn’t; that’s a brand consumers really understand. And they understand certain series — like “Dummies”, say. But the value of house brands and imprint brands is really lost on them, as valuable as they may have been for the intermediaries that get publishers to the consumers.
We have seen that the Web world confers enormous power to brands like Amazon and Google, among many others. This is something publishers need to take on board. The branding that was the key to success in the 20th century may be almost meaningless in a few short years. Publishers should be thinking about how to rebrand their businesses, into niches of course, while they still have the power to do so.
OK, back to a description of our future world, the one we’ll see in 2020 when the iPod puts the whole history of IP creation in your hand, subject to rights availability, of course.
Every subject worth considering — probably not as numerous as Wikipedia entries but on a highly granular level — will have its community: largely self-organized and with brands that are local to the community. And the brands and community will really know each other.
The readers that publishers will be looking for mostly exist within the community. And the writers will also, and they already know the brands because they’re all in the community.
Because technology has simplified making books and because POD and ebooks have very much lightened the capital requirements, those advantages for today’s publishers will be gone. And since the web community is where the readers will be, it is members of that community who will be able to reach them. Since much of this activity will be in the form of digital downloads, whether the file has material to be read, listened to, looked at, or watched — or some combination of the four — won’t make a lot of difference to the “publisher.”
Within the market niche, the brands will have the capability to reach the audience very inexpensively. Only in those cases where the content needs to reach many niches will more widespread distribution, such as what trade publishers know how to do, be of great value.
I’d consider what we’ve covered on the previous slide to be pretty certain. But there are some crucial questions that are much harder to answer.
First of all, how confident can we be that today’s youngsters will want physical books ten years or more from now. Author Cory Doctorow, who is a seminal thinker about these digital matters, notes that many people are “pervy for paper.” I love the term and see what he’s talking about all around me. But will we see it all around us ten or twenty years from now?
The second challenge that is critical for publishers to consider is whether a proliferation of print-on-demand capabilities will change the game. Today’s publishing economy is built on pre-printed books distributed through brick and mortar stores. Other things happen, but that’s the backbone of the business. Quite aside from the growth of online bookselling at the expense of brick and mortar, will pre-printed books lose market share to printed on demand ones? If not now, when POD is mostly a centralized game, how about when every Kinko’s does books? How about if the day comes when a print-and-bind machine can be in an office or home?
Third, we must wonder whether today’s youth — growing up with texting and blogging and all sorts of bursts of communication — will have the patience for or interest in long-form reading.
And last, how pronounced will be the shift away from mass, or cross-niche, markets? Will it be sudden and apocalyptic, which seemed possible to a reader of Chaos 2.0? If Oprah and The New York Times can’t garner mass markets anymore, and Garfield posits that they won’t, how will mass audiences be gathered? It is not a trivial question.
Nobody knows these answers, but we’ll all have to guess. Here are mine.
Although the book is a fabulous form — I loved Michael Cader’s recent formulation that it “comes with” its own “reader” — it isn’t the best for everything. It is easier to Google “define this word” than it is to pull a dictionary off a shelf and look it up. There is nobody in this room — or any other room — who isn’t using the net today for things they would have used a book for 10 or 15 years ago. And we’re talking about what will have happened by 10 or 15 years from now. We really have to expect continued erosion.
A big illustrated book provides an experience that isn’t yet replicable digitally, though screen technology keeps improving and that will continue to change. For a while, at least, we’ll certainly need those books.
And physical books are sometimes needed for their value as a “token”, like a birthday card. That won’t change. But in the digital future, aren’t you more likely to want to give a uniquely-created customized book than a mass-produced one, as a personal token? I’d think so.
There will ultimately be room for a middle-function here: somebody who assembles that personalized gift book for you: promising you it is unique and probably letting you tweak the concept yourself for an additional fee.
The Amazon Kindle, Sony Reader, and digital readers of many stripes to come, also threaten the pre-printed book model. The sales base for brick and mortar will keep shrinking. Some consumers will go to ebooks. Some will go to online shopping. And some will go for personalized compilations they create themselves and order printed-on-demand. But in the next 10 or 15 years, we’ll still have a large base of 20th century people — like all of us in this room — who might still prefer to read ink on paper. And who are still getting their information about books from horizontal media. And who still like the feeling of being in a large enclosed space jammed with books.
So while there is bound to be great consolidation among bookstores, there will still be a demand for them over the next 10 or 15 years. But the financial pressure and the infrastructure demands of dealing with print-on-demand, used books, and customization, will probably mean they’ll all be part of one large chain.
