The publishing industry is undergoing significant disruption. Amazon is pushing down book prices and controlling the point of sale. Self-publishers are flooding the market with cheap books, producing some very high quality work that competes with traditionally published books, and proving a new business model that may well lure authors away from traditional deals.
The level of disruption cannot be underestimated, and it’s going to have a significant impact on publishing as we currently know it.
“Across industries, only 9% of disrupted organisations ever recover,” found Clark Gilbert and Clayton M Christensen in recent research into innovation in digitally disrupted markets.
“Of those, 100% created a separate digital unit to take on the disruption. Not one company […] succeeded trying to develop digital inside the existing company.”
Gilbert is a former Harvard Business School professor who now runs the Deseret News and Deseret Digital Media in Utah, and Christensen is, of course, the author of The Innovator's Dilemma, a book as relevant now as when it was written in 1997.
Although Gilbert is in the news business, his findings apply just as well to books. The parallels between news and books are close: both produce easily digitised content, both have legacy costs, both struggle with commercial innovation, and both have been slow to adapt to technology. Indeed, I believe the news industry is a much closer parallel to books than the oft-cited music industry.
Gilbert has produced six principles for how media companies must deal with disruption, which should be of interest to all publishers. I also think that it’s important for self-publishers to understand these principles as well, even though we are part of the disruptive force. The landscape is changing and will only change more as the the disruption truly takes hold.
Whilst some of these principles apply mostly to traditional businesses, there are some that are relevant to self-publishers.
1. Create a separate digital unit
Gilbert’s first finding, that only companies which created separate digital units survive disruption, is the one that he gets most push-back on. But, he says, the evidence is so compelling that to argue against it is “like arguing against gravity”. However, while having a separate digital unit is essential to survival, by itself it is not sufficient to guarantee success.
2. Transform the legacy business as well
The second of Gilbert’s principles is that companies must transform their legacy — print — business as well as creating a new digital unit, adding new revenue streams and developing new markets. I think Osprey and Angry Robot are great examples of how to explore new products and revenue streams such as subscriptions and memberships.
But there are a lot of core business transformations that publishers also need to address, including improved author accounting, better collaboration tools and practices, and the improvement of digital understanding across not just one imprint but entire houses. There are also editorial innovations to come, not just around the potential for technology to create new storytelling platforms, but also around how authors are developed through canny use of short stories and novellas.
Self-publishers too would be wise to learn these lessons. Don’t just look to book sales for your revenue, explore other models too. It’s also very important that self-publishers understand the efficiencies technology can provide. You have limited resources; make the most of them.
3. Legacy transformation: Get smaller and better
Gilbert’s third principle is that legacy transformation involves getting smaller and getting better. Many publishers have already shed a lot of editorial staff, moving from an employee to a freelance model, but that’s not enough. Remember, it’s smaller and better, not just smaller.
Publishers also need to understand their market in more detail, and that means readers not retailers. They need to connect with readers and form the kinds of deep relationships that the likes of Amazon simply can’t manage.
Self-publishers must take this latter lesson to heart, not least because Amazon will happily ride roughshod over self-publishers if it turns out to make business sense. Don’t let retailers control your relationships with your readers.
4. Understand digital on its own terms
Says Gilbert: “This new unit has separate staff, a separate physical space, a separate balance sheet of profit and loss, its own management structure and distinct content and product teams. Because this unit will be centered on digital, the content produced is different, appealing to the strengths and user behavior inherent to web-based platforms.”
Here, publishers should learn a lesson that most in journalism have yet to grasp: In order to be successful you need to hire in domain expertise, which means hiring people from outside of your industry. You want to really understand social? Hire someone who has been working on social for years, not a Facebook power user who happens to work in publishing. You want to rethink accounts as an author service? Hire in someone with an unparalleled understanding of Xero and CRM.
Even publishing insiders who have a phenomenal grasp of digital may end up still thinking within existing paradigms, cleaving to industry norms despite their best efforts. The same happened in journalism and it’s very hard to combat because we aren’t always aware of our own inbuilt biases and assumptions. To paraphrase journalist Steve Yelvington, human mothers only give birth to alien babies on SyFy.
Self-publishers also need to make sure that they don’t get trapped in their own paradigm. I see a lot of group-think already in self-publishing, especially when it comes to issues around social media and marketing. Look to domain experts, not self-publishing ‘gurus’, for advice on specialist topics.
5. Keep legacy and digital units separate
Gilbert’s fifth principle is that the relationship between the transforming legacy business and the new digital business must be aggressively managed so that the two sides “meet solely to share resources and overall vision, not to combine into a hybrid model”. Allowing the legacy organisation too close a relationship with the new disruptive business will result in legacy “suck[ing] the life out of” the new business.
“[T]op managers have to take great care to let each organisation work independently. The legacy transformation will be the better for it, and so will be the new and frankly disruptive entity.”
For self-publishers, this means making sure that any traditional deals you are offered don’t stomp on the freedoms that you value as an independent author. You may have to make some adjustments and compromises, but you’re independent for a reason, so don’t let that independence be undermined.
6. Don't underestimate the magnitude of the disruption
Finally, Gilbert says that “magnitude of the disruption cannot be ignored”, and that’s just as true for books as it is for news. The publishing industry has multiple challenges facing it and is simply not going to triumph by nibbling around the edges with digital-only imprints, outsourced workforces and collapsing advances for midlist authors.
For self-publishers, this means accepting that change is ongoing. What works this year may not work next year, and visa versa. We have to keep on top of the transformations that our industry is seeing and not allow ourselves to be blindsided by future disruptions that alter the foundational assumptions upon which we have built our careers and businesses.
