Stay Ahead of the Shift: What Product-Centric Publishers Can Do to Flourish in a Community-Centric Web World BEA, 28 May 2009 Mike Shatzkin

The fundamental premises:

Things will change The fundamental premises:

Things will change

It is necessary to have a view of the future to anticipate change The fundamental premises:

It is necessary to have a view of the future to anticipate change

The market and how you reach it will shift in some ways between when you sign titles and publish them for the foreseeable future The fundamental premises:

The market and how you reach it will shift in some ways between when you sign titles and publish them for the foreseeable future

You must try new things: it is as important to be nimble and opportunistic as it is to be analytical when you do The fundamental premises:

You must try new things: it is as important to be nimble and opportunistic as it is to be analytical when you do

For maximum benefit: new things should be tried within a framework of understanding (your “view of the future”) The fundamental premises:

For maximum benefit: new things should be tried within a framework of understanding (your “view of the future”)

A lot happens in 20 years

TV 1968-1988 : Broadcast networks go from totally dominant to highly challenged In 20 Years…

TV 1968-1988 :

Broadcast networks go from totally dominant to highly challenged

Music 1980-2000: Record companies fat from sales of new formats to a total breakdown of the business model In 20 Years…

Music 1980-2000:

Record companies fat from sales of new formats to a total breakdown of the business model

Newspapers 1989-2009: From stable cash cows thanks primarily to classified to endangered species In 20 Years…

Newspapers 1989-2009:

From stable cash cows thanks primarily to classified to endangered species

Mass-market paperbacks 1975-1995: from multi million dollar bestseller advances to category strugglers In 20 Years…

Mass-market paperbacks 1975-1995: from multi million dollar bestseller advances to category strugglers

Online access 1989-2009: From klunky dial-up through a closed online network to the Internet in your hand In 20 Years…

Online access 1989-2009:

From klunky dial-up through a closed online network to the Internet in your hand

Books 1989-2009: From pre-Internet, pre-POD, pre-long tail, pre-SUPERSTORES to now… In 20 Years…

Books 1989-2009:

From pre-Internet, pre-POD, pre-long tail, pre-SUPERSTORES to now…

Books 2009-2029: That’s what we need to think about today… In 20 Years…

Books 2009-2029:

That’s what we need to think about today…

A point of view: the world of content in 20 years

All in the cloud ; piracy and license control no longer a problem (DRM obsolete); almost all file access of any kind is “tethered” 20 Years from now…

All in the cloud ; piracy and license control no longer a problem (DRM obsolete); almost all file access of any kind is “tethered”

We are all both licensors and licensees 20 Years from now…

We are all both licensors and licensees

Access through multiple devices/screens (synonymous) 20 Years from now…

Access through multiple devices/screens (synonymous)

Nugget (more granular) and niche organization for everything: search, content, social community combined 20 Years from now…

Nugget (more granular) and niche organization for everything: search, content, social community combined

Format- specific publishing gives way to format -agnostic publishing 20 Years from now…

Format- specific publishing gives way to format -agnostic publishing

Community gateways, portals, upstream aggregates 20 Years from now…

Community gateways, portals, upstream aggregates

Crowd-sourced content; crowd-sourced editing and curation 20 Years from now…

Crowd-sourced content; crowd-sourced editing and curation

Professional and personal super-editing and super-curation 20 Years from now…

Professional and personal super-editing and super-curation

Subscription models common; per-item sales relatively rare 20 Years from now…

Subscription models common; per-item sales relatively rare

Mass market (cross-niche) content arising from niches (a new “farm system”) 20 Years from now…

Mass market (cross-niche) content arising from niches (a new “farm system”)

20 Years from now… The publishing business has a much larger B2B component

The publishing business has a much larger B2B component

Perhaps: one general trade publisher

c Aggregates from across the internet universe One general trade publisher:

Aggregates from across the internet universe

Delivers “books” (ebooks, multi-media, group-creations), but mostly POD One general trade publisher:

Delivers “books” (ebooks, multi-media, group-creations), but mostly POD

Press runs? If there’s someplace to sell them… One general trade publisher:

Press runs? If there’s someplace to sell them…

Publishing “skills” applied within the niches and the nuggets

Own, manage, administer, or lead a nugget or a niche (or work for somebody who does) Within the niches and nuggets:

Own, manage, administer, or lead a nugget or a niche (or work for somebody who does)

Generate, curate, aggregate content of any kind from and for the niche Within the niches and nuggets:

Generate, curate, aggregate content of any kind from and for the niche

Employ skills of selection, editing, formatting for presentation, marketing Within the niches and nuggets:

Employ skills of selection, editing, formatting for presentation, marketing

For many biggest business: B2B content development for the niche Within the niches and nuggets:

For many biggest business: B2B content development for the niche

Not particularly relevant, but many here would ask: “Books?”

