Trade Publishing

On Amazon Publishing

It’s big news that Larry Kirshbaum is leaving Amazon Publishing, it’s just not so big as it appears, especially as the retailing giant is going nowhere, and its Kindle project is as strong as ever. That also doesn’t mean that Amazon Publishing will have an easy ride in the years ahead. Laura Hazard Owen sums up some of it nicely:

Nonetheless, at least seventy percent of the books sold in the U.S. are still print, so Amazon’s inability to get its titles into bookstores was a huge strike against the vision that it would be able to compete directly against general trade publishers on big fiction and nonfiction titles. And just because many have argued that the traditional book publishing industry’s business model is outdated didn’t mean that Amazon would be able to completely upend the way the industry does business in New York in two years.

via Amazon Publishing reportedly retreating in NYC. Thank or blame Barnes & Noble — Tech News and Analysis.

This recalls to me one of the three things I identified a bricks and mortar bookshops’ advantages in their struggle against Amazon and online retail for a talk at a booksellers gathering last year:

Physicality: being a place is an underestimated thing as is its almost completely ignored sister point Proximity: the idea that a bookshop is often a local place that is NEAR the reader or the customer. Where is Amazon? I wonder how many Irish people know that the company has a customer service centre in Cork and an engineering office in Dublin? Or indeed how helpful either fact is when you want something nearby?

The other two points I figured went in bookshops favour are Knowledge and Sympathy, tools and advantages that Amazon itself possess to some extent, but which are greatly added to by the physicality and proximity of bookshops.

I would expect Amazon to respond in three ways to this set back:

  1. Push its niche imprints more aggressively than ever because those imprints have massive advantages in specific verticals and can deliver real benefits to authors and readers.
  2. Work to convert more readers to digital or online book purchases (booksellers have made themselves Amazon’s true enemies now whereas in the past they were simply the hapless victims of Amazon’s usage of new distribution and sales systems).
  3. Find a new way to market for its printed books. This might be seen as a slight contradiction of 2, because it might require working with bookshops, but it would be a sensible strategy for Amazon to find SOME way to get books in front of people in large numbers. Several avenues suggest themselves; somehow convincing a chain or a group of indies to take them, selling the retail print rights to the best market offer (I’m sure bidders would emerge), doing a deal with retailers of other products with good footfall and a desirable audience (this might work), or simply hiring out empty retail space on short leases for book big launches (expensive but interesting potential, especially around peak season releases).

It’s very clear that Amazon has taken a defeat of some kind, frustrated by its competitors and by circumstances. I don’t expect that will end the company’s drive into publishing, it has created a much too valuable commodity with its platform to retrench at this point, but it will clearly require a rethink and a retool before the company can move forward again against the big fish in New York.

That would not make me happy if I was an executive in those same houses though, it would make me even more nervous. This reversal does nothing to counteract Amazon Publishing’s attractiveness to niche authors and the KDP Platforms dominance of digital self-publishing. Publishers will need to think and act smart if they are to take advantage of this Amazon misstep.

The Gill Family Takes Full Control Of Gill & Macmillan

Gill   Macmillan   HomeSome of the most interesting news in Irish publishing for some time tripped across my phone line and email inbox last night. The Gill Family has bought out Macmillan’s 50% share of one of Ireland’s largest trade and educational publishers, Gill & Macmillan.

It’s a fascinating move on many fronts. Firstly it’s nice to see such a large element of the Irish trade firmly in local hands, that’s healthy for the Irish industry given how heavily exposed to outside publishers it already is. Secondly it indicates that Macmillan’s strategic interests no longer include holding such a complex position in a joint venture like G&M. Lastly it lays the ground for interesting years ahead as the newly focused Gill (no longer & Macmillan?) faces the challenge of Penguin Random House which controls a large chunk of Irish publishing.


