By George Lossius, CEO at Publishing Technology
There is every chance that, in the not too distant future, 2012 will be referred to as the start of a new era in trade publishing, when the industry fully accepted that it is no longer serving a market of consumers converting to digital; rather digital has become a naturalized part of the core offering of the industry.
The year began with the aftermath of Christmas 2011’s frenzy of e-downloads and printed book sales still on the slide. However, contrary to many predictions, and not surprising when you consider the vastly larger global digital marketplace, early indications show that this rush to digital is supporting a growth in the total book market, rather than merely cannibalizing on print books. Indeed, most digital consumers who were print book readers are still buying print books as well.
At the same time 2012 will be seen as the start of an era where major publishers decided they needed to bulk up to stand toe to toe with megaliths like Amazon, Google and Apple. The announcement of the merger between Penguin and Random House looks to shake up the industry and set the trend for big name alliances that will dominate 2013 and 2014. What does trade publishing look like in 2013 then? Here are five of the trends we can expect to steer the industry agenda over the coming months:
1. Consolidation as a Means of Accumulation?
The merger of Penguin and Random House hit the headlines at the end of October, and there is no doubt in my mind that the deal represents the first in a series of similar ventures which will alter the shape of trade publishing again. Larger publishers have little choice today than to work with Amazon, Apple and Google. Each of these organizations have done amazing things for the publishing sector, but at the same time they dictate, and you either find other ways of trading or you find ways of standing up to the dictates. Both require versatility, which smaller publishers are probably better placed to benefit from, strength of market position (not to be lost to competitors), which the mergers are aiming to achieve, and cash investment. As a result, I think we could see the number of large trade publishers diminishing by up to half.
These new global organizations will, like their chief competitors, require global intellectual property solutions which share IP across an establishment. This corporate streamlining of the industry is distinctly different from the fragmented, insular workings of imprints within houses that have been the norm until now. Of course, this growth in size will impact on the mobility of publishers, and we will continue to see the steady creation of small businesses. Lean outfits that flourish, interest and excite will be prime targets for larger publishers looking to innovate.
2. Amazon is Top Dog
Amazon’s strength and size is such that it is irrevocably altering the very makeup and fabric of the industry. It’s also driving the way consumers engage with content. While content presentation and delivery is wholly focused on end-user demand, and publishers and retailers will continue to wrangle in their attempts to surpass each other in satisfying the consumer, Amazon still has the virtual monopoly on ebook consumption and self-publishing. The tendency for the consumer to prioritize the ease and familiarity that Amazon represents will continue far into 2013, and publishers will have to work really hard to provide an offering strong enough to alter consumer behaviour in this regard. Moreover, if self-publishing through Amazon becomes a commercially viable route for authors and more migrate their books to the site, consumers will come to view Amazon as a resource for exclusive content to rival the output of traditional publishers.
3. It’s all ‘APP-ening Online
One trend that we are bound to see more of in 2013 is an alteration in trade publishing’s approach to app development. Technological competition will, over time, result in a diminished market share for the “closed” technology products that dominate the landscape today. A clear side-effect of this will be a move from device-based apps to web-based apps that buffer content and tools, but at the same time function cross-platform. This transition offers publishers a much stronger opportunity to invest in end-user satisfaction and successfully invest once to monetize content for numerous platforms.
It is undeniable that social media has thundered into a position of cultural prevalence. It is also certain that the likes of Twitter and Facebook present publishers with a brilliant platform for marketing and publicity activities. What hasn’t happened, however, is the evolution of social media as a viable sales platform despite the hype. Migrating e-commerce to these platforms remains elusive. Could 2013 be the year that publishers leave social media to individuals, and focus resources elsewhere?
Trade publishers may find it more commercially savvy to concentrate their online investment on web-based content, multiple device strategy, and working on new means to divide and distribute e-content (such as trialling chapter or sample downloads and payment options for ebooks). It’s certainly a transitional time for sales channels, content sharing and new business models targeted at the vast casual online audience.
5. Exploring New Markets
Publishing is becoming a more globalized industry. Mergers, acquisitions, joint ventures, shared media platforms and technological advances have made the world a much smaller place. Trade publishers should continue to exploit the opportunities within the world’s fastest-growing markets. In 2013 it is my bet that the USA will continue to reign supreme given the sustainability of its current readership rates and openness to new models of publishing. China will also remain a lucrative market given the heavy investment the Chinese government is committing to the industry, but lucrative mainly to local publishers for the time being. Finally, the Latin American countries have avoided the economic downturn, so unlike their European contemporaries offer a buoyant market place. Of these, Mexico, Colombia, and Ecuador are particularly interesting because as they find their footing within the international market place, the process of foreign content acquisition grows apace, but perhaps this is more of interest to academic & education publishers.
It’s my belief that we really are amidst a watershed moment for the publishing industry. Digital is firmly a part of the offering, but the landscape within which we work is about to alter considerably. Trade publishers should be braced for change, but not fearful of it. Perhaps rather than trying to predict the future, publishers need to focus on getting their houses in order, as strong and efficient systems are an ever-more necessary foundation for secure and successful working within an unpredictable future globalized market place. With strong foundations, priority investment in multiple platforms and an open mind to creative and commercial ventures both in the UK and further afield, alongside the key commitment to content generation, trade publishers can and should thrive in 2013 and beyond.
George Lossius is the CEO of UK-based, AIM listed software and services provider, Publishing Technology.