Corner Office: Aiming for Agility
For a company that celebrated its 50th anniversary last year, Minneapolis-based Lerner Publishing Group is not spending much time looking back at its history and tradition. Instead, it is focused on remaining lithe enough to adapt to the changing book market.
With its acquisition of Darby Creek Publishing on New Year's Day, the company's list of imprints grew to nine, and it has more than 3,500 titles in print, serving the K-12 school and library markets. But Adam Lerner, president and publisher of the independent, family-owned children's book publisher, says one secret to thriving in today's environment is understanding that the company can't continue to rely on print revenue alone.
"Keeping up with the pace of change and the speed at which we need to adapt as a company to be successful is probably what keeps me up most at night," he says. "Are we up to the challenge culturally, as a company? Do we have the right energy here to be able to be agile, yet leverage the wonderful history as a company that we have? Can I mesh those things together to be successful?"
Here, Lerner discusses with Book Business the publishing company's strategies for thriving in an evolving marketplace.
• What are some high points of your strategy in this transitioning book market?
Lerner: … It's a dog-eat-dog market, and it's all about marketing and market share, working your niche and creating efficiencies, and publishing the very best books. Each book we publish has to have something either exceptional about it and literary merit, or meet a specific audience need. Nobody, I don't think, can afford to just publish in the hopes that a market will come any longer. It's just too tough out there.
• How are you combating this strain? What role is digital publishing playing in your business model?
Lerner: … Most of our business is in the school library and institutional markets, which aren't changing quite as quickly as the consumer market. That's an advantage for us. … Digitally, in the school library market, it's still playing out what specific products are going to be wanted or purchased. But … as far as workflow and XML format, in creating a digital workflow so we can create print and digital products simultaneously, we know we have to transition to that kind of workflow, for one. And to also install a content management system to allow us to really leverage our content as assets.
• What digital strategies are you employing?
Lerner: Well, we are definitely looking at digital products … specifically for the school and library markets, because those markets are ... just really starting. No one knows exactly what kinds of products are wanted. We're going to be trying several different kinds of product approaches and see which direction gains some traction. This fall, we will be releasing digital products that do things and reach markets that our print titles can't.
• So what do you see as your greatest digital
Lerner: … Digital opportunities have to work hand-in-hand with print. … While it's understood that the majority of every book publisher's revenue now is still derived … from print revenue, without digital elements, print will suffer because the relevancy of the house will diminish. I think it's just imperative to have a digital strategy and show that to the market.
• Do you foresee challenges in trying to implement your digital strategy?
Lerner: There's a myriad of challenges there. It's hard to know where to start because there are so many. But around … the workflow—I think that, in itself, is a big challenge for a traditional publisher like us who's been in business for 50 years and has relied on [only] print for revenue. So [our challenge is] to change the mindset here that it's important that we're not just a print publisher, that we're a content publisher. And whatever format we end up publishing our content in, be it print or digital, that's what's important and that's what we bring to the market, as opposed to just a digital version of it. …
It's a challenge because creating a digital infrastructure is not an inexpensive thing. … So it's a real fine line to be able to fund the change in workflow without necessarily counting on revenue—digital revenue. That's a real big balancing act, I think.
Working creatively in print is different from working creatively digitally. And … we only have a limited amount of expertise creatively on the digital side. So we've had to seek to find the right partners that can … augment the creativity in our print and translate that in some meaningful ways digitally. And then to learn from them and begin to incorporate that as part of what we do—it's a big challenge.
• Overall, what are your biggest business challenges?
Lerner: … Just that the market is not growing. It's shrinking. And so … it's a market share game. Not everyone is going to grow; especially in the school library market right now. Budgets are shrinking, and the only way we can grow is to take market share away from our competition. That's a big business challenge.
• How has the economic climate impacted your business strategy?
Lerner: Well, I think it's negatively impacted it, primarily around … the school and library funding [issue]. … That's not to say there still isn't funding out there to acquire print books. But, at best, that funding has stayed flat. And some of those funds have been shifted over to digital [content] acquisitions. So most schools and libraries are property tax-based and, obviously, we know what's happened with property valuations. So that's had a direct impact. Our [parent] company [Lerner Universal Corp.] also has book manufacturing and graphics [services]. And that's been hard-hit by the economic climate.
• What are your company's biggest growth areas?
Lerner: ... We are very confident in the quality of our books, in the purpose our books serve. And so, we think that we can continue to grow market share of our print books. We're very excited—one of our titles ["Bad News for Outlaws," by Vaunda Micheaux Nelson] just received the Coretta Scott King Book Award at [the American Library Association 2010] Midwinter [Meeting], which is unique for a publisher outside of New York or Boston to win that kind of award, outside of one of the major houses. So as a publisher, it's very gratifying to publish books that serve a social good like that. … And, at its core, that's what our job is—to publish books that are going to inspire kids.
We're excited about the digital market [too] and being able to publish content not only in print, but digital format.