“Today the book business stands at the edge of a vast transformation, one that promises much opportunity for innovation: much trial, much error, much improvement.”
—Jason Epstein (“Book Business: Publishing Past, Present and Future,” Norton 2001)
That was seven years ago, and today, innovation and experimentation—trial and error—is the theme of the Book Industry Study Group (BISG) report “From Experimentation to Innovation in the Digital Age.” The report contains the results of a survey on the industry’s attitudes and actions pertaining to experimentation (more on page 7). It also contains case studies—based on interviews conducted by Mike Shatzkin, founder/CEO of The Idea Logical Co., and Ted Hill, president of THA Consulting—on 10 publishers who, based on their responses to the survey, stood out for their innovative initiatives. The report was unveiled at the group’s annual Making Information Pay conference, held May 9 in New York.
The now-legendary former Random House editor Jason Epstein wrote in his book that in the last half of the 20th century, publishing had lost its way. It had “deviated from its true nature by assuming, under duress from unfavorable market conditions and the misconceptions of remote managers, the posture of a conventional business.”
That deviation has clearly reversed itself. As Michael Healy writes in his foreword to the BISG report, while the industry’s “appetite for innovation and experimentation that we discovered” may reflect the technological and distribution uncertainties of the times, “the survey and the case studies reveal, above all, optimism, determination and the willingness to use new tools and technologies in the process of creating the future.”
Epstein also made the point that “Book publishing is not a conventional business. It more closely resembles a vocation or an amateur sport in which the primary goal is the activity itself rather than its financial outcome.”
To many today, this would be considered a prosaic and old-fashioned dream that went out with the era of “gentlemen publishers” 50 years ago. (Thankfully we now have plenty of “lady publishers.” How gentle they are can be the subject of an essay in another venue.) Certainly, this would not appear to describe Hachette, HarperCollins, Random House or Wiley, who provided some of the innovative case studies in the report.
However, Epstein is no Luddite, panning technology and large publishers. I think he was referring, in this day and age, to the spirit that we bring to the “product” side of the business, whatever the size and sophistication of the firm—the “art side,” as my old Goodyear Publishing Company boss and mentor Al Goodyear used to say.
In fact, after writing his charming short book on the history of trade publishing from the 1920s through the turn of the last century, Epstein made a bet on technology and business by investing in the Espresso Book Machine—the book-at-a-time device that may soon become a ubiquitous presence in bookstores, airports and libraries. It is the Espresso machine, developed by On Demand Books, of which Epstein is co-owner, that forms the centerpiece of one of the 10 case studies presented in the BISG report.
Shatzkin and Hill define the terms: experimentation, “trying something with no idea how it will turn out,” and innovation, “using new techniques to accomplish an established objective.”
Out of the mix, the BISG report presents case studies that fall into three areas: “Product Development and Marketing Experiments,” “New Processes,” and “Outside the Box.”
The Espresso Book Machine Installation
A good example of an “Outside the Box” case study featured in the report is on the Espresso machine installation in the University of Alberta’s bookstore. This case, by the way, I think, points to the most revolutionary of the innovations in the report. Based on an interview with Todd Anderson, the bookstore’s director, it is central to a major industry transformation in distribution, inventory control and reduced carbon footprint strategies.
First, the situation: Anderson had been looking at in-store print-on-demand (POD) for a long time (including the InstaBook Maker)—as far back as the mid-’90s, when Sprout tested an in-store installation of its POD machine. So, when he met Jason Epstein in fall 2006, he was eager to learn more about the Espresso Book Machine.
Anderson faced a growing number of requests for “course-packs, professor-created materials, and a growing list of public domain titles,” he said. He saw POD as a solution without a labor-intensive component—as there is considerably less labor-management flexibility in Canada than in the United States.
Especially appealing was the Espresso’s potential feasibility for a return on investment. His immediate goal was to test the model, learn how to make books with the machine, and try a variety of uses.
Anderson cataloged against the $144,000 cost of the machine more than $650,000 in course-pack related sales, out-of-copyright books, small-scale trade book sales and potential unrealized rare book sales.
He then had to persuade university funders, publisher content owners and even On Demand Books, manufacturers of the Espresso, that an installation would pay off. Less than five months after the machine was installed in November 2007, the BISG report explains, “his store was already husbanding its capacity … and the machine now runs from nine to five every day.”
Anderson’s primary internal lessons dealt with shaping his pricing and service to discourage business (such as general-purpose vanity publishing) from interfering with workflow that served the needs of students. He has also seen interest from students in acquiring both print and digital versions of the same title. The general industry lesson is that this new supply-chain development—one that creates a site-independent capacity to do book printing and publishing—will be a challenge as well as a benefit to both booksellers and publishers.
Other Experiment Highlights
A few other lessons for the industry found in the report are:
• Harlequin introduced “Spice Briefs” in August 2007 as a $2.99 short-format monthly e-book series (5,000-15,000 words), sufficiently successful so that it spawned another series launch this year, “Nocturne Bites,” and will also populate a print anthology version to be released early next year. There are lessons here in how to develop a new publishing imprint as well as the advantages of owning an imprint brand to give it presence, and why it may not be for everybody.
• Two separate case studies explored the uncharted waters of distributing unprotected or free digital content: Hachette Book Group by testing (with so-far-encouraging results) the distribution of digital audio without digital rights management protection, and Random House by announcing a free giveaway on “The Oprah Winfrey Show” of digital copies in English and Spanish of a best-seller—in this case Suze Orman’s “Women and Money.” The experiment propelled the book, which had begun to see slowing sales, back into best-seller status. Both of these cases are instructive about how each publisher measured the potential risk/reward, and the unique factors that led to success—and that may not apply in other instances.
I started this column with a reference to Epstein’s book because, as I was reading BISG’s report, I was reminded that so much of the discussion in these columns is understandably addressed from the standpoint of the business and development interests of our industry. Epstein was looking at business and technology from a different place—the editorial and literary side, the product side.
He wanted to take a look at the future of the business he so loved in this new age of transformation. So, he first set out to trace the rise of trade publishing to its pinnacle of creative diversity and success in the mid-20th century, its creative decline in the last half of the century, and what he saw as the beginnings of a creative recovery––paradoxically to be shaped by new technologies and the Internet.
Because of digital technologies and the Internet “vestigial,” publishing tasks such as “marketing, sales, shipping and warehousing, together with their bureaucracies and inefficiencies, can be minimized and assigned to specialist firms. Book publishing may therefore become once more a cottage industry of diverse, creative autonomous units, or so there is now reason to believe,” he wrote.
As I think the foregoing case studies illustrate, BISG has initiated a useful process out of which it can develop an annual study of the past year’s innovations and experiments—especially if publishers are willing to share their experiences to mutual benefit. The case study approach is most useful, and can be even more rewarding to the extent that they can be connected to reading habits, sales and trends in the marketplace.
Of course, we will doubtless discover each year that many a significant change was a consequence of unanticipated opportunity, circumstance or the unforeseen, and hence not subject to the rationality of strategic or tactical planning. But by scanning industry efforts, planned or unplanned—successful or failed—we will all benefit in our purposeful planning for the future, whatever it may turn out to be.
Eugene G. Schwartz is a regular contributor to Book Business. He is a publishing industry analyst, writer and editor-at-large for Foreword Magazine. A former PMA board member, he is president of Consortium House, a management and business consultancy to publishers.
Eugene G. Schwartz is editor at large for ForeWord Reviews, an industry observer and an occasional columnist for Book Business magazine. In an earlier career, he was in the printing business and held production management positions at Random House, Prentice-Hall/Goodyear and CRM Books/Psychology Today. A former PMA (IBPA) board member, he has headed his own publishing consultancy, Consortium House. He is also Co-Founder of Worthy Shorts Inc., a development stage online private press and publication service for professionals as well as an online back office publication service for publishers and associations. He is on the Publishing Business Conference and Expo Advisory Board.