See the full press release below:

RELEASE DATE [ Wednesday 14 August at 10am ]
PRESS RELEASE
Gill family takes full ownership of Gill & Macmillan
The Gill family and Macmillan Science and Education, joint owners of Dublin-based publishing company, Gill & Macmillan, have announced that the Gill family has taken full ownership of the company.

The new ownership structure will have no trading consequences for the business and the Gill family, alongside the company’s Management Team, looks forward to building on its current success. A change in name and branding will take place at a later stage.

Gill & Macmillan was founded forty-five years ago in 1968 when Macmillan acquired an interest in the long-established Irish company, M. H. Gill & Son Ltd. Since then the company has become one of the most prominent book publishing and publishing services companies in Ireland. Publishing educational content for Irish schools and colleges has been a major part of Gill & Macmillan’s activities since its foundation. The company is also Ireland’s largest trade publisher as well as providing distribution services to the majority of the country’s independent publishers.

This development marks the next chapter for the Gill family, whose name has been synonymous with books in Ireland for 180 years, since Michael Henry Gill was appointed printer to Dublin University in 1833. Six generations of the family have now been actively involved in management of the business.

Michael Gill, Chairman of Gill & Macmillan said: “This is a very positive development for the company. Now wholly Irish-owned again and continuing to employ more than 70 talented and energetic people here in Dublin, we are excited by the transformative power and many opportunities and challenges provided by the digital age, both in Ireland and worldwide”.

Annette Thomas, CEO of Macmillan Science and Education, said: “The relationship between Macmillan and Gill has, over many years, been a model partnership of collegiate cooperation and shared business interests in this successful company. Whilst the sale of our 50% holding fits within our greater strategic objectives, we are delighted to maintain the many close friendships which have been forged with our colleagues in Dublin.”

The financial details of the sale have not been disclosed.

-ends-
Contacts:
For Gill:
Teresa Daly, Communications Manager, Dublin, Ireland
+353 (01) 500 9521 / +353 (0) 86 838 3559; tdaly@gillmacmillan.ie
For Macmillan Science and Education:
Sarah MacDonald, Group External Communications, London, UK
+44 (0)20 7833 5672 / +44 (0)7714 916798; sarah.macdonald@macmillan.com
Notes for Editors:

About Macmillan Science and Education
Macmillan Science and Education, part of the Holzbrinck Publishing Group, is home to the Macmillan businesses which empower those with curious minds to achieve great things. Through the provision of high-quality content and services to scientists, educationalists, students and academics around the world, Macmillan is changing the way students learn, teachers teach and scientists discover. Operating in over 50 countries with some 5000 employees, the division consists of Nature Publishing Group (NPG), Palgrave Macmillan, Macmillan Education, Macmillan Higher Education, Digital Science, Digital Education and Macmillan New Ventures. For more information, please see http://www.learndiscover.com.

About Gill
Gill & Macmillan is the most prominent book publishing company in Ireland. Drawing on more than one hundred previous years of tradition and experience, Gill & Macmillan publishes educational content for primary and secondary schools as well text books for university, college and further-education courses. Its trade division publishes widely in history, politics, current affairs, sport, entertainment and lifestyle. The company has met the emergence of digital communication by providing e-book versions its bestselling titles alongside a rapidly evolving range of digital resources and tools for teachers and students. The company also provides a comprehensive distribution service for the majority of independent Irish trade publishers. For more information, please see http://www.gillmacmillan.ie.

Go Read This | International restructure for Holtzbrinck | The Bookseller

Very interesting indeed!

From 2nd July, the company is to operate through three divisions. Global Trade, managed by Sargent, will encompass all the consumer book publishing operations of the Group, including all the US, German, UK and Australian houses. Thomas will have management of a Global Science and Education division, consisting of Nature Publishing Group, Macmillan Education, Macmillan Higher Education and Palgrave Macmillan, also to include Digital Science, Digital Education and Macmillan New Ventures.

via International restructure for Holtzbrinck | The Bookseller.

