The Corner Office: Growth Through Acquisition

We're extremely excited and optimistic about the strategic landscape for publishing for the foreseeable future, driven by the technological changes in both e-books and apps. We feel like that creates some extraordinary opportunities for independent presses versus the larger, entrenched houses. But, it requires some courage and forward thinking in order for independent houses to take advantage of it.

What may those effects be, both positive and negative?

Bottorff: On the positive side, I think ultimately a more efficient delivery platform for content has the potential to shift the demand curve for books versus other draws on peoples' time. So you're talking about an aggregate market increase in consumption. Number two, the efficiencies of e-books for publishers to distribute globally and to reduce returns provide some extraordinary opportunities. The investment cost for new titles is reduced, which allows publishers to provide a more diverse offering to potential customers.

On the negative side, as there's a channel shift from brick-and-mortar stores to online to e-book, the amount of inventory that's required to be held by the channel goes down. And because that inventory can be returned, there's going to be a drag on printed book net sales. Second, as the cost of producing a new title goes down, the number of competitors goes up because the barriers to entry are coming down. In addition to that, shelf space for e-books is effectively infinite compared to brick-and-mortar stores where you've got a finite amount of space. So in that model, marketing becomes even more critical than it has been in the past.

In addition to the growth of digital publishing, what other challenges confront you as head of an independent book publisher?

Bottorff: When you compare publishing to other industries, it's a business where execution across all functionalities is critical to being successful. And even when you get it all right, you still might not have the final component, which is a little bit of luck. It's a management-intensive business. From title acquisition to production to sales and distribution and marketing, you have to execute very well in all of those areas while maintaining a high level of productivity.