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If the industry is changing, publishing house structures, processes, and budgets need to change too

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A thought kept recurring — one I’ve written about before — while I was learning new stuff at Digital Book World last week. The structure of publishing houses and of the publishing process as it has developed over the past century make some of the challenges and opportunities of publishing in the emerging digital era very hard to address for publishers operating at any degree of scale.

One example arose from the incredibly insightful presentation from Author Earnings’ Data Guy. As most readers of this blog know, Data Guy is the pseudonym for an author-cum-analyst who scrapes the sites of book retailers, starting with Amazon, and breaks down the sales of ebooks (and now print books too) looking for insights. One of the most compelling Data Guy insights shown in what he presented at DBW is the importance of “introductory” pricing for debut authors. What DG’s data strongly suggests is that the odds of a debut author breaking through are increased dramatically by having very-low ebook pricing.

That’s quite a challenge for a conventional publisher who has a one-book-plus-option deal with a debut author. Making money becomes very much more difficult if ebook prices are lowered dramatically. Doing that would almost certainly also require that the print edition for the debut be a trade paperback, not a hardcover, or the stores would feel really disadvantaged by the edition they had to carry. So to adopt this as a strategy, publishers would have to sign all debut authors to contracts for two (or more) books, so the debut could be seen as a loss-leader with a later opportunity to cash in.

Otherwise, the publisher takes a loss on the debut book and then, even with an option, has to bid against other publishers if the debut is commercially successful (which does not mean it necessarily “made money”).

Here’s another way publishing as it is done now structurally precludes using modern techniques. One piece of wisdom from DBW workshops last week was repeated in Monday’s New York Times. Andrew Rhomberg’s Jellybooks enables publishers to track the ebook reading of a book across enough people to draw some interesting conclusions. The Jellybooks data is being used by some publishers, apparently right now mostly in Germany, to adjust marketing spending. Publishers can reduce what was planned to be spent on a book nobody’s finishing, or increase the budget for one which is getting a surprising level of traction. But there is clearly no time, or appetite, for addressing the fact that most people abandon midway through Chapter Five.

Now that there is a tool that enables publishers to understand how readers react to a book, wouldn’t they want a publishing structure that gave them time to use what they can learn to craft a more appealing piece of intellectual property?

Here’s another takeaway from DBW that requires structure changes at publishers. The “transforming” publishers often cited the need to create consumer-facing brands to work for them. Mary Ann Naples mentioned it as part of Rodale’s strategy. Dominique Raccah’s Sourcebooks has created “Put Me In the Story” and “Simple Truths” to appeal directly to consumers, while not trying to make Sourcebooks a consumer brand at all. Marcus Leaver is in the process of reorganizing Quarto around verticals and nesting them in the “Quarto Knows” rubric to create a public face that is logical for consumers.

Publishers need to come to grips with this. Publishing brands — house names and imprints — have always cultivated their B2B reputations. They are about impressing bookstore buyers, library collection developers, reviewers, and authors. They are not about selling to the public. Yet imprints that are not audience-centric are still being created, and most big houses have books for the same or similar audiences housed in different imprints. It certainly won’t always be possible to create new brands that are also new businesses, as Sourcebooks has done (once from a standing start and once by acquisition) and which Quarto may ultimately aspire to do with Quarto Knows. But all houses need to be rethinking their imprint and presentation structures, as well as tailoring their acquisition decisions to fit an audience-centric strategy.

Another point Mary Ann Naples made, citing a speech that Dominique Raccah made a couple of DBWs ago, is that experimentation and failure are a critical requirement for success. One wonders how many of our biggest publishers — which are, after all, corporations seeking profits and measuring their sales and margins quarter-by-quarter — have built that understanding into their internal scorecards. It seems doubtful that employees of big houses are encouraged to try things that might very well not work and then take the learnings on to a next experiment.

We’ve been experiencing the structural barriers to doing the right thing throughout the building of Logical Marketing Agency, the digital marketing enterprise I work on with Pete McCarthy and Jess Johns. One of our core tenets is that valuable market research is now pretty cheap, and it should be done to inform all acquisition decisions and as a first step preceding all other marketing decisions, including the writing of any copy.

Even getting publishers to accept the idea that research should be the first step built into the marketing workflow has been hard, although we’re making progress. We’ve worked with all the Big Five houses, and lots of others, and perhaps 100 bestselling authors. We now see a couple of big houses that are really beginning to see the light. What has been much harder to get across, even though it should become standard practice, is persuading publishers to do research into a topic or author they’re looking to acquire. Only in a couple of cases where publishers were preparing for a possible bidding war have we succeeded in getting publishers to make that investment.

Understanding “why” isn’t hard. There is simply no budget for editors to do research on a book not yet under contract. But there should be a research budget for editors. To not have it means we are requiring editors to invest the house’s money based on hunches and guesses when actual data and facts could be employed. Sometime in the future, we’ll look back at a time when editors had no budget to do research into big acquisitions and wonder what we were thinking. And the answer will be that big houses hadn’t yet matched their structures, processes, and workflows to the new digital realities.

It would be nice to think that big houses are indeed rethinking their imprint structures and acquisition-to-development-to-publishing workflows from end to end, but out of the public eye. The industry is transforming. Each house has to examine itself for how it too should change.

I was flattered that the folks at Bookbub, writing about the marketing takeaways from DBW, ranked my observations about how publishers need to work more effectively with authors on their digital footprints and branding number one. This also points to two really significant structural issues.

One is that publishers sell individual titles, not author careers. Many authors have books across houses, and houses are reluctant to invest in selling other publishers’ books. That creates a real barrier to thinking through and investing in the author’s branding in many cases.

The other problem is this. Even the marketing departments of publishing houses are challenged to keep up with all the opportunities in digital and to think about them across titles and verticals as well as authors. But the house’s normal “interface” with authors and agents is through editors, not marketers. And editors are often not as conversant with these digital issues as their marketing colleagues are.

Some things have to change. Probably most houses need to start schooling editors in digital marketing, at least so they know uniformly more about what authors ought to do to help themselves than the typical author or agent does. That kind of training should perhaps extend to authors as well. But that calls for marketers to be directly in touch with authors and agents, which at the very least complicates the “control” the editors have over those relationships.

The post If the industry is changing, publishing house structures, processes, and budgets need to change too appeared first on The Idea Logical Company.


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