By Daniel Kalder
As Executive Vice President, Strategy and Business Development at Publishing Technology, a digital publishing services company, Randy Petway leads the firm in its strategic development to ensure continued growth and market leadership, and is responsible for international business development. Recently Publishing Perspectives spoke with him to discuss future trends in publishing.
PP: You have said that mainstream, commercial publishers could learn a thing or two from academic publishers…such as?
RP: I’ve been working with academic publishers for a long time, and they are ahead of the curve in different areas — such as the use of technology to deliver content. They introduced electronic delivery many years ago…I’ve been in the industry for 14 years and even back then every publisher had some exposure, showed a willingness to experiment in the use of technology.
One aspect for instance is the fragmentation of product, where you take what might have been an entire book, shrink it down, bundle it up, split it into fragments and then monetize by inviting the reader to use it differently. They can buy parts of it and combine with other parts online to create a new book.
Academic publishers embrace the idea that business follows a consumer model. They pay close attention to what consumers want, and work directly with users. Now of course, these experiments are not always successful, but you learn from the examples.
PP: Can you give us some examples of innovations in academic publishing that could be applied to more mainstream publishing?
RP: Sure. Take crime, for instance. Consumers typically come back to the genre. They like to draw links between content and not just one specific author…For instance, perhaps they are interested in crime novels in one specific area or historical era. Academic publishers use the semantic web to draw out relationships between people and their interests, which helps in the discovery process for the end user. This could be applied to the trade marketplace. There’s so much more content now — technology can be used to focus on bringing things to the consumer’s attention.
PP: What about fragmentation, whereby a single book is split up or fused with content from another book or books?
RP: Fragmentation may not be ideally suited for narrative works, like novels, but it works well with instruction manuals, or hobbyist publications. There’s real potential for custom publication there,where you purchase fragments or chapters from a specialty trade journal, just the information you need, for instance, and combine it with other things you need. If your purpose is instruction, then you can take content from different books and combine them.
It also makes sense with recipe books. Here you can take a market that is challenged because of the availability of recipes online and you could reinvent it and let it re-emerge. You could go into an archive of recipe books and pull together pieces from the books you were interested in, and create a book of your own — and then make it a gift to friends and family of your favorite recipes.
PP: How is the definition of “publisher” changing?
RP: Technology has really opened the door for self publishers. People who produce content can become publishers themselves thanks to the advent of POD and digital delivery systems. Technology allows entrance to the marketplace. POD and digital printing have removed the supply chain issues that presented a barrier to the investor. It remains to be seen how significant a trend this will become, however. Some digital-first publishers have their own marketing programs, but as yet these do not represent a large number of organizations.
PP: Are e-books a threat or an opportunity to traditional publishers? Should they be scared?
RP: Yes, they should be afraid because it’s change, and we don’t know what that change will bring. Technology has opened the door for significant change. The fact that e-books are not physical has lowered the price point, for instance… But production costs haven’t gone down comparably. There is still the initial investment to be made, the costs of infrastructure and development. Publishers still need to make a serious investment of money at the front end, and they still need to produce a print copy. It’s not the end of the world, but publishers need to do serious cost modeling.
However, the lower price point on a digital book makes the purchase of a new title more of an impulse purchase, so over the long run this may drive revenues up. Absorb the costs up front, and later the lower price point will be attractive — or at least acceptable.
PP: Are physical books dead?
RP: Well, the e-book is inevitable; it’s already here. But in this debate over the tangible versus the digital, it’s easy to lose sight of that fact that not everyone is in publishing. Not everyone places value on such things as what it feels like, or the smell of a new book and so on. At the end of the day, if your goal is simply to read, then the e-book is not just acceptable but preferable for flexibility and portability.
This doesn’t mean physical books like hardcovers are going away. I still see a market for the physical book. But it’ll be a specialty market for a specific type of customer — so publishers will probably be able to charge a premium for it.
PP: What about the mass market paperback?
RP: It’s not doomed tomorrow. But it’s a convenience issue. Here’s an example: Borders are closing 700 more stores across the US. One of those is local to me. Now in the past on my way home from work, I might have gone in there to browse because it was convenient. Now it’s gone and the closest bookstore is eight or nine miles away. I’m not going to drive that far to look for a paperback, so I’m more inclined to buy it as an e-book. People are not buying mass market paperbacks as objects, they buy them to read. So they’ll go with convenience, which is to download with one click.
We really can’t underestimate the importance of “one-click purchases,” whether we read on the phone, or on an iPad with an e-commerce mechanism built in. It’s the convenience: you find out what you want, and then click, it’s yours. Shopping for books is turned into an impulse buy. You don’t need to hand over cash, or mess about with your credit card. If we make it easier to purchase books, then people may not read more, but they will buy more. Over time the one-click purchase will spread to other channels. Think about Facebook, for instance. They’re always looking for ways to monetize. Imagine there’s a reader’s group [online] and they review a book, and then, with one click it can be yours.
PP: What have publishers learned from the experience of the music industry?
RP: They have learned enough to be scared. They saw what happened. But they’re still not aggressive enough in dealing with a changing market. There are differences between music and books yes, but sometimes it feels like too many publishers are leaving their heads in the sand…
Like music, publishers will have to shift their focus to other revenue streams. People will have to be very clever to make up for lost revenues. In music, a lot of the money now comes from touring. Authors can’t do that, except for a few who have built up a brand. So perhaps they will need to monetize other things such as granting early access to content, or paying for access to a serialized story. Enhanced books are another possibility, but publishers really need to start thinking about the experience rather than just adding bells and whistles because they can. The experience should be seamless, integrated, invisible.
The change has not played itself out completely…but there are two things you’re not gonna fight — technology and consumer demand. Consumers will get the content they want. The key is to deal with these two realities — and monetize.