Publishing whatever sector, geography and format has always
adhered to Pareto’s 80/20 law and in many cases less than 20% have generated
even greater than 80% of revenue and unit sales. This obviously leads to a polarisation
of the market, with in many cases, no more than a handful of publishers and
channel operators dominating each sector. Many don’t like it, cry monopoly, but
its not going away and the dilution of one operator will just be replaced by
another.
We recently raised the question of the impact of the migration
from print to digital revenues and asked what it would mean to organisations,
supply chains and the remaining print based operations. We all know digital is
happening and continues to accelerate and although we may not be able to
predict where the line will be drawn, the impact will be significant and not
preparing for it may be like a publishing ‘Pearl Harbour’. Perhaps today’s
biggest conference circuit agenda should be on , ‘How to survive in a downsized
print world.’
When Chris Anderson first coined ‘long tail economics’ in 2006,
many were cynical and merely asked where the money was. It challenged the fundamental
principles of the economies of scale and scope on which the 20th
century was successful. However, today no one can deny that the long tail is here
and not only has it arrived, revitalised the forgotten back list, inspired many
authors to do it themselves, but it has challenged the industry’s obsession
with front list. Penguin’s recent acquisition of self publishing operation
Author Solutions, is not just about feeding the machine, it also about trying
to accommodate the new long tail world and get involved in a mass movement.
Amazon have once again shown great strategic vision and application with their
Kindle DP programme, which could now become a significant jewel in their crown
and although other players are trying to emulate it, they are playing catch up
and are clearly behind the curve. Open research and access is also going to
have a significant impact on some markets and change the balance of power
across the value chain. However, we still to see some more moves and there are
some real opportunities today that are just begging to be taken.
Only this week we read in Publishers Weekly about the
demise of print back list sales which is in part down to reduced shelf
space and also part down to digital offering what we believe is a more logical
and better home for these works. This again impacts the balance of the market
both in terms of front versus back list and also physical versus digital. the
interesting question is, if the physical back list market becomes less
predictable and attractive does this give publishers the confidence to digitise
their back list or raise the risk that digital migration may not be rewarding? Will
they merely sit on their assets, revert them, digitise them with no marketing
effort, or let them slide into an orphanage? Digital may only be seen to be
worth the effort if it generates sales and if the digital shelves are full how
do readers find and differentiate the back list from the rest?
We are no longer talking about ‘long tail’ economics but ‘long
market’ economics.
So what will be the organisational and economic impact of
the seismic changes that are taking place today? It is not just a case of responding and
generating new revenues, but one of managing and protecting old ones too. We and
many others believe that the 80/20 law will still prevail but that the market
will become even more polarised and middle ground will change radically. One of
the leading thinkers and a Director at Bloomsbury, Richard Charkin, recently is
quoted as saying that, ‘publishers should now start to act and think as
start-ups.’ A very scary thought for some, but a stark reality for many.
In some media sectors competitors are now working together
to share investment and importantly risk and reward. Do we see a similar collaborative
publishing environment, or a continuation of the ‘winner takes all’
Many still believe that digital is just about pouring the physical
book content into a digital container. Whilst others believe that digital
wizarderly and extras will prevail and digital content will become a full blown
multi media experience. Reality will be somewhere in the middle but what is
clear is that publishing will continue to polarise and in doing so create some
exciting opportunities which will demand market and organisational change.
The democratisation of reading and writing is happening and the
question is who will be prepared, fit, and responsive and succeed in the Brave
New World of digital and physical content?
Some say the today’s weather is becoming more volatile,
extreme and unpredictable. Welcome to publishing tomorrow.
