“Despite what you may have read,” said PublicAffairs founder Peter Osnos, moderator of the Future of Book publishing panel at Untethered, New York’s newest digital publishing conference, “ book publishing is not in deep crisis. We haven’t lost advertisers or subscribers because we never had them.”
Osnos was addressing the audience at Untethered 2010: Profitable Media in the Tablet Era, a first-time digital conference organized by Slate’s financial blog The Big Money, and emceed by its editor-in-chief, James Ledbetter. He was moderating a high powered panel that included the presidents of Simon & Schuster, McGraw-Hill Education, Perseus and HarperCollins—in addition to Google’s director of strategic partnerhips, Tom Turvey—and he used his opening remarks to provide a different point of view—you could say a top down POV—of an industry that has been challenged by the rise of digital publishing and much criticized by new media pundits as out of touch.
The CEO panel provided the main event in a day-long conference that offered a host of high powered media—from the aforementioned book and magazine publishers to National Public Radio CEO Vivian Schiller—talking about the challenges of digital publishing and promise of tablet computers along with an ever-growing arsenal of personal computing devices that people will use for reading. Nevertheless, despite a lineup of grade A panelists and speakers, Untethered, held at the McGraw-Hill auditorium in midtown, was about half-full at best and maybe a bit less than that by the time the Osnos’s panel convened around 4p.m. While it is a first-time event—organizer James Ledbetter said the show drew about 200 people and had met his expectations for attendance—this is the first in a string of digital book conferences over the last year attended by this reporter that didn’t have an overflow sellout crowd.
That said, the audience appeared full of the usual digital professionals and the show had much to offer in the way of informational nuggets and direct-from-the-publisher reflections on the state of the industry. Indeed among the day's notable pronouncements: the CEOs of Simon & Schuster, McGraw-Hill, Perseus and HarperCollins all said they believe the traditional book industry business is “healthy” and that the digital sector could account for as much 40% of their business in 5 years; consumers will likely buy as many as 8 million tablet computers by 2011 and the future of personal computing will likely be app-centric (for both handheld devices and PCs) and multi-platform with no single device winning out overall.
The remarks on the number of tablets and nature of personal computing were from Sarah Rotman Epps of Forrester Research, who outlined the future of consumer behavior in the new era of tablet computing. Epps focused on tablet computing and the apparent success of the iPad. Besides “looking great” the iPad seems to be replacing the laptop in the home, Epps said, with people “even using it in the bathroom,” and she projects as many as 59 million tablet computers will be sold in the U.S. market by 2015 with tablets outnumbering notebook computers and dedicated e-readers by 2012. While she said that “Apple isn’t infallible,” and that iPad will also have to contend with cheaper dedicated e-readers and smartphones, she also conceded that it will be “difficult for other device manufacturers to compete with Apple.” Epps said, “the iPad is a device consumers don’t know they want and Apple is best positioned to convince them that they do.”
Probably the oddest panel of the day was Will the iPad Kill Off eReaders?, moderated by Slate tech columnist Farhad Manjoo, which included B&N v-p Anthony Astarita and Priscilla Lu, CEO of Spring Design, producer of the Alex e-reader; and David Donovan, v-p at Dutch ereader producer IREX. Spring Design is suing B&N, claiming it stole the design of the Nook from the Alex Reader, and IREX has filed for bankrupty, although none of this was explored or even mentioned by Manjoo—although the chatter on Twitter sure pointed it out--until the panel was almost over. Donovan said the Dutch government has offered the company refinancing support and that “IREX is down but not out." But Manjoo never mentioned the Spring Design lawsuit. When approached by this reporter after the panel was over, Lu was quick to acknowledge that the lawsuit against B&N “continues.”
But the CEO panel really offered a window into the digital perspective of big time New York trade book publishing. Osnos said that publishers biggest problem is always “inventory management,” and said that technology has been “our friend” in addressing it. Perseus president David Steinberger said digital publishing had “lowered the barriers to selling,” and that “discovery” was the new challenge. “Discovery used to be a New York Times review but that’s only part of the answer now,” he said. But there was a unanimous assertion among the panel that the traditional book business is doing just fine.
S&S CEO Carolyn Reidy, said “digital will change the shape of a book and the form of books, but our business model is healthy.” Although HarperCollins president Brian Murray, described publishing as a “high-cost print distribution business,” he also emphasized that “our business model is not under threat but our challenges are now different. I’m optimistic in the short term.” Indeed in response to a question about whether the agency model—bringing higher e-book prices and the loss of retailer discount programs—was driving a wedge between publishers and consumers, Reidy answered with a resounding, “No!” She said the ability to control the price of S&S e-books “is bringing us closer to consumers. We can change prices, experiment and see results,” noting also that most online retailers do not share consumer data with publishers.
Indeed with the exception of McGraw-Hill Education president Peter Davis—“we have professional titles that get a much higher price under the wholesale model and we’re not changing” —the agency model makes big publishers, well, happy. “It’s exciting,” said Steinberger, “we’re not locked into an arbitrary low-cost price for e-books and it’s showing that people will pay for digital content on mobile devices.”
The publishers projected that 5 years from now digital publishing would represent anywhere from 15% of their business (Davis "digital will dominate over the next five years") to as much as 40% or 50% (Murray). Google’s Turvey, on hand to represent the looming launch of Google Editions, said “we see opportunities in an e-book market that is independent of where the consumer bought the book,” and described the current digital marketplace as “a permanently hybrid world,” that will require aggressive investments in both digital and print publishing. “It will be different,” Turvey said, “and a challenge to find where the value is in print v. digital."