I keep asking parents the question about kids reading long form and I can’t get a consensus on an answer. Some parents — even of little 21st century toddlers — think their kids just love books and will want them forever. Some say the opposite. But what we know is that one? heavy book-buying days are later in life. My cohort — the baby boomers — is headed into peak book-buying age now. That should carry the industry for some time while we wait to find out whether the kids will read novels.
My hunch is that they will, but at a reduced level compared to us. Aside from the conditioning they?e getting being so different than ours, so is the competition. We never had the choice of watching a movie or reading a book while we waited for a plane. They do.
But whatever we?e reading ten or fifteen years from now, I don? think we will cluster around big titles as frequently as we do now. Mass audiences depend on mass media. It is hard to see how we can all gather around something unless we all hear about it and, if we?e not ?istening to the same sources, that becomes much less likely.
What should today? general trade publisher do to meet the challenges of the digital future. Assuming that the picture we’re painting is right, the imperatives become pretty clear. We’ll go into each of these in some detail.
First, General Trade Publishers must begin to see themselves as “Multi-niche Trade Publishers.”
And, in what will be a byproduct of the same sort of thinking, publishers need to see what they’re doing in aggregates, not just book-by-book.
There is also a big opportunity to move from what we’d call “expensed marketing” to what can be termed “investment marketing.”
When the publisher’s content and market identity becomes defined by the communities they are in, rather than the book format, many things become possible.
And when the publisher becomes “audience-centric” rather than “product-centric” the shift to a sustainable 21st century model becomes complete.
Book publishers today — indeed, along with the whole world of information in which publishing exists — are very much in a transitional stage. There are a host of changes taking place now that are necessary prerequisites to the digital future and even the most forward-thinking publishers will find it hard to move the needle on change alone.
First of all, XML-tagged content, which is just beginning to be implemented by trade publishers, enables a lot of change, and the lack of it makes some incremental opportunities marginally too expensive to initiate. When you have it, doing large-print or recombinant books, for example, become easy and practically free.
I hasten to add here that we’re only in the first stage of XML: tagging books to enable simpler production and rights clearance. Tagging for editorial value, so that you can find all the material for a Halloween book or aggregate the content you have on American presidential elections, is much more difficult. We’re going to have to get there, but I don’t think any general trade publishers have even started on that task yet.
SharedBook is the first easily commercializable application for online book assembly. We’ll be living in a different world when many publishers have harnessed this capability within their own lists and we can start looking across publishers’ content with this application.
In the general trade world, the first communities to be recognized have been horizontal ones: Facebook and MySpace and even LibraryThing are no more niched than AOL. In fact, they’re pretty similar conceptually: AOL was Internet 1.0 for Dummies and these new sites are Internet 2.0 for Dummies. But they’re already niching themselves; LibraryThing is one of a number of book sites that are inviting the community to help with the niching. As Wikipedia has demonstrated, give the crowd some time and they can do a massive job of content-organizing. The crowds are also organizing the communities.
And the ebook world is showing some signs of coming to life too. It will be a very different environment if the ebook readership gets to 10 to 15 percent of the total. How long will that take? I don’t know, but I believe we’ll get there within the 10 or 15 year time frame being contemplated today.
If you imagine these changes in place, along with the handheld device that holds the entire history of content, you’re in the right frame of mind to imagine the land grab we’re going to see take place, subject by subject.. We’ve observed earlier that, because of network effects, the Internet favors one or two “winners” for any category. We believe that will be true of each niche. If that’s true, the contest for media primacy in the middle of the 21st century is being fought, niche-by-niche, starting right now.
Of course, book publishers will not be competing in these niches alone. Everybody will be there: specialist magazines, newspapers, product and service companies, and content-originating web sites. But book publishers have some very important advantages over all these looming competitors.
Publishers own content. Newspapers often do too, but magazines often don’t own much.
Publishers have a unique commercial relationship with authors: a royalty relationship. We will see why that is an enormous advantage over the staff or work-for-hire arrangements in other media.
Publishers, through the many books they publish, can also distribute URLs to drive niche customers to niche websites.
Book publishers have products to sell to their internet community. Their competitors usually don’t.
Book publishers understand niches; they have a “taxonomic” feel. They understand the subsets that make up many markets.
And publishers have long been spotters of trends. Historically, they have been forced to “lead the target” with that capability, seeing what markets will be there for books that will come out 12 or 18 months after they’re signed. In the Internet world, that capability can be leveraged more effectively.
So now that we’ve ticked off the objectives and the tools, here are what I hope are practical suggestions about how to think about them and create a plan for migrating from the spectacularly successful format-specific subject-agnostic publisher Random House has been to one that will meet the challenges of a niche-specific and content-agnostic entity that will characterize the successful media company over the next two decades.
