Hachette Digital’s Maja Thomas on Digital Revenue, Bookish and the Leaked Manifesto
By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid
In 2008, digital revenues at New York-based book publisher Hachette represented about 1% of the total for the company. This year, about 20% of Hachette’s revenue will come from digital.
Managing this explosive growth is Maja Thomas, senior vice president of Hachette Digital. Thomas is responsible for Hachette’s e-book and audio divisions and has input on all digital strategy, investments and new digital business development. She also chairs the digital publishing committee for Hachette’s Paris-based parent Hachette Livre; the committee makes all digital publishing decisions for the company.
In addition to her responsibilities at Hachette, Thomas is heads strategy at Bookish, the upcoming online-bookseller joint-venture from publishers Hachette, Penguin and Simon & Schuster. Bookish will launch some time in early 2012, according to Thomas.
Thomas, 49, got her start in publishing at Atlantic Records, working on audio books as an editor and producer. She has also spent time in executive roles at Time Warner and Hachette, mostly overseeing audio-book businesses. She has a bachelor’s degree from the University of California, San Diego, and has completed three years of coursework toward her English literature Ph.D. at Princeton University.
We spoke with Thomas about the ceiling on digital revenue growth, what Amazon might say about Bookish, and Hachette’s leaked digital manifesto.
Jeremy Greenfield: In 2011, Hachette is expected to derive 20% of its revenues from digital. How will the company accomplish this? What will this number be in 2012? In 2015?
Maja Thomas: It’s an interesting question.
I started in audio and spent a lot of time in audio. At first, I was at the beginning of a business that didn’t really exist. It was a minimal part of what we did. When I took it over and started to really work on it, it had that rapid, hockey-stick growth; but it took ten years to get to 10% of the revenue of hardcover books.
With digital books, it’s been a lot faster: It was 8% last year, 4% in 2009 and 1% in 2008. It’s now surpassed 10% in less than half the time.
Audio was the first publishing business to go digital. It was the first business where the file could be delivered by iTunes. At first, our revenue was 90% or more physical and much less on the digital side, but, as time went by, this has started to shift. While other publishers have dropped the physical format, we have not. We are at 50% physical.
There is a natural limit to the growth of digital. I think it might be 50%. The book as an object is a perfect object. It has a lot of utility. People love it. There is something about a book. We’re going to see again a doubling of our growth over the next few years, to 40% or more. But once we reach a plateau, we’re going to have two businesses: a digital business and a physical business.
JG: What’s the most exciting untapped digital growth opportunity for the book publishing industry?
MT: I think there are a couple.
We’ve just now have had the two new readers come out after the iPad. Now that we have color readers, there are huge opportunities for us.
There are things that can be done with illustrated books that we haven’t even begun to work on – razzle-dazzle.
Look what we’ve done on the app side with Ansel Adams. We got permission to use three short films that show Ansel driving around Yosemite taking pictures, making something that can be flat and passive into a more interactive experience.
Second, Spanish-language e-books are going to be a really big deal for us and for most publishers.
Third, international expansion of digital into every country in the world in English language. There’s a limit to what you can do moving physical inventory worldwide. But with digital you can move into markets that have an established mobile phone user base.
We’ll also see much much cheaper readers come out and have a much different penetration in developing countries. Already, we’ve gone from the kindle being almost $300 down to $79. I’ve said for a long time that I’ll expect to see a free reader come on the market with some business model around it and I’m still expecting to see that.
JG: Let’s talk about Bookish. You’re one of the chief strategists on the joint venture between Hachette, Penguin and Simon & Schuster. How do you think Bookish will change the game in digital distribution and discoverability?
MT: Bookish is a single source where serious readers, book-lovers and people who are just curious about books can find out about books, get book recommendations and purchase books. If they like, they can also buy books on another site they are more familiar with.
In the past, publishers have been a b-to-b business – publishing books and then giving those books and all the materials that surround them to retailers. Then the buyer makes the decision. Whenever you have a step between yourself and the consumer, there’s a chance for that message to be diluted or changed.
