Challenges Publishers Face
Digitization or in other words the availability and consumption of content in an electronic format is one of the biggest changes confronting the publishing industry. Moreover, the speed at which the digital environment has engulfed the industry has caught several playersunaware.
As content and consumption become increasingly digital, old order business models based on distribution are no longer relevant. Consumers are increasingly calling the shots, demanding content in multiple formats, across multiple platforms, and at a time that’s convenient for them.
Book publishing traditionally followed a time-tested process – contracting an author to write a book, developing the manuscript, copy editing and typesetting, designing, proofreading, printing, distribution, publicity and retail sales. In the digital arena, every element of the process is being redefined.
The logistics of printing and shipping do not play any role in ebook publishing, while at the other, authors are opting for self publishing, threatening the existing role of publishers themselves. In the digital space, the sales and marketing process is also being redefined, since publishers now need to reach out directly to customers, not necessarily through retail stores.
Print-on-demand is another element that is changing the dynamics of the print process since publishers no longer need to plan for a minimum print-run. An important aspect for ebooks is that the entire publishing cycle can be cut down to a few weeks as against months in the traditional print medium. Notably, both costs and revenues are typically lower for ebooks, and they often enjoy higher profit margins than their print counterparts.
As sales shift from a distribution paradigm directly to a consumption paradigm, publishers have to rethink their strategies. This essentially means that we are moving from a B2B (Business to Business) environment to a B2C (Business to Consumer) and potentially a C2C (Creator to Consumer) environment.
Navigating the Digital Age
While the ultimate role of the ebook in publishing remains debatable, only a few doubt that in many sectors of publishing, the future is digital.
How far will the digitization of the publishing industry go? It is difficult to make accurate predictions given the dynamic nature of the industry; however based on current trends, we believe that by the end of 2016, 50% of all books sold will be consumed electronically.
Despite strong and growing consumer demand for digital content, many content offerings fail to meet customer requirements. This is typically because of one or more of the following: they do not match specifics of consumer demand, they are not well optimized for the platform or technology, or they are not correctly priced.
Most media companies have largely replicated their traditional analog products — books, magazines, and newspapers — in digital forms. While this is may be a good start, it will not complete the digital transition until they have created entirely new digital media products unencumbered by the past, to provide truly original products.
Content Usage Rights
Any publishing asset is more than just content; but content by itself has no value as an asset unless one also has the right to use it; publishers therefore need to know not only about the content but also about the rights they have to use that content in any given context. Digital rights management (DRM) is an essential requirement for achieving the potential of new media. Publishers are literally unable to sell what consumers want and at what price because they cannot uniquely identify these new products or their rights to sell them.
Emerging Business Models
Henceforth more power will shift from content creators to the platform on which content is distributed. Many solution providers, especially in publishing, are developing their own products that optimally leverage the technology capabilities of their platforms. Content owners will partner with solution providers of these platforms to stay in the game.
As smartphones, e-book readers and tablets become all pervasive, publishers need to anticipate rather than react to how mobility will affect their business. To understand how game-changing this mobility could be, consider what is happening in the education area. Many educational institutions are now ‘going digital’ and allowing students to purchase digital versions of textbooks. From this year NCERT books for class X and XII will be available in digital format. In a classroom context, students will require their digital versions for note-taking or updating notes with others over wireless networks. They will also expect content updates (such as new sample tests for those purchasing tutorial material for competitive exams) in the same way software companies update their programs.
Digital distribution is driving the transition of business models from traditional B2B towards B2C. With products that can now be ‘pulled’ by the consumer, and not just ‘pushed’ by the creator, it is critical for publishers to have a clearer understanding of their customers.