3 Major Changes in the Publishing Industry

At today’s Publishing Point Meetup, David Young (CEO, Hachette Book Group) spoke about the major changes in the publishing industry. Here are some highlights.

1. Changes in Bookselling

“Last year 50% of our revenue came from companies not directly invested in our business (e.g., Walmart, Costco, etc.)” – this is a big change from the days of getting all their revenues from bookstores.
“You go to bookstores to discover books you never heard of, you go online to order books you know you want.”
Bookish was Carolyn Reidy’s idea (Simon & Schuster CEO). Unlike S&S, Hachette is not a household name (“our authors are our brand), so users are not drawn to our website. We limited Bookish to only 3 publishers due to advice from anti-trust lawyers.
“I don’t see that we’ll be selling 100% direct to consumers in my lifetime.”

2. Changing Definition of Publisher

“We’ve done a poor job of explaining what publishers do. Simply put, we want to broadcast books to as many places and in as many formats as possibly can.”
There are challenges to being a publisher today: there’s a lower cost of entry, we pay writers to go off and write (when we pay advances), debt collection, anti-piracy.
We’re doing a project that’s not sexy, but will have a huge impact, which is a change of our order-to-cash system. We’re removing our old mainframe and going to the cloud. This is changing everything, costs multiple millions, and is impacting everything that touches the business. We designed a system for publishers and distributees (not parachuting in a system from SAP, which they forced to fit publishers). There were lots of “naughts at the end, and not an immediate ROI against it,” so it’s amazing they approved it. But it can’t happen fast enough, really.

3. eBooks

We need auditability of eBook sales – the info. has gone dark again (at a time when it should be more transparent.)
On eBook Pricing: “We’ve sold more eBooks above $10 than below. There’s little change when we drop $2, $3, $4.”
On eBook Library Lending: “I’m meeting with the President of the ALA in June and talking to partners on this. If you let that particular genie out of the bottle and get it wrong – you’ll get into a lot of trouble. We want to do it thoughtfully.”