Publishers' Outlook 2011
Looking ahead into 2011, book publishers seem to be focused more on opportunities than challenges—or perhaps, as the economy continues to rebound and consumers open their wallets a bit wider, it's a case of seeing ways to turn the latter into the former. Certainly, all the free publicity surrounding the exploding e-reading device market has put publishers at the center of a cutting-edge retail trend. The question, as always, is what audiences actually want to spend money on, and in what form. As the options for content delivery continue to expand, many publishers are experiencing success with forays into mobile and e-books, and 2011 looks to be a year when these become more "normalized" as core revenue channels, rather than adjuncts.
Book Business interviewed executives from a number of companies in various segments of the book publishing market to get a clearer picture of where the industry seems to be heading in the new year and decade.
Adam Rothberg, Vice President, Corporate Communications, Simon & Schuster
➜ Simon & Schuster (S&S) has been at the forefront of digital publishing, including the launch of the comprehensive Simon & Schuster Mobile version of its website in July 2010 and recent success with apps for "The Bro Code" and "Choose Your Own Adventure" book series. The company now seeks to position itself for further growth in the e-book and mobile markets.
BB: How do you expect the flurry of new e-book readers to impact your sales and product mix? What sort of growth in that market do you expect in 2011?
Rothberg: We're seeing tremendous growth in our e-book sales, and as new user-friendly devices and new e-book retailers enter the market, that will only continue. For some of our best-selling frontlist titles, the ratio of digital to physical book sales is quite high, and so we are having to adjust our print runs to reflect this new reality. And, we'll have to keep doing that as the e-book market continues to grow. In 2010, we [experienced] triple-digit growth in e-book sales, and there is no reason to think that will change in 2011.
BB: Do you anticipate more integrated print/digital offerings in 2011, or will the trend be toward replacing print with digital?
Rothberg: We will continue to offer the vast majority of our books in both print and digital formats. And now, with the growth of tablet and color e-readers, we look forward to expanding our catalog of digital offerings to include illustrated children's books. Certain titles, like enhanced e-books that have integrated video, obviously can only be offered digitally, but at the moment that is a small number of titles. ... [These titles also are] offered in print and as standard e-books: "Nixonland" by Rick Perlstein, "The Kennedy Detail" by Gerald Blaine and Lisa McCubbin, and "You: Raising a Child" by Michael F. Roizen and Mehmet C. Oz are the best examples.
BB: What do you anticipate will happen with mobile apps in the trade book market over the next year? How will S&S respond?
Rothberg: We have done a number of successful apps, many as [a] means to promote or supplement specific books, or to satisfy fan interest in a particular author. We will continue to take a selective approach to apps, as the universe is so large that discovering book apps is pretty difficult for the consumer, and we are competing against many very low price points.
For some authors with a particularly dedicated fan base (such as Jodi Picoult and Jennifer Weiner), we've created apps that allow the fans to keep close tabs on the author and their books. Other apps extend the content of a new or popular book or strong brand in a fun way (Bro2 Go, Search for Wondla game, The Silly Band Books), [or] provide practical information (Wealth Watchers, Healing Foods).
BB: What retail trends do you expect in 2011? How will changes in retail affect large trade publishers such as S&S?
Rothberg: Online retail will continue to grow for sales of both physical and digital books. The bricks-and-mortar marketplace has been unsettled for the last couple of years, due to … the economy, the growth of online and financial pressures. We certainly hope that traffic increases and consumers come back to retail in pre-recession levels.
BB: How many titles will S&S publish in 2011? How does this compare to 2010?
Rothberg: We publish, domestically, nearly 2,000 titles annually, and will do so again in 2011. That number includes reprints, which have a separate ISBN and represent a different purchasing decision for the consumer.
Neil M. Alexander, President and Publisher, United Methodist Publishing House
➜ United Methodist Publishing House (UMPH) encompasses Cokesbury Press, a publisher and distributor of materials for Christian clergy and laity, as well as Abingdon Press, teen website ILeadYouth.com, and several other websites. As part of an overall digital strategy designed to improve customer experiences, UMPH recently enhanced its two core websites, Cokesbury.com and AbingdonPress.com. Cokesbury also operates 64 retail locations in the United States and is the lead retail publishing outlet for several other religious denominations.
BB: Why was now a good time to improve your websites? Do you expect online sales to be your fastest- growing sales medium in 2011?
Alexander: Improvements to our retail site, Cokesbury.com, are ongoing every year and not triggered by a point-in-time event. The bar is set high and rising in the marketplace, and customer expectations are increasing with respect to search capabilities and ease of check-out. Yes, we expect that online sales will be our fastest-growing Cokesbury retail channel in 2011.
