After years of talking about what the digital future might hold, a CEO panel at this year’s Frankfurt Book Fair instead took a look back at the last decade of change. “Digital is no longer something which is in its infancy, to be cooed over and admired and tickled under the chin,” declared moderator Richard Mollet, CEO of the U.K. Publishers Association. “It is in fact beyond adolescence, and in the voting and drinking stages of early adulthood.” With that, Mollet turned to his panel: three CEOs with over 60 years of combined experience, to take stock of the lessons the publishing industry has learned over the last decade of change.
“My view,” began Richard Charkin, executive director at Bloomsbury Publishing, "is that publishing has adapted remarkably quickly." Although still "afraid around the edges," on the academic side, the business is "probably now a 90% digital business," he noted, and on the trade side, maybe 15% to 20%. What publishers have not done, however, is adapt their print systems to the new digital world, Charkin added. “For example, there are still 24 handlings of a book between manufacture and purchase,” he noted. “That’s an awful lot for a $10 thing.”
George Lossius, CEO at Publishing Technology, agreed that the digital transition has been swift for publishers, and that publishing was in a good state. But still, publishers are “not yet fully utilizing and promoting the intellectual property we created in those book packages with new ways of selling and promoting things,” Lossius observed, noting the power of digital to enable communication. “I also think we have allowed ourselves to be governed or directed by big players like Amazon or Apple, and perhaps in the books area, unlike the academic area, with [trade] books publishers haven’t as yet sorted out the opportunities to create their own marketplace, their own brands, and loyalty.”
Matt Hanbury, CEO at Murdoch Books, took that thought a step further. “It does seem to me wrong that those who take the greatest risk in producing reading materials in any format make the least money,” Hanbury said. He called the proliferation of tablets the greatest consumer product "perhaps ever," and said that the Internet and digital offered a revolution akin to that of the enlightenment, the “revolution” was in danger of being hijacked by technologists. "Some of the early things like doing deals with Amazon and Apple at these ridiculous levels of discount for the tasks they provide," Hanbury said, "it just bedevils me that these big international [publishing] companies could make these atrocious deals.”
Mollet followed by asking what decisions the panel might have gone back and changed? While acknowledging the power of a platform like Amazon’s Kindle, Lossius bemoaned the “desperate clinging onto a big player rather than thinking for ourselves." Charkin prefaced his comment by saying that he viewed publishing as a “service industry” to authors. “I don’t think we’ve invested enough in helping out authors reach out and use this technology,” he said. “We’ve allowed other intermediaries to come in take some of that away.”
Mollet then asked Hanbury about his criticism of those publisher deals with big players, and whether there was really an choice but to play ball, given the consumer pressure. “The only thing you can do to resist something which is undesirable is not to do it, which is always tough,” Hanbury said. “But you have to say no sometimes. Maybe doing so would’ve led to a more book-industry friendly retailer coming forward.”
So, what’s gone right for publishers? Despite the panel's “self-flagellation” over the balance of power in digital book business, the digital reading device, the panel agreed, is a marvelous innovation, and Steve Jobs and Jeff Bezos great innovators. Hanbury pointed to the advent of analytics and the extraordinary data now available to publishers. Charkin then noted that most of the innovators in publishing remain anonymous, for example the first person to think of the site license for the STM publishing business, an innovation that transformed the industry. The same with the innovators of open access, which represents both “a threat and an opportunity.”
Is the lesson here that it is perhaps hard to identify what is a good decision or a bad decision in times of such change, Mollet asked? And what about decisions that were not made? For example, why is there not a publisher developed and owned “silo” for digital books. In fact, in the academic world, there are, the panelists noted. In terms of trade books, “perhaps there is a reluctance to work together,” Lossius observed, as well as a lack of consumer brand recognition. “And perhaps, mea culpa, maybe a technology provider just failed to come forward and say ‘let’s do it together.”
Charkin pointed again to academic publishing, citing linking service Crossref as a great collaborative publishing venture. But he also called out the elephant in the room: the Department of Justice. “On the trade side it is very difficult to collaborate because of antitrust, and we know what happened there. On the question of bad decisions, not because I think people are stupid or anything like that, but clearly the Apple agency model has cost our industry a huge amount of money in terms of legal expenses and things like that, money that could’ve gone into developing new things. So, I’d point to that one.”
The panel all agreed that copyright laws remain important. “I think that copyright has proven incredibly flexible," Charkin said. “We can decide to give things away free,” he said, “but it’s our choice.”
The panel ended with prediction time. What, Mollet asked, did the CEO’s think they might be reporting to their boards in another decade? Hanbury said he’d like to see better analytics. “Publishing is a game of risk and uncertainty, and the publishing industry has studiously avoided codifying that kind of uncertainty. But if you are in a field of uncertainty, you want to know what the odds are,” he said. “We have to get into the game of really understanding the numbers.”
Lossius offered the most optimistic prediction, however: that print will still be around, and that the reading community will “double in size as all these e-readers proliferate.”
