Sunday, June 03, 2007

The End of General Trade Publishing Houses?

Mike Shatzkin, founder and CEO of the Idea Logical Company, gave a speech on May 31st at Book Expo America (BEA). The title of his speech was "The End of General Trade Publishing Houses."

Talk about a subject that was likely to get everyone's attention.

In this post, I'm going to quote from Shatzin's speech. His words will appear in italics. Bolded comments are quotes from my own previous blogs together with the date of the post in which they appeared.

The lines between author and editor and aggregator and audience are blurring, with people shifting roles as they like, or as is convenient or useful in any particular conversation.

April 28, 2007: What I suspect is going to happen is that the lines between publisher, distributor, bookstore and author are going to start blurring.

While the engineers will be building storage capacity and bandwidth faster than we can create intellectual property, our audiences are going to be organizing what we do create, and organizing themselves to discuss it, add to it, and mash it up in various ways. That’s the other thing that we can already see that is a critical change dynamic challenging general trade publishing: people moving from the horizontal media we’ve always known to niche communities of the interested.

October 20, 2006: Niche markets across a wide spectrum may prove more valuable to a company over the long haul than a single large market.

We have seen in the past five years that a disruptive technology can turn an industry upside down overnight. IPods, YouTube, TIVO, and CraigsList -- for what it has done to newspaper classifieds -- have demonstrated that in the current decade.

April 6, 2006: [A]nother writer . . . questioned me on the future of e-books. I said that, while e-books have been gradually gaining in acceptance, I thought the tipping point would occur when a viable e-book reading device came on the market.

[H]ere is a short summary of the future:

* There will be vast amounts of content available to everybody.
*It will be highly organized -- tagged and rated -- by communities that will form around it.
*The communities will self-create and mix and merge and re-form as people participate.

March 30, 2007: It makes more business sense for that [independent] bookseller to operate online from his home with much lower overhead and where his customers are only a click away. He can still offer his expertise and service, but now he isn't competing on price or geographic convenience. He's offering a home to the niche buyers. If he's smart, he'll provide an online community for those niche buyers (widely separated by space) to chat about books and authors ad nauseum . . .

The large bookchains are going to have to re-invent themselves . . . Community will be the key word here. While I talked about virtual communities for niche markets above, here [at the large bookchains] the focus will be on real communities for broader markets. The chains could help set up bookclubs or writing groups and provide space for those groups to meet.

The objective is to reach the potential audience with an author’s work, which implies a symbiotic relationship with authors which the wisest publishers see as part of a covenant to be of service to authors. 'Author care' was an unspoken priority for the gentlemen trade publishers of the early 20th century; it has crept back up in consciousness among the big corporate trade publishers recently.

May 20, 2007: I ended my post about Simon & Schuster last night saying that I believe publishers are going to have to start offering BETTER deals to writers, not worse ones.

That's why Simon & Schuster's posturing doesn't bother me. They're standing on shifting soil.

[M]ost sales trade publishers make are to trade channels: bookstores and libraries. What distinguishes these customers is that they are horizontal: they buy books, not books on particular subjects. And the best bookstores and the best libraries might well buy every single title on the best publishers’ lists. It is now the case that the true vertical thinking necessary for the future exists only in the special sales department at general trade houses.

October 20, 2006: Vertical integration is about cost and control. Companies who vertically integrate are trying to assert greater control over their business. The obvious benefit is that they can capture the profit margins at each step along the chain. They can also make it harder for competitors if they can gain access to a scarce resource. The drawbacks include that the organization now becomes much more complex, and the owners assume more risk by sinking more and more assets into this one industry rather than diversifying.

The “publishers” in this niche will be members of the community. Marketing will be through them. In a digital world, much of the distribution will be through them. You either own the tollgate or you pay at it.

That doesn’t leave no room for today’s general trade publisher, but it doesn’t leave much.

And the even better news is that the prescriptions we will discuss this morning are the right ones even if you don’t buy the idea that general trade publishing is a dead man walking.

May 24, 2007: After decades of centralization, I wouldn't be surprised to see the publishing industry begin to fragment again. The Internet and POD technology will make it possible for small boutique publishing houses that serve specific niches to emerge.

And will there still be interest in what we call book-length narratives today? Or will our attention spans have become so compressed that the kids of today will have largely abandoned the novel and lengthy narrative non-fiction by two decades from now?

January 19, 2007: Consider novellas, short stories and flash fiction. In a world in which we do things in short bursts of time, the options for fiction continue to expand to include fiction that can be read (or listened to) quickly and without a great investment of time.

But we also think that the days of the new-books-only store are already numbered.

March 30, 2007: Eventually, the chain bookstores will move into the used market . . .

You can read Shatzkin's entire 8,600+ word speech here.


Laura Vivanco said...

They should have asked you to give a speech, Maya.

Maya Reynolds said...

Thanks, Laura :)

I had a lot of fun with this post.