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The ‘Book Publishing in 2010’ by Bradley and Bartlett

In: Business and Management

Submitted By LucWilliams
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29 April 2013 MBA Paper: Dr Daniel Lucero The ‘Book Publishing in 2010’ by Bradley and Bartlett presents a comprehensive picture of book publishing before and after the onset of the e-­‐book revolution.

What are the long-­‐term threats and opportunities facing the book publishing industry? Threats: -­‐ Amazon / Apple – companies like this have revolutionized distribution (by being so highly efficient) and have gained the upper hand and bargaining power over Publishers as concerns PRICING – therefore greatly reducing prices and profits for Publishers. -­‐ E-­‐books -­‐ percentage of ebook sales will continue to grow – again this threatens pricing and profit margins and through cannibalization of especially existing paperback sales threatens the profitability and continuation of the paperback. -­‐ Death of chain bookstores – low margins on sales units threatens the closure of these distribution points – which have traditionally played a major role in the value / supply chain for Publishers – their going out of business changes the playing field for distribution (correctly adapting at the “top of the wave” will be an opportunity to exploit) -­‐ Self-­‐publishing – authors no longer need Publishers and cut them out / bypass completely, going directly to the Customer – considerably loss of potential profits. -­‐ Reading rates sharply decreasing – especially by age, where the younger generation (12-­‐25) spends miniscule time reading compared to older generations. Books have been traditionally read and the new generation is not reading! -­‐ Average annual household spending on books in decline -­‐ Lost interest with new generation – the new generation is distracted and more attracted to social media, chat, mobile phones, networking sites – all of these have taken away their interest in the Publisher’s product – great lost of potential clients.

Opportunities: -­‐ Stronger “alliances” with authors – Publishers can now be closer partners with authors – creating new revenue sharing which also has authors bearing more of the risk for sales – no longer high royalty advances and distribution and storage costs can be reduced in this new paradigm of Publisher –author relationship. -­‐ Embracing and use of new technology – Publishers can through adopting new technology adapt more quickly to changes and client desires and more quickly focus on and be able to define and control a “niche market”. -­‐ Niche Market Focus – increased opportunities to define specialty niches and build loyalty bases around a “niche” theme – e.g., political books, hobby & travel books, education, etc.





-­‐ -­‐

Hard Copy Heritage Value: “Best Sellers” and Classic in this Print Form will increase in value with time and become legacy/heritage items for families, personal collecting -­‐ Hard Book Copies will not go away and will be much like the Vinyl 33 in the record industry. Innovate and create their own direct path to market – Publishers can avoid and eliminate middle players (Amazon, Apple, etc.) and go directly to customers through social media channels – a home page on web, tweeter, Facebook can be used for promotion, sales, and distribution of Publisher end products for quicker and more direct sales – moving away from mortar and bricks to on-­‐line methods. Building of new partnerships with other media players – The whole concept of the “Book” can change and Publishers, historically established have significant financial power to acquire capital investment and will be able to build new alliances with technology firms (e.g., developers of gamers, film, media, music, etc.) to create new technologies and interact and integrate these technologies to create a new “experience” where a book is a collective experience of these technologies all carried and “read” through the use of computers, mobiles phone and a new generation of readers– the sky is the limit. Digitalized order and print on demand processes – again this provides services in partnership to and with authors which can greatly reduce supply chain costs – printing, shipping, storage, returns, etc. Religious books will stay in Print – The Bible is the world’s best seller -­‐ new translations of the Bible can be printed in multiple languages and distribution to emerging country markets focused on, as literacy rates rise in these parts of the world -­‐ this could defy communist China but people want the power to read, know and decide for themselves! The Bible can sell another few billion copies in India and China alone! But Africa and South America also key emerging market opportunities.

* Some strategic recommendations that could help book publishers adapt their business strategy/model for the future. A simple definition of a business model is that it “defines the rationale of how an organization creates, delivers and captures value.”1 The article, “The Book Publishing in 2010’ by Bradley and Bartlett clearly denotes the history and present issues that the Publishing Industry is forced to face with the advent of modern technologies and in a very specific way the emergence of the ebook. But the ebook is just one aspect that presently technologies are exploiting. As I make strategic recommendation for the Publishing Industry I do so on the assumption that it will be through the exploitation of technology that the Publishing Industry will find it self a profitable future. It will do so much as and in the same way that the music Industry has survived – it will adapt but the basic core value is that Publishers provide a service to society that will never go away – they provide a “good story” in an attractive and pleasing format. Just as mankind “gravitates to music” so does he/she gravitate to a “story”. The format, the medium through which it is conveyed may change but the basic “story” itself – no matter how presented or in what medium – is what “the customer” will always desire. The