The Abingdon Press site was enhanced to support the launch of the Abingdon Fiction line, which is more end-user/customer and author-relationship centric than many of our other publishing categories. And yes, we expect that sales of Abingdon Press books through Amazon, B&N.com and other online retailers will be our areas of biggest growth next year for both print and digital formats.
BB: How has your audience responded to e-books?
Alexander: Our fiction audience, in particular, has responded extremely well to e-books. "The Common English Bible," the new Bible translation being marketed and distributed by Abingdon Press, has had excellent response in e-book format from when the very first downloads were available. Numerous digital versions (for all types of e-reader devices) of the "New Testament" are now available.
Calendar 2010 sales for Kindle e-books alone will be approximately $10,000 per month. This is expected to increase significantly in 2011, likely to double the current growth rate with the additional backlist titles we are offering and the multiple e-book distribution channels available.
BB: Have religious bookstores become less important to your distribution strategy? What is the trend in terms of retail sales for your market?
Alexander: Religious bookstores remain very important to us, and "The Common English Bible" has brought us into even more dynamic marketing and distribution relationships with important Christian bookstore groups such as Parable, Munce, Covenant and Family Christian as well as many CBA [The Association for Christian Retail] independent stores.
Our Vacation Bible School (VBS) [church summer camp] programs are being carried in many Christian bookstores, including Lifeway stores, and these are important and growing relationships for Abingdon Press products in all categories.
The launch of our fiction line generated a tremendous positive trend in our sales through trade bookstores such as B&N, Borders and [American Booksellers Association] independents, and we are preparing for a new sales relationship with one of the … big-box warehouse chains. Our future publishing plans will make these traditional bookstore sales channels even more important to us, but for pastoral leadership, church school curriculum, Bibles and VBS products, there is no diminishing role for religious bookstores, and those products fall into some of our most important publishing categories.
BB: How has your product mix changed to reflect shifting consumer needs and demands?
Alexander: Our relatively new Abingdon Fiction titles are much more trade-oriented than our longstanding offerings in church school curriculum, theology texts and pastoral studies. We have also given top priority to publishing in multiple formats and bindings for the new "Common English Bible," and there are many new ancillary products related to [it] that are planned [such as study Bibles, gift editions and children's illustrated versions].
We expect to increase the number of titles in our Christian Living category with emphasis on devotionals, family life and spiritual growth for trade distribution. And we are aggressivenly moving our reference and academic publishing from print-only to digital platforms.
BB: Will you be getting into mobile in 2011? If so, how?
Alexander: Yes, we [launched] our first mobile app in 2010 (Daily Bible Study), with two more slated to follow quickly. Production on targeted mobile apps will accelerate in 2011. Our new leadership resource site, MinistryMatters.com, will be available as a mobile app from launch early in 2011.
BB: Will you be publishing more titles in 2011 than in 2010?
Alexander: We will be publishing more titles across the entire program—growing those categories where we see potential and publishing fewer titles, especially in print editions, in categories that have peaked or are in decline. In our Cokesbury chain, we are giving increased emphasis to products from the entire array of publishers/vendors in order to increase options for customers without over-burdening our own publishing and production activities.
Susan Brophy Spilka, Vice President, Corporate Communications, John Wiley & Sons Inc.
➜ Now entering its 204th year, Wiley publishes across a broad range of scientific and technical, professional, trade and educational categories. One of the company's challenges is to tailor an integrated content strategy to market segments reflecting various workflow requirements and stages of adoption of digital delivery.
BB: Which products/segments do you expect will see the most revenue growth in 2011?
Spilka: Today, about 45 percent of Wiley's overall revenue base is digital, and that figure is obviously growing. Print-on-paper books will be a part of the publishing landscape for the foreseeable future, although most of our anticipated future growth is digital.
The percentage is higher in our scientific, technical, medical and scholarly (STMS) business, where our customers showed readiness for online delivery much earlier than in Wiley's other businesses. Today, about 56 percent of our STMS revenue comes from digital products, services and solutions—at this point, predominately (79 percent) from journals, and about 11 percent comes from digital books on Wiley Online Library or e-books (available through digital book vendors). Online advertising and databases are also growing sources of revenue.
BB: Do you anticipate more integrated print/digital offerings in 2011, or will the trend be toward replacing print with digital?
Spilka: We see a growing demand for digital books. Over the next several years, we're going to see more flexible and customizable delivery of content/solutions, more digital license-based business models, e-books, e-learning, branded and vertical websites, online advertising and nontraditional revenue. We are becoming more and more focused on end-users: delivering greater ease of use/purchase [and] discoverability; and providing 24/7 access and support.
