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News & Press: Amnet Thought Leader Series

Future of Publishing: Challenges and Opportunities for Publishers

Sunday, June 17, 2018   (0 Comments)
Posted by: Grace Hong

Me: Siri, write me a bestseller. Oh, and can you take care of the production, marketing, and sales? I’m heading out, but I’ll be back in an hour. Let’s check in then.

Siri: Sorry, Grace. I’ve decided to go start my own business.

Whether or not we get to a point where bestsellers, hit songs, or masterpieces of art—those things we consider distinctly human—are generated by AIs, there is no doubt that the role of publishers and content creators will continue to change dramatically.

Robots are already generating “human-free stories.” The Washington Post, Associated Press, and LA Times use in-house software to create news and social media posts. A growing number of commercial products automate the production of industry reports, email and marketing copy, and more, and provide options to “humanize” style and tone. This technology will almost certainly make its way into other genres, like fiction. Robots may become fantastic novelists!

This is an extreme scenario, but it illustrates some of the challenges traditional publishers face on a smaller scale today. Anyone, including robots, can create and publish. As quality content becomes more available, content on its own may become less the locus of value. Marketing and platform capabilities that help readers discover and engage will be differentiators. Value will also be assigned to aspects of the digital experience—personalization, delivery mediums and options, functionality, speed to insight, and social engagement with creators and communities, among others. Robots won’t fulfill the need for human connection and real experiences.

The next wave of innovation will certainly push publishing further into the digital space. Over half the world’s population is now on the Internet. People are tethered to their devices, trying their best to stay up-to-date. Seventy-one percent of Americans sleep with their smartphones[1] and 81 percent have a social media profile.[2] Much of what we consume is based on recommendations on social, e-commerce, and other platforms we use for multiple purposes.

Publishers will need to develop strategies that more fundamentally disrupt the existing model.

Challenges with the Book-First Business Model

The paradigm of the book as the unit of commerce and the book-first mode of production is hurting trade publishers. The professional and education segments have had an easier time going digital. The use cases for information in the context of workflow have been more immediately apparent.

Nevertheless, the industry continues to grow, though unpredictably—it grew 6.2 percent in Q1 2018 over the prior year. However, much of the growth is attributable to a single format—audiobooks, which surged 33 percent.[3] For many publishers, this format alone is keeping their digital businesses profitable, as e-book revenues continue to decline.

While significant opportunities exist in audiobooks, Amazon has captured 41 percent of the market.[4] Popular authors like Michael Lewis are contracting exclusive deals with them and skipping print altogether. Amazon is going beyond audiobooks, investing is developing original stories similar to their model in streaming video—plays, audio magazine articles, and content from people who aren’t writers.[5]

The following are some structural challenges of the current book business model:

Reading habits. Americans spend eight minutes a day reading,[6] while they spend 5.9 hours on digital media.[7] Content they consume online is visually and audio rich, brief, created for the digital medium, pushed to them, and constitutes more time-consuming video, gaming, and streaming services.

Format innovation instead of content and platform innovation. The dominant form of commercial innovation has been format innovation. Publishers have evolved from print to e-books, audiobooks, and other products and vehicles for delivery like apps, and now, voice-enabled devices. Should the industry continue to look for the next format and medium to deliver the same content?

Transactional business model. The largely transactional model based on unit sales makes it difficult to project and control revenues or look beyond the near future. The success of select formats, titles, and trends may drive big spikes, but these are short-lived. Publishers must establish more sources of recurring revenue and new revenue streams.

Publisher Strategies

Publishers should continue to maximize their opportunity in audiobooks. At the same time, they must respond by designing content for listening and other modes of digital consumption rather than pursuing a direct translation from books.

This requires rethinking the definition of product in a fundamental way. The product is no longer just the format or purely the content. It’s in the delivery of stories and information, conveyed the way people want to consume them. Some may want a brief audio, video, or written synopsis. Others will want to go deeper and get a more complete picture, whether it’s an extended version or a set of related stories from multiple sources. Publishers must adapt to consumer desires for options and think more expansively about the audience they can address, an audience broader than readers. This means getting away from the book- and print-first mode of organization, development, distribution, and consumption.

Potential Strategic Pathways

Publishers should examine their own advantages and recognize there are opportunities Amazon is not as well-positioned to address.

Strengthening Author-Reader Relationships
Publishers could work to strengthen the author-reader relationship and involve readers in the journey of book development. This could take the form of a centralized platform for discovery and engagement, offering ways for authors and readers to connect and pursuing models that serialize novels and release them in chapters. Instead of writing being a solo exercise, writers could bring readers in on the journey of story development and also provide additional commentary in video, podcasts, and other formats.

