Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.
A few weeks ago I was lucky enough to participate in New York University’s Summer Publishing Institute. I put together a panel about new business models in book publishing with folks from Diversion Books, Scribd and Librify. But before we had a panel discussion, I spoke for a few minutes about the topic at hand to set the stage. My fellow panelists thought it might be a good idea for me to post the transcript of this talk. So, lightly edited, here it is:
Good morning and welcome to Exploring Current and Future Business Models. Before we start, I’d like to thank NYU and Libby Jordan in particular for putting this together.
I’m Jeremy Greenfield, editorial director of Digital Book World – for those of you who don’t know, it’s the largest ebooks and digital publishing conference in the world and it’s every January in New York City.
We’re here today to talk about business models for book publishing, something that would have perhaps been absurd to have a panel discussion about as recently as ten years ago. The book publishing industry today, however, is vastly different than it was then.
Let me give you just one data point to start off. According to a new report that came out just yesterday, the U.S. trade publishing industry was just under $15 billion last year – and $3 billion of that was ebooks.
It’s astounding if you think about it. I’m not sure what amazes me more about that: that in a few short years from the launch of the Kindle in 2007 until now that a stable, $3 billion business has arisen; or, that unlike that newspaper, magazine and music industries, the big companies that create most of the content didn’t get decimated in the process.
Big book publishers – and even some of the smaller ones – are more profitable today than they’ve ever been, in fact. Ebooks cost less to produce and distribute than print books and so companies that have invested in ebooks and seen ebook sales grow have seen their profit margins grow as well.
It seems obvious now looking back that a big publisher produces and sells ebooks, but it wasn’t such an obvious decision before Amazon launched the Kindle to spend money and time digitizing books and making them available for sale. There were concerns of piracy, concerns that a cheaper ebook would undercut the value proposition for the reader of a hardcover title, concerns that a lot of money would be spent and there would be little or no return. For those of you here who remember the early 90s in book publishing, you’ll recall that CD ROMs were once the future of the industry – and publishers invested heavily. How many people here have read a book off a disc?
The history of business is a graveyard of promising new ideas.
That said, book publishing today is an incubator of new ways of doing things and there are dozens, maybe even hundreds, of new companies that have sprung up to with that in mind.
In fact, I would argue that there are literally hundreds of thousands of new companies in book publishing today because of the other biggest trend in the industry following the rise of ebooks.
After you leave this room this morning, each and every one of you could publish and distribute a book – your own book, one you’ve written – to millions of potential readers, with just a few clicks.
And if you’re good and you’re lucky, you could make a lot of money doing it.
Digital distribution, ebooks, has democratized the access to large audiences for publishers – and anyone can be a publisher today. In 2012, over 300,000 books were self-published in just the U.S., eclipsing the number of books “professionally published.” While most of those books are read by few if any people, many of them are reaching huge audiences of readers. Some authors are even becoming millionaires from their self-published work.
It’s created a gold rush in self-publishing, with authors scrambling to strike it rich publishing their own work. But just like the California gold rush in the 19th century, it wasn’t the prospectors who consistently got wealthy, but the entrepreneurs who sold them the pickaxes, panhandles and whiskey.
This is another trend that has given rise to new business models in book publishing. For those of you in this class hoping to go on to a career at a big publisher like Penguin Random House or HarperCollins, you might not think this has anything to do with you. Well, Penguin Random House owns Author Solutions, the largest self-publishing services provider in the world. And for those aspiring acquiring editors, the next time you bid on a book, know that you’re bidding against other publishers as well as the ability for the author to publish it herself.
Digital distribution…self-publishing….so much has changed. And that’s not even considering the impact that Amazon has had on the business – both as a physical bookseller and as the catalyst for the ebook revolution.
So, with that backdrop, let’s talk about new business models in book publishing.