I spoke tonight at the Dallas Area Writers Group and made a lot of new friends. My talk ended about 8:30, but it was after 9:00 before I made it to my car.
I really do love these talks. It's always nice to meet new writers. When I was trying to learn the business, I can remember visiting every available discussion on writing anywhere in Dallas and Fort Worth. I schlepped hundreds of miles, seeking helpful info. It's good to be able to give something back now.
Regular readers of this blog will remember that I've often quoted Mike Shatzkin.
Mike is the CEO and founder of Idea Logical, a consulting company. He is a frequently sought speaker, especially on the impact of digitization. A little over seven months ago, he spoke at Book Expo America. That speech can be found here.
Yesterday's Publishers Weekly had an article by Shatzkin here titled 15 Trends To Watch in 2008.
It's going to take some time for me to absorb all his predictions, but I'm going to start here tonight sharing my thoughts.
First, let's look at Shatzkin's comment BEFORE he began making the predictions:
You won’t catch me climbing out onto any billion-dollar limbs as I offer my forecast for book publishing in 2008, but some of the changes I envision do call for fundamental changes in how the business operates. There is an overarching theme to the changes already taking place. Consumer media in the 20th century tended to be horizontal and format-specific. The New York Times and Random House define “horizontal”: they publish across all interests and markets. The Internet will drive 21st-century publishing enterprises to be more like what professional publishing has always been: highly vertical and format-agnostic.
Shatzkin has talked about this subject before. Traditional 20th century media pursued the broadest audience. Network television, daily newspapers and movies all sought to appeal across age, racial and economic boundaries--what we call a horizontal approach.
I've talked about it before, too. The Internet changed our world. Suddenly niche groups--even those widely separated by geography--could connect via the Worldwide Web. See my blog for July 14 here for more on this subject.
When Shatzkin talks about moving toward a more vertical model, he's referring to the hundreds--or thousands--of niche markets. The markets are fragmenting. Consumers have never had so much choice--both in content and in mode of delivery (which he calls format).
Prediction #4 is directly related to this trend:
Publishers will start acquiring specialized Web sites to get content for their books and to target niche audiences. By year-end, every major publisher will need to have an understanding of how to put a value on Web sites, because the old measures—namely, sales and profits—won’t necessarily be relevant and because the acquisitions will be smaller than what the companies would normally consider. The process will be similar to acquiring books, requiring a bit of imagination to see how the deals will pay off.
With an understanding of horizontal and vertical markets, you can see his reasoning for Prediction #4. Publishers seeing the market fragment need to find ways of reaching those niche audiences.
And the fragmentation leads directly to Prediction #11:
Literary agents will begin to experience the same kind of consolidation that has hit other parts of the book business, as the shrinking of advances below the very top tier of authors and the growing need for agents to provide editing, marketing and increasingly detailed rights management make it hard for smaller agencies to bring in enough money to cover their overhead costs.
The top tier of authors with broad appeal will still command large advances. However, a fragmenting market means smaller groups of readers; thus smaller sales and smaller advances.
In the same way that publishers shifted the task of vetting manuscripts to agents, enabling the publishing houses to cut down on salary costs, Shatzkin is predicting publishers will begin to shift other tasks to agents. He suggests that smaller agencies will have financial troubles as the result.
Prediction #12 also naturally follows:
Publishers will rethink the traditional sales conference and begin to move toward a continuous publishing model. This will be a belated recognition of two key facts: national accounts are mostly covered by staff, and the rest of the accounts can be reached quickly and efficiently by e-mail.
The sales conferences that were once so necessary to keep in touch are made redundant (and costly) by the Internet. E-mail is cheaper, more intimate and just as effective.
We'll wait till another day to tackle more predictions.