With Bookish, we don’t have the limitation of inventory and we can promote the full list of books that publishers publish, the whole rich backlist.
JG: How will Bookish promote specific books?
MT: We have a team of editors and some disbursed sources, scrapers on the Web that get information [and use it to recommend certain books]. It’s both human and technology – but all editorially driven.
JG: What would you say to people who might accuse Bookish of promoting only Hachette, Penguin and Simon & Schuster books?
MT: The editorial group is separate from the publishers. They’re independent and make decisions about what the reader needs to know that day and not what’s necessarily being published this week.
JG: How do you anticipate Amazon, Barnes & Noble and other established online booksellers reacting to Bookish?
MT: Since the point of Bookish is to market books and to sell books, I think they should be happy that there’s another way that people can discover and learn about books. There will be no impediment to people discovering books on Bookish and buying them in physical form at B&N or online at Amazon.
JG: When will it launch?
MT: We haven’t announced a launch date yet. It will launch in early 2012.
We didn’t want to launch something half-baked. We wanted to improve search and improve the recommendation engine, and until we’re happy with those things, we won’t launch – but we’re getting close.
JG: Last week on Digital Book World, we published a leaked document from your company about what publishers do and why they’re relevant. Can you tell me more about it?
MT: The manifesto is just a slide from a presentation that we started doing more than a year ago with agents because agents were saying they felt that they didn’t know about the digital world, they didn’t understand the nuances around rights and royalties in digital books. We put together this presentation for them discussing our strategies. It’s been an evolving document. We’ve presented it to several hundred agents.
As it progressed, it became clear that we needed to have a slide that said, ‘this is the value proposition that publishers bring.’ It’s part of the overall, ‘let’s explain ourselves, let’s show why we’re a great partner for agents and authors.’
I would say that it had some great success with certain authors and agents and a more limited success with others in terms of what they took away from it or how persuaded they were by it.
With our authors who were more interested in being digital pioneers, it’s been a great tool.
JG: Do you think the publishing industry as a whole needs to go to its various constituencies and explain its relevance?
MT: I do. I think there’s a propaganda battle going on. Publishers have traditionally and rightly been a modest bunch. Publishers have always been a pedestal for the author, who is the star.
When you finish a book, you don’t get a list of credits at the end like in a movie or on an album, that’s something that publishers have been modest about in order to let the author take center stage.
The problem with that philosophy is that nobody knows the hundreds of people that contribute to making a great book.
JG: Digital staffing is a big challenge right now in book publishing. How are you approaching this issue?
MT: The biggest challenge is that it’s a moving target. If I hired someone a year ago and said in the job description that they have to have working knowledge of ePub, that would have made sense. But this year, that person needs ePub, ePub3, KF8 and app-development skills. Every year, people need new skills. So you need people who are focused on their own education and keeping up on trends in the industry.
I love to be around people like that. I don’t think there’s any shortage of them, but it’s a different kind of mindset than people who might go into publishing because they like to read and they like things to be the same and they like the smell of books and a pipe and slippers. That’s not the person who is going to set the world aflame with the new digital distribution options.
That’s not to say we don’t want people who love books. We need them.
JG: What would you say to a prospective employee considering joining the book publishing industry?
MT: I can’t imagine any more fun place to be. What you’ve got is a respected field in incredible flux.
Just because you’ve done something as a publisher for 20 years doesn’t mean you’re going to do it tomorrow or the next year. You have to be a person who wants to take risks and think creatively.
I can’t imagine a more exciting time to be in book publishing.
JG: What are you reading and on what platform?
MT: I have all these devices and I read on them all because I like to see how the interface works on each one. With e-readers, my reading has quadrupled and I say this as someone who used to read a couple books a week.
I’m halfway through the Steve Jobs biography, which I’m reading on my iPhone and iPad. I’m just finishing Slaughterhouse Five on my Nook. On my Fire, I loaded some books on there so I could play with it this coming weekend.
And, on my bedside table, I have Miranda July’s short story collection, No One Belongs Here More Than You.
Write to Jeremy Greenfield