Book publishers, I think your business model is expiring! If you don’t update it now, you will suffer the same fate as the music industry: “cluelessness” of what to do to fight steeply declining revenues!
I am by no means an expert of the book publishing industry. My only qualification is being a huge buyer of books and being an aspiring author with a business model innovation book I am working on. The innovation behind the book: I am not alone in writing this book, but my co-author and I are working with another 250+ 470+ co-authors who paid to be part of the book writing. Oh, I almost forgot, we not working with a publisher… I never even submitted a manuscript to a publisher…
Here four substantial trends off the top of my head that will rock the book publishing industry and their business models (trends which you probably know, but are not taking seriously):
Distribution is a commodity and attention is scarce
Publishers and retailers used to controlled distribution. That gave them the power to promote authors and their books. With Amazon.com, self-publishing sites such as Lulu.com and the rise of e-books that power is gone because anybody can (print and) distribute a book. The name of the game is now capturing attention in a world of abundance and the absence of distribution scarcity. The publisher’s role of the gatekeeper is soon gone. We are entering the ultimate meritocracy. Books will be successful without a major publisher if they can capture the attention of potential readers through the mastery of the tools of the attention economy: blogs, communities, search engine optimization (SEO) and viral marketing. Readers will catapult a book to success if their attention can be captured. We have already seen this happen sporadically in the music industry.
New business and revenue models will dominate the landscape
Traditional revenue streams from selling books are prone to die. Learn from the music industry: Apple is now the dominant force in digital music and has replaced the incumbent players with a completely different business and revenue model. They sell music online, but they earn most from selling their iPod hardware. Or look towards the artist that give away their music and earn their revenues from increased concert sales or special edition albums. They use “free” as a way to capture attention and earn from new revenue streams.
Authors want to be liberated from the handcuffs of publishers
Very few authors get lucrative royalties or a substantial advance from their publishers. Royalties usually run around 5-10% of the book price. You have to sell VERY many books to live from it decently. In addition publishers don’t allow you to do most of the interesting stuff: experiment with new formats, revenue models and online communities. Hence, new authors have little interest to work with publishers and many of the most lucrative successful authors will run as soon as they have the courage: Paulo Coelho is famous for his stance against the publishing industry and their traditional methods.
New experimental formats will emerge
Books will be written by communities, they will come in versions (like software: cf. the unbook movement by my friend Dave Gray), they will have innovative intellectual copyrights (e.g. creative commons) and novels will have multiple endings. They will take advantage of multimedia by integrating online content and they will be delivered to digital readers like the Kindle. There are absolutely no limits to imagination of how the “books of the future” will look like. Sadly, publishers (with notable exceptions) lack the required imagination to exploit the new opportunity space.
UPDATE: Richard Baraniuk’s talk at TED on textbooks: Goodbye, textbooks; hello, open-source learning:
http://www.ted.com/index.php/talks/richard_baraniuk_on_open_source_learning.html
Hi Alex,
the last idea is very interesting… almost sounds like online video game. Well, turning the process of writing into a game that authors can play with readers is really a creative idea!
I would love to come to your book launch in June… definitely will go in spirit – if not in person
Qin
Having recently attended a lecture at the LSE given by the MD of Harper Collins, who waxed lyrical about their new website that to me looked like a less useful version of Amazon, I was convinced that the publishing industry just doesn’t get Web 2.0 and Generation C(reate).
Having seen the wealth of content created by users from mashing up music, photos, videos, etc from external sources as well as their own creation, I was wondering how this could be applied in the book industry?
What if you could go to a website, select the content of your favourite book, then illustrate it with images, diagrams, photos, music, etc, using an application on the site?
You could share this with other users and elect to pay to receive it as an eBook or printed copy of your personalised Illustrated copy (not sure about the music bit though). Authors could be safe in the knowledge that the integrity of their work was protected as users would not be able to delete, reorder or change the words – just illustrate, and they could receive a payment when people buy the soft or hard illustrated copies of their work. I’m sure authors would enjoy and benefit from this increased dialogue with their readers and find it inspirational as well.
I am a heavy reader with a passion for art, and miss the days of illuminated manuscripts, and the beautifully illustrated books of my childhood. It seems that as adults, we are expected to read lots of text without illustration. As a very visual learner who appreciates the additional information/aid to memory from pictures/diagrams I find myself creating diagrams and mindmaps of non-fiction works for myself.
The expense of providing illustrations in books (not just cost of printing but licensing of such images) has obviously substantially contributed to this situation, but this is not longer an issue.
A particular book I read recently which desperately needed illustration was Peter Watson’s “A History of Ideas” – he refers to paintings and inventions (without illustration), pieces of music (no music file), and tracks the progression of a huge number of ideas without providing a map to show the relationships between them. Obviously to publish this book with all of these “value-adds” would be hugely expensive (to the publisher and the buyer), however, I’m sure there are many people who would happily co-create and provide the images, sound files, idea mapping within and between different idea/concepts/fields, that would make the content so much more useful as a source of knowledge.
This new concept/business model could revitalise the publishing industry, as well as providing book-lovers with a whole new avenue for engagingand interacting with the works they love. It may be something to consider for the new book you are working on also.
Happy to discuss further if you would like to get in touch.
Cheers,
Fiona
Fiona, interesting ideas! Thanks for adding. Established companies unfortunately have problems expanding out of their traditional (but expired) thinking space. Publishing seems trapped in that space…
i find your logic justified and so i agree with what ever you said. it is important to grow with the growing time or else a big industry can even face such a problem. any ways thanks for the post. will follow a few more of your articles.
thanks
Web designer mumbai
Alex, you seem only to talk here about non-fication books. Books that get better with more people working on them.
What about fiction? The beautiful book that is written by a talented writer, alone. What business model changes can (s)he expect?
Rutger, interesting point! Changes are indeed different for the publication of fiction books.
There might not be as much co-creation for fiction books, but when it comes to editing and marketing the case is exactly the same! There will be profound changes in the way fiction will be brought to the market.
dear alex,
as a reasonably successful self-published author i wrote a lengthy blog about a new business model for the book undustry, it being modeled on ASCAP payments for musicians and composers. you can see it all here with link to eco libris where the discussion and comments went on–
http://justinlocke.typepad.com/art_and_commerce_justin_l/2009/02/intellectual-property-rights-in-used-books-the-discussion-continues.html
this had more to do with intellectual property rights in the resale of used books. in england authors get payments for each checkout from a library, and a precedent, in europe painters get a percentage of reales of their paintings.
but beyond that, the book business relies too much on a finite number of bookworms rather than encouraging book buying by those who don’t normally buy books. take it from one who knows, the big publishers and distributors are still using quill pens and are a deer in the headlights when it comes to new technology. I have bypassed them completely and actually make money selling books. and boy is it fun.
see my website for videos, etc if you are interested, i have a new book on creativity and innovation that is most unusual i guarantee!
–justin locke
Hi Alex, how can we implement a business model in private equity?
Robert, I guess there are a couple of possible business models in the private equity industry. The art is to design the right one
Thanks Alex
Do you think that it’s possible to define a general business model for all the private equity industry or we can only think to a different business model for each investor?
I don’t believe in general business models. Several successful models can co-exist in the same industry… (cf airlines, music, etc.)
What is the connection between Normann’s Business idea, business strategy and Business model?