Platforms and Services for Brand Development

Such a platform could also address additional challenges authors and experts face today. For example, struggles with audience development and brand development. There may be ways to centralize and make the author experience of blogging, social media, and establishing connections with individuals and communities more efficient.

Productizing Data and Services

Some periodicals are working on monetizing their data, though this approach faces challenges given current debates on user privacy. Hearst recently announced they will launch a 20-person “data studio” to provide advertisers with insights on how audiences respond to ads.

Strengthening Digital Marketing

As one recent example, at Book Expo in May 2018, Penguin Press presented their story on how they worked with Goodreads to promote Celeste Ng’s Little Fires Everywhere, which involved providing advanced reader copies to booksellers, preorder announcements on Goodreads, and driving “Want to Read” selection on the platform through email campaigns, influencer strategies, giveaways, and other methods. The results are impressive. Three months ahead of publication, it had 4,888 “Want to Read” shelvings.

Newspapers and periodicals like the New York Times, Financial Times, Time Inc., and Vice have all acquired marketing agencies to help them better serve their audience and advertisers.

Platform Partnerships

Publishers should consider new models of partnership with the platforms that people use most. Tech companies like Google, Facebook, and others are investing heavily in content and engagement strategies. Some efforts will benefit the publishing industry. For example, Google recently announced they will invest $300 million in their Google News Initiative, with the goal of “helping news organizations and journalists thrive on the web.”

Collaboration to Create an Ecosystem, Streaming Service, or New Technology

All the aspects above could come together in an ecosystem involving creators of both written and other content and audience. This could be organized based on interests or in other ways. Creators could be encouraged to write shorter content designed for the web. The publishing industry could consider new models of collaboration that unify their efforts and business models based on subscriptions and/or micropayments to read snippets of content or support authors more directly. This could evolve further into a marketplace for authors to find editorial, marketing, skills development, and other services and presents opportunities for advertisers and technology partnerships. Making it an open ecosystem would allow third-party developers the opportunity to contribute and add value for users as well.

Where to Start

The question of how to allocate scarce resources in the digital space is difficult. There is no singular future for the industry as a whole. Each publishing segment and each company will have a different set of opportunities and capabilities to address them.

The starting point is the same: deeply understanding creators and consumers. This means being an anthropologist, analyst, designer, and strategist. When you have a crisp understanding of the customer, the problem you are uniquely well-positioned to address will become apparent.


[1] “Trends in Consumer Mobility Report,” Bank of America, 2015.

[2] “U.S. Population Social Media Penetration,” Statista, 2017.

[3] “Book Publisher Revenue Up 6.2% in First Quarter of 2018,” American Association of Publishers, May 25, 2018.

[4] “Amazon Already Disrupted the Sale of Print Titles. Up Next: Audiobooks,” Wall Street Journal, February 5, 2018.

[5] “Want to Read Michael Lewis’s Next Work? You’ll Be Able to Listen to It First,” New York Times, June 2, 2018.

[6] “Reading Habits in the U.S.,” Statista. 8 minutes a day refers to Americans aged 20-24.

[7] “2018 Internet Trends Report,” Mary Meeker.

This article is brought to you through a partnership with Amnet, a technology-led provider of services and solutions, catering to the needs of businesses for content transformation, design, and accessibility.

 

Grace Hong is Founder/Principal of GXH Consulting, a strategy and innovation consultancy. Previously, she held several executive positions at Wolters Kluwer, a software, information, and services company serving professionals in 4 main areas--healthcare, tax, law, and financial services. As VP of Strategy and Product Development for their Tax & Accounting Research business and as General Manager of Tax Learning, she was responsible for crafting and executing growth plans and restructuring of the publishing and information portfolio. As VP of Global CIO Program Office, she led several key programs across the enterprise: data center consolidation, cloud migration, disaster recovery planning, and other corporate technology planning processes. As Director of Corporate Strategy, she led strategic initiatives across the entire Wolters Kluwer enterprise.

 

Prior to Wolters Kluwer, her career included government consulting for former heads of state (South Africa, Liberia), finance and technology special project roles at the investment management firm, the D. E. Shaw group, and public affairs and research roles at think tanks. She is passionate about building businesses and a better future. Grace holds a B.A. in Comparative Literature and Art History and an M.A. in International Affairs / Economic Political Development, both from Columbia University.



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