Deepening Consumer Insights Takes Priority for Book Publishers in 2015
Book Business interviewed several leaders in the publishing industry to discover what new trends will disrupt publishing in 2015. We featured those interviews in our December issue. Here we want to share the full interviews, which offer valuable insight on the future of the book business.
Following David Lipsey, partner at Optimity Advisors, shares his insights on the year to come in publishing.
What big trends do you think will disrupt the book industry in the future?
I think that there is continuing need and growing importance for book publishers to know more and more about who their customers are. The same way that the distribution channel has been so tremendously disrupted with Amazon and the myriad of ways that books are consumed so can the publishers disrupt the supply chain by getting to know better the individuals buying their books. Part two is learning how to use those insights and that data for title acquisition, marketing, or just sustaining relationships through time.
What tools exist for publishers to better track their customers?
There are certainly a lot of tools on the customer relationship management side. Data is available but many distributors are reluctant to share that data. I think publishers are a bit challenged because they have to work very hard to get that information. They have to build new channels, like author fan pages, to actually capture their readers.
Understanding that data and making smart bets based on it is a whole other set of tools. Part one is figuring out how to get the data and reliably track it. Part two is determining whose job it is in the organization to understand what's predictable from the data collected. What they learn from A/B testing and monitoring these results can affect title acquisition, advertising, and even negotiations with the distribution channels. It has a lot of potential purposes.
Do you think that direct selling is a viable strategy for publishers?
I think it is a critical area of exploration and investigation. The disruption that has come into the market through Amazon, and the disappearance of traditional supply chain partners, has led to a lack of data coming back to publishers about their consumers. That lack almost demands that publishers consider selling directly.
The challenge that comes with that is publishers' names are not known like General Motors or HBO. These are highly identifiable brands. Are consumers buying these stellar brand names that you and I know-Simon & Schuster, HarperCollins, etc.-or are they buying just by the author? If they just purchase by author, it crimps the publisher's ability to introduce new authors. The real dilemma in direct sales is, "What is my brand?"
We're seeing this with Hachette right now in the very public discussions that went on with Amazon. Suddenly because of all this publicity, consumers are seeing Hachette as a single brand, and they see Hachette associated with a very prestigious list of authors. Now does Hachette take this opportunity to assert its brand identity so that people start to think, "Hachette has high quality authors. I should look at them"? That kind of brand thinking is something publishers have never had to do. It raises a big question for publishers, "Am I my brand or am I my authors?" And it's probably a bit of both.
Are you optimistic about the future of the book industry?
Yes, I am optimistic about the future of the book industry. I think the explosion of digital devices has provided a tremendous opportunity to further the reach and consumption of books. I think the increase of mobile and internet access globally will have a tremendous impact on the book industry and I would be aiming every day to understand which developing countries are improving bandwidth and digital access because there will be a huge demand for content in those regions. I think that future is bright for tapping these emerging digital readers.