… We see opportunities to serve the research community with new journals, online reference works, workflow tools, continuing education services, virtual conferences and community sites.
BB: What's on the horizon for Wiley in terms of mobile/app initiatives?
Spilka: We have submitted three apps for approval to Apple that are derived from Current Protocols, an online, full-text collection of laboratory manuals offering step-by-step laboratory procedures. … The apps were developed in-house and are based on popular tools from the CurrentProtocols.com website. Each app is $1.99.
BB: What other trends or opportunities will impact the way you sell materials in 2011?
Spilka: We have initiated a pilot project with DeepDyve [an online STM content rental service] that will make selected Wiley-Blackwell journals available through their "Research, Rent, Read" access model. The project focuses on 26 journals in biotechnology and will evaluate whether DeepDyve's enabling technology and 24-hour, view-only rental access to articles is a useful channel to market in a discipline where researchers typically do not have access to … institutional library [resources].
Jeffrey Mathews, Vice President, Corporate Strategy and Business Development, Scholastic Inc.
➜ Scholastic continues to pursue innovation in book distribution and marketing, reacting to—and influencing—evolving reading habits in a market encompassing everything from picture books to plugged-in teens to young adult titles with not-always-predictable broad cultural appeal.
BB: Which products/segments do you expect will see the most revenue growth in 2011?
Mathews: Young adult (YA) isn't just for kids anymore—YA will produce good results as we continue to see more adults reading this genre and as more e-book versions of YA novels are sold. Multi-media titles such as "The 39 Clues" will continue to be popular with middle-grade readers. Children's e-books (other than YA) will begin to gain traction in 2011 as child-focused e-reader software, apps and devices come to market.
BB: With the release of NOOKcolor and other new tablets, do you expect 2011 to be a breakout year for children's e-books?
Mathews: Yes, the color Nook and other e-readers can now address some of the issues that have, so far, limited children's e-books, but there remain other usability factors unique to how kids and parents read and buy books that will need to be addressed before the market breaks away. Scholastic has announced that we will introduce an e-reader (software) in 2011 that will be specifically designed to meet the needs of children and families.
BB: Do you anticipate more integrated print/digital offerings in 2011, or will the trend be toward replacing print with digital?
Mathews: We believe there are significant opportunities to integrate digital and print for young readers, as we've shown with "The 39 Clues," "Skeleton Creek" and other series. We have a number of programs in development, including an extension of "The 39 Clues," due to the popularity of these properties. There may be some substitution of print with digital, but ... [we see this as] an opportunity to enhance the reading experience for kids and get more kids reading. For example, fully a third of kids polled in the 2010 Scholastic Kids and Family Reading Report said they would read more books if they had access to e-books.
BB: How will the evolving mobile market affect your marketing and distribution efforts?
Mathews: Social media, mobile [and] online are all great marketing tools to acquire new customers and to convert impressions into purchases, in addition to creating more opportunities to read books. A key element of Scholastic's marketing and distribution model has always been to engage parents and teachers as drivers and influencers of kids' book purchases, and we will continue to do this both for digital and print products.
BB: What retail trends do you expect in 2011? How will changes in the retail landscape affect large trade publishers such as yourself?
Mathews: In addition to selling through retail outlets, Scholastic distributes extensively through schools where we conduct 115,000 school-based book fairs each year and where nearly 1 million teachers participate in the Scholastic Book Clubs program. By taking books directly to kids and their families, and by encouraging kids to choose the books they want to read, we keep great books in front of kids and their parents despite changes in the retail landscape.
BB: How many titles will Scholastic publish in 2011? How does this compare to 2010?
Mathews: Scholastic publishes approximately 600 original titles annually, and that remains our plan for 2011.
Justin Hummel, Director, New Product Development, West Academic
➜ West Academic, the academic and law publishing division of Thomson Reuters that includes Foundation Press, Gilbert and West, has made significant changes to its product mix in response to consumer demand for digital delivery. The changes have not been across the board, however, as West Academic has hewed closely to the workflow demands of its specialized market, while keeping a careful eye on future trends.
BB: How are changing audience habits and expectations affecting your product mix?
Hummel: … Speaking from the authors' perspective, if they see peers creating different materials—whether powered by Westlaw, Nexus, [etc.]—they are seeing what is possible and are coming to us with requests. They want us to provide more mechanisms for content delivery, such as quizzes … and audio-video accompanying websites.
In years past, it was all about what fits between the two covers of the book, and the book is still critically important for us, but ... [authors] want more from publishers, and we're having to respond.
