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The Future of Publishing

Challenges and Opportunities for Publishers

Future of Publishing: Challenges and Opportunities for Publishers

About the Author

Grace Hong is Founder/Principal of GXH Consulting, a strategy and innovation consultancy. Previously, she held several executive positions at Wolters Kluwer, a software, information, and services company serving professionals in four main areas: healthcare, tax, law, and financial services.

As VP of Strategy and Product Development for their Tax & Accounting Research business and as General Manager of Tax Learning, she was responsible for crafting and executing growth plans and restructuring the publishing and information portfolio. As VP of Global CIO Program Office, she led several key programs across the enterprise: data center consolidation, cloud migration, disaster recovery planning, and other corporate technology planning processes. As Director of Corporate Strategy, she led strategic initiatives across the entire Wolters Kluwer enterprise.

Prior to Wolters Kluwer, her career included government consulting for former heads of state (South Africa, Liberia), finance and technology special project roles at the investment management firm D. E. Shaw Group, and public affairs and research roles at think tanks. She is passionate about building businesses and a better future. Grace holds a bachelor’s degree in Comparative Literature and Art History and master of arts in International Affairs / Economic Political Development, both from Columbia University

Me: Siri, write me a bestseller. Oh, and can you take care of the production, marketing, and sales? I’m heading out, but I’ll be back in an hour. Let’s check in then.

Siri: Sorry, Grace. I’ve decided to go start my own business.

 Whether or not we get to a point where bestsellers, hit songs, or masterpieces of art—those things we consider distinctly human—are generated by AIs, there is no doubt that the role of publishers and content creators will continue to change dramatically.

Robots are already generating “human-free stories.” The Washington PostAssociated Press, and LA Times use in-house software to create news and social media posts. A growing number of commercial products automate the production of industry reports, email and marketing copy, and more, and provide options to “humanize” style and tone. This technology will almost certainly make its way into other genres, like fiction. Robots may become fantastic novelists!

This is an extreme scenario, but it illustrates some of the challenges traditional publishers face on a smaller scale today. Anyone, including robots, can create and publish. As quality content becomes more available, content on its own may become less the locus of value. Marketing and platform capabilities that help readers discover and engage will be differentiators. Value will also be assigned to aspects of the digital experience—personalization, delivery mediums and options, functionality, speed to insight, and social engagement with creators and communities, among others. Robots won’t fulfill the need for human connection and real experiences.

The next wave of innovation will certainly push publishing further into the digital space. Over half the world’s population is now on the Internet. People are tethered to their devices, trying their best to stay up-to-date. Seventy-one percent of Americans sleep with their smartphones[1] and 81 percent have a social media profile.[2] Much of what we consume is based on recommendations on social, e-commerce, and other platforms we use for multiple purposes.

Publishers will need to develop strategies that more fundamentally disrupt the existing model.

Source
[1] “Trends in Consumer Mobility Report,” Bank of America, 2015.
[2] “U.S. Population Social Media Penetration,” Statista, 2017.

Challenges with the Book-First Business Model

The paradigm of the book as the unit of commerce and the book-first mode of production is hurting trade publishers. The professional and education segments have had an easier time going digital. The use cases for information in the context of workflow have been more immediately apparent.

Nevertheless, the industry continues to grow, though unpredictably—it grew 6.2 percent in Q1 2018 over the prior year. However, much of the growth is attributable to a single format— audiobooks, which surged 33 percent.[1] For many publishers, this format alone is keeping their digital businesses profitable, as e-book revenues continue to decline.

While significant opportunities exist in audiobooks, Amazon has captured 41 percent of the market.[2] Popular authors like Michael Lewis are contracting exclusive deals with them and skipping print altogether. Amazon is going beyond audiobooks, investing is developing original stories similar to their model in streaming video—plays, audio magazine articles, and content from people who aren’t writers.[3]

The following are some structural challenges of the current book business model:

Reading habits. Americans spend eight minutes a day reading,[4] while they spend 5.9 hours on digital media.[5] Content they consume online is visually and audio rich, brief, created for the digital medium, pushed to them, and constitutes more time-consuming video, gaming, and streaming services.

Format innovation instead of content and platform innovation. The dominant form of commercial innovation has been format innovation. Publishers have evolved from print to e-books, audiobooks, and other products and vehicles for delivery like apps, and now, voice-enabled devices. Should the industry continue to look for the next format and medium to deliver the same content?

Transactional business model. The largely transactional model based on unit sales makes it difficult to project and control revenues or look beyond the near future. The success of select formats, titles, and trends may drive big spikes, but these are short-lived. Publishers must establish more sources of recurring revenue and new revenue streams.

Source
[1] “Book Publisher Revenue Up 6.2% in First Quarter of 2018,” American Association of Publishers, May 25, 2018.
[2] “Amazon Already Disrupted the Sale of Print Titles. Up Next: Audiobooks,” Wall Street Journal, February 5, 2018.
[3] “Want to Read Michael Lewis’s Next Work? You’ll Be Able to Listen to It First,” New York Times, June 2, 2018.
[4] “Reading Habits in the U.S.,” Statista. 8 minutes a day refers to Americans aged 20-24.
[5] “2018 Internet Trends Report,” Mary Meeker.

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