Publishing in 2010: Part 2

Yesterday we started looking at the changes that are impacting publishing and posted our thoughts: Publishing in 2010: Part 1

Today we look at the two issue of, ‘Content on Demand’ and ‘Consolidation’

3. Content On Demand.

We are moving rapidly from a culture of ‘buy and wait’ to one of ‘click and get it’. This first started with the near instant gratification from the likes of Amazon, who re wrote customer service online and which has now been adopted by the use of mobiles and streaming of music and video.

In the print world we started with printing ‘just in case’ and that resulted in over production and waste and then moved in many areas to print on demand, or as it is often called ‘just in time’. This may not have been true ‘just in time’ but did reduce print runs for back lists, reduced the unpredictable reprints and to kept titles effectively in print. Some took bold steps to move the printing locally to the consumer and in doing so move from a ‘print and distribute’ to a ‘distribute and print’, but the reality today is that the price to do this is still to high and the model still unproven.

We now see digital offering digital downloads of video, audio and ebooks on demand and TV is also being streamed. YouTube has changed our taste and brought video to all. Importantly digital now offers the opportunity to store digital inventory once at source and deliver it locally direct to the consumer on requested. No more tying the transaction, information, customer relationship to the content, but effectively separating these and creating truly virtual and distributed inventories. In the case of publishing there is no reason why the content should ever leave the publisher’s warehouse until it is sold. He instantly knows what is sold. This shift changes relationships and often the publisher believes it offers a direct channel to the consumer. The reality is that it strengthens not weakens the existing channel and provides the opportunity for anyone to sell their titles. We often ask publishers how many trading partners they give their digital files to today and how many they think they will give them to tomorrow. Often we still see many continuing to hang on to the old ways and we still hear ‘my repository is bigger than yours’ schoolyard naïve bragging.

However, the greatest challenge and opportunity that content on demand offers, is the potential shift from outright ownership of a physical book or digital copy, to the licence to access a digital copy. If we look at music and the new digital streaming services, we see a rebalancing between the track to access and the tracks to own models. Consumers will still want to own, but may now want to own less and rent more.

We therefore need to watch the likes of the emerging Google models where their library and Editions models use the same content. We must watch the streaming services like Spotify and Google music who stream music today but could stream anything digital tomorrow.

Finally we need to recognise that the public libraries have real growth opportunities tomorrow. There are no longer restricted to the shelf space but to an unlimited virtual shelf consisting of everything ever published. However, this then raises the conflict between their rent for free model and the reseller’s purchase model.

Content on Demand is not just about delivery it’s about the total customer interaction, storage and service. Google have adopted a store once serve many ways approach and others a store anywhere and serve anywhere technology. What is clear is that the consumer now wants ‘click and get’ and that this impacts both physical and digital content.

4. Consolidation

Many predicted that the market would consolidate around the few and the others would be slowly suffocated out of the market. It could be resellers, wholesalers, publishers whoever, we have been brought up to believe big is good and big is the only way. This logic is not wrong and will continue to work. The economies of scale and scope will always rule but rather than killing the rest they are now facilitating ‘small is beautiful’ and ‘small works’.

Digital provides a level playing field. This however doesn’t mean that this is open to all, nor that all can succeed. What is clear is that those in the middle are most at risk. They can’t compete with the big, but have their profile. They also can’t compete with small, as they often have too much baggage and aren’t able to move and adapt swiftly to change. The other challenges is that we often assume big is as we knew it yesterday, it isn’t and often now about the size of new entrants. The new big is Google, Adobe, Sony, Apple. In accepting this we must also accept that the new small and the new middle will also change.

We have yet to see full vertical consolidation. The problem is that organisations often find it difficult to collaborate and work a vertical all too often we see many trying to compete with those they should be partnering with and partnering with those who they should be competing with. The vertical world is not always content centric and may consist of a number of content providers, who together make the vertical offer.

Horizontal consolidation has been happening for some time. We look at our high streets and see fewer general chains. We look at music and see virtually none. The challenge here is that these were the stores that often shifted a wide range of volume and once gone are often replaced with ones that shift a narrow range of volume. The independent bookstore can survive but not as a multi publisher franchise that is supported by sale or return.

Consolidation is impacting the channel, the range, the print run, the rights acquired and developed and everything from the author to the reader. This genie is out of the bottle and not going back so we must adapt and change to survive.

Next we will look at the mystical publication date and the marketing focus.