The efficiencies and savings of online book buying were evident to most book lovers when they discovered the additional, significant benefits introduced by e-books a few years ago.
In the meantime, bookshops had to battle a double-dip recession which has pushed people to spend less, while rents and business rates kept increasing. If it wasn’t for the great value bookshops deliver on the “discovery” front, and for the intrinsic value that books have compared to CDs and DVDs (a book does not need a player to access the content), bookshops would have gone the way of most music, film and video-game stores. Nonetheless, the number of bookshops closing is, unfortunately, still growing.
In true Darwinian style, only the fittest will survive. They will be the companies with the leanest business models, the biggest volumes and the best margins. For a period of time, the channels available to publishers to get their books in the hands of readers will decrease—they will increase again once the natural competition cycle picks up again, but it may be a good few lustra!
“Lean” will probably be the most used word in the next five years in the book industry. Mergers, acquisitions, trimming and downsizing will be in the headlines quite a lot. As the publishing value chain will have to be reconsidered and optimised, all players will look at their role within it and look at ways to find more opportunities and, ultimately, additional revenues and margins. In any value chain, the first and the last rings are always the most important. If authors could sell their books directly to readers for the maximum possible returns with no editing and marketing, we would not need any of the other rings in the chain. But this won’t happen.
Publishers have a good relationship (if not a stronghold) on the authors, but they lack knowledge about the readers. Retailers, on the other hand, know a lot about readers—especially online, and more so with e-books—but they have not yet managed to build strong relationships with the authors. The writing is on the wall: the most ambitious retailers are trying to get close to the authors; publishers will have to get closer to the readers.
The key benefit a publisher could draw from knowing the readers is that by knowing what people like and dislike they should be able to plan in a more efficient way how, and what, to invest in. There are other obvious financial benefits as readers could be engaged in a number of additional ways: testing new books before release, upselling of the same genre releases, and so on.
Knowing readers will become increasingly important depending on the type of books published because the migration to e-books won’t be the same by genre. Children’s books will have a new life as interactive apps, most fiction will be read on smartphones, while photography books will probably still be printed on glossy paper and rest on our coffee tables. Students will rent academic e-books on their tablets, while women in their late thirties will enjoy the latest mummy-porn novel behind the fake-leather cover of their £20 e-reader.
Publishers will need the data in order to cut the current inefficiencies around the selection, marketing and sales of books. But how can publishers get the data they need? While it’s tempting to think that opening a bookshop online is the best way to capture consumer data, I would actually argue that there may be more effective ways to achieve the same result without having to venture down a road which will prove too unfamiliar and treacherous for most publishers.
Companies should stay true to their nature, as it’s very hard to do something different from what you are generally good at doing. Retail is not publishing, and if publishers want to have an interest in it they should buy retail companies or build arms-length businesses run by retailers—Anobii and Sainsbury’s, for example. This is what Amazon does—it buys publishers rather than attempting to become one.
But retail is not the only way to get readers’ data. There are plenty of examples of businesses that are gathering data on what people read/like/dislike without selling anything. You can let bookworms catalogue their books (Goodreads, Librarything, Anobii, etc), or you can let people share their opinions on them (Facebook, Twitter, Goodreads, Amazon, etc); you can let them import their e-books into a single hub (Bookshout), or you can find out what people would like to read by letting them sample 10% of the e-book and share their views with their friends (Jellybooks), and so on.
Creativity and lateral thinking are required by publishers who want to get under the skin of their readers to understand how to hedge their bets on the next manuscript that lands on their desks.
Matteo Berlucchi is the founder and former c.e.o. of Anobii