It's All About Content and Rights

Publishers rightly tend to stick to what they good at when it comes to genre and content. The public may not always recognise the Publishing brand and only recognise the author, but focusing on the genre and building authoritative collections is critical to publishing today. Some mistook this focus as being what book sellers should also do, but forgot that book consumers were eclectic in their buying habits and wanted both value and ‘one stop’ shops.

Earlier this year, Wiley sold its Fromer’s travel guide to Google and had declared its intent to dispose of its remaining trade and reference division. Today they concluded that sale to Houghton Mifflin Harcourt (HMH). The sale includes Wiley’s cookbooks, dictionaries and study guides. This continues the new approach within HMH to trade and consolidates material under their Betty Crocker, Better Homes and Gardens and How to Cook Everything brands. We are all aware of the cookbook celebrity brands and success of the likes of Jamie Oliver in the UK and Betty Croker in the US. Cookbooks appear to be holding their own in print and despite the significant growth in cookery applications and websites, account for some 2% of book sales in the US market. HMH now also add Webster’s New World Dictionary to it’s CliffsNotes and educational publishing, test preparation and assessment services.

Growing vertical publishing operations is not new and is publishing. As further publisher consolidation takes place, what we once saw a one industry joined together by a single format - the book is starting to diverge and consolidate into stronger vertical operations. The digital marketplace now allows these focused content repositories to be exploited in ways that were somewhat restricted by the book and the economics of the physical market. Consolidation of ‘book’ content will continue for those wanting a one stop shop and book buying value, but new markets will now evolve for the digital content and context which will be outside of the book market as we know it today. Packaging and licencing rights into new offers will become increasingly important as the content itself starts to become more fluid. We must always remember that Steve Jobs in creating iTunes sold tracks not albums, George Martin said the album was the menu and the concert the meal and that individual recipe could be proportionately more valuable than the collection.

Should publishers become the genre point of focus? Can author brands co-operate to form compelling points of consumer focus, or will they always be reliant of third parties to aggregate them? Who are the genre consolidators that the consumer recognises and how can they cash in on their ‘first point of contact’ opportunity?

Yesterday, books were not stocked by retailers whose primary goal was to sell other stuff,  but as retail itself migrates increasingly online, then adding associated digital content that enhances the proposition and authority of the sale, becomes a potentially no risk, small cost added consumer value and lock-in. Being able to licence that digital content in chunks, collections and many renditions may be the key to many publishers moving forward.

It’s all about content and rights.   

Amazon Takes Another Step to Join the Publishing Pieces

There verticals that deal with niche markets and offer everything to do with that particular market or segment, the butcher, the baker and the candlestick maker. There are other vertical businesses that effectively cover all the bases from creation to consumption. There are the generalists who offer a range of products and specialise in one aspect of the respective supply chain. Finally there are the category killers who monopolise a particular segment by a service feature, product or other unique and compelling offer and stifle the competition.

So what has this to do with publishing?

Amazon.com yesterday announced the launch of Montlake Romance. It’s not the first but the fourth and latest imprint from Amazon Publishing. We saw with Harlequin the early adoption of the romance genre in ebooks and with resent research claiming that there are more women ereaders than men, romance looks a safe ebook bet. Montlake Romance takes its name from the Seattle neighbourhood of Montlake, and will publish a range romance sub-genres such as suspense, contemporary, historic, fantasy and paranormal.

Amazon, as we have long predicted, is now morphing into a true vertical that not only offers a comprehensive range of print, audio and ebooks, a digital platform, self publishing, print on demand, exclusive and no exclusive author deals, a global service, a fledgling library / rental / lending facility, a public library tie up with Overdrive and brand, but now also growing publisher services. Have we missed anything? Well there is their technology which now includes cloud facilities, other media activities, huge customer base, affiliate service and market clout.

We ask ourselves as to when do agents start to consider Amazon as a publisher?

Amazon has proved many times that it now understands the book business and is constantly figuring out how to do it smarter. Many still believe that it must follow the traditional route, but Amazon has cherry picked its route and somewhat wisely has avoided the high risk and speculative road. It has invested heavily, but in doing things smarter and avoided the publishing gambles that litter the market. After all, they know they can sell these if they are winners and avoid them if they are losers.

