Good day. I want to start out by thanking Olaf Winslow and the Danish booksellers for inviting me to your lovely city to talk to you today about the future of books for publishers and booksellers. You are going to get what is, admittedly, an English language-centric and US-centric perspective of the world from me; the unavoidable consequence of my being a lifelong New Yorker. But I believe you will find insights here you can apply to your own businesses; that is certainly my intention.
There is a big picture and a long arc within which our day-to-day activities are taking place. The 20th century consumer media were horizontal in their subject matter — that is, very broad — and format-specific. In the States, that means entities like CBS or NBC in television, The New York Times, or Random House. All of these companies provide content across the full range of human subject interests, but they pretty much stick to their formats: broadcast, newspapers, and books, respectively.
But the Internet naturally tends to vertical organization, subject-specific organization. It naturally facilitates clustering around subjects. And as communities and information sources form around specific interests, they undercut the value of what is more general and superficial information within horizontal media. At the same time, format-specialization makes less and less sense. Twentieth century broadcasting, newspapers, and books had special requirements that demanded scale, sometimes related to production but more often driven by the requirements of distribution. On the Internet, distribution is by files, and files can contain material to be read on screen or printed and read; it can contain words or pictures; it can contain audio or video or animation or pieces of art. When the file become the medium of exchange, not a book or a newspaper or a magazine or a broadcast delivered over a network with very limited capacity, it eliminates the barriers that kept old media locked in their formats.
The biggest, most successful trade publishers who do the novels, biographies, celebrity books, and all the other material that we think of as the most commercial offerings of our industry, have also been highly dependent on other horizontal media for promotion and marketing. When you might do a novel today, a memoir tomorrow, and a cookbook next week, you want similarly horizontal institutions through which to promote and sell your books. For years in the US, daily newspapers were a big part of the trade publisher’s promotional toolkit, followed by television and radio talk shows that were “variety” shows. They would very comfortably promote a novel author today, a biography author tomorrow, and a cookbook author next week.
But now those media are suffering attrition from the competition of the Internet. So there are fewer book review pages in newspapers, fewer talk shows that will put on authors to promote their books. And, of course, there are also fewer bookstores that will carry all the titles across all the subjects that trade publishers want to get to the public.
The first requirement to be a publisher, of course, is to be able to get what you publish known and purchased by potential readers. If the horizontal paths to market will be replaced by vertical communities which become the new paths to market, it is going to require that publishers be vertical as well. As the online vertical communities grow, the entities that have the attention of those communities will control what is published to them. But they will be able to “publish” whatever they want, not limited or defined by format. After all, it’s just a file…
We have already seen that the net also facilitates a big increase in the amount of publishing as well. There has been a big surge in the number of titles being published in the US, largely driven by small publishers and self-publishers. The market for books may be getting tougher, but the cost of entry is going down even faster. Widely available tools make it easy to go from a Word file to a printable PDF, and there are online services — Lulu is the best known and most successful — that will do this for you quickly and easily. And you don’t even have to bear the cost of inventory anymore. With ebooks and print-on-demand as a substitute for a print run, which used to create both physical and financial hurdles that kept books out of the market, more and more titles are being published.
That’s not making it any easier for the legacy publishers.
So that’s the long view. What’s happening now? I can tell you from the perspective of a guy who tries to keep up with new developments that it is a challenge to do so at the moment. There have been some very significant strides forward over the past year or so.
First of all, ebooks finally seem to be edging toward the mainstream. The release of Amazon’s Kindle last November, while probably adding only a few thousand new ereading devices to the marketplace so far — nobody outside of Amazon knows because nobody inside of Amazon is telling — has been catalytic. At current count, three major publishers — Hachette, Random House, and Simon & Schuster — have bought large numbers of Sony Ereaders, the Kindle’s most direct competitor, as working tools for their staff. The readers will be used to reduce the intra-company use of printed galleys and to make it easier for editors to carry around manuscripts.
Many years ago, before the cell phone and iPod became exceptions to this rule, I observed that technology adoptions tended to start at work. The fax machine, the personal computer, email, word processing programs, and spreadsheet programs, and even the World Wide Web were all things that people learned to use on the job and then “brought home”. Ten years ago, I thought ebook uptake would start the same way.
