Cover Story: Hitting a Moving Target

Of course, the production and manufacturing infrastructure required to produce print books is not going anywhere soon, nor are the associated costs. This presents publishers with a challenge as far as balancing short-term return on investment with longer-term investment.

"I think you have to look at them as two separate questions," Shatzkin says. "You must optimize your current processes. You cannot afford to be wasting money in any way at all, so you've got to not print books you do not need. You have to go to XML processes, so you're not spending money on conversion and quality control in order to go to digital books. You also have to keep reassessing your deployment of personnel."

Shatzkin points to recent internal reorganization at Simon & Schuster (S&S) as the type of tough, but necessary, changes publishers need to make. S&S reorganized its sales force, substituting some salespeople in the field with phone reps. "I'm sure [it] was a painful decision and not well-received by many bookstores, but it probably made financial sense."

If one side of the coin is cost savings, the other is what to do with the money saved. Both Shatzkin and Eckler say investment in the digital workflow is critical, but Shatzkin also says publishers should think in terms 
of verticalization.

"Think eyeballs first," he says. "In other words, you need to aggregate a lot of eyeballs, and you can't do that across an unlimited number of subjects. 
Nobody can."

'Having a Clear, Strategic Focus'
Shatzkin believes the future lies in niche markets. "I think one of the things which is not yet appreciated is that the Internet will reward you for focusing on subject matters, and it will punish you for trying to publish in too many subject areas," 
he says. "Most successful large trade publishers have never thought about that before."