16 Tips for Steering Your Company Through an Evolving Industry
It is a challenging time to be a publisher, to be sure. David Hetherington, a 25-year book publishing veteran, describes the current climate as a “perfect storm, as various forces converge to create what may prove to be a truly unique ‘weather system’ for the book publishing industry.” He believes that the combination of the credit crisis and an economy in recession, coupled with a skittish consumer mentality, rising oil prices and the fluctuating dollar, will have a different impact on each major industry sector. “The question will be one of degree. Which sector,” he questions, “will have the toughest time, and how will they respond to the challenges?”
For nonfiction publishers, the greatest current challenge is returns, says Marji Ross, president and publisher of Washington, D.C.-based Regnery Publishing. “Nested within this concern are a few related problems, such as the shorter attention span of our marketplace, overcrowded media markets, and a 24-7 news cycle that serves up a new crisis for people to worry about every day,” she explains. The challenge for publishers then is to keep up with what people are interested in and to keep their attention. The politically conservative publishing company is enjoying success with a couple of its titles, thanks in part to the heightened awareness of and interest in politics throughout the 2008 presidential campaign.
Digital technology is an area that can be a challenge for publishers, but it can also be the source of many growth opportunities. And, today, keeping on top of digital technology is practically a necessity to compete in the changing publishing environment.
Several publishers and experts reflected on current industry challenges and offered tips for leading your company through these evolving times.
TIPS FROM …
David Hetherington, adjunct professor, Pace University
Hetherington is currently an adjunct professor at Pace University’s Graduate School of Book and Magazine Publishing. His prior experience includes senior finance, manufacturing and operating positions with Simon & Schuster Higher Education, Reader’s Digest, Bearing Point Consulting, Lippincott Williams and Wilkins, and Columbia University Press.
1. Be creative.
As a general rule, I would suggest that if there was ever a time for “out-of-the-box thinking,” this is it.
2. Understand your total cost.
As an industry, we have had an unhealthy obsession with unit cost and not paid enough attention to the “total cost of ownership.” Publishers should understand their total cost for all major business processes and think seriously about how to reduce those end-to-end costs without compromising quality.
3. Reduce costs.
Look at your break-even point and consider what steps the organization can take to reduce it. Anything you can do to reduce your significant fixed costs will be a help.
4. Keep an eye on your capital.
If the credit markets continue to be tight, we can expect to see cuts in inventory and infrastructure investment as publishers husband cash to cover their operating requirements and as those carrying large amounts of debt manage their debt service.
TIPS FROM …
Thomas Woll, president, Cross River Publishing Consultants
Founded in 1993, Cross River Publishing Consultants (PubConsultants.com) specializes in all areas of trade, professional and college publishing, and works with large, small, for-profit and nonprofit publishers.
5. Increase your participation.
Get involved in all facets of the industry, but especially with proactive organizations such as Book Industry Study Group and the Independent Book Publishers Association (formerly PMA).
6. Do your homework.
Publishers need to research competitive books on the market, pricing, formats, use of color, key authors, current royalty rates and advances that make sense within the financial parameters of each book and key marketing outlets—both traditional and non-traditional.
7. Challenge the norms.
Think as a consumer, not as a publisher. What does the consumer want and need? How can you create products for that consumer?
8. Keep a tight rein on receivables and cash flow.
It’s even more important today than ever. (Check out the tips for improving your cash flow on page 37.)
9. Strengthen your Internet business model.
Free is what people want, but free is not a good value proposition. Many publishers—primarily scientific, technical, medical and professional publishers—are successfully monetizing their content through the use of subscription models, payment for downloads, and other such strategies. Trade publishers are having a much more difficult time implementing such strategies because buyers only want defined pieces of content, and they don’t want to offend their regular retail and wholesale customers. Some, however, such as Harlequin, with a defined niche, do seem to be making inroads in this direction. Still, the question is one that all publishers continue to grapple with.
10. Take advantage of digital.
Digital is facilitating a broader and faster distribution network, thereby increasing sales potential for products. It also enables the purchase of pieces of content, such as chapters, which expands the revenue potential and base of products.