It didn’t, and although the cell phone and the iPod didn’t need the boost, technology introduced at work becomes a “must learn.” Once learned, it becomes a part of people’s personal lives as well. The fact that people who read narrative writing for a living will increasingly be doing it on handheld devices suggests that their use will spread much faster in the months to come. Anecdotal reports from ebook retailers and publishers say that sales in all formats have increased sharply since the Kindle launch and the widespread publicity it generated.
The digital revolution is also proceeding at a rapid pace in “search”. The Google BookSearch program and Amazon’s “Search Inside the Book” were the pioneers, but they are no longer alone. Barnes & Noble has started its own competitive See Inside program, scanning more books beyond the estimated 100,000-150,000 available for this purpose from publishers. And publishers are rapidly increasing that number, as a number of them have started to offer the capability on their own web site, and in widgets that can be spread all over the net.
The spread of discovery results has accelerated because of the rise of DADs, or “digital asset distributors.” These companies, led in the US by Ingram Digital and LibreDigital, relieve publishers of the burden of developing all the technology for digital distribution. Of course, the DADs, with the repositories, format conversion capabilities, and fast reaction to new opportunities, such as cell phone distribution, will be needed by all publishers in all languages. One of the questions I would think comes before the Danish book trade — and we have already seen this arise in Canada — is whether you should create your own DAD or, more likely, facilitate the interaction between a DAD and the various players in your market.
Audiobooks have been a growing segment of the US trade market for some time. That market has been expanded by the growth of digital downloads. Audible was the pioneer in this field, and they have an exclusive arrangement to provide audiobooks for iTunes. This channel to market became part of the iTunes monopoly. Now that Audible has been bought by Amazon, the future of that distribution agreement is open to question. The best hope for publishers might be that Amazon kills the iTunes deal when it expires and takes over Audible distribution through Amazon. Then publishers can go direct to iTunes to fill the gap, and then they might have two robust channels to market. In the Internet era, which tends to favor monopoly, that would be a welcome departure from historical norms.
Audiobooks are expensive to create. Unlike ebooks, which require only changing the form of content already created, audiobooks require creation of content. The technology for converting text to audio keeps improving; if acceptable quality audiobooks could be created through automation, it would be a huge boon to publishers. That kind of technology development would almost certainly be language-specific, but it will certainly be easier for small languages when they can build on what is done elsewhere.
Print-on-demand is another important component of the new digital world and it is another area where technology keeps marching us forward. It has been a bit over 10 years since Ingram started Lightning Print, now Lightning Source Industries, or LSI. Lightning was probably the first industrial-scale print-on-demand operation and certainly the first one that was really plugged into the book distribution system. A few years ago, Amazon bought BookSurge, a competitor to Lightning that took a different strategic path.
The key to Lightning was aggregating as much POD work as possible at a single location. That enabled Ingram to keep delivering improvements in the technology: better quality, more trim sizes, hardcover lines, and then all-color books. To build the biggest repository of files for POD delivery, Ingram used its leverage as the world’s biggest wholesaler. They had contact with all the publishers, they knew their lists and what sold, and they connected Lightning’s quick manufacture of a single copy to Ingram’s quick delivery throughout the supply chain.
Ingram did open a Lightning UK operation early in this century. It took them a long time to get the scale they needed to make that operation successful, but they’ve achieved it. Now they’re looking to expand the Lightning capabilities to other markets. The repository of files they can print is a major asset for them, decreasing the time it will take each new operation to become profitable.
Amazon is now attempting to use its leverage as the world’s biggest online retailer to claw back some of that POD business from Ingram for their BookSurge operation. But the initial strength of BookSurge, that they worked with printers around the world who were already in place, spawned its weakness. Reports from publishers I have spoken to say BookSurge’s quality and flexibility don’t compare to Lightning’s. And apparently their printing charges are higher. But since Amazon sells so many of the books that are printed on demand, their threats to make those books less available if they are printed outside of BookSurge carry tremendous weight.