They have instead chosen to focus on building a comprehensive platform from author to reader. The information that they have is significant and their ability to link authors, titles and readers within their own environment can’t be underestimated. As publishers struggle to build a direct market Amazon are building back up the chain to capture content and rights.

In less that a month Amazon have strategically partnered with Overdrive on public libraries and now has taken its next baby step with Montlake. We doubt that those who feared the domination of Amazon in the past as a retailer have seen the reality and potential of a vertical category killer in the future.

Digital Publishing Observations and Conclusions

Today we look at the major underlying changes that are reshaping publishing.

We would like to introduce three observations which help explain the challenges and then explore how these will impact and reshape publishing.

The first observation we would offer is about observation itself.

When you look through a window into a house you see a room. The view will be different, dependant on which window you look through. If several people look at the same house, but through different windows, they will each see something different. It is the same house but each window is rendering a different perspective. It is understandable that they may all form a completely different view of the house based on what that they view thy have observed.

Unless you are an architect, builder or tradesman, we often take for granted the building’s fabric. This holds it offers common services in the various rooms and protects it by a common roof and walls.

We would suggest businesses are no different and often we focus on the individual perspectives and ignore the framework that supports them.
What are the core elements that are the fabric and provide common services through publishing and are these fit for purpose in this new digital world?

The second observation comes through our experience within the oil industry.

The oil industry is ‘vertical’, with at one end, the upstream activity of acquisition and exploration though to production, and at the other the downstream activities of refinery, distribution and retail. There are always specialists operators in all areas but the Mobil, Shell, BP, Total, Elf are vertical operators who have build global and vertical brands that are capable of transcending sectors and providing vertical authority. These companies may be viewed by some as very rigid organisations, but are in fact very flexible and dynamic in their internal structures and operations. Most oil fields are operated by one company, with their competitors and others being joint venture shareholders/investors in the same field. These organisations understand collaborative ventures and that these mitigate risk, in a very high risk business, strengthen each operator’s ability to deliver and shares the spoils often across a number of ventures.

Today the oil giants no longer view themselves as solely in oil but are redefining and repositioning themselves in the energy industry. They are still vertical but the width of their focus just got a whole lot wider.

Are there true publishing verticals that are flexible and who are now expanding their brand to a wider market?

The third observation goes back to that famous 1979 Andy Warhol quote, ‘Everyone will be famous for 15 minutes.’

We have seen the dramatic rise in social networking and the new age of communication. The technology has in effect made everyone a journalist, photographer, social commentator a would be musician and author. Youtube, Facebook and Twitter have each started to reshape social interaction and provided the platform for the democratisation of creativity.

Yesterday our generation watched TV, listened to music, played games and read books, but there now is a new generation who, make TV, music, games and books, but do not always share our values with respect to the rights and permissions we observed before. They now often want to often ‘mix’ or repurpose old material to create new works. The new environment is fuelling this and spawning a generation where many can enjoy and attain their 15 minutes of fame.

Conclusions: These observations help us understand some of the challenges publishing is facing today. The question is how it is positioned to now meet them?

Publishing is a rights business.

It is these rights that define its rules, relationships, processes, the reward structure and can shape the content itself. Rights can be seen as the fabric, utilities and services that make it a house.

However imagine you have returned to find that the new occupiers have moved the rooms around, what was the kitchen is now a study and the loft is a new master bedroom with a new view through a new skylight. Alternatively, the rooms may have remained but the furniture and look has been completely redesigned. It’s not enough to understand the rights as they were.

Rights have to adjust to new demands, new owners and merely expecting every occupier of the house to maintain the status quo is naive. Publishing rights must adjust in both use and time and not straight jacket us into the past. We must respect that houses don’t last forever without maintenance. The house now requires new digital services.

Publishing several industries joined by a common format – the book.

