The ONE Thing Big Pub Must Change In Order To Survive

Hey there, here is an excellent article by April L. Hamilton about the changes in the publishing industry. Well worth a read…

First, the bad news. Your revenues are in decline, your distribution model is unsustainable, you’re beset on all sides by technologies and cultural changes that seem to have just as much potential to harm your interests as to further them, and despite having been in the same business for over a century, your inability to predict your customers’ wants and needs makes you feel (and operate) more like professional gamblers than the capable captains of a respectable industry.

Now, the good news. All of these seemingly insurmountable challenges are really just the distracting side effects of a single, underlying issue. Better yet, it’s an issue you can resolve anytime you like, by yourselves, without the input of any high-priced consultants, the adoption of any expensive new technology, nor the invention of some as-yet-undiscovered business paradigm.

When I tell you what the underlying issue is, your initial reaction will most likely be to dismiss what I’m saying out of hand. All manner of rebuttals will immediately spring to mind, you will remind yourself that you are the publisher here after all, and there’s no way some nutjob on the internet could possibly understand your business as well as you do.

If only for the sake of being able to honestly say you’ve explored every possible option, please commit now to keeping an open mind for as long as it takes you to finish reading this article and giving it full consideration. At this point, can you really afford to ignore any new ideas?

The underlying issue is this: you have an image problem. More accurately, you have a self-image problem.

You don’t recognize the business you’re actually in, and as a result you believe your business is unique and ultimately unassailable on some level. This distorted self-image keeps you from fully aligning your business practices with your business goals and the desires of your customers.

You think you are curators of literature, and both authors and guardians of culture, but those functions cannot possibly be performed by any organization being run with a primary profit motive. You are no more curators of literature than Nike is a curator of shoes. If you wish to remain solvent, you can only be authors and guardians of culture to the extent that it helps (or at least, doesn’t harm) your bottom line.

You also believe your industry in its present form is a permanent fixture of modern culture, an institution venerated by the public it serves. You believe in the inevitable longevity of your industry, in its very right to exist regardless of profitability, with the same certainty and fervor the executives of print newspapers had about their own industry until very recently.

If you could see yourselves as outsiders do, you would realize you’re actually engaged in the most common (and possibly oldest) business there is: producing and selling consumer products. There is no shame in this; your products have the power to inform, entertain and inspire. However, bibliophiles notwithstanding, there is nothing inherently valuable or sacred about your products, and you will only remain in business as long as large numbers of people are willing to buy them. Yours are not the only products that can inform, entertain or inspire. If consumers find a competing product they like better, they will buy the competing product.

The fact that your product happens to be books doesn’t make it unique or special in any way, in a business sense. However, you believe books are special and unique products, and have built your entire industry around traditions and practices that support your false belief, often to the detriment of your business. In every other commercial industry, traditions and practices are only honored so long as they help (or at least, don’t harm) the bottom line.

Purveyors of computers, cell phones, clothing and even kitchen appliances wait to see how well consumers like a given product before investing the effort and money on releasing a premium edition of the product. If you intend to release both a premium (hardcover) and standard (paperback) edition of your product, you release the premium version first, and release of the standard version is often contingent on sales performance of the premium edition.

Many times I’ve wanted a book that I couldn’t afford in hardcover, or didn’t think was worth the hardcover price, but the book was never released in paperback. Apparently you aren’t aware of this, but cost-conscious consumers—and this group encompasses most consumers—will frequently “wait for the paperback” in the same way they will often opt to skip a movie at the theater and “wait for the DVD” or “wait for it to come out on cable”. This business practice alone probably costs you millions of dollars a year in unsold hardcovers and lost paperback sales, yet you continue to do it because it’s traditional to your industry and you’ve attached a certain degree of status and internal fanfare to the idea of a hardcover release.

Movie studios allow their customers to access and use their products when ever, how ever, and in whatever format those customers want. Whether it’s in the theater, on DVD for sale or rent, Blu-Ray, via digital streaming online, on pay-per-view, or even on an iPod, the customer is completely empowered to control his experience of the product. As a result, many, many more copies of the product are sold and filmmakers earn much more money than if they limited their films to theatrical release alone.

Meanwhile, your industry is investing its time and money in practices, devices and technologies intended to keep control of, and broad accessibility to, your products out of the hands of your customers. You don’t release every book in print, audio and ebook formats. You release very few titles in audiobook form, yet fight against Text To Speech (TTS) technology even on books you have no intention of ever releasing in audiobook form. You don’t show strong support for cross-platform ebook standards, yet you fully support the proprietary file formats used on the Kindle and Sony Reader. Having learned nothing from PR debacles in the music and film industries, you are moving to criminalize your customers with stringent DRM.

You believe your products are special and your role as their producer grants you both rights and responsibilities over and above the mere needs of your customers.

With respect to TTS and DRM, Big Pub hides behind a shield of ‘protecting the interests of the artist’, just as music and film producers have done in the past. But it didn’t take long for those producers to realize motivated pirates and hackers will always exist, and withholding purchase and use options from your entire customer base in order to discourage the criminal acts of a few is a bad business decision. They also realized customers are willing to pay for digital media, and in fact will buy digital media just as often as hard copy media, so long as it’s convenient, affordable, and meets their needs. Free from your curator complex, they’ve embraced digital media to the fullest extent and are reaping the benefits.

The software, videogame and film industries take cross-platform support for their customers a step further by providing simplified or downsampled versions of their products for use on mobile devices. No one playing Guitar Hero on a Nintendo DS expects the same gaming experience as playing the full-featured console game, no one using MS Office Mobile expects to find the same feature set as regular MS Office, and no one watching a movie on an iPod expects the same audience experience as seeing the film in a theater. Makers of these products understand that on a portable device the customer’s priority is—surprise!—portability. Content and functionality matter to customers too, but customers are willing to trade bells and whistles for convenience and cost savings.

When you start down the road to release a book in electronic, portable form, you begin with the assumption that you must preserve the “integrity of the page” and “integrity of print branding”. If you can’t exactly duplicate the frames and shading employed in sidebars, or get the tiny graphic of the geek with his finger in the air to display in the exact location and size as they appear in the print book, you don’t want to release an electronic version at all. Even when working with a minimally-formatted book like a novel, you strive to preserve original fonts, typesetting and layout details in the ebook version. You set up task forces, invest in development of new devices, software and technologies, and generally make things much harder and more expensive than they need to be.

You appear to be completely oblivious to the fact that one of the major draws of the ebook is the flexibility users have in controlling how the text is displayed. Most e-reading software and devices allow the user to change the font, font size, line spacing, orientation of the page, and sometimes even the font and page colors. All your efforts to preserve the “integrity of the page” are wasted.

Nevertheless, you pass the expense of these efforts on to the ebook buyer, and as a result your customers think you’re ripping them off on ebooks. You repeatedly defend your pricing on the grounds that your overhead in producing an ebook is comparable to producing a print book, but you leave out the part where you could provide a simplified version of the ebook at a much lower cost—a cost consumers would find much more reasonable and appealing. You ignore the customer’s priorities (portability, convenience and cost savings) in favor of your own, self-imposed priorities. Once again, it’s because you believe your products are special and you answer to a higher calling than serving your customer base.

Even your unsustainable policies concerning bookseller returns are the direct result of placing your flawed self-image and industry traditions above the needs of your customers. Chain bookstores are no longer the only game in town for bookselling and consumers already know the chains can’t compete with online vendors for selection or price, with ‘big box’ stores for convenience or price, nor with indie booksellers for service. None of your customers’ priorities are being served by chain booksellers (which is why they’re suffering a slow economic death), yet you continue to remain in voluntary bondage to the chains and even grant them preferential terms.

When chain record stores like Musicland and Tower Records began to falter, record labels didn’t engage in efforts to prop them up or prolong the inevitable. Instead, the labels followed their customers into new markets and new distribution models. If you didn’t feel beholden to the ‘old ways’ of bookselling, you would do the same.

If you want to take the high road and place artistic integrity and tradition above profit, that’s fine. Independent imprints do it all the time. The only problem is, preservation of artistic integrity and tradition often exists at cross-purposes to mass-market economic demands. You want all the big profits that come from serving the mass market, yet believe you are entitled to deny the wants of that market whenever you choose, with no impact on your bottom line. You feel justified in forcing your customers to subsidize the costs and suffer the inconveniences of your misguided efforts in curatorship.

Let libraries, museums, academics and critics decide which of your products are worthy of preservation, just as they do in art, film and music. Drop your curator complex, and suddenly all the ancillary challenges and crises that eat up most of your days and resources fall away. Of course you will always have the challenge of trying to forecast which products will be most popular to your customers, but so does every other business that produces consumer products.

Letting go of costly, needless business practices reduces your risk on each individual product, and enables you to open up new revenue streams that can help balance the overall profitability scales when an individual product fails. Focus on making your customers’ priorities your own, and the way forward becomes obvious.

And lest you think your industry can never fail completely, since people will always need sources of information, inspiration and entertainment…there’s an app for that. Lots of them, actually.

About the Author: April L. Hamilton is the author of The IndieAuthor Guide and the founder of Publetariat. Her latest book is From Concept to Community.