Digital Book World: a CEO’s view of the future
January 25, 2011 | 10:02 am
By Paul Biba
Jane Friedman, Open Road; Mike Hyatt, Thomas Nelson Publications; Brian Napack, Macmillan; David Steinberger, Perseus Book Groups
Friedman: state of industry – vibrant, vital, in midst of secular change. No change in the past like what is happening now. Not a storm, but a tsunami. Nothing will be the same again. 2010 was the end of the beginning. Tired of hearing about the “big six”. Are 80K independent publishers in the US alone and why the emphasis is on the big six, who will have the most difficult time making the transition, don’t know. It will be a “sea change” in skill sets for the big publishers to survive. The smaller independents will do well. Used to be that “front of store” was what publishers wanted, but fact is that people shopping online now and front of store doesn’t have the same impact. Traditional bookstore imploding and social media exploding. Independent booksellers have a real chance to come back today. Independent bookstore is part of the community and are talking community today. The smart ones will be understand this. Pie in the sky for publishers to get to individual consumers. More important to use social media to get to verticals rather than one-to-one. Music tracks are not books and are not analogous. Publishers won’t go out of business if they don’t own names. As for competing with Amazon, we are the ones who bring the content not Amazon, but are partners and will compete a little bit. If publishers focus on content will do OK. Publisher should be the arbiter of taste. They curate the books and is this is most important. Don’t know that the “proper price” is. Free is not a business model, it is a marketing model. “E” allows for a lot of different pricing models and allow a lot of experimentation. Disagrees about Napack on libraries. Library consumer has not traditionally been a book buyer, but since buy is now easier and since pricing has come down, feels that libraries may make for new consumers that never bought before. Biggest problem for publishers is to define what a book is. Have to learn from the consumer what the consumer wants. Epub 3 will give us the ability to experiment if we want to.
Napack: fork in the road. For publishing is the golden age – a gift in that the devices are in the hands of millions of people. However, may not be the golden age for publishers, as opposed to publishing. Those who don’t get the new skills will fall by the wayside. Big issue today is the discoverability of books. 26% of people discover books in the store and have now to find a way to market to the digital audience. Agrees that independent seller can come back and their role will be essential in marketing books, even though will remain fairly small in total sales. If chain sellers are only a showroom for what’s online then they will fail. Big booksellers will have to master both worlds. For most history publishers had no idea who their consumers were. Industry was behind in understanding that the public is made of individuals. For publishers to become retailers is a leap too far at the current state. Apple became dominant in music because it created the chain at a good price point. Amazon represents a significantly lower percent 60% of their business because new channels are opening up. Have always been retailers who published books. This is not new. Over 1million books published in the US every year and publisher’s role to to bring the good ones to the public. Will see a wide range of pricing in ebooks but will not see $28 ebook. $9.99 is a fine price for ebook, some will be less and some will be more and the art of the publisher is to set the proper price for the book. Free might be a business model for a single author, but not for a publisher because of the risk of free crowding out paid. Macmillan believes in libraries but haven’t found an appropriate business model that will allow them to work with libraries – fear is that they won’t sell any of those library books. Now have the ability to learn much more about what the consumer is doing to our products. Epub 3 opens up a huge set of opportunities. It will give us the possibility to experiment with formats and find new formats that can bring to the public. Won’t change the business much, however, in the next two years. Beyond that time frame the experiments will begin to take hold.
Steinberger: people focus on be bestsellers, but digital is about lowering the barriers to market and sell books. A giant wave will make books that have a more modest audience easier to get out there. Getting best sellers out was never a big challenge – but getting the midlist out was hard. With digital the midlist will be profitable and available. For independent publisher, the big question is what they are going to be best at. For them to change their business to be “digital” isn’t the right direction. They need to do their job as publishers first – create great books. Are in a much healthier environment than a year ago, seem to be new opportunities every day. Free is not a great idea, newspapers and magazines trying to retreat from this. “E” creates the opportunity to have other pricing models. International market for english books is a tremendous untapped market for publishers. International sales for magazines in the digital format are off the charts.
Hyatt: CEOs now have to run two companies at the same time, both print and digital. Big shift now is physical distribution of books to online retailers. Awash in content and discoverability had in the past is gone. Have new methods available now and have to jump on them now – social media. Owning the name is not that important except in certain markets. May be useful if you are targeting a specific audience – a specific community. Content is king and if have great content then will be able to compete. Today smaller companies that stand for something can actually become a brand in communities. The is no “one fair price” , market will set the price. People are not buying the price they are buying the content. Exciting thing about ebooks is that publishers now have ability to get a lot of intelligence about their readers and what they do.