Editorial by Javier Celaya
A dramatic shift is happening in the Spanish-language publishing sector. In the last few months, the three largest publishing houses — Random House Mondadori, Grupo Planeta and Santillana — have taken a series of decisions (i.e competitive e-book pricing offers, launch of digital first collections, greater investments in e-marketing campaigns, etc.) that, when viewed collectively, signal the end of the first stage of the digital era in Spanish-language publishing.
Following an initial phase, known in the sector as the Libranda Era, which attempted to slow down changes in the sector by maintaining the current ecosystem in the book world, many book professionals in Spain believe that we will be entering a much more dynamic second phase, one I’ll dub the Internationalization Era. This new era is characterized by increasing interest by the main international players — Amazon, Google, Apple, Barnes & Noble, TheCopia.com, Kobo, Yudu, among other — to enhance their platforms with content in Spanish from Spain and Latin America.
Spanish is the third most spoken language in the world after English and Chinese, and the revenue potential from a market made of 500 million Spanish speakers will not be overlooked. As we all know, the Internet has no frontiers and, therefore, once the English content market consolidates, the main international players will enrich their catalogs with content from other potential markets, especially the Spanish one. Barnes & Noble has already initiated this race towards globalization by aggregating more than 40,000 Spanish titles from various Spanish and Latin American publishers and offering them for sale online — an approach that will soon be imitated by the rest of the international players.
The upcoming academic year (2011-2012) will see the gradual arrival of each of the aforementioned players in the Spanish markets, which will undoubtedly accelerate the digital race. Spanish publishers, booksellers and librarians will have their hand forced and will henceforth need to make strategic decisions in reaction to the arrival of these international competitors.
In this competitive context, it is not surprising that Spanish publishers are testing dynamic e-book pricing policies in an effort to consolidate the increasing digital demand. Publishers are relying more and more on new Web 2.0 technologies to promote their books and authors. But, most important of all, we’re seeing a re-definition of their sales and distribution strategies to cope with this new book ecosystem.
The new sales and distribution strategies may be divided into three major channels: direct sales via the publishers’ websites, sales via specialized online bookstores, and, sales via multichannel platforms offering digital books, music, movies, magazines, and more. None of the above three channels excludes the other and are, in fact, entirely complementary. Depending on the type of publisher (trade, STM, K-12, etc.) one of the channels will have likely have a more significant impact than the other. But no publisher should refuse to market their products in any of the three categories, as this would limit potential for growth and undermine their ability to analyze consumer behavior using real time sales data from each category — the most important strategic management tool for any company in the digital era.
Various entities in the publishing sector have been directly selling their books via their websites for years. Excluding a few highly specialized publishers, most of them have indicated that sales have not been especially high, inspiring little trust in the direct channel option. Of course, placing a cart on a publishers’ website does not guarantee results. What’s more, those publishers who believe that an analysis of direct sales should simply be based on revenue derived from the total number of transactions will never truly understand the real potential of this channel. The fact is, beyond the simple e-commerce transaction, the true added value of a direct sale is the ability to glean first-hand knowledge of customer behavior during the purchasing process, as well as the post-sales process when the product is consumed and the customer expresses satisfaction or dissatisfaction.
If publishers fail to make e-commerce central to their new business strategies, results will always be limited. In the 20th century, distribution was publishers’ main competitive advantage and they, unlike potential competitors, were able to promote their products in the largest number of points of sale. In the digital era, any website or blog, or even a social network such as Facebook or Twitter, can become a point of sale for any type of book. The competitive advantage for publishers in the 21st century resides in the having first-hand knowledge of their customers and their behavior during the purchasing process and consumption patterns of their products and services.
We are entering a new era where the relationship between companies and their users (B2C) will have a greater impact than that of the current intermediary model, i.e. “from company to company” (B2B). In the digital era, a publisher’s main asset is creating a direct, trusted and value-added relationship with authors and readers, respectively. This should not be forgotten.
Javier Celaya is the vice president of the Spanish Digital Magazines Association (ARDE), member of the Board of Directors of the Spanish Digital Economy Association (ADIGITAL) and CEO and founder of Dosdoce, an online portal analyzes the use of the new technologies in the cultural sector and publishes annual studies related to trends in the Spanish publishing sector.