But neither BookSurge nor a much-expanded Lightning are the last word in decentralized print-on-demand. The next step has been taken by On Demand Books, and their Espresso machine. The Espresso prints and binds one book at a time — one-color and paperback only, although with a full-color cover — and is intended for in-store use. There are only a handful of them in place, but they offer the entrepreneurial bookstore some very intriguing opportunities to expand their business. We have encountered a very entrepreneurial bookseller at the University of Alberta in Canada who has made one work profitably in his store within months.
Last month, Espresso announced a deal with Ingram by which the Lightning repository of files will be made available for delivery on Espresso. That suddenly makes the Espresso proposition a lot more likely to succeed. Espresso is worth exploring in any place where English-language books are in demand, that is remote from the sources of English books, and where prices for those books are high. In other words, the Danish book trade should look into it.
And Espresso is only the most recent “last word”. Technology companies like HP are looking hard at how even less expensive and smaller print-and-bind machines might be made available for home or office use. Those capabilities will happen. In the long run, the biggest value of Lightning may be in the database of print-ready books it has available, linked to commercial arrangements with the copyright owners. Putting something like that together is not something technology can make simple or easy; you still have to get the attention of somebody to get their agreement and automation can help only so much.
One other new development just coming into sight on the horizon are books assembled by customers. This is an idea that has existed for a while, particularly in the college and university markets where “coursepacks” of material from different sources are assembled into a single publication. But a US company called SharedBook has mastered and simplified this technology for consumer content. SharedBook puts its technology on AllRecipes.com, for example. and enables consumers to create their own cookbooks, using both recipes housed on the site and ones they create and upload themselves. Most of SharedBooks’ early clients have been content-generating web sites, not publishers.
But that is changing. Random House has announced an initiative working with SharedBook to enable customized and personalized books, and another major house is apparently close to a deal.
Among the more successful phenomena of the past few years are the social networks that have changed the nature of interaction among the young and have had impact across all ages. I’m talking about MySpace and Facebook, but also more specialized sites like LinkedIn, which is a social networking site for businesspeople.
These sites are basically horizontal, not vertical, even though MySpace started as a site for teens and Facebook as a site for college students. But they become vertical pretty fast, as members start creating communities of interest within them. See them as “AOL for Web 2.0”. The analogy is that AOL — and CompuServe and Prodigy and MSN — were successful initially because they simplified the online world and then the early days of the Internet. They made email and navigation and the basic capabilities of the net easy and intuitive and safe for technophobic people to use. What the social network sites do is to make the Internet 2.0 capabilities of networking, content generation, posting, and file-sharing simple for the technophobic or neophyte user.
But, over time, the technology gets simpler and the users get smarter and the importance of vertical never goes away. And a number of applications, including one from Google called “Open Social”, are now making it easier for communities of the interested to find each other across the silos of different social networks.
Tagging, which makes content easier to find and characterize according to how it is regarded by any particular user, is also proliferating. Sites like Digg and Deli.cio.us enable anybody to call additional attention to anything they find on the net and to label it. More and more sites like LibraryThing offer this kind of highlighting and identifying capability specifically for books.
In this way, the content on the net is being sifted and labeled. This is a process that the vast body of already-published material from the history of mankind will undergo. One concern often expressed in a world where user-generated content is proliferating is how an ordinary person is going to sort through all this stuff. But even on the net, there are more readers and raters than there are writers; there are just a lot more writers than there were before we had an Internet and, with all the legacy material out there to be read as well as new material, it will take a while for the readers and raters to catch up!
Another change on the verge of great prominence is the net connection untethered from the less-than-totally-portable computer. Smart phones with improving screens are making the net something you carry in your pocket and connect to all the time. Particularly since the two-thumbs keyboard is always going to be less user-friendly than one for all your fingers, that trend should increase the ratio of reading and rating to writing.
Publishers are also going to be adding much more to the metadata describing content as more and more of them adopt digital workflows. Going to what can be called an “start with XML” workflow is a looming issue for publishers. On the one hand, it requires painful process changes going all the way upstream to when the editor takes in a manuscript, and even to the author’s creation. On the other hand, it enables all content to be tagged with structure, content, and rights information that makes for more flexibility, discovery, and revenue downstream. This is another item that all publishers in the world need to be thinking about.
If the forces we see in place now keep developing, augmented by things we haven’t talked about like the semantic web which will only accelerate our ability to find and organize information, what will see in the decades to come?
My hunch is that we’ll see vertical “portals” for every conceivable subject: an overall organization that serves as a guide to every topic of interest. Think of wikipedia entries turned into entire web worlds.
All the content, legacy content and newly-generated content from all sources, will be tagged and rated by the community, having gone to the community more thoroughly tagged and organized than we can imagine now in 2008.
The aggregator brands we know today will have largely disappeared. They will have been replaced with brands that are much more granular, much more subject- or niche-specific. These brands will have grown up out of these communities.
The taxonomies by which information is organized in each niche will be constantly evolving. The standards experts of the future will be much more concerned with reconciling taxonomies across niches. Some obvious ones will need to be rationalized, like farming and gardening, cooking and dining, business travel and pleasure travel and adventure travel.
Leaving the horizontal media of the 20th century behind will mean that multi-niche successes, what today we call mass market successes, will become relatively rare. As people find it easier and easier to delve deeply into what interests them most, they will spend less and less time exposed to things that interest large numbers of people. Word-of-mouth requires that people be speaking to each other to work.
On the other hand, what can spread virally will spread much faster. Mass market phenomena will be less common, but those that occur will both rise and fade much more suddenly than they do now.
I want to spend a few minutes talking about a much-discussed aspect of the Internet, the “Long Tail”, a term popularized by Wired Editor Chris Anderson in an article and then a book by that name.
The concept is simple. In the days before the Internet, the choice of products available — let’s say, books — was pretty much limited by retail shelf space. If a book wasn’t in a store, the barriers to discovery and purchase were very high and the book essentially left the field of commerce.
Amazon.com, of course, changed that overnight. On the net, shelf space is unlimited. By using Ingram and Baker & Taylor, America’s two large wholesalers, to start, Amazon offered many times more books than any terrestrial bookstore. Pretty quickly, Lightning Print and then used books added even more titles to those a consumer could easily discover and obtain.
Anderson documented two very important things. First, the number of items that had some market, often a very tiny one, was very large. If you make a book title available, over time, somebody will buy it. And the second thing follows from the first. The cumulative sales of all the books — millions of books — beyond the 100,000 or so at one time that were really available in the pre-internet world was substantial. There is considerable debate about whether the titles past 100,000 on Amazon sell 25% of the total or 50% of the total or what (and Amazon, true to form, isn’t telling), but, cumulatively, it is a substantial number.
Some of those long tail sales represent growth in the market; they are sales that wouldn’t occur if that particular book in that particular edition weren’t available. But many of them are not. Many of those sales just substitute for the sale of one of the books that would have been available in the prior model, but without the competition of the long tail books.
What this says to me is that the long tail Anderson has identified is great for consumers and great for the retailers that can sell the long tail books, which primarily means Amazon. It’s great for Lightning. But the long tail is not a good thing for publishers or authors. From their perspective, the primary impact of the long tail is to bring them competition that 10 or 20 years ago would not have been on the field with them.
And herein lies a very important point. The competitive slope for each new book published is steeper than for the one before. Today’s senior management in publishing grew up in a world where the market was expanding as the numbers, wealth, and available time of the literate population grew and the landscape included the feature that old competitors died away. For a variety of reasons, it is likely — although not proven — that the Euros and hours available for book purchase and reading have declined. But it is incontestable that the feature of “dying competition” has been eliminated. Now every book published remains available to compete for sales approximately forever.
If the world of content changes in the way I’m postulating, publishing will, of course, change with it. In the largest sense, it means that the consumer content world will become more like the academic and professional worlds, which have always been highly cognizant of their communities and have always had “rating”, called “peer review”, as a part of their environment.
So the publishers who are already serving academic and professional markets are best positioned. They have already evolved with their markets to some degree: recognizing the critical role of niches as opposed to more general approaches to the market, evolving from print-only to print-and-digital or digital-only products, building marketable databases with user-generated participation, and exploring and understanding new business models beyond the “make it and sell it” models we knew prior to the 21st century.
