While everyone knows that digital distribution and consumption has affected everything about the world we live in, James McQuivey is one of the people who has figured out exactly how the change works. A vice-president and senior analyst at Forrester Research, McQuivey is frequently quoted in the press on the state of technology, and has consulted with many media companies, giving him a great vantage from which to observe how digital technology has reformed our world.
The book industry is in the midst of that sea change, and book publishers are generally roundly criticized for their response. But in an interview with PW, McQuivey singled out the book business for praise, hailing publishers for being “psychologically more open” to change and embracing the digital shift and new tools and opportunities it has produced.
McQuivey’s theories on digital disruption—how it works and how we can take advantage of it—have been collected in a new book, Digital Disruption: Unleashing the Next Wave of Innovation, to be published by Amazon on February 26. In the book and on his blog, McQuivey lays out the means and methods by which digital has upended traditional models. He also explains how businesses and individuals can take advantage of thinking like a digital disrupter by pursuing adjacent possibilities on a practical level, by using the free digital tools already available rather than brainstorming massive new initiatives.
On his blog, McQuivey sums up the basics of digital disruption: the use and creation of free or nearly free digital tools; the aggressive exploitation of those tools; acknowledgment that customer experience and satisfaction is the primary goal; and partnering as much as possible to deliver benefits quickly and at low cost.
PW caught up with McQuivey at this year’s Digital Book World conference in Manhattan, where he had just presented his annual survey on publisher outlook, which polls about 60 executives on their reactions to the industry’s digital transition. The survey mixed general optimism and personal gloom. While a sizable majority of publishers seemed to think digital was a good thing in general, only 34% thought their own companies were ready to adapt to new strategies.
McQuivey pointed out that the gloom shows up despite the overall positive benefits of digital—“It makes more of everything,” he said—and publishing’s own survival skills. Traditional publishing has held out the longest of any old media system, he said, and the industry is psychologically very well prepared to deal with the ongoing disruption, with a more flexible mindset overall. This leaves the publishing industry well situated to take advantage of future digital disruptions. According to McQuivey, conventional books have survived longest both because of demographics—the end users are older and not kids killing time in dorms on YouTube or video game users—and because the early reading devices were not optimized. This has given publishing time to absorb how new technologies have evolved before making onerous early investments in the wrong thing. “Early e-ink readers were terrible,” he points out. “It wasn’t until Amazon solved both the demographic problem and the device problem and then convinced publishers to try [the devices] that it exploded.”
Being able to watch how things rolled out in the music industry has been instructive to publishers. Indeed, at the CEO panel following his presentation, McQuivey pointed out that even top publishing executives were talking about the minutiae of social media. “This would never have happened in the music business 10 years ago,” he observed. “When music industry CEOs got together to talk about what to do, it would have been, ‘We need to sue these people. We need to express our rights. We need to stop this.’” As we know now, their combative stance was a failure.
Instead, the book publishing industry has become far more adaptable—publishing industry execs pick up an iPad and get it immediately. “They may be afraid, but they’re not going to let their fear stop them,” he pointed out. “I think that’s really unique to this industry.”
McQuivey’s publisher survey also introduced a kind of Mayan apocalypse date for the printed book. “Every year we ask when e-books will become half of all books sold, and the answer has always been the same—publishers think that by December 2014 their sales will be half e-book.” McQuivey contends that publishers’ attitudes are changing. In previous years, publishers believed they would lag behind this milestone—now they feel they are ahead of schedule. “They feel the roller-coaster [of the digital transition and disruption] is over.”
McQuivey experienced the changes in the conventional publishing model firsthand with his new book. He self-published a smaller book last year as a sort of test, and planned to self-publish the new book as well, as his own proof of concept. But at some point he decided rejecting a paper option was not consistent with his belief that digital creates more of everything—even print. His conversations with book publishers led him to Amazon Publishing, where the delivery date became something of a talking point for the disruptive view. In a July 2012 conversation, Amazon suggested a November pub date—which McQuivey accepted. However, there was a problem: they meant November 2013 and he meant November 2012, believing the subject matter called for the timeliest delivery possible. “I was nearly laughed off the phone,” he recalled. “However, after a few days Amazon called back and suggested January.” (Even so, the book has been delayed until the end of February.)
While he said his theories on digital disruption will be relevant for a long time, timeliness of delivery is key. “I wanted this book to demonstrate that digital allows speed and requires new approaches to things, which Amazon was willing to take on.” This included very quick turnaround on edits on both sides, another change from traditional publishing models. Of course, the accelerated schedule led to many working nights and weekends, but McQuivey saw the bigger picture. “It was consistent with what we’re talking about. When you go digital, you have to work hard but you accomplish more.”
Working with Amazon, one of the Big Five—Amazon, Apple, Facebook, Google and Microsoft—of the digital era, was also consistent with McQuivey’s analysis. These five companies are the “utility companies” of the digital landscape, but unlike traditional utilities, McQuivey doesn’t see them becoming quite as odiously bureaucratic. Unlike monopolistic electric and phone companies of the past, digital utilities must all work together. Even when they compete they often still enhance each other’s experience. McQuivey points to the Google Maps app, which was downloaded 10 million times over 48 hours after Apple’s own map application was found to be nearly useless. “Essentially, Google was making the iPhone experience better. [Google is] enabling their competitor, but at the same time, they are sucking the life out of their competitor by being there. The Kindle app is one of the top five apps on the iPad constantly. The competition between them is [the consumer’s] best friend.
“These platforms are becoming more powerful,” McQuivey continued, “but the beauty of it is there are no boundaries between them, so they will compete so aggressively that you’ll feel less pain than from traditional utilities.”
Even with the tools at everyone’s disposal and the consumer’s eagerness to explore new delivery methods at the drop of a hat—think how the Seamless Web has changed dinnertime in urban and suburban areas—digital disruption won’t go on forever, a subject that McQuivey covers in the last chapter of his book. Eventually, he writes, the next generation will see the availability of digital tools as just the way things are, and an ongoing model of innovation will be expected.
“Today’s 20-something is not by nature disruptive. Give us another 20 years [and you’ll have] a generation of people who assume all kinds of personal power, not just in a symbolic way.”
While today’s digital tools provide access to the digital superhighway, tomorrow’s will enable users to build their own vehicles on that highway. “If I have access to all the tools, I could have all the resources to launch my own tablet tomorrow by simply piecing together the outsourcing.”
The good news for publishing is that the industry is already there, as self-publishing case studies such as E.L. James and Amanda Hocking show. “[Publishers have] realized that you can’t just change the way people read the book, you can change the whole process of finding books. Digital disruption is about changing the whole way that product is conceived of, created, and distributed in every industry.”
And sometimes irrational fears about change are just that—irrational. A history buff, McQuivey quoted the story of the Erie Canal. When this mode of commercial transport was being threatened by the transcontinental railroad in the 19th century, canal owners fought back by arguing that the health risks of travelling 16–18 miles an hour over extended periods of time were unknown. “They theorized that all the oxygen in the cars would be sucked out when you traveled that fast,” he said laughing.
One of the messages of McQuivey’s book is that embracing disruption is the best way to fight the fear. “I’m very excited about the coming changes. Other people would be terrified by it, but that’s okay. People were once afraid of trains.” If McQuivey is right, grabbing new technologies to improve your own business means there’s no need to be afraid.