Moving from “horizontal” to “vertical”, or niche, is a process. But it must begin by visualizing, and then organizing, your company around the market niches you occupy already, but don’t think of that way. Thomas Nelson’s announcement last spring that they were eliminating imprints and reorganizing around BISAC codes sounds like a logical way to begin.
But it isn’t the only way to begin. You might look at how your special sales department organizes your lists as another way. But since the ultimate objective is to make your publishing activity map to the way the world is organizing itself online, probably the best way is to map the content you control to the way the internet is in some way. Since the premise is that web communities will drive publishing activity in the future, the sooner you think about both at the same time, the easier the transition will be.
When you do map what you publish against human activity on the Web, you’ll see your books either as living in clusters or as outliers. You’ll naturally start applying the concept of “critical mass”, which you’ve always used in other contexts, to the communities you’ll want to be important to on the Web.
This will be an iterative process. Houses like O’Reilly, Wiley, and McGraw-Hill have a natural advantage in this kind of exercise; they focused their program by subject matter long before the Web. They were already vertical. As you and the other big horizontal houses take the need to “verticalize” seriously, you’ll discover places you’re deep and places you’re shallow. And where you’re shallow, you’ll have to decide whether you want go deeper or get out. You’ll see that choice pretty quickly; you’ll know you can’t stay shallow, particularly as you start cultivating the advantages of being deep.
Once you have a niche-logical framework through which to view your content, you need to USE it. Think in terms of it. In the new world, strength in a subject area adds marketing clout to every book and cuts marketing cost for every book. Ask the publishers who do it that way.
Next, you need to employ the techniques you use today to manage imprints to manage niches. Look at your revenues and costs that way. Organize your marketing efforts around the niche, with the title-by-title aspect being a “layer.”
You’ll naturally start to see potential alliances with other stakeholders in the various communities. The chances are your special sales department is already developing opportunities like this. But if you have an overall niche-recognition strategy in the company, and fewer barriers created by imprint silos, the opportunities will come thicker and faster. And alliances with non-publishers is likely to be one of the revenue growth areas in the new media economy.
You’ll be doing two things for your marketing at the same time when you think about your content in aggregates for niches rather than book-by-book. First of all, you’ll be trading the “here today, gone today” aspect of most marketing done now with a series of more permanent marketing assets. And the second is that you’ll be building a replacement infrastructure, which you’re going to need as the old horizontal ones — the talk shows and book review pages you’ve relied on for years — continue to disappear.
When your focus is on using your content — frontlist and backlist — to continually build your presence in a niche community, you build relationships that will help you over and over again.
Activities you already undertake now, like acquiring email names or developing relationships with web sites and bloggers will become much more powerful within a niche context. You need to tally those email names and those web addresses and recognize them as the assets they are. As you use them, you will unlock the value of nearly-free marketing being built on the back of previous efforts.
You want to keep track of how many emails you get people to open, whether it was “selling” them something or not. You want to keep track of whether you get them to click through to you for any reason, whether you’re making a sale in the process or not.
One of my predictions in PW two weeks ago was that publishers will start acquiring web sites in 2008. Recognizing which ones are important marketing partners for clusters of your content is a good way to start prospecting. And, by the way, think about the possibility that the web site you don’t acquire might end up in the hands of a competitor.
All of this activity takes you in the direction of being a community leader. You take a subject, any subject, and start to use your tools to the benefit of a community. Give chunks of useful content to relevant web sites.
Some of those will be retailers or service-providers who can use your content to the benefit of their site visitors. Anybody but a book publisher trying to create a web presence finds content creation to be the biggest challenge. They don’t have it, and they’re not experts at creating it. Or contracting for it.
This is old news to a niche publisher already living in a 21st century paradigm. General trade publishers are thrown off the track by the book-by-book nature of their business. Seeing your content in aggregate — all the material you have on knitting, say, across imprints and including both juvenile and adult — will give you material to sell or barter across manufacturers, retailers, and blogs and personal-interest web pages that cumulatively have your core audience.
I touched earlier on the danger that you’d see a competitive book publisher acquire sites that are important to you. Actually, if I were advising one that did, I’d tell them that shutting you out would be a bad strategy. If you’re operating in the interests of a community, you don’t block content that they would want to have access to. On the other hand, the site owner collects the best benefits, the rest usually pay tolls.
As you interact with more and more sites and bloggers, new opportunities will open up: for customized books, for user-generated content, for useful databases you can construct that will drive more traffic or even give you something for a book.
