"BOOK PUBLISHING IN 2009'S DIGITAL LANDSCAPE"
A panel by SNCR Research Fellow, Danny O. Snow
2009 Publishing Business Conference
March 23-25, 2009 in NYC
The following material is a summary of remarks by UP founder Danny O. Snow, a senior research fellow of the Society for New Communications Research, for a panel about changes in the book publishing industry. This is not a verbatim transcript, but rather previously prepared "talking points" used to organize Snow's presentation.
Preamble: Remember the transitions from snail mail to fax to e-mail in the late 20th century? The slow and costly practice of putting words on paper, then paying to ship the paper across town or around the world gradually gave way to the fax, and then to e-mail. Faxing retained the paper but eliminated the envelope and speeded delivery; e-mail took the final step to instantaneous delivery at near-zero cost.
Until just a few years ago, the mainstream book industry still functioned much like smail mail: it was wasteful, expensive and environmentally unfriendly... and was about as fast, friendly and efficient as the US Postal Service.
Today in 2009, "Print on Demand" (POD) is helping publishers move from snail mail to fax; in the years ahead, it seems inevitable that e-Books will eventually make the jump from fax to e-mail... though no one is yet sure exactly when or how.
The goal of this panel is to help today's foresighted publishers realistically weigh current market factors, and anticipate likely outcomes in the years ahead.
What do we know about the US book industry early in 2009?
Reading is growing, not shrinking, with 112 million 'literary' readers, according to the NEA's recent "Reading on the Rise" study. But who is doing the reading? Aging Baby Boomers or Under-30 readers? In the latter case, look for increasingly digital consumption in the years ahead. Other studies suggest that there are inherent physical or cognitive differences between the way readers "interact" with paper, versus a computer screen. Some conclude that e-Books will be slow to overtake tree-Books as a result.
e-Books are growing but tree-Books are NOT fading. IDPF says US e-Book sales rose from about $19M in 2006 to $31M in 2007. (These are wholesale figures; retail could be as much as $60M or more.) Meanwhile, PW says sales of tree-Books rose 3.2% from 2006 to 2007 to $25B per year. (Much of the increase in print can be attributed to POD books.) e-Books are growing much faster than tree-Books, but still represent only a small fraction of the book market. The key point is that BOTH are growing, suggesting that sales of e-Books are NOT yet "cannibalizing" sales of tree-Books. In fact, there are anecodotal reports to the contrary. To cite just one example, St. Martin's Press reports that some tree-Book sales have GROWN as a result of giving away free e-Books!
Brick-and-mortar bookstores are struggling while online booksellers are growing. Reading isn't dying, tree-Books aren't fading -- but sadly bookstores are. BKS stock has dropped from $34 to $17 from 2004-2009 while AMZN has grown from $42 to $64. Netpop Research says that 59% of people who enjoy books and go online for information are now likely to purchase books/brands advertised on their favorite book sites. Will these trends accelerate in the years ahead? In an era of economic downturn and high fuel prices, it seems likely that they will. The rise of online bookselling is not just important in terms of retailing, but will also have a profound impact on the ways that publishers promote books, and print them. Manufacturing will shift toward POD and e-Books, as covered below. Publicity will shift toward social media.
POD book publishing is growing, while traditional bulk printing, warehousing, returns, remainders, etc. are shrinking. POD eliminates the need for a costly initial press run and other inefficient artifacts of the 20th century publishing industry. As a result, the publisher's investment and risk to get a book in print are slashed, allowing publishers to take a chance or more new books, keep midlist titles in print and revive backlist books. (Get the upcoming book Print on Demand for Dummies from BISG to learn more.) Leading POD printer LSI says its annual output has grown from 7M in 2004 to 15M books last year. The growth of POD is enhanced by the momentum of online bookselling. (Few bookstores stock non-returnable POD books, but they are easy to order online.) The fate of publishers who continue to rely on bulk printing and coventional distribution models may hang in the balance as brick-and-mortar bookstores fade. (A list of POD printers appears in the resources section following.)
New devices for digital reading (Kindle, e-Reader, iPhone, Android, etc.) are growing. This trend will gain momentum as the amount of available reading material grows -- especially the upcoming re-release of millions of older books by Google. At this time it's impossible to predict whether proprietary e-readers or open-platform multi-use devices (and file formats) will prevail in the marketplace. Because there are so many more 3G phones than dedicated e-book readers on the street, many experts predict that they will dominate the e-book market for the next few years. But most also agree that the ultimate e-book device has not yet been invented. Either way, Digital Asset Distributors ("DAD"s) make it easy and economical for publishers to convert the files they use for printing to a variety of e-Book formats, and get them to e-tailers. (A list of DADs and e-tailers appears in the resources section below.) DADs simplify life for publishers, and help them stay positioned for future growth as the diversity of current hardware and software platforms battle for supremacy in the marketplace
Wireless interoperability and "Cloud" computing are on the rise, reinforcing the trend toward digital consumption of writing. Your home and office computers, portable devices and phone may be separate pieces of hardware, but will be increasingly interconnected in a seamless way. For example, the new Kindle2 allows you to buy books from Amazon on your home computer, but read them on your Kindle or iPhone almost automatically.
More and more books are reaching readers through tightly targeted outlets, versus general publishing trade portals. BISG's "Under the Radar" study says that non-traditional markets for books now total at least $11.5B per year -- almost half the size of the conventional book trade, and growing.
In the online world, as Amazon and Google capture larger and larger market shares, it's important to note that Amazon functions more like a traditional bookstore, while Google could dominate niche marketing. Listings from Google Book Search (both free and paid) are not limited to book searches per se; they appear whenever people search a targeted subject. Google also allows publishers to embed previews natively on their own Web sites (versus a bookseller's) by adding as few as three lines of HTML code, with links to a variety of outlets where readers can order, including the publisher itself. (See demo following.) Amazon offers a proprietary “Look Inside” feature without links to other sources. It is interesting to note that many consumers order from Amazon even when a book is available from the publisher or other sources, since they already have an Amazon account and are familiar with the ordering process.
Online and offline, more and more readers are discovering books in places with a direct focus on the subject matter, rather than bookselling portals alone. Social media are ideal vehicles for promoting books in the 21st century.
Sidebar: How publishers can embed a Google Book Search preview on their own sites by adding just a few lines of HTML code:
Books and reading are very much alive in 2009, both online and offline! But the manufacturing, delivery and marketing of books are moving toward more efficient, more tightly targeted processes. To keep up with the times, savvy publishers should consider taking the following steps:
Digital Asset Distributors
(Visit http://www.idealog.com for overview):
Amnet Systems: http://www.amnet-systems.com
Calibre e-Book Management: http://calibre.kovidgoyal.net
Code Mantra: http://www.codemantra.com
Ingram Digital: http://www.ingramdigital.com
Libre Digital: http://www.libredigital.com
Publication Services, Inc.: http://www.pubserv.com
e-Booksellers (Wholesale and Retail):
eBooks about Everything:http://www.ebooksabouteverything.com
Net Library: http://www.netlibrary.com
World eBook Library: http://www.worldpubliclibrary.org
LightningSource, Inc. (LSI): http://www.lightningsource.com
Replica Books (Baker & Taylor): http://www.btol.com
Research and Statistics:
Book Industry Study Group: http://www.bisg.org
Independent Book Publishers’ Ass’n (formerly PMA): http://www.ibpa-online.com
Int’l Digital Publishing Forum: http://www.idpf.org
Net Pop Research: http://www.netpop.com
Society for New Communications Research: http://www.sncr.org
About the Speaker: