Redefining the book supply chain: A glimpse into the future

Lauren Stewart: Hello, everyone. Thank you for joining us for today's Tech Forum session.
I'm Lauren Stewart, Operations Director at BookNet. Welcome to Redefining the book
supply chain: A glimpse into the future.
Before we get started, BookNet Canada acknowledges that its operations are remote and our
colleagues contribute their work from the traditional territories of the Mississaugas of the
Credit, the Anishinaabe, the Haudenosaunee, the Wyandot, the Mi'kmaq, the Ojibwe of Fort
William First Nation, the Three Fires Confederacy of First Nations, and the Métis, the
original nations and peoples of the lands we now call Beeton, Brampton, Guelph, Halifax,
Thunder Bay, Toronto, Vaughan, and Windsor. We encourage you to visit the native-land.ca
website to learn more about the peoples whose land you are joining from today.
Moreover, BookNet endorses the calls to action from the Truth and Reconciliation
Commission of Canada and supports an ongoing shift from gatekeeping to space-making in
the book industry. The book industry has long been an industry of gatekeeping. Anyone who
works at any stage of the book supply chain carries a responsibility to serve readers by
publishing, promoting, and supplying works that represent the wide extent of human
experiences and identities and all that complicated intersectionality.
We at BookNet are committed to working with our partners in the industry as we move
towards a framework that supports space-making, which ensures that marginalised creators
and professionals all have the opportunity to contribute, work, and lead.
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Now let me introduce our speaker, Brian O'Leary. Brian is executive director of the Book
Industry Study Group, a U.S.-based trade association that disseminates information, creates
and implements standards, and conducts research to benefit the book publishing supply
chain. Before being named to this role in 2016, O'Leary was principal of Magellan Media
Consulting, which helped publishers improve how they create, manage, and distribute
content. In that role, O'Leary wrote extensively about issues affecting the publishing
industry. With Hugh McGuire, he co-edited the book, "Book: A Futurist's Manifesto,"
published by O'Reilly Media in 2012. O'Leary served as senior vice president with
Hammond Inc. and oversaw production and distribution operations at several Time Inc.
magazines. O'Leary joined Time Inc. after earning an MBA from Harvard Business School.
He also holds an AB in chemistry from Harvard College. So Brian, please take it away.

Brian O’Leary: Thank you, Lauren. And let me start by thanking you and BookNet for the
significant work that you've done over the last several years and channelling some of the
ideas and the concepts for respecting and recognising indigenous populations. It's particularly
evident in our work on subject codes and BISAC. And the update that's coming up next
month I think will demonstrate a lot of the work that you've been leading.
I wanted to start today by talking a little bit about why. And the why for me is actually three
different pieces of an argument on what the future might hold. Since I started... I came to this
role in 2016. So I'm a little bit more than seven years into it. And three things seemed really
evident, perhaps in my first few months. So somewhere between late 2016 and early 2017.
The first was the North American publishing business. And we do look largely at the U.S.,
and there are distinctions between the U.S. and Canada.
But today I'm talking really about the two countries' markets combined. But the growth in the
North American publishing business has been flat for a long time. It's not been... Generally,
if there's an up year for one type of book, there's down year for another type. And you see a
relatively static... In the U.S. market, for example, it's typically between U.S. $25 billion and
U.S. $27 billion in annual sales.
So one thing that became increasingly evident to us and to me at BISG was that growth in the
North American market is going to increasingly come from the sales and effective
management of rights, which is an undercapitalised opportunity. That's not necessarily a
controversial argument, but it is a shift in how we think about what we manage and where we
put our time and attention.
The second corollary to that, and it's certainly become more true as the physical cost of
books has increased both during and after the pandemic, that managing the cost of effectively
book publishing and all the different activities, creating, distributing, selling, and returning is
going to require greater commitment to efficiency. This is not a supply chain that has really
been built for efficiency and it doesn't necessarily provide information through legacy
systems and workflows that allow publishers, distributors, and retailers to become more
efficient. But we think that's going to be a critical issue as we move forward, particularly as
the cost of physical products continues to increase.
And then the last piece is that we need to be smarter about placing bets. So product selection
and product development is going to demand an understanding of the markets we're working
to serve. And so the ability to both gather and manage consumer information is going to be
critical to companies throughout the supply chain. We need to understand where the market
is going.
And you've seen some changes in the industry already. If you think about it in the U.S.
market, the changes that James Daunt has brought to Barnes & Noble, they're trying to
become more consumer-facing at the local level, not making decisions based largely in their
headquarters in New York or even in regional, but giving more autonomy to regional or local
booksellers. Those kinds of things are becoming more important, but they also demand
information systems and transparency that were not necessarily built to capitalise on just yet.

So we're going to talk about a variety of things after this, and I'll come back to these three
toward the end. But this is kind of the thing. These are the three things that we think about
when we do our work, particularly at the Book Industry Study Group.
So we'll talk a lot today about supply chain. And I thought it'd be useful to have a couple of
slides on both what we mean by supply chain, as well as how it plays out in the book
business. I mean, this is kind of a standard definition that, you know, it's a network. It's all of
the individuals, organisations, resources, activities, some technologies involved in the
creation and sale of a product, in our case, the book, and that supply chain encompasses
everything from the delivery of source materials to the manufacturer all the way through to
its eventual delivery to the end user. That's pretty high level.
In practical terms, there are at least five or six, depending on how you look at it. And there
could be more components of what a book publishing supply chain looks like. And these
components sometimes are either iterative or overlapping. So if you think about authors,
agents, and publishers as an example, they're all involved in the creative part of the book
process.
Manufacturers and distributors, they're converting ideas, sometimes rendered as a PDF in the
case of a printer, through to physical products and digital products in the EPUB form that are
then sent to libraries and retailers often simultaneously. But these are kind of the beginning,
middle, and end of what we normally see.
Underpinning that are all the industry service providers that sell the technology, the
solutions, the services that anyone, sometimes more than one part of the industry uses. And
those are also a critical part of our overall supply chain.
It's useful to note that the roles and structures of the different supply chains vary by type of
publishing. So what you see in trade is not the same as what you'd see in education or
scholarly or professional publishing. But the core activities are generally represented by
these groups across the industry.
At the same time, and this is kind of an insider play for BISG, you know, we have five
different ways that we think about measuring supply chain success. The first is transparency.
And I've added the words level playing field here because effectively, what a larger player
doesn't matter whether it's a publisher, a printer, a distributor, a retailer, what a larger player
knows and sees is probably broader and more complete, because it's looking at a bigger part
of the business, but it also has the ability to invest in systems and data gathering that the rest
of the industry might not.
So one of the things we try to do at BISG and I think BookNet Canada, and particularly does
a really good job of this for the Canadian market is make core information available widely
across the industry so that anyone at any size at least has a fighting chance of understanding
what's actually happening in the marketplace.
A second area is product visibility. So we think about things like what's for sale. One of my
favourite examples of an effective example of product visibility is 49thshelf.com, which
showcases Canadian-authored content. It's a really good way to use metadata to give people

access to information about books that they may be seeking but don't necessarily have an
easy way to find or research Canadian-authored content. So it uses metadata to join the site,
and then the site, in turn, gives a set of consumers who are looking for Canadian-authored
content immediate access to a full list of books that fit that.
Ultimately, whatever we do is we want to sell more books. So one of the questions we ask in
our metadata committee regularly, and are asked by people when we propose a change is, is
this change or is this metadata going to help us sell more books? Because the purpose is not
simply to have good metadata, it's to have good metadata to drive better sales.
The other component is essentially a good supply chain doesn't cost you a lot of money. So
we try to take rework out of the system. An everyday example that's kind of the plumbing as
a book business for us are labels on cartons. So there's a standard for both what information
should be presented on the label and where that label should appear on the carton. That's
important for two reasons. One, you don't wanna open the carton to know what's inside of it.
But increasingly, a lot of warehouses are set up with machine-readable technology in place,
whether it's robots or just a hand reader. So having a label that is reliably in a place on the
carton where you can get at it, particularly if you're a robot, is a critical piece of the puzzle.
That's an example of trying to solve a problem before it occurs.
And ultimately, these things taken together, you'd like to see a supply chain that allows its
participants to adapt and grow. The world is not static. We've seen a lot of changes in
product formats, in business models and the like. And you'd like to be able to see the players
be able to either introduce new things or take advantage of new things without having to
revamp the entire supply chain. And as you'll hear me talk about in a minute, that's harder
and harder to do.
So the question that BookNet posed to me was, what does the current supply chain do well?
And it's important to note that it was built in the 1970s and 1980s in an era of physical
products, so print books and audiobooks on tape, later audiobooks on CD, although CDs
were not widely available until the mid-1990s. So it does a pretty good job of managing most
aspects of print sales and distribution, things like ordering, receipt and return, and sales
recording are all pretty strong for physical products. It also supports transactions between
established trading partners, but it doesn't necessarily extend to the system of folks who are
not booksellers, for example, by design.
We struggle sometimes when we are working with third parties that are...for example, a mass
market store where books is not the primary product that they sell. It's hard to do business
with them using the established...what we currently use for metadata transactions because it's
different from the other things that they do.
So it falls short in a variety of different ways. The legacy systems, the ones that are in place
right now from the '80s and even the 1990s, don't necessarily take advantage of new
approaches, these so-called enterprise solutions, and by that I mean an accounting and
transaction system, purchase order system, etc., that you might see in an existing publisher
was built with custom integrations. Those typically make it hard to adapt to new business

models. They're hardwired based upon the business that existed at the time that they were
built and turned on.
We see new use cases that force development of one-off solutions. So if you think about a
decade ago, or they're about a decade ago, the advent of agency pricing, which was largely
limited to the largest publishers, but it's an entirely different business model. That took a lot
of work to try and set up, particularly at retailers such as Kobo, Barnes & Noble, and
elsewhere.
The other thing that makes it hard, because they were built quite a long time ago, it's hard to
create any interoperability across the industry. Some of the things that we've been working
on with respect to forecasting would benefit enormously from sharing of information
between, for example, publishers and printers, but also among publishers in some sort of
anonymised fashion. That's tough to pull off when the systems are really built for a print
supply chain.
And the last piece, particularly when it comes to metadata, is that we see repositories of
information that are either proprietary or just non-existent. And without repositories that can
be queried in a consistent way, you lack transparency, and that reduces industry-wide
understanding. So these are gaps in the current supply chain that I think organisations like
BookNet and BISG regularly work to try and address.
So within that, the three things that we kind of think about when we say, what do we need to
do to improve the supply chain? The first is more effective tracking management and
promotion of rights. We think it's a significant growth opportunity. It's not going to overtake
product sales, at least not in the near term, but it is where the growth is potentially the
greatest.
The second is we need better data going out, metadata, in particular, and better data coming
back, things like inventory data, sales data by channel, real-time reporting of information,
particularly about operations. Those things are very difficult to pull out. There are some good
operating examples between trading partners. So a given publisher, typically larger and a
given distributor can talk about figuring out ways to solve that problem. But the industry
lacks it. In a similar way, we're not really deeply aware of what's going on with respect to the
independent publishing and hybrid publishing community. And without that, we don't have a
full understanding of what trends are with respect to e-books and print books as well.
And then the last piece is both greater and growing understanding of consumer demands.
There are some interesting startups that have tried to address this. I think of Callisto, which is
one that being acquired by Sourcebooks, which is majority owned now by Penguin Random
House. Callisto was trying to do some good work in this area to kind of be driven to create
books based upon consumer demand. This is not necessarily a recommendation for taking
editorial out, but rather for expanding the role of editorial to better understand the
marketplace and to give those people within the product decisions tools that they can do
more work with to make better decisions.
So in my first conversations with Lauren and BookNet, I had several different things that I
said I'd love to be able to see. And these are, well, the six. We're gonna talk about each of

these in turn, but rights management, metadata repositories, payments clearinghouses are
things that have been proven either in this market, but not widely adopted or proven in other
markets. So two has work about returns and real-time data exchange, particularly in the UK.
And then the last, which has not really been proven as well is integrating other parts of the
supply chain. If you wanna do better forecasting, you actually have to have a good
understanding of what's going on in the print side of the market, as well as what capacity is
in the nearer markets, whether it's the U.S., North America, or further field, Asia, Eastern
Europe, etc. And then go through each one of these in turn, and then kind of bring you back
to the three core principles that we reorganised.
We'll start first about investing in rights management. We did a study about two years ago
that confirmed really strong returns on investment for a variety of different rights
management solutions. That report is actually something that we'll put the link or have put
the link in the chat. And for the next week, it's normally a U.S. $49 product, but we've
created a code, BOOKNET, all one word, that you can use to get it for free. It's a really good
summary of how quickly investments and effectively managing rights pay off sometimes in
less than a year. So essentially, cash positive in the first year in which you go live. Other
times up to maybe 18 months. And there are some really good use cases documented.
So there are good reasons to do it. It's profitable and it's smart. The U.S. and Canada both
have really strong markets with substantial front lists, but also very substantial back lists.
And both of them are prime opportunities for selling rights. As I noted in the outset, product
sales have been flat, largely flat for the past decade. It's both a warning sign and an
opportunity. I like to think of it as an opportunity and that we'd like to see more people
reading books and more books. But the reality is that product sales themselves, unit sales
haven't moved in a while.
Things like finding out who owns rights and acquiring the desired rights, as well as
monitoring rights deals. Those are all really hard to do, particularly without an investment in
systems. If you're using either paper-based or spreadsheet-based systems, particularly if
they're not shared, that information is siloed within an organisation and it's really hard to act
on. And scaling that business, which is kind of where the growth would come from is
particularly difficult. That's the last bullet here, which is that if you don't invest in rights,
you're not gonna gain the revenue that you need and you're potentially gonna increase
unauthorised uses.
And one of the things that we're hearing stories of, particularly when people either don't
know who to contact for rights or who contact them. And those folks are really hard-pressed
to answer every inquiry. So they don't get back to them. People go ahead and use the content,
whether it's a permission that they should have paid for and didn't, or if it's a right piracy. But
that's more likely when people are not given the information they need to do the right thing.
So those are situations we would love to try and change.
I talked a bit about repositories, and my specific ask and my wish list is to create what we
call metadata repositories of record. Canada is in a much better position than the U.S. in this

regard, because BookNet Canada serves as a metadata repository for English-language
Canada, and it supports BTLF in doing a similar thing for French-speaking Canada.
The U.S. doesn't have that metadata repository. We have multiple repositories, which create
a number of different challenges. We did a full report on this in 2012. It's old, but the
problems really haven't changed that much. The difficulty is you have multiple parallel feeds
going to distributors and retailers. If anyone changes them, there's no way to bring it back.
There's no canonical or absolutely authoritative record. And I think we have an opportunity
to create what would be a federated set of metadata repositories of record.
One of the difficulties in the U.S. market is that BISG can't just assume the role that BookNet
stepped into 20 years ago and has continued to refine. There are already companies doing
this work in the U.S. market, but I think we could provide standards and the ability to query
whoever owns the metadata record to say, all right, this is the canonical source for this
metadata. It could be a publisher themselves, so a large publisher like Penguin Random
House or HarperCollins might be its own repository. It could be a company like Firebrand or
Ingram who represents a publisher in the marketplace. But essentially, it would be a smaller
universe of folks where the information would be stored. If it's updated, then it could be
automatically republished to a variety of different recipients and provide the opportunity to
develop and share information across the supply chain.
I mentioned API calls here. API is Application Programming Interface. It's actually a way
that the BookNet repository is built. You're essentially given piece of the kingdom to be able
to query metadata in specific controlled ways. That allows you then to build businesses
around that. I think it would give the industry a better understanding of trends, opportunities,
as well as areas of misunderstanding. We struggle a lot in the U.S. market to even find out,
for example, how many publishers are sending information about accessibility on a regular
basis. I think this is a big opportunity, but it is a change in the nature of how information
flows across the industry.
Payments clearinghouse is a little bit more esoteric, but it is already in place in the UK. If
you think about it, we've got thousands of publishers delivering books to thousands of
retailers if you think about the number of different retail outlets across North America. That
creates accounting as well as order management challenges. I think we've gotten pretty good
at the order management piece, but accounting is still accounting. There are intermediaries in
place, Ingram, Baker & Taylor, Independent Publishers Group in the U.S. market. There are
others in Canada that do something similar that solve some of this, but there's no
clearinghouse.
In the UK, BATCH, which is a company really built to provide the ability for retailers to
write one cheque to publishers that then gets distributed based upon the invoices that are
already in the system provides that clearinghouse, reduces the overhead, and also gives the
opportunity to do something that's on the next slide, which is to talk about better
management of returns, because you can tie returns of specific orders that are already in the
system.

The hurdles to overcome here, there are a variety of different retailing ordering systems.
There are different protocols on how they're organised. It's not a logistical nightmare, but it's
a logistical challenge of significant scale. And what we think we're going to try and do in the
coming year is develop a roadmap for change. There are organisations like MVB U.S., which
oversees the Pubeasy and Pubnet standards that serve retailers and are something that
BookNet Canada also actively uses. But who could play a significant role here? And we're
trying to figure out, how do we get this to work differently?
When it comes to returns, you know, again, it's a model from the UK, which tackled this
topic over 20 years ago. They use the consulting firm, KPMG, which does a fair amount of
work in terms of establishing financial impact of changes in supply chains. KPMG at the
time said that the UK was wasting what would be the equivalent of about $1 billion in the
North American market, that was about £100 million in the UK at that time on inefficient
handling of returns. So what they wound up doing there is not to say what the return should
or should not be, but to create agreements among publishers, distributors and retailers on
when returns are allowed and when there are exceptions.
The important thing there is not whether or not you can do returns. That's always a
negotiated agreement between two trading partners, a publisher and a retailer, most likely, or
sometimes a distributor record and a retailer. But rather to say if it falls within these
parameters, you know, after 3 months, before 15 months after the order and not greater than
the order as kind of a shorthand of the kind of thing that they were thinking about, then yeah,
you can return it.
And we'll automate the returns authorisation. You can put a sticker on a box, it goes back
with the clear authorisation attached to it, and the accounting is relatively straightforward at a
distributor or a publisher. And a payments clearinghouse along lines of BATCH, or there
could be another model, tie them to specific orders. So you're not having the flow and the
estimates that then have to be referenced by publishers on a monthly basis. That reduces
work. It also reduces discrepancies.
We think returns are generally on the way down in the U.S. market as a percentage of total.
Part of that is a function of increased use of online selling, but it's still a significant number,
estimated widely between 15% and 20% in total volume. I think at that level, figuring out
ways to handle them more efficiently is an important part of our thinking going forward.
And then the last two things that I just wanted to talk about. One was real-time data
exchange. The legacy systems that are talked about largely support one-way communication.
So we have metadata, here it is. And then retailers have sales data, it comes back. The sales
data is not tied to the business models that are described in metadata. They come back as flat
file reports, like something in Excel generally. And that's not really effective, particularly for
digital sales where there's a burgeoning number of different business models in play.
So there are people in publishing houses and sometimes vendors in between publishing
houses and retailers taking the data that's coming in and then massaging it to try and create a
picture each month or each week of what's going on in the marketplace. That's not an
efficient model for the business. We could do better than that by effectively using

technologies that already exist and techs, in particular, to get more robust digital sales
reporting.
Things like lead times on reprints, meaning second printing or subsequent printings of front
and back lists mean that it's important to track what's going on in the pipeline. If somebody
has 2,000 copies in the inventory, particularly a larger retailer that they plan to return, it's
really useful to know that before you decide to go out and print 3,000. And so that becomes
an imperative. There's not that communication in place at this point.
The way that we do sales reporting, which is weekly at best, makes efforts to track marketing
impact really a lot less effective. If you do a promotion, most industries wouldn't be looking
at the QM on a daily basis. Some would be looking at it hour by hour, particularly for online
sales. That's not the case in most book publishing houses.
And the reality is that more timely two-way communication is an investment. It's an
investment in the systems, but it's also an investment on both the sending and the receiving
side, whether the sender is a publisher or a retailer. And that's something that requires the
planning that we're intending to do.
And that last piece is to look across the supply chain. So this is an expansive view, but over
the last two years, we've been investing a fair amount of time, particularly in our supply
chain committee, to look at forecasting tools and techniques. To be good at forecasting,
you've got to have clear communication among printers, distributors, and retailers.
The relationships between publishers and these entities haven't been fully developed. We'll
get there, but that's part of the reason you have organisations like BISG and BookNet. But it's
important because we need to be efficient and effective. And publishing in North America is
probably the largest publishing market in the world, at least in dollar terms. It's still a small
industry relative to most others. And so without investing effectively, we run the risk that
we're operating a small, almost boutique industry ineffectively, inefficiently, and that puts us
at risk. And I think there is this opportunity, and this is probably the message more than
anything else, that there's an opportunity for us to come together across the supply chain to
build a stronger industry.
Some steps that we could take to get there. We have, over the past year, committed to what
we call transforming supply chain communication. This is a multi-year effort. I like to think
it's a three-year effort. Probably will take longer. Most things like this do. Because the first
thing you gotta do is identify the priorities. I've outlined six here. There could be more. And
the reality is whatever those priorities are, we then have to solicit agreements around the
required changes. That's a supply chain commitment. It's not publishers, it's not printers or
distributors or retailers or libraries. It's the entire industry.
And we might have a stage structure for that. We're planning a summit on January 24th with
representatives from all the segments in the industry. And that will probably lead to
initiatives that launched over this coming year. But it's not gonna be solved in 2024. I'd be
surprised if it's fully solved by 2026. But it's the kind of thing that I think is critical for us to
commit to and begin to change and create a roadmap around it.

Lauren asked me to talk a little bit about how these changes might affect the Canadian
market. I don't have a crystal ball, but I took each of the six and kind of laid them out. So
rights management. We work with BookNet Canada to share any recommendations and
solutions that we make as an organisation. We recognise very much that while the Canadian
market is a strong and independent publishing community that there is significant influence
from at least some U.S. publishers in the Canadian market. And anything that we would
change, we talk to BookNet on a regular basis.
So, we have a couple of things that are in work, particularly with respect to a standard for
rights and royalties reporting from international houses that I think would be really useful for
Canadian publishers. And when that's ready for prime time, we're definitely going to be
sharing it.
When it comes to repositories, BookNet Canada is our model. I joked, and Lauren and others
have heard it, that BookNet Canada is what I'd like BISG to be when it grows up. It's a really
effective model for how to manage the supply chain in a given market.
Payments clearinghouses would likely be shared solutions across borders, but they don't have
to be. If there's value in it, then I think BookNet would look carefully at it. They're already in
the middle of a lot of the conversations that we would have with publishers and others. I
think that, again, we would move jointly on that.
Similarly, with returns, the markets are similar, but whatever agreements are built I have to
respect where we are nationally. It's not like the U.S. could come up with a solution for
windows for returns that automatically applied in the Canadian market. That just wouldn't
happen. And real-time data exchange. This is actually modelled on parts of BookNet Canada,
but also what's happening with BIC, which is Book Industry Communication in the UK.
These are effectively ways to use APIs to communicate information back and forth that allow
for smarter and more informed operational decisions.
And then the same thing with integrating other parts of the supply chain. We were going to
work with BookNet to align approaches with... There's no decision that we make that doesn't
start by first talking to folks running BookNet to make sure that we've considered everything
that we need to.
I said I would want to move back to this, so the three things to emphasise. The first is we are
trying to do things that would increase the relative efficiency and the scalability of effective
management of rights. And I think that any publisher should be working on that today. And
if you're not, I think that you're leaving money on the table.
The second is we do need to be much more efficient in how we work on our supply chain.
And I think that's going to require changes that more tightly integrate what we do as an
industry, but also share information on an ongoing basis in a two-way fashion, so both
publishers getting information out into the supply chain, but other elements of supply chain,
particularly retailers getting information back to publishers in a way that helps them
influence or change their decisions and act in a way that's best for them in the industry.