In the niche-centric world of 15 years from now, the community itself, not content, will probably be the primary instrument of monetization. Having the attention of groups of people with similar interests is always monetizable. There are many lessons about the future to be drawn from Michael Cader’s PublishersLunch and PublishersMarketplace businesses, but a critical one is that you must focus first on creating a community, and then on monetizing it.
This is one of the hardest parts about the transition for a commercial publisher. The instinct — trained into all your marketers — is that the point is to sell books! But that can’t be the central focus if you’re going to build communities. The central focus must be to understand and satisfy the community’s needs, which could lead to publishing something you learned was needed, but it won’t work if all your outreach is about selling what you’re publishing anyway.
Of course, it makes you very popular with a community if you publish what the community creates. Figuring out good “crowd-source” projects — some variation of the old “Day in the Life” photographic series — might serve multiple purposes: engaging the community, developing a publishable project, and laying a marketing groundwork for it.
What is essential is to avoid the temptation to spam or to oversell. If you think first about your audience, you’ll make the transition. If every interaction you have with your web communities is to sell them a book, you’re still a 20th century book publisher.
We talked earlier about some advantages general trade publishers bring to the evolving contest to compete in niches of interest. Before we stop for any points you’d like to raise, let’s entertain how to apply them. The only practical way to think about this, of course, is niche-by-niche. Otherwise, many of these ideas will seem too vast to even contemplate.
Using your content requires taking inventory of it in a completely new way: by chunks. The most useful ones are stand-alones. They tend to be most common and easy to identify in reference books, how-to books, compilations. But general narrative can work too. Let’s say you had a few great reference books on the Civil War that you could build around. That would make it worth looking for biographical material on Civil War military and political leaders throughout your other books, even in fiction.
Or you might have several series or brands in some areas, like games or travel, that would permit you to mount an overall web presence that provided great utility. If you have content that solves a practical problem for people — and there are chunks in books on gardening and retirement and gambling, to name three examples, that do just that — you have the discoverable content that can draw traffic to a site.
Wiki-ing appropriate content can also be a tool to generate community. Material on subjects where experts abound — let’s say a Who’s Who in Film — can be the foundation to attract a lot of traffic which can be leveraged. And setting up a Wiki can be a good excuse to ask for registration, adding a new database of value to your asset base.
Of course, the straightest path to monetization of content on the net is to license it. Here again, you’ll be much more successful if you’ve analyzed your content on a level both more granular and more aggregated than “the book.”
Of all advantages publishers bring to the niche land grab, their relationship with authors is the most significant. In fact, now is the time that publishers who have royalty relationships with authors gain a distinct advantage over any publisher or packager whose model is “work for hire.”
We recognized in a project we did for a general trade house two years ago that “teaching authors to fish” was the key to a “new marketing partnership” between authors and publishers. That point of view has been acknowledged in some recent initiatives, particularly your speakers bureau and Harper’s recently debuted author tool set.
As part of the work for that same project, we collaborated with Market Partners on a survey of agents about author web activity. What we found two years ago was real cynicism about how helpful publishers were, but real conviction that authors needed to spend a great deal of time and effort promoting themselves online.
The vision I’ve had for a couple of years, as yet unrealized, is that a publisher could create a “vortal” — that’s a vertical portal — using legacy content and links out to all the other sites of interest to the community. Then you set your authors to blogging on the subject, on their own sites or on the vortal itself. Either way, RSS feeds from the authors could provide fresh content on a daily basis, a sine qua non for a site that wants a lot of regular traffic.
Of course, some, if not most, of these authors are already blogging or maintaining their own sites. That doesn’t change the concept. Publishers can add traffic to their authors’ sites by adding links: linking the authors to each other and linking them all back and forth from the publisher’s sites. As you know, legitimate links drive up Google search rankings. That’s a real reason for an author to join your site family, if you’re niched in a way that will drive the right traffic to them.
Back in the days when the idea of a “web site for every book” or a “web site for every author” was a very radical idea, publishers would often say to me, “but how we will we get any traffic for the site.” I hope I’m not insulting anybody here by saying this, but I always thought that was a remarkably lame question, coming from an entity that distributed hundreds of thousands, if not millions, of books a year — plus press releases and collateral — all of which have plenty of extra room to carry a URL.
As publishers have discovered.
But pushing a URL that is for a publisher’s web site is a waste of an opportunity. If somebody buys a book about retirement or Switzerland, they want a web reference with more information about retirement or Switzerland, not a book catalog.
That mistake isn’t made as often as it used to be, but it is almost as bad to send readers to an author web site, unless the site is maintained and has constantly refreshed content. In fact, that could be part of the negotiation with authors: sure, we’ll put your web link on your book jacket, IF you commit to posting new material on your site on a regular basis.
