Earlier this week I was invited to speak at the London Book Fair Digital Conference. Thanks to Orna O’Brien and the team from Reed for putting on an excellent event . With over 350 executives from the trade publishing, digital retailing and technology space attending, the appetite to learn about digital best practice in the book market remains high.
It was interesting to see the majority of speakers take a binary view of the emerging digital opportunity. The consensus seemed to be that E-Books were going to be an important part of the future, and that Apps (& other digital products) were unproven, and as such were not worthy of significant investment and effort (beyond R&D). I do have concerns about this approach. A focus on building E-Book revenue is understandable given very clear market demand. However failing to grasp the wider opportunity to innovate around product & customer engagement is risky.
By way of example, in lifestyle publishing we should expect new competition from outside the industry who will offer Apps and interactive multimedia experiences