Sure, because of POD, new ones “appear” all the time Books?

Sure, because of POD, new ones “appear” all the time

More new titles are created by readers than by publishers (might already be true!) Books?

More new titles are created by readers than by publishers (might already be true!)

Press run titles are the exception, not the rule Books?

Press run titles are the exception, not the rule

And reading on paper is definitely “retro” Books?

And reading on paper is definitely “retro”

The uncomfortable bottom line on this change: from N to X

Value moves from conte n t to conte x t From content to context

Value moves from conte n t to conte x t

Ownership of attention will be more important than ownership of content From content to context

Ownership of attention will be more important than ownership of content

Value moves to scarcity From content to context

Value moves to scarcity

Content creation and distribution no longer require scale From content to context

Content creation and distribution no longer require scale

Niche by niche and nugget by nugget: community attention (i.e. marketing) does require scale From content to context

Niche by niche and nugget by nugget: community attention (i.e. marketing) does require scale

If you have capital, where is competitive advantage? From content to context

If you have capital, where is competitive advantage?

So today’s value creation isn’t tomorrow’s

You win today by owning valuable content and shelf space to merchandise it Today vs. Tomorrow

You win today by owning valuable content and shelf space to merchandise it

You win tomorrow by owning valuable eyeballs and mental bandwidth You win today by owning valuable content and shelf space to merchandise it Today vs. Tomorrow

You win tomorrow by owning valuable eyeballs and mental bandwidth

You win today by owning valuable content and shelf space to merchandise it

The historical revenue model was clear Today vs. Tomorrow

The historical revenue model was clear

The next revenue model is not (yet) The historical revenue model was clear Today vs. Tomorrow

The next revenue model is not (yet)

The historical revenue model was clear

Transitional decades coming: costs rise, revenue falls

Supporting multiple models: print books, ebooks, and new forms The Transition

Supporting multiple models: print books, ebooks, and new forms

Legacy content (yours and everybody else’s) all being digitized The Transition

Legacy content (yours and everybody else’s) all being digitized

Legacy content (yours and everybody else’s) all being tagged and organized The Transition

Legacy content (yours and everybody else’s) all being tagged and organized

Digitizing of rights databases could be more expensive than digitizing content itself! The Transition

Digitizing of rights databases could be more expensive than digitizing content itself!

New screens, platforms, channels proliferate and all create some level of expense The Transition

New screens, platforms, channels proliferate and all create some level of expense

Digital natives inventing a future (social networking, uses of links, redefining roles, determining formats of presentation, feedback, mixing of media) The Transition

Digital natives inventing a future (social networking, uses of links, redefining roles, determining formats of presentation, feedback, mixing of media)

Things that happen during this transition

Lines blur among newspapers, magazines, books, games Things that happen during the transition

Lines blur among newspapers, magazines, books, games

Content finds markets and pricing models; markets find (and create and promote) content Things that happen during the transition

Content finds markets and pricing models; markets find (and create and promote) content

Access to audiences remains the key: NY Times and B&N were ; Google and Amazon are ; Facebook and Twitter to be ? For how long? Things that happen during the transition

Access to audiences remains the key: NY Times and B&N were ; Google and Amazon are ; Facebook and Twitter to be ? For how long?

Darwinian processes (with a boost from technology) create vertical clusters (and do you know Ning?) Things that happen during the transition

Darwinian processes (with a boost from technology) create vertical clusters (and do you know Ning?)

The old model still “works”; just for fewer titles (and fewer general trade publishers and fewer bookstores) Things that happen during the transition

The old model still “works”; just for fewer titles (and fewer general trade publishers and fewer bookstores)

Back to the present and near future: change we can feel

Soon: one bookstore chain exacerbates critical mass issues Change we can feel

Soon: one bookstore chain exacerbates critical mass issues

Soon: five, then four, then X general trade publishers Soon: one bookstore chain exacerbates critical mass issues Change we can feel

Soon: five, then four, then X general trade publishers

Soon: one bookstore chain exacerbates critical mass issues

Mass market “events”: fewer in number, faster to cycle, and shorter in duration (and not just for books) Change we can feel

Mass market “events”: fewer in number, faster to cycle, and shorter in duration (and not just for books)

