One need not be some egghead visionary to predict the future of the publishing industry in this age of technological revolution.
Think of it this way. Every time a dedicated reader buys a digitized reading device whether it be a Kindle, SONY reader, Vook, iPad, the upcoming Google device or others crowding into the marketplace, the big box stores and small hard-pressed independents selling hardcover or paperback books lose one customer. That one customer, if he or she is a truly dedicated reader, can be counted on to buy at least one book a month.
Thus, the potential customer for both the big box and independent stores stocking books by traditional publishers can lose ten to twelve sales or more a year. Let us further calculate into the mix that most of these books are one time reads, the industry’s highest profit category.
It is estimated that within the next few years, these reading devices will, by most counts, mount into the multi-millions. There can be no accurate measurement since the number is dependent on numerous factors including the price point, which is bound to be lower and the fact that the content on these dedicated readers are already morphing into mobile smart phones.
Considering the erosion of his customer base, can the retailer locked into the sale of physical books survive using his traditional business paradigm? Does he need the display space to sell his shrinking flow of paper product? Without getting into the esoterics of the retail end of the business with its bizarre contingency methods and pay for placement ploys, he will have to reduce his space as fast as his leases allow and try to save his sales volume by quickly converting his content stream to digital devices. Case in point, the Vook by Barnes and Noble.
His loss of retail customers will be directly proportional to the rise in the number of e-reading devices. Considering the ease of purchase, the endless assortment, the sheer convenience of buying content on these devices, his future will pretty much resemble what befell the music industry. His real hope is that the proliferation of digital reading devices will be slow enough for him to make a sensible retreat and create a new business plan to counter the shrinkage of his paper book customer base.
Unfortunately, when technology creators smell a buck, new innovations swiftly follow and soon products find a price point that fit more and more pocketbooks. Expect the cost of reading devices to dive as more and more people discover that the e-book experience does not impinge upon their comfort with and enjoyment of the content.
What about his principal supplier, the book publisher? The publisher has long held a monopoly over content, advertising, publicity and marketing, along with his partner, the big box bookstore and his on-line partner, chiefly Amazon, which, by far presently holds sway over the physical book business.
With his content, advertising, and marketing monopoly eroding, the publisher has finally awakened to the fact that he is endangered by the slimmer margins he had to swallow by Amazon having set a price point of $9.95 as the price of that content. Fighting back, he has forced Amazon to reprice its book output. There is a growing consensus that this price surge has come too late in the process and will quickly default to Amazon’s $9.95 cap or less.
The publisher, like the retailer, is betting that sales of the digital reader device will move at a pace slow enough to get him to reorganize his resources and cut costs to protect his margins while he noodles ways to continue to show profits to his parent company. If he does not protect his bottom line his number masters will either jump ship or strangle his resources with penny pinching.
The publisher has another problem. He has relied on his skills at branding his authors and impressing them on the public mind. But his branding of new authors will be stymied by the catastrophic shrinkage in the print media and the vast splintering of attention going on in cyberspace. To get traction on the Internet and feature an author above the chatter is a challenge beyond merely flacking him or her on book and social networking sites. Yes, book marketing depends mostly on word of mouth, but it needs a head start somewhere.
One can expect dedicated reading device companies to devise various promotional opportunities for suppliers of digital content, but in a vast marketplace of millions of books multiplied by Google’s ambitious plan to digitize all out of print books and new author generated publishing entries, this will present a challenge that no one has yet come close to mastering.
There is always the possibility of promoting a book on television or direct mail but the margins of single sales may not allow that to equate with a sensible return on dollars spent on these types of promotion, especially for an unbranded author.
One must not discount the creative power of the publisher and the retailer to come up with business saving solutions, but the economic and historical realities will have to be factored in. Which brings us to the author, the producer of the raw material for the publishing trade.
The publishers can still count on their best sellers to lead the pack, although even those who write these books will suffer diminishment in their advances. Like the movie business, the publishers will expect their top sellers to carry the load with the rest of their authors holding up the rear at lower and lower advances, their survival based more upon the necessity to keep alive the concept of a “publisher” who produces many books, which gives his reputation heft and viability. Expect authors who no longer can depend on publishers to provide them with a comfortable living to set out on some alternative publishing path made possible by the ease in which they can enter the fray with the new digital devices.
Of course authors who have not been vetted by the traditional publishing gatekeepers, who keep their eyes peeled for customer trends in every genre, may stumble on their ego generated belief that they can either buck the trends or come up with creative ways to shoehorn their work into traditional genres. Some will succeed. Most won’t. The best shot at alternative publishing will be that author who has been multi-published by the traditional media and can capitalize on his previous books, some name recall and actual participation in the marketplace.
Others may try to emulate the savvy publishers of Romance and Science Fiction genres that now dominate the e-book market, but that strategy will come up against both branded authors of both genres and a glut of product.
Thus, the content monopoly once enjoyed by publishers but no longer as potent, will further diminish their power, along with their marketing monopoly. Still the playing field will not be level for the entrepreneurial author and it will not be easy for him to strike out on his own. He may choose to go with third party digital sellers or hook on exclusively with digital device providers or perhaps join author cooperatives that might or might not achieve results. Deprived of ample advances he will certainly have to pony up his own resources, if he has them.
Indeed, even the branded author with a multi-million book sales experience, might one day take it on his own to sever his relationship with the traditional publisher and set up his business as a marketer of his own books. There are already signs of this alienation beginning.
Rising above the chatter, finding sales traction among millions of books, will be a challenge of enormous proportions for both the publisher and the author, not to mention the impact on backpack manufacturers, bookcase manufacturers, printers, binderies, libraries, artists, and any other trades that have feasted on the publishing business for many years.
One thing is certain, the digital revolution will be game changing for all concerned in the publishing business. It will be deep and profound. Nothing in the business will remain the same. The question will be how long it will take for the e-book
tipping point to arrive.
In my opinion the publishing business might have just enough time left for an orderly retreat. It will make a valiant stand, but in the end it will be forced to surrender to the relentless forces of change.