TIPS FROM …
Marji Ross, president and publisher, Regnery
Regnery Publishing (Regnery.com) was founded in 1947 with a mission to contribute to the rebuilding of Western civilization after World War II, publishing works of cultural recovery, including establishing and sustaining the postwar conservative intellectual movement in America.
11. Be relevant.
It is increasingly challenging for a book and an author to be relevant and unique, and for any book to stay compelling over a long period of time. Certainly, for our market, the presidential election affected our business. As we got closer and closer to Nov. 4, the media was more and more unilaterally focused on the presidential race, and we had to work even harder to make sure our books and our authors were relevant.
We’ve really had only two books this year that enjoyed that kind of extended selling season: “Real Change” by Newt Gingrich and “The Case Against Barack Obama” by David Freddoso. Newt really nailed it when he focused his message on change. Our book came out in January, the perfect time and the perfect author to target the central theme of the primary season. Then in August, of course, we released “The Case Against Barack Obama,” and again met the marketplace exactly where it was: hungry for hard-hitting, investigative reporting on the political life of Barack Obama, after so much attention had been paid to the horse race between him and Hillary [Clinton]. But that kind of timing is hard to do, and the pressure to have something new every week is intense.
At the same time, we have to project ourselves beyond the election, and try to predict what people will be worried about, and interested in, after the election, with a brand new administration.
12. Know how to cut back during tough times.
It’s a pretty good bet that the economic and political climate in 2009 will continue to be uncertain. The recent turmoil in financial markets and the general uncertainty for the future of the economy have certainly prompted us to be very careful about the risks of over-shipping books or over-spending on discretionary items.
13. Limit your scope, and do what you do well.
Particularly in times of uncertainty, I think one of the best ways for publishers to improve their success is to focus on what they do best. It’s tempting to try and capture new markets and conquer new frontiers, but at Regnery, we have become highly successful by sticking to what we know. For us, that means publishing current-events books for right-of-center readers. When we stray too far from that mission, we often strike out. But when we focus on what we are good at, we have a lot of hits, and some real home runs. When I meet independent publishers and ask, “What do you do?” I hate to hear, “We publish a little bit of everything.” Because I think that’s a recipe for way too much lost time and money. It’s hard enough to be successful at what you know! I recommend you ask yourself: Who are my readers, and what do they care about? This, more often than not, will lead you to a successful book idea.
TIPS FROM …
Todd Stocke, vice president and editorial director, Sourcebooks
Founded in 1987, Sourcebooks (Sourcebooks.com) is a leading independent book publishers in North America. It offers nonfiction, commercial and literary fiction, romance novels, gift books, calendars, children’s books and more.
14. Know your audience.
Be flexible and diversify. Publishers need to think about their readership. And not just reading, but reading books because they offer something importantly different. There’s a lot of focus on the format of what people are reading, but at the end of the day what matters is if they’re reading. We need to be pressing forward on the many joys of reading.
15. Adapt to the current economy.
The economy is obviously difficult, but we believe that we have some interesting opportunities. A flat or down market is a classically great time for the entrepreneurial to gain market share. Readership is changing and the retail book marketplace is changing, but that’s actually a constant in this business. What matters is how well you anticipate and adapt to the changes.
TIPS FROM …
Marie Macaisa, Web development manager, Sourcebooks
16. Embrace digital technology.
The digital landscape presents an unprecedented opportunity for our authors to engage with their readers directly. The publisher could also potentially get information from readers through all phases of bringing the book to market, from acquisition to launch and publicity. The challenge is to nurture the distinct voice and vision of the author in light of unprecedented feedback. Fundamentally, publishers help authors reach readers. Digital significantly multiplies the ways in which authors can reach their readers.
Missy Smith is an associate editor at North American Publishing Co. in Philadelphia. She also freelances for Montgomery Newspapers and is the editorial coordinator for Little Blue World, a nonprofit Tori Amos fanzine.