Some of these have clear vertical positions and brands and these are visible today in professional, scientific, academic and educational segments. These markets are dominated by a few organisations that have already made great digital inroads and some have repositioned themselves, their market relationships and are capable of widening their offer.

However, when we look at the general trade the opportunity is far harder to envisage.
We may have major publishers and major retailers but we only have Amazon that today is capable of being vertical in a major sense. It has built brand, grown global reach, acquired companies and started ventures right across the publishing life cycle and value chain. Niche players may build vertically but still think horizontally and often believe the world revolves around them, when often its around others and they are merely playing a part.

When it comes to direct sales many publishers are often buffered from the consumer coal face and often haven’t the list and relationship management skill set they think they have. This again is truer in the general trade environment than in the other more vertical ones.

The traditional retailers are having their legs chopped off as supermarkets and other retail giants take the easy mass market volume sales and are likely to compete hard for the emerging digital market. Many believe that Apple and Google are the competitive threats, or opportunities to compete against Amazon, but we also have to throw in WalMart, Tesco, Costco, and even local players such as Sainsburys.

The author is an often overlooked vertical opportunity who has the brand and up until today needed the publishing infrastructure to be heard and sell volume. However, the new world will offer some, the opportunity to follow the Ian Fleming estate and do it themselves

Finally, reading is not a social experience but books are.

Social Networking has opened up our world to wider connected communities. We no longer are restricted in how, what and when we communicate and who we communicate with. We still have the immersive reading experience but now are able to share this with others in ways that we just impossible before.

Academia has long been pushing back these social boundaries and clearly has common interest in doing so at many levels. However, readers are very eclectic in their interests and reading taste and therefore creating a Facebook for reading would appear a questionable route and one far from proven today. Niche interest groups will always flourish, but they will be limited to their area of interest and community. Do we recreate Facebook or use Facebook to create reading groups? We have to recognise that sharing our personal thoughts and recommendations often starts with friends not strangers.

There is no silver social networking bullet but there are lots of experiments, baby steps, community bridges to be built. Anyone serious about doing business tomorrow can’t afford not to be trying many routes. Some will prove useless, some limited and some may open up new opportunities and growth. This is not restricted to publishers but is equally relevant to authors, resellers, today’s reading groups and libraries, in fact everyone.

Today everyone wants to have the potential to be heard and publishing has to understand that this in itself will have a dramatic impact on everyone within today’s value chain and isn’t about selling more books but about connecting people and context with content,

Cookstr a Vertical CookWorld?

Why not have a dedicated portal just for cooking where you link cooks, recipes, restaurants reviewers and of course consumers? It makes a lot of sense and is a clear vertical which touches all.

We looked at Cookstr.com which was foundered and is headed by Will Schwalbe who was previously at Hyperion Books and before that William Morrow. He is supported by Katie Workman, who was previously Associate Publisher of Workman Publishing. The site is clean and gives the perfect meeting place to discover cooks, cookbook authors, recipes, restaurants and has profiles of the cooks, a foodie blog. The user can print off a recipe send it to a friend and will soon offer MyCookstr, where they can save recipes, make notes, and shopping lists.

At first it shows the potential of the vertical and the wealth of content available. You can buy a cookbook, but the reader is referred to a cascade of US stores to complete the purchase, which somehow breaks the connection just formed and may be fine for some but why do you want to to do it and give them a beauty contest. There doesn’t appear to be any video clips, GPS linking to nearest restaurant or links as to where you can source produce, but this is only a beta site! You can buy kitchen gifts and advertising is coming. It clearly is one step better than the cook magazine and breaks the spine of the old cookbook.

We presume the author/cook always owns the recipe irrespective of any compilation or cookbook which gives us an interesting issue when the chapter/recipe/article can be traded outside of the book.

The question we had was how you make money on the individual recipes which after all is what everyone will want especially if you can print it off for free. We also see a design that is still basically publisher centric and not consumer centric in that it has joined the cook recipe and consumer dots but missed the restaurant recipe, supplies and consumer ones. We liked it as a site and it obviously can port to a mobile app is linked to twitter and Face Book and it shows want can be done with some slick design.