Friday, January 24, 2014

Digital Warming

Global warming is effecting our weather and being blamed for the extreme weather we are witnessing around the world. This year alone we have had exception gales and flooding across the UK, a heat wave down under and polar freezing weather in the US and Canada. We understand some of the causes, but we still appear powerless to predict the future weather past the short term.

Publishing has been effected by its own digital warming which has seen the extreme performance of some, demise of others and a general unpredictability of most.

Is there a critical digital point which tips the scales of all other channels, or are there a series of tremors and spikes that we now have to live with? Technology is fairly predictable but the combined impact of this and changing consumer and social behaviour is making what was once fairly predictable market into one which now appears to be stormy and highly volatile.

Polarisation and consolidation is a given and if anything will increase as the big seek to retain market share and control and the small carve out viable niches. This is not just impacting a few but is now prevalent across the value chain. However, the traditional industry is no longer defined by the book but increasingly by technology, markets and media. Amazon is barely twenty and Google, Facebook Twitter are all relatively newcomers. The recent combination of Random House and Penguin pales into insignificance against the size of the new technology, social and online players. Size as once defined is no longer as relevant as community, touch, engagement and the Wow factor.

Interestingly we see a relatively flat overall market. Some sectors may be experiencing greater decline as their market accelerates online, whilst others are more resilient and subject to a more unpredictable path. Prices have fallen and are under constant pressure, merely raising the RRP to compensate for the discount given becomes a vicious circle where the market will increasingly dictate the price in a price comparison world. We have seen publisher declare increased revenues but is this a trend or merely another spike? We have seen other publisher flat line, or decline and is this reflective or the corporate adjustments being made, their publishing mix and offer, or digital warming? Retailers have experienced the same volatility and only recently we have seen John Smiths go one way whilst other flat line or go the other way. Many retailers no longer have the property asset to fall back on and are now a one trick pony. The ebook market is also changing. No longer are we obsessed with ‘lookie likie’ eink readers that offer little but now are focused on mobile platforms and towards a permanently connected online cloud world.

Technology has done wonders to raise the profile of the book but appears to have done little yet to increase reading. We have continued somewhat naively to pour the physical content into the digital container without questioning the logic and consumer need. Some would say it is like giving the early mass literacy readers of the Victorian age ‘War and Peace’ to read as their first book. Books must now compete even more in a time poor, channel hopping, and choice rich market.

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