The right answer becomes obvious if a publisher has vortal sites and thinks in aggregates; you drive traffic from niche books to appropriate niche sites. A similar strategy is employed by some publishers with “newsletters.” If you publish regular newsletters by subject niche — and perhaps have some excerpts from your authors’ blogs to power that — you can drive sign-ups with the relevant books you publish.
Every book cover and every press release and every ad should contain a useful URL, which means one the consumer will find worth bookmarking and returning to. As you become a 21st century niche publisher, it will be obvious to you that if you don’t have such a URL to put on the cover, you probably shouldn’t be publishing the book!
When publishers compete for the niche-future, their non-book competitors will fall into two categories. Some will have products but no content; others will have content and no products. Book publishers are really the only ones with both.
There are two great benefits here. One is that being a publisher adds credibility; if you hire authors, edit books, and market them to a niche community, you must necessarily have knowledge the community wants to share. But the other is more straightforward: book sales can produce revenue.
I want to emphasize the positioning here. Until now, most of your web activity has probably been for the express purpose of selling books. We’re advocating a web effort that is about community building, not necessarily book sales. Book sales should be used judiciously as part of that community building effort.
Direct sales by trade publishers are bound to increase, but care should be employed not to overuse the tactic. Doing it for margin enhancement is probably the least good justification. The additional margin isn’t necessarily that great, once you factor in the “referral fee” you’d get from most retailer sites. And your site visitors already have accounts with Amazon, BN.com, and Powell’s; they don’t with you. So offering youself as the only option, even with attractive pricing, is likely to reduce unit sales.
Of course, direct selling can also enable bundling (book and audio, book and ebook, this book and that book) experiments, which is a good reason to do it. And direct selling also gives you direct customer contact: names and credit cards. There’s value there too.
I know everybody who publishes fiction listening to this description of the future says, “yeah, but what about my niche?” Fiction is, of course, already in many niches, and they are each developing their own online communities.
Beyond that, sites like LibraryThing and Shelfari are pulling together communities of readers to tag books their own way. These tags will lead to easier niche-discovery in the future.
Obviously, poetry creates its own community, and a highly interactive one. Literary fiction is carving out its own world too.
And the niching of the subject world means that subject-oriented fiction can attach to its community more readily. How much easier would the launch of John Grisham have been through the lawyers that were his first core audience if there had been an online world to use when he started?
We all know that Word of Mouth sells books, and particularly fiction. Word of Mouth today is largely done through instant messaging or cell phone texting. Or Facebook or MySpace. Or Twitter or deli.cio.us.
Obviously, there will always be some books — many books — meant to reach across niches. It isn’t that those books will disappear that should concern us, but that the horizontal book-specific review, promotion, and sales mechanisms will atrophy. And that the attention of the public will be increasingly consumed by each individual’s niche interests.
When books can cross many niche lines, there will be the need for the services of an organization that looks like today’s General Trade Publisher. But how many such opportunities will there be? Enough to support one or two, maybe? Not many.
Bookstores will find cross- or multi-niche books by data mining the net, part of the expensive infrastructure we think bookstores of the future will require. And that’s why we think bookstores will all boil down to one chain in the decade or two to come.
There is logic behind the idea that the still-standing bookstore chain, which viewed from today certainly looks like it would be Barnes & Noble, is a competitor to be one of the general trade players. They’ll control the primary outlets for what are general trade books by then.
Bestsellers will not entirely disappear. The top echelon of what is sold in B&N in 2020 may well also be sold in the Costcos and Sam’s Clubs that are around then too. But the combination of output and audience won’t generate anything like the number of mega-sellers we’re used to now.
On the other hand, the total title output will be way up. By multiples.
There is only way to avoid the future, and none of us is volunteering to take it.
The web is going to be more content-rich than we have ever imagined; much of the content will be free and all of it that you want will be held in your hand.
The support system for general trade, particularly the horizontal media that have allowed us to promote books just because they were books, is disappearing.
The self-organization of the web into niches is inexorable. That’s not an open question. What are open questions are how to monetize it, and how to get to a position of strength in it from a position of strength in general trade publishing today.
But we all have to tackle these questions. I’m likely to be the oldest guy in this room, but I expect to be consulting to publishers, such as they are, when they are operating in this changed world. Those of you much younger than I am will have a career that stretches beyond the life our current business models. It is in all our interests to figure out workable answers.
Thanks very much for your attention. The previous version of this speech, the one given at BEA, last year, is at the URL on this slide. So is my email address: I’d be happy to extend this conversation with anybody here who wants to. It’s been my pleasure to join you today.