Change was in the air at the Book Industry Study Group’s Making Information Pay conference held Thursday in New York City. Organized around the theme of “Points of No Return,” speaker after speaker said all parts of the publishing industry needed to quickly get up to speed with the changes occurring in the industry because of the digital revolution or get left behind.
With its members coming from all parts of the industry BISG has focused much of its attention on making the supply chain operate smoothly, but executive director Scott Lubeck said that supply chain now more closely resembles a Rubik’s Cube with all the different pieces that are now part of that chain. During his presentation, Bowker’s Kelly Gallagher observed the supply chain that feed the old “push model” form of publishing is giving way to a “demand chain” driven by the needs of the consumer. The customer is the “queen and king” in today’s publishing climate and publishers need to know what consumers want and where they learn about books, Gallagher said. Social meeting, he noted, is becoming increasingly important to spreading book news with 69% of book buyers using social networks.
The morning was officially kicked off by predictions by one of the conference organizers, Michael Shatzkin, that painted a frightening picture for traditional players in the book field. By the end of 2012, 25% of new narrative titles will be bought as e-books and with traditional bookstores predicted to close stores at a rapid rate, more books will be bought online than through brick-and-mortar stores, Shatzkin said. Traditional bookstores aren’t coming back, Shatzkin said. (PW noted in a story several weeks ago that after two consecutive years of declines, revenue from the three largest bookstore chains had likely peaked in 2007). With more sales coming from e-books, Shatzkin predicted that the 25% royalty rate for e-books with be unsustainable and that the increase in royalty rates and lower prices of e-books will put more pressure on publishers’ margins andtraditional business model.
Shatzkin’s predictions did not all sync with a survey of industry members done prior to the conference. Sixty-two percent of those surveyed said they believe they have the skills they need to continue to do the job they are currently doing and 59% said they don’t think their editorial jobs will change. More than half said they believe the digital changes will make the industry more profitable and bring more jobs to the industry, a finding Shatzkin said is overly optimistic.
All speakers said they while change is coming--and that the industry is indeed past the point of no return in terms of moving to a digital future--there is still plenty of opportunities. George Lossius, head of Publishing Technology, said the move to digital is creating more content readers, particularly as the market for mobile technology expands in the U.S. “There will be a multiplication of selling opportunities,” Lossius assured attendees. And while he acknowledged there are still many uncertainties about what the digital future holds, he said enough is known now to make investing in technology critical or risk being left behind forever. Repeating one of the major themes of the conference, Lossius said publishers must use the newly available tools to learn what there customers want and to then deliver new products in whatever format they need.
St. Martin’s Press v-p and associate publisher Matt Baldacci said the point of no return came to him last year when a bestseller that eventually sold 30,000 copies in hardcover sold 11,000 e-book copies within the first few weeks of release. Now, some SMP e-books account for 30% of sales and the company average is that e-books account for 10% of sales. With that switch, Baldacci has shifted more of his marketing dollars to online vehicles with about 25% of his marketing budget given to digital initiatives.