Niche- and self-publishing and blogs as a “farm system”: will become standard practice Change we can feel

Niche- and self-publishing and blogs as a “farm system”: will become standard practice

More and more paper books short run and POD Change we can feel

More and more paper books short run and POD

Ebooks increasingly have content edge: more of it and more timely Change we can feel

Ebooks increasingly have content edge: more of it and more timely

More difficult to launch new titles Change we can feel

More difficult to launch new titles

Harder to sustain backlist Change we can feel

Harder to sustain backlist

From stable to ever-changing marketing vehicles Change we can feel

From stable to ever-changing marketing vehicles

Indispensability of social networks as word-of-mouth device Change we can feel

Indispensability of social networks as word-of-mouth device

What pushes (or nudges) publishers to vertical

Necessity (horizontal marketing and sales channels diminish) What pushes publishers

Necessity (horizontal marketing and sales channels diminish)

New marketing opportunities arising on the web What pushes publishers

New marketing opportunities arising on the web

Costs skyrocket marketing outside known niches What pushes publishers

Costs skyrocket marketing outside known niches

Natural development of “in-niche” relationships What pushes publishers

Natural development of “in-niche” relationships

Web sites as a market for content further drive vertical aggregation (across publishers) What pushes publishers

Web sites as a market for content further drive vertical aggregation (across publishers)

Remembering our own fundamentals: what does a publisher do ?

Connects content to markets (20 th century) What does a publisher do?

Connects content to markets (20 th century)

Connects databases to networks (21 st century) What does a publisher do?

Connects databases to networks (21 st century)

Understands communities of content consumers: what they want and how to reach them What does a publisher do?

Understands communities of content consumers: what they want and how to reach them

Recognizes creative possibilities in not-fully-developed ideas What does a publisher do?

Recognizes creative possibilities in not-fully-developed ideas

Coordinates the disparate activities necessary to connect a creator to an audience; sometimes to connect creators to each other What does a publisher do?

Coordinates the disparate activities necessary to connect a creator to an audience; sometimes to connect creators to each other

Manages a massive amount of detail What does a publisher do?

Manages a massive amount of detail

The publisher’s position today to get to tomorrow: pros and cons

books are ultimate “niche” products publishers are trained niche marketers skilled at content creation, development can put a “souvenir” on the shelf can target-distribute URLs Pros:

books are ultimate “niche” products

publishers are trained niche marketers

skilled at content creation, development

can put a “souvenir” on the shelf

can target-distribute URLs

product- and book-centricity not continuous (most) not vertically focused lack resources to experiment lack a culture of technology or a culture of experimentation Cons:

product- and book-centricity

not continuous

(most) not vertically focused

lack resources to experiment

lack a culture of technology or a culture of experimentation

What we said when we started: We’re in an era of rapid change We must experiment and re-invent Do that within a framework created by a “view of the future”

We’re in an era of rapid change

We must experiment and re-invent

Do that within a framework created by a “view of the future”

The view of the future presented here: Move toward vertical and community

The view of the future presented here: Move toward vertical and community

So what’s a publisher’s 21 st century action plan?

First and foremost: understand yourself vertically! (BISAC, Special Sales) The Publisher’s 21 st Century Plan

First and foremost:

understand yourself vertically!

(BISAC, Special Sales)

When you know what your verticals are (or might be): research your vertical web world The Publisher’s 21 st Century Plan

When you know what your verticals are (or might be):

research your vertical web world

Construct business metrics and track financials by verticals The Publisher’s 21 st Century Plan

Construct business metrics and track financials by verticals

Have a sensible Web strategy: 1 presence for B2B; at least 1 for each vertical The Publisher’s 21 st Century Plan

Have a sensible Web strategy: 1 presence for B2B; at least 1 for each vertical

Create a complete email list strategy: vertical-sensitive and with an author-facing component The Publisher’s 21 st Century Plan

Create a complete email list strategy: vertical-sensitive and with an author-facing component

Over time: reshuffle your publishing portfolio The Publisher’s 21 st Century Plan

Over time: reshuffle your publishing portfolio

Over time: maximize cumulative effects of web marketing efforts The Publisher’s 21 st Century Plan

Over time: maximize cumulative effects of web marketing efforts

Over time: construct alliances that will enable new businesses and new business models The Publisher’s 21 st Century Plan

Over time: construct alliances that will enable new businesses and new business models

And if this doesn’t work for you, create another view of the future that does! But HAVE ONE !

And if this doesn’t work for you, create another view of the future that does!

But HAVE ONE !