No New Normal – The Value Web

For some reason this has been a very hard post to write. It’s a rather strange situation for me as in essence what I’m writing about is really a very basic idea. Maybe it is because I’m afraid that people will misunderstand it or take the wrong message from it. Which if I’m honest means I’m not writing it clearly enough. Oh well! Here goes nothing.

~~~

I want to write about this very simple idea:

That as the impact of digital distribution begins to be felt along the trade publishing value chain, what will emerge is not a NEW VALUE CHAIN as much as a new VALUE WEB, an environment that sees, not one way to generate value in the industry but many ways of doing so. What’s more, this state will persist because no particular method will emerge as the single ‘way’ of trade publishing (if that term even retains relevance), at least not for some time to come.

Everyone (at this stage) thinks that the trade publishing value chain is endangered. They’ve even created a word to describe it, disintermediation. And Everyone is right.

What I think they tend to ignore is the way in which the value chain is endangered. It’s not a simple change that we are experiencing, it’s far more dramatic and complex then is often imagined.

Until recently, the trade publishing value chain looked something like this:

Author > Agent > Publisher > Distributor/Wholesaler > Retailer > Reader

Some people fear that Amazon or Google or Apple will make a big move and the result will be something like this:

Author > Amazon/Google/Apple > Reader

And there’s some real danger of just that happening. You only have to look at how companies like Apple and Amazon have facilitated self-publishing and in so doing excised huge swathes of the old chain from certain sectors of publishing. Certainly on Amazon’s part the ambition to disintermediate the publishing industry has been obvious for some time, at least if you were paying attention, it was certainly clear long before they made this announcement, but sometimes it takes BIG HEADLINES to make people pay attention.

There’s an added complication in that authors themselves (or some of them at least) might just wish for something that looks more akin to this:

Author > Reader

And what’s to stop that? After all there is no reason why using Paypal or some other selling tool, an author could conceivably sell ebooks directly to readers and maybe even turn a small trade by doing so. You could argue that Amazon’s Kindle Direct Platform is a close approximates of that, but I think the platform ownership position of that player means its role is greater than just a service provider.

Hold on tight
But, and it’s a huge but, despite all this evidence of disintermediation there is absolutely no reason to believe that one way of reaching an audience or one way of delivering value will win out for ever and in every instance. For example:

  • Random House has just disintermediated the agent by doing a deal directly with Tom Sharpe for digital rights, and that is by far NOT the only way in which publishers, big and small are finding new ways to operate in the digital era.
  • Bricks and mortar bookstores, despite being at the coal face of the digital wave, are not against a bit of disintermediation themselves. B&N is quietly disintermediating everyone in the self publishing world (just like Amazon is) via Pubit service for their Nook platform. You should expect to see them take their print publishing arm (Sterling) even more seriously then they already do after Amazon’s announcement.
  • Agents are building direct channels to consumers and publishers, long the supposed victims of the piece are beginning to find direct selling attractive and capturing audiences to (hopefully) turn into readers.

The point being that as this digital distribution wave of change washes over the industry, it will radically reshape the value chain in unpredictable ways.

For some titles it will force authors to make hard decisions, it will reduce the predominance of publishers (or at least the traditional ones) while elevating the role of platform owners like Amazon, B&N, Apple and maybe even Google, but for some titles it will broaden the role of publishers and if they are lucky and smart maybe even the surviving booksellers.

All of this will happen despite, or perhaps because of the fact that, the actual slice of value captured by each player changes in size and shape. Publishers will be forced to cede more revenue to authors, the idea that 25% Net is a defensible long-term ebook royalty rate is a farce best forgotten about quickly.

Agents may find their 10% under threat too, especially on backlist titles, unless they offer something more valuable then just conversion, after all, their authors are pretty much able to upload a file to a platform for conversion themselves.

Authors themselves will face greater competition both from the increased numbers of writers (Good and Bad) facilitated by digital distribution and the existing databases of ALL titles ever published digitized and available for distribution. If most authors already have low incomes, then they will get lower. Though I’d also expect the winners to become even more gigantic!

