In our end is our beginning
By Stephen Page, CEO, Faber & Faber
2014 was the year when print fought back. The year when Kindle devices stopped selling through Waterstones, and perhaps elsewhere too. The year when the noise about subscription models grew louder. The year when some innovative startups – including Bardowl, Blinkbox Books and Textr – fell away. Above all, it was the year of the Hachette vs. Amazon public negotiation and the story of writers caught (and having to chose sides) in a war of supply vs. copyright investment. Quite a year. Another one.
I wonder, though, if 2014 wasn’t just another year of fast change, but will be seen as a tipping point. The actions of the players in the world of reading and writing in the coming two years will define the era we enter. So in what way is the current moment an end point?
From the early 1980s bookshops expanded rapidly. When I was Sales Director at 4th Estate in the mid 90s I inherited a world with at least 8 book chains in the UK and Ireland, 3 stationers, 5 wholesalers, supermarkets, a strong international market, and a large body of independents. We concentrated our marketing on the trade and our creation of demand on the plentiful print and broadcast media. And then in 1997 along came Amazon, and away went the Net Book Agreement. This invited even more players into our market creating further growth and distribution reach. In 1996 4th Estate published Longitude: perhaps a peak book in a peak market. We sold over 1 million copies of a £12 hardback on either side of the NBA collapse.
But of course, over the following decade and a half, the rapid growth of online retail and cheap bestsellers in the mass market killed all but one of the specialist book chains. Now we have a smaller group of (often excellent) independents, a mass market that is challenged by ebooks as paperback sales fall, one specialist bookselling chain, and the fact of Amazon’s print and ebook sales representing a large part of the UK market. Shelf space has fallen to 1980s levels and visibility of midlist has declined rapidly as bookshops back fewer books in volume – while online shopping doesn’t as effectively support browsing. So I believe that the world of selling books – the world I’ve worked in for 25 years – is now changed so fundamentally that we need to understand what the new world means, because it doesn’t mean a tweak to the old. The old is over.
If you look at publishing and bookselling in the 1970s you’ll see a surprisingly recognisable world. No book chains to speak of, a narrow mass market, subscription sales (read: book clubs), UK publishers strong in international markets. On the other hand, publishers were smaller and less global, there was no internet, terms of trade were dramatically different and there was a net book agreement. But the smaller distribution environment of the past is relevant and interesting today, as is the lower cost base and use of volume-based terms. Publishers have struggled to retain control of price (or rather, value) and their share of consumer spending. In the new era, publishers will have to imagine ways to reset this dial – to become expert at new things while remaining expert at the old in order to command more value for themselves and for writers. How to do this?
- This will be a marketing and digital age. The two are one. Publishers have just begun to invest in the level of expertise and in the structure they will need to master the creation of demand in a social and online world. They have to travel fast towards being marketing-centred in their commercial thinking, while remaining editorial-centred in their discovery of content. Search optimisation alongside ownership of and access to niche audiences will be essential.
- Publishing can be far more global. The internet allows us affordable access to consumers globally from our one office in one location.
- The relationship between print and digital formats is a new challenge, especially when maximising value. The trade has imposed price points on writers and their works via compliant publishers. We must now start from a position of imagining value first, not price. Publishers must figure out processes and tools to ensure that they create the full range of value for writers. Formats and channels must be managed over the life of a book. Books can live in high specification editions through to digital subscriptions via mass market formats. Segmenting consumers, and meeting their needs and desires in various ways, is new to publishers whose main target has been the trade.
- Publishers need to re-draw their routes to the reader. In the distant past, trading terms varied with volume. More recently, terms have become more uniform: simply the price of access to an audience. As easy subscriptions fall away, creating demand will be central: publishers need to reimagine how they get rewarded for their contribution to this process.
- As in the 1970s, publishers may have to be smaller, more agile, and centred on editorial and marketing/consumer disciplines. They must find great copyrights and bring them to the attention of readers. A Proctor & Gamble world where product, sales, publicity and price are all the servants of marketing? Maybe not – our product is not ours to invent, only to licence – but certainly publishers will need to look more like brand businesses and less like trade businesses. Interestingly, though, they may not need to look like purely digital or digital startup businesses. The physical world still exists for publishers and their challenge will be to navigate between and in both the digital and physical worlds.
I believe that this new environment is dramatically different to the trade-orientated, physical distribution business that still underpins most publishers’ business. The clues are there, and the business jeopardy too. The platform is burning to incentivise publishers to choose and create different models. Perhaps it is happening naturally, but most evolution comes in leaps, in my view, and it feels time to get ready to spring to a new environment more of our choosing. The opportunity demands it. And besides, we’ve been here before in large part, but we now have the advantage of the genuinely new. What a time to be a publisher. Again.