And then the last piece is that we have to be smarter about the marketplace. You know, book
publishing is truly a business of linking content to markets. Understanding those markets is
probably more important now than ever.
And I thought I'd just wrap because this is a lot. If it's inspiring to you or motivating, a few
things, not to temper your enthusiasm, but to guide it. Change takes time. And supply chain
change can take a lot of time. An example that probably most publishers and much of the
industry is familiar with is ONIX 3. It was introduced in 2009. Its best applications are really
for digital products and yet its uptake is still a work in progress. I think we're doing pretty
well with it. It's been a real focus for us since 2017. But the reality is that North American
market had a pretty strong install base of 2.1 users and it's been work to get it to get adopted.
Good ideas, even the best ideas are almost always going to encounter resistance. And the
resistance is not necessarily bad. I think it's people asking you to refine the argument to
understand where they are. Managing change is a skill and is also an investment. And we
have a workflow research paper that has some useful tips in that regard I think that we're also
sharing a link to.
I could probably tell a great length of story of all the failures we've had on my watch, but
certainly, you know, failure does occur. You know, sometimes things don't get adopted or
they only get partially adopted. Taking it in stride is both accepting that not everything's
possible in the first go-around, but also what do you learn from this? And the more you do
this, the more challenges you take on, the more it makes change easier and managing change
easier.
So I'm pretty optimistic about this, even though we have an ambitious agenda. I just think for
any of us it's going to be a lot of hope and effort and, hopefully, some progress, but if it
doesn't all occur in one year, we have the next one. With that, I'm going to pause and turn to
Lauren and see what questions you might have for me.
Lauren: Thank you, Brian. That was really interesting. I know we were going to have a lot
of engagement in the chat and in the Q&A. And as we get that organised and as we
encourage the audience to send some more questions, and I thought I'd get us started. When I
was listening to the talk, I think the largest shift that stuck out to me of the ones that you
presented is that publishers' growth will come largely from the exploitation of rights.
Obviously, the international publishing industry has proven to be very successful over the
years doing this, selling rights to publishers around the world to produce books in different
languages, or for sale in international markets, and then all the subsidiary rights, like
licensing content to be produced into movies or television shows, or character licensing, or
permissions, and all of that. And often when we're talking about subsidiary rights, we're
talking about the sale of these rights to third parties and often operators outside of the
publishing industry.
So my question for you is if you see a marketplace where publishers widen their output and
become television producers, merchandise creators, things along that line, or do you see
opportunities for publishers to better capitalise on the rights granted by creators in addition to
selling rights to third parties?

Brian: Yeah, I mean, a lot of that is a strategy decision that people will make at an individual
organisation level. There's always a trend toward either vertically integrating or not. You see
companies like one of my former employers, Time Warner, that was Time Inc, and then
Time Warner, and then a variety of other businesses integrate and then sell off its assets. So
it's hard to beat prediction. But I do think that there are a number of different signs that
integration of rights management and getting involved in where the business is going. You
think about what Wattpad did with Wattpad Studio. What agencies have done like CAA on
the West Coast, where they're much more involved in essentially building a business around
selling rights for movies and for other media.
Certainly, the growth of streaming services has created a much greater demand for
storytelling. And you see people like Hugh Howey now serving as executive producer on an
Amazon series that seems to be doing pretty well. At the same time within the business itself,
within book publishing, companies like StoryFit, which offered an AI solution for
manuscript evaluation, among other purposes, that would be helpful in saying, here's a
manuscript that would be particularly good for a screenplay. Got no uptake or very little
uptake in the book business, and they've pulled back and they now only work with film
producers.
And I think that our focus has just been getting people to spend money on rights management
solutions, the systems that they need to be able to be prepared to even know what rights they
own and what rights they've licensed and where the money's coming in. Even that's hard. So
I'd say there are plenty of examples out there that say, yes, you should be thinking about
being more integrated and more active in exploiting your rights, even as a matter of author
care, which a lot of publishers increasingly kind of turn their focus on, so that you can say
we're acting in your best interest. But at the same time, they don't take the operational steps
yet to do that. And the vendors that could be working with them more aggressively are
struggling to get heard and seen and sometimes have given up on the marketplace. And that's
why we're pitching the story that we have.
Lauren: No, understood. That's some great points there. I hadn't thought of that before. And
I'm just seeing here a question from the Q&A. This is pointing to your notes about finding
efficiencies. The questioner writes, "Efficiency improvements tend to favour consolidation.
Think of the limited players in traditional distribution and the gatekeeping that creates
limitations for small press access. Is there a way to create the necessary efficiency
improvements while preserving small and independent press access?"
Brian: Yeah, well, I mean, it's an important question. That is my motivation. It's not that I
don't want to serve the needs of larger publishers, most of them are members of BISG and
have an interest in seeing us do our work well. But we need solutions that give, for example,
insight into how to be effective at forecasting for the industry. And we need platforms,
printers of any size, not just the largest three or four, but any book printers, and potentially
book printers that are not based in North America can have access too because if there's
capacity to produce a book and a publisher is looking for a solution, then it would be good to
have access to, you know, an open marketplace for that. And not necessarily with the intent
of getting the lowest printing price, but rather just getting a project, a book printed in a
warehouse. I think that those are critically important.

Our motivation here is not to create a business that is increasingly consolidated. Those are
decisions that are made by individual companies and partners. Our job is to create standards
and best practices that allow anyone to participate and for anyone to be as efficient as they
can be in that environment. Some of our education is also built around that. And I think very
much the education that BookNet provides, particularly around its products, is built around
that notion. Let's make this available to anyone.
Lauren: Yeah, and I also really appreciate your education efforts. I find it really wide-
ranging for anyone who's not aware. Please visit BISG's website. It's a great source for
information.
Brian: Getting better.
Lauren: That's good. A great question from the chat is from one of your longtime peers,
Shane Kennedy. He writes, "Brian, how do you see the growth in POD for continental
Europe in a post-Brexit supply chain?"
Brian: Well, it's good to know that Shane's always posing good questions. I think that POD
is actually going to become... There are probably a couple of things that are playing a role
here. One is there's a large retailer that has increasing operations in Europe. And I think that
they're going to be interested in not necessarily shipping books from the U.S. to Europe. But
I also think there's a sustainability argument. Books that sell in smaller quantities, it doesn't
make sense to ship books across the ocean. The environmental footprint is not great. And
also the demand is not necessarily predictable.
There's been a significant growth in POD, both in the UK and in Europe. And I think that's
going to continue to sustain. And while I'm not an expert on EU regulations, my
understanding is that there's going to be greater attention paid to the carbon footprint of
books going forward. And I think that that's going to make it really important to have local
solutions. Some of them might be inventory-based, but I think a fair number are going to be
on demand. And that's probably a smart thing for the book business.
Lauren: And thanks for bringing up the sustainability piece, because that's another thread
that I saw weave itself throughout your vision of the future. And I know that we at BookNet
have been working with you as well as BIC in the UK, as you mentioned, on the Green Book
Alliance, and that sustainability is inevitably weaving through your thoughts and your
projections. So how would you expect that your projections would be accelerated if the
industry was to respond in an aggressive manner to climate change? Would they look
different if the publishing industry ignored calls to action?
Brian: Well, the first question is, I think the context is that I think sustainability is the
ultimate supply chain problem. You know, it's the thing that we're... The whole purpose of
thinking about sustainability is to stay alive and to keep the planet, you know, habitable not
just for us as humans, but all the species that are here that we rely upon for the ecosystem.
The book industry is not the biggest player in that regard, but we have to play our part. And I
think in terms of the projection, sustainability is baked in. We're kind of working with the
notion that this is a component of what we do. If the entire industry jumped on the

bandwagon today, it would help, particularly on the efficiency side because people would
start seeing the externalities. The inefficiencies of inventory-based systems would become
much more apparent. And they'd want to say, "All right, well, what can we do to really fine-
tune our projections and to make sure that we don't overprint or that we don't waste or
transport books that only come back to us?"
If returns are, for argument, say 20% of the total, that means that 20% of your printing and
transportation is redundant at some point. And that's the kind of thing that you really want to
get your arms around. And I think that sustainability would be a driving force on that.
Beyond the Green Book Alliance, which we've been committed to since 2020 working with
BookNet and Book Industry Communication in the UK, we formed a working group this
year on sustainability that's just getting off the ground and will do a lot of good work in
2024. I think ultimately if we don't figure it out, and not just the book business, but really
more globally, then anything that I'm telling you today is kind of deck chairs on the Titanic.
This is the most important problem we have to solve in a global sense.
Lauren: Yeah, I agree.
Brian: Not to be a downer.
Lauren: No, I was like how to turn that around. But you're absolutely right. Yeah, you're
absolutely right.
Brian: That's why we're working on it.
Lauren: Yeah. And the other large thing that, you know, I think when I think of the trends
and, you know, the inescapable large events that have impacted the last several years, not
events, but you know what I mean, so climate change being one, but also the pandemic. And
how have you changed or adapted your vision of the future over the years, you know, since
2020?
Brian: I feel liberated. Honestly, I feel like we can engage folks from... We went virtual as
an organisation in 2017. We have an office. I'm in it today. But fundamentally, all of our
committees meet virtually and have since the start of 2017. We did that because we
recognised we were a national organisation. We couldn't ask people to come to New York on
a monthly basis. They weren't, and so we wanted to broaden the representation.
I think that what this has done is it's opened up the conversation about two things. One, you
no longer have to look for talent in New York. You can look nationally. You could look
internationally if you chose and it worked for you. Time zones are sometimes a challenge,
but you can work. You can figure out how to manage some of that.
But the other pieces, I think it became really clear, at least to me that we don't have a lot of
time to do stuff. The pandemic kind of brought us back to some core questions about what do
we value and how do we value it? Some of that is fading now. And certainly, the political
climate plays a role in that. You tend to look at what's gonna happen in the U.S., for
example, in 2024 and all the tumult that seems to be going on politically.

But I just look at my own business and I think how much time do we want to wait before we
start to really tackle the problems that are core to what we do? I feel like we lost a couple of
years because it was hard to...we had to spend much of 2020 just learning how to work
remotely. BISG had a pretty good beat on it, but all of our members were dealing with that
for the most part for the first time.
But I think we came out of it in 2022, resolved to try and solve the big problems. That's why
we're talking about the things I am today. These aren't the biggest problems that the industry
faces necessarily, but they are the biggest supply chain problems I think. And that's where
our mandate is. So I feel like I have important work to do, and let's get to it. And that's kind
of a pandemic afterglow I guess.
Lauren: Well, that's good. Like, let's get to it, right? So if you were to say to the people
attending here, and they're completely bought into everything that you've shared today into
your vision of the future, what should they take back to their firm today or tomorrow to
implement change?
Brian: I think the first thing I'd say is that people want to be heard, so start by listening. This
is something I was very impressed by the work that you were involved with, that BookNet
was involved with in talking to indigenous communities. You recognise that it's a long-term
effort, but you really started by trying to listen and not to tell them what you wanted to
accomplish and what you thought they needed to do. And I think that's a really important
place to start.
I think people want to be treated with respect. So be comfortable sharing the truth as you see
it. Recognise that your truth may not be the truth and it may not be shared, but be honest with
folks in talking about what you can do, what you can't do, and where you don't know what
you're doing. That's a vulnerability. I think it's really helpful.
And I think people want help in specific ways. And when you know what that is after
listening and after building the relationships, you have to be responsive. And that's the
hardest part because we're all busy and we all have things to do. But if you want to be a
change agent, you have to help people make that change. So being responsive, being,
empathetic is really important. I know those aren't, like, tick-off-the-box kind of answers, but
I really think it's about mindset more than it is about delivery.
Lauren: No, and also a wonderful through line from lessons learned since 2020, moving
with empathy and listening to others I think is a wonderful way to end. Far more optimistic
than some of the other places we could have gone. Thank you.
Brian: I hope so.
Lauren: Yes. Thank you so much. I think that's a fabulous place to end, looking at we're one
minute shy of the hour. And so thank you for joining us, Brian. And to our audience as well,
thank you. Before we go today, we'd love it if you, the audience, could provide us feedback
on the session. We're going to drop a link in the chat shortly with a survey. If you could
please take a couple of minutes to fill it out. We'll also email you the link to the survey as
well as a recording of the session as soon as it's available.

To our attendees, we also invite you to join an upcoming session that we have on December
5th, Show and Tell What's in Your Tech Stack. Secure your spot now by registering through
the link that we will also put in the chat. And you can find all upcoming sessions and
recordings of every previous session as well as this one once it's available on our website,
bnctechforum.ca.
And finally, we'd like to thank the Department of Canadian Heritage for their support
through the Canada Book Fund. Thanks to all of you for attending, and thank you to Brian
for being with us today and sharing your vision of the future. Thank you, everyone, and have
a fabulous day.

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