As the influence of bricks & mortar retailers wanes, especially the chains, so too will their ability to demand such high levels of discount. I’m pretty sure the platform owners will be able to squeeze most players for a greater share of the revenue. How powerful they will become remains dependent on just how easy it becomes to read a file you buy one place anywhere (currently easier then I’d have imagined).

None of them will go away though. For some books, print will remain a huge segment of the market and bookstores or supermarkets will remain the best place to sell them and traditional publishers will probably remain the best home for such books. For others, the author’s platform will be large enough to justify a going-it-alone route, but even for the biggest authors, for the right book. partnering with an agent, a publisher or a platform owner might be the right move. That’s where the web comes into play.

The tidy chain discussed at the start begins to look, and will be in real life, a whole lot more complicated.  Instead of a publishing value CHAIN, we have something more akin to a value WEB. Different actors can work together on different projects depending on their needs at a given time. And that means title-by-title projects, agents taking on roles more akin to producers (or publishers or retailers or maybe all of them doing so but not on every title). Of course for large parts of the business the platforms and self-publishing will suffice, but overall, the change will be dramatic and will, I think, look something like this:

It’s not all going to be plain sailing
Of course there are going to be losers. The least well positioned players in the game are wholesalers and physical bookstores. Their roles are uniquely challenged because of the shift in format from physical to digital. Yes, as I have said, some print market will persist but what size and shape that will have in twenty years time is anyones guess, what we DO know is that it will be smaller and because of that we’ll have fewer physical bookstores, but how that shakes out we cannot be sure.

I’m sure too that we’ll see casualties among the publishing houses that currently thrive. Some because they make bad decisions and fail to adapt and some from just bad luck. Other will lose market share and fall under the wing of other players, maybe they’ll be publishers too, or maybe they’ll be retailers or platform owners.

The funny thing about this disintermediation business is that the only clear winners are at the ends of the old chain, writers and readers. The writer’s win is tainted by the knowledge that though their options, the costs of and their routes to publication will have expanded greatly, their chances of earning a living from writing will have decreased rather dramatically too.

Readers on the other hand will be faced with a surfeit of choice, less of a problem then most people imagine, but still an issue if too much time is wasted in filtering through those options. On the other hand they can expect to see the price of individual pieces of content to fall, especially when the creator, however talented and however the web has coalesced to deliver that content, is an unknown.

Is Feidir Linn,
Eoin

Yet Another Bloomsbury Property Goes Digital

There’s a paragraph on Bloomsbury’s Strategy page on their website that always grabs me. It reads:

A key element to Bloomsbury’s strategy is to broaden the base on which it acquires and exploits intellectual property. This began in 1994 with retaining paperback rights and moving into children’s publishing. With the advent of the internet, the company identified a growing demand for quality on-line reference content which culminated in the development of our first major database, The Encarta World English Dictionary.

The reason it grabs me is that you can see the company put that paragraph into action very regularly. The latest is Reeds Nautical Almanac from their A&C Black division (the location of some of their most interesting properties).

I wrote before about Bloomsbury that:

It further occurs to me that nearly all the moves place them in a position to exploit the brand potential of all these properties and to do that through new digital avenues if and when they choose to

That still holds true and when you check the site out, you do begin to wonder why it wasn’t done before, but that’s not the point. This is strategy in action before our eyes. What’s more, it’s a sensible strategy that’s moving physical products and customers towards digital models in an un-hyped way.

It shows the value of intellectual property that has something that can be made available as an online service as well as a print product. Sure it brings its own worries and concerns, but it also offers opportunities and real hope for a future for publishing and publishers.

Maybe it should be more hyped! Or maybe more publishers should copy them!
Eoin