It is the general trade publishers that are most challenged. Their competitive edge is in their ability to cost-effectively execute the format , the access to the marketing levers, and, usually through intermediaries, their access to the buying public.
All of these advantages are now highly challenged. The format-specific capabilities diminish in importance every day, with pressure coming from two directions. First of all, as we have observed, when the transaction takes place by file exchange, format-specificity is meaningless. But second, it is getting easier and easier for the rank amateur to get a competently-made book delivered at a reasonable price.
The trade publishers who are most niche-oriented to start with will be most able to adapt to the developing future. Last month I spent some time with two relatively small but focused US publishers. They’re not randomly selected; they came to see me because they see the future compatibly to the way I’ve been describing it. But one of them — Berrett-Koehler — has already appointed somebody to the newly created position of “Community Manager”. And the other one — Chelsea Green — is developing a new web presence organized specifically around niches such as “Green Building” and “Renewable Energy”. These are steps no major trade house has taken yet, to my knowledge, but they will all have to.
It’s not an accident that the biggest trade publishers have been slow to move in the direction of change. The speedboats can zip around the harbor; the supertanker has a devil of a time trying to turn around. That’s a generalization which masks the very specific reasons big publishers remain stuck in old models.
First of all, the horizontality of their history leaves them a legacy list that reflects the randomness of mind by which it was acquired: there are few niches with any critical mass of content. One of the sharpest digital strategy people I know at a major house in the UK was explaining the futility of trying to build a niche strategy with her house’s vast backlist. She just found no areas where their content gave her enough to really build on. Of course, Lesson Number 101 here might be that these niches will never be built on one house’s content alone.
The second big problem of the big houses is that their brands, which were built over a long time and are perceived to have great value, have only business-to-business, or what we call B2B, value. Consumers don’t know who published the last book they read, and they pretty much don’t care. With some rare exceptions, like Harlequin for romances, publishers’ brands have very little equity with consumers. It is a publisher’s instinct to promote the brand they have when they market on the web. For Chelsea Green, that might make sense. For Random House or HarperCollins, it doesn’t.
The third challenge for big companies is the requirement to keep making money with their current models, which are horizontal and which are book-specific. Smaller, owner-managed companies can more nimbly make decisions about experimentation with their future direction than big companies that report to investors about the value of their holdings.
The fourth challenge for big companies is that they are, of necessity, more highly structured than smaller ones. In the Internet age, when editorial, marketing, and sales functions get harder to divide neatly, structure and hierarchy can be the enemy of constructive change. If you look at the variety of interactions a publisher might have with Amazon.com, or with a content-generating web site whose community the publisher wants to reach, it is easy to see that a smaller company, where functions can come together in a single person, can function more effectively.
Also vexing larger companies more than smaller ones is their product-centricity. Book publishing companies live by creating new books, marketing them, and then selling them. It really taxes the models and the systems when a book could lead to a web site which could lead to a new business completely. One of the great examples of this in the past few years was with the a book called The South Beach Diet, which was an extraordinarily successful book that also spawned a series of businesses in newsletters and diet plans that followed it. It is no accident that the ancillary businesses were not built by South Beach’s publisher, Rodale, but by an entrepreneurial internet company called Waterfront Media.
Big companies, much more than smaller ones, also have to deal with the concerns of big authors and literary agents. If big publishers are stuck on old business models, authors and agents can be even more so. I had a recent experience where a major publisher asked me how to make best use of an encyclopedia of science fiction they were going to publish. It sounded to me like the perfect community-builder for a science fiction portal. But that possibility wasn’t open to them; the contract with the author required some sort of subscription model that would produce attributable revenue they could share. Indeed, there is a potential for competing interests here: a book could be used as a tool to build a community where the payoff isn’t necessarily reflected in that book’s revenue or royalties. Smaller publishers, because they tend to have less-connected and less-agented authors, also often find it easier to negotiate deals that allow flexibility in how they use the content.