beauty of the Publisher – is that they have always been more than just a printer – and by their integrating new technologies they have the ability to redefine what a modern book “experience” is. Also because of the thousands of years of history – and with the quality and longevity provide in Hard Back Books – this format of publishing will remain a mainstay of the Industry – much like the Vinyl 33 has held strong and maintained it’s place in the music industry. Like the music industry which has survived, adapted and changed -­‐ their model can be readily applied to the Publishing Industry where the book will and should I suggest, integrate media sound, video and special effect on the platform of computerized digital “new” reader – just as music has added graphics and videos to its industry. Therefore the Publishing Industry must radically look at their each component of their business model – they need to re-­‐look at and think through the basic questions that define any business2: a. What do customers want? b. How do the customers want it? and c. How should they the Publishers organize themselves so as to have customers pay them for their needs in a profitable way? Asking these question means strategically redefining in their business model: Their purpose – o They must diversify and market and “RE-­‐BRAND” to the customer that they are more than just printers – they are providers of the world’s stories! A rich and long history. What they offer and to whom -­‐ o I would have publishers focus on niche markets and it would be ludicrous for me that they would not include Religious Books as one of their key niches. The Bible is the world’s bestseller -­‐ new translations of the Bible can be printed in multiple languages and distributed to emerging country markets Business strategies – o Publishers must focus on areas of promotion, sales, distribution in a new technology age – WEB Based promotion sales and on-­‐line distribution must be their new business model strategy – they must be more than “brick and mortar” but become “brick and click” as major players in the music industry, automotive parts and entertainment industry have become. Their infrastructure – o Publishes in their new business model must move beyond brick and mortar to fully embrace the digital world of production and distribution to customers over the web. Their organizational structures – o Must cut out the agents – work directly with authors. o Must develop a whole new department of video graphics that will combine written and media, video and music technologies – interactive 3-­‐D books! o Other than the Hard Back Books – which will become collector’s


items and develop into legacy and heritage pieces (like the Vinyl 33) there will be no more printing. Paperbacks should disappear from their production chain. Publishers should only print produce: 1) Hard-­‐back copies and, 2) New integrated technology ebooks. They need to define what new authors to invest in – but using on-­‐ line trials they can determine which authors are to be invested in with technologically interactive books. o Must go directly to the customer (cut out wholesalers and retailers) and build stronger alliances with libraries/public domains Their trading practices: o Must evolve: with their providers -­‐ authors – who they will treat more as partners, and, o Customers – who they will service more conveniently and seamlessly using technologies of web down-­‐loads In the future Publishers must essentially focus on and incorporate into their business model existing and new emerging technology. I would have them combine new media formats with the “story teller”. There would not just be “audio books” – but new “media books”. The heart of the industry is about telling “stories” and today a Publisher should merge and mesh the oldest of passions (i.e., “story telling”) with the newest of technologies – digital and video so as to create dynamic new interactions that are so interactive for readers (which are also “viewers”) that they will eventually have the ability to change and adapt endings and plot lines. With a new generation of “vreaders” (= reader +viewer), won back to the concept of reading, the authors will guide the story by framing it even as the audience (i.e., “the reader”) now participates in writing it. Technologies that allow the collection of data and what “vreaders” do with story, can be exploited for marketing and new book investments. Thus combining technologies will be a key. NO FILM can truly capture the power of the written word (all of us know that the films based on the books that move our spirits can never capture the imagination of the book) but to put the written word in a narrative style with video and media graphics which contain special effects options is to offer the “full-­‐blown” package to a new audience of people who still, like all former generations crave a good story! By doing this, the Publisher re-­‐ creates his relationship with the author and offers all this technology so that the author will not bypass the Publisher and go to direct publishing with the customer. The Publisher because of financial power can offer all the technological tools that the author can use. The new value supply relationship will be Author – Publisher (Multi-­‐Digital Components) – Customer. Thus all means that Social media must be exploited – the “story” is still the key as the film industry knows (my son is a music composer for film & media). Publishers will need to maximize and assure that they have direct access to their “public” and create their own loyalty base which will be much like a dynamic interactive learning community of loyal followers, so the Publisher will need to brand itself and know exactly who he is and who they want to and can reach in this wired world of instant digital contact with millions of potential “customers”. Therefore the Publisher will in the future need to treat the “customer” in a highly


personal way by interact with and using Facebook, Twitter, LinkedIn – promos, pictures, and chats. The integration of technologies is inevitable and will ensure a rich and thriving Publishing Industry, albeit reduced in size as capital expenditure will be high. But eventually with spin offs and new “players” in the niche graphic and media space newly created, time will once again see both “Big” and “Smaller” players who are able to makes profit while providing a product customers want. Resources/ References 1Business Model Generation, A. Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self published, 2010
J.K. A Hypermap for Supply Chain Management, World Academy of Science,

Engineering and Technology 2010, 66: 1178-­‐1181. Porter, M.E., Competitive Strategy: Techniques for Analyzing Industries and Competitors. (New York: The Free Press, 1980).

Porter, M. E. The Five Competitive Forces That Shape Strategy”, Harvard Business Review, January, 2008, pp. 79-­‐93


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