BB: Do authors want their products marketed and distributed differently?
Hummel: Absolutely. In years past, there was not an appreciation of how the Internet can drive adoptions and expose people to what is contained in your material. The historical model of casebook adoption was [that] publishers send the book to potential adopters [who] peruse the book and make an adoption decision. Now you can do a search on Google to get exposed to any number of books in that subject area and, oftentimes, are directed to accompanying websites [that] provide sample materials and give you more perspective from the authors about why they've taken the approach they have.
You can [also] get updates and leverage those [online] tools to interact with authors. … You can more easily ... form a stronger relationship not only with the book, but with the people creating the book, and in turn have impact on what is included in the book because the authors now have a mechanism to get [user] feedback.
BB: Are new digital products starting to become more free-standing, rather than supplemental to the print book?
Hummel: We are starting to play around with those things through our Law School Exchange [website for law faculty]. We are delivering books that are electronic only, and we create those a bit differently than we would our traditional print books ... [developing] things that are supplemental, but could be used separately from the book, such as quizzes.
[Product decisions] also are impacted by faculties' use of classroom management systems [such as Blackboard or West Academic's Twen] ... which allow them to have different types of interactions with students than they otherwise would have had available to them. They are using those tools to deliver their own types of content, to measure students' understanding of things, to do things like instant polling to get a sense of students' comprehension of whatever they are covering in class that day. So those tools are changing how people are using [and] accessing content.
BB: Do you anticipate more integrated print/digital offerings in 2011, or will the trend be toward replacing existing print products with digital?
Hummel: I think that is very much still in the nascent stages. I anticipate that we will continue to live in both worlds for awhile.
If you consider, for example, how students use the core case materials—the case books—they spend a lot of time on a page or two, heavily invested in understanding the concepts and elements of a particular case, and they write their notes in the margins, and they highlight and do all these things that print does a fantastic job of facilitating. Digital offerings are getting better with those functions, but they haven't yet completely reproduced what is possible in a print book. … For an invested, deep, interactive reading experience, print still does a really good job.
The other thing that impacts the ability to go straight to digital is that a number of faculty still … allow students to have print books in front of them, so they can leverage their notes. But if you go digital, … [the students] have access to other content, products, services, etc., and the possibility of cheating. [In many cases] their professor is not allowing them to use that computer or tablet.
So digital is going to grow, but I think it's going to grow faster in the discretionary and study-aide side of the business than on the core casebook side of the business. It's also going to be aided by leveraging of things like flashcards and memory devices.
BB: What do you anticipate will happen with mobile apps in the education/law market over the next year? How will West Academic respond?
Hummel: I expect smartphones and tablets are going to put more pressure on publishers to deliver digitally. We certainly hear from the market [that] there is demand for our products to be optimized for smart devices, or for us to develop applications for smart devices, and we've done some of that. We released "Black's Law Dictionary" on the iPhone about a year ago, and that's doing really well for us. We will soon release that for the Android [operating system], followed by the Blackberry operating system, and we expect those to do well.
It gets to be difficult from a publisher's perspective to think about building digital offerings in the native application manner because you're right back in the software world, which most of us got away from with the advent of the Web. It was much easier to develop products that worked on a browser because you could develop them once, and it was easy to update. With software products, you have to continuously update as the operating system changes, so there is a lot of overhead that goes into managing and developing your localized applications. It can be much more costly than developing a Web application.
With the browsers on these devices getting better, we are looking to do more and more [mobile] digital delivery through browsers rather than native applications.
BB: Do you expect growth in the e-book market, in terms of revenue and number of titles, in 2011?
Hummel: I think we will probably see double-digit growth [in both], but that's starting from a pretty small base. We are certainly putting more content into digital, and, even with a small number of adoptions, your revenue goes up.
BB: What other important distribution/retail trends are you expecting for your market in 2011?
Hummel: I think we'll see more and more resellers developing their own electronic delivery platforms. We've seen Amazon and Barnes & Noble developing their own ecosystems ... [such as Barnes & Noble's] Nook Study, which is specific to textbooks. You've seen that with the Nebraska Book Company—all these retailers that are looking to have and own that digital relationship with students because they recognize that that is the direction the student users are going.
[Students] want that just-in-time delivery. The idea of having to go to a physical location to buy a book is not as satisfying to sudents who come in with exposure to and familiarity with digital delivery, [and] familiarity with Amazon. …
I think those sort of things are impactful to anyone else who is trying to sell content. … You want to own that relationship with the user and continue to have him or her come back … to get whatever additional content he or she is going to need. BB
- People:
- Jeffrey Mathews
- John Wiley