And because of all of these reasons, big horizontal trade publishers don’t see the world in terms of communities. They see a hierarchy of authors and books: big ones that pay the rent, others that might backlist, others that fill out the list, preferably with low risk. They see a hierarchy of customers and a hierarchy of promotional media. But they see them horizontally, in terms of size and importance, not vertically in terms of niche or community. There has never really been much reason for them to think this way. It’s hard to superimpose a whole new way of looking at the world on a large organization.
Amazon dot com began not quite 13 years ago, in July of 1995. In its early days, I was a lonely voice saying that the first impact of the internet revolution on our business was going to be that it would be used to sell more paper books. Today the internet is responsible for perhaps 20% of US book sales and Amazon is most of that, perhaps 90% of that or more. But that 20% is an average, almost certainly higher in non-fiction than fiction, perhaps much higher. It is also certainly higher on smaller books than on very big books, perhaps much higher. One major university press told me four years ago that Amazon was larger for them than all other US retail combined! One can only imagine how much of their consumer sales are through Amazon today. There are certainly books that could be, and are, published successfully on the Amazon sales they make alone.
Amazon has built the customer base that enables this sales record on two major pillars: it is the first place to look for a book — great database and great search capabilities — and it provides a nearly flawless customer experience. Amazon’s search and navigation, including its famous “1-click” purchase; its pricing; its speed and reliability; all are best of breed. Some stores beat an Amazon price sometimes. Barnes & Noble has a delivery option in Manhattan that is unbeatable: you order in the morning and the book arrives at your doorstep in the afternoon. But these are exceptions. As a rule, Amazon rules.
The monopoly position that Amazon occupies is making publishers increasingly uncomfortable because there have been several recent signs that Amazon is quite willing to use their market leading position to grab margin from publishers. There is a growing threat as Amazon sharpens the propositions it offers directly to authors. Why not, if it is true that many books are viable on Amazon sales alone? So publishers would prefer to see some competition in the online channel. There are no great threats to Amazon, but there are a few small vulnerabilities.
The first thing to weaken may be Amazon’s position as “the first place to look” for information about a book. If Amazon has a weakness, it is that they won’t link “off” their site. Once they get a web visitor, they don’t want to let them go without making a sale. So they won’t send you the author’s web page, or refer you to a review they don’t host, or show you pages of the book that might be viewable at Google at Microsoft, but which isn’t within their proprietary control.
Not only are Google and Microsoft, with their own scanning and viewing programs, working hard to become the first place to look for books, sites such as LibraryThing are aggregating large amounts of reader-generated reviews and information that a book browser would want to see. In time, as the content on these domains becomes more robust, any of them could become the database of choice for some people, ahead of Amazon.
If the Internet does organize into useful verticals the way we’ve discussed today, then those verticals will probably control unique content not necessarily available through Amazon. Some of it might surround the book; some of it might even be offered as a digital download as a value-add when a book is purchased. Amazon’s proposition of “completeness” in the offering has been a foundation since it began. If the vertical web sites start to control vertical content that never makes it into the horizontal book world, Amazon won’t be complete anymore.
Of course, Amazon is threatening everybody else with that same proposition right now, signing up authors for Kindle and BookSurge publishing that will make them essentially unavailable anyplace else.
And the last possible point of vulnerability is if the online-and-offline combination can be made to work for the consumer. If that happens, then in America, it is a game only Barnes & Noble can play. Amazon has no stores, Borders has no money to invest, and no other retailer has a true nationwide presence to exploit. If the online-and-offline combination is going to deliver consumer value, it will have to be invented. Indigo in Canada has the scale to do it in that country.
Can a combination of Danish stores, working together somehow, invent this part of the future?
Most of what we’ve discussed today, while my experience is US-based, is true the world over. Now I want to talk about something that we don’t think much about in the US, but which I think is of great importance from your perspective: the ever-increasing impact of English.
Just as English has become the Lingua Franca for business, it is increasingly also the Lingua Franca for the Internet. With so much of the world’s content, and therefore the internet’s content, generated in English, it is pretty natural that much of the net’s conversation and chatter, which becomes the next wave of content, is in English as well.
As ebooks become increasingly popular, they will also tend — at least for a while — to increase the growth of English usage. Although in the long run, ebooks and print-on-demand enable smaller market content to be delivered efficiently — and that can certainly include smaller-demand languages — that won’t be the immediate effect. A great deal of English content is set up and ready to go in ebook and POD formats; the content that is ready for delivery in these ways will be spreading across the globe while content in Danish and Welsh and even Spanish and French is still being digitized, translated, and converted.
Decentralized print-on-demand — BookSurge-style, Ingram-style, Espresso-style, or in forms yet to be invented by HP or others — will also, at least in the beginning, propel the spread of English.
You are no doubt aware that US and UK publishers have recently been battling over the rights to sell their editions in Europe. That battle is a consequence of increasingly challenging markets at home. The London-based market has been diminishing for almost four decades, as parts of the UK commonwealth are no longer dependent on the UK for their book supply. Both markets have been challenged by increasing consolidation in the book trade; the number of outlets is actually diminishing and the concentration of what remains hurts publishers’ margins. The net effect of this is to make growth markets increasingly important, and Europe is a growth market for English-language books.
And the Internet is making it easier and easier for B2B, business-to-business, relationships to be conducted with less expense. Reps are useful, but not critical anymore. Free or almost-free Internet telephone, combined with web-based presentation materials, make possible effective sales coverage without travel. These capabilities will be increasingly employed in the future.
So what does all this mean for you? In the very long run, a small country provides a coherent niche. So, a decade or three from now, when the mass world has really been splintered, and “Denmark” is a functioning online community as well as a country — certainly including Danes the world over — this might all be different. But, as John Maynard Keynes famously said, “in the long run, we’re all dead.”
The first observation I would make is that the challenges for publishers are quite different than the challenges for booksellers. Publishers in Denmark are tethered to the Danish language; booksellers are not. All of the intrusion of English we expect can be adapted to by the trade, which can sell English books. But Danish publishers can’t realistically acquire English-language rights for Denmark.
I have been given to understand that even major bookstores in Denmark carry not much more than ten thousand titles. I have also had it explained to me that internet ordering has been discouraged by flaws in your systems for home delivery, which require you to pick up packages at central locations if you’re not home when the mail or FedEx delivery arrives. If that’s true, it would constitute an opportunity for bookstores to be your point of pickup. That might give you a head start on the online-and-offline combination, which is called colloquially called bricks-and-clicks in English.
The Danish language market is itself a small-market niche and you can perhaps take some hints from what the American university presses have done. Pioneered by the University of Chicago, which put a print-on-demand capability inside its warehouse, many university presses are going to a one print-run strategy. Each book gets an initial press run and everything after that is print-on-demand. That eliminates wasted inventory and keeps books available forever, or as long as there is any demand. I am sure that Danish publishers frequently face the problem of a second printing that carries extraordinary risk of wiping out the profits from a success. It no longer has to be that way.
I know you have a central national warehouse, which makes a lot of sense. You also need consolidated national capability to compile your metadata in a way that will allow computers all over the world to identify and transact for your content. That means you need to be compatible with global standards, particularly ONIX. If you don’t take those steps, any digitization efforts you undertake will have only a very localized effect.
As I implied earlier, a national effort to organize print-on-demand could make a lot of sense as well. I am sure Ingram would find it much easier and less expensive to load Danish-language titles into the Lightning database if there were a central authority in your country pulling together the books, getting publishers to agree the terms, and providing the accompanying data. If this were coupled with some kind of in-country POD capability, whether you owned it or they did, it could increase availability of your output all over the world and cut your costs at home.
Ebook distribution is something else that suggests a national effort. One ebook store back end with a view of the product database available through each individual bookshop would be the most efficient way to sell ebooks countrywide. It doesn’t make sense to create multiple ebook distribution structures, but you also want the benefits and opportunities of the market to help all the retailers in your market, not to be part of a winnowing process over time.
The coming decades will be challenging for publishers and booksellers who built businesses before the communication technology of the 21st century was put into place. There will be a lot of change, and there will certainly be some pain mixed with the opportunity. I hope you will find it comforting to know that you are not alone in the challenges you will face and that being small and unique will sometimes be to your advantage. Thank you for your attention, and it is my sincere hope that some of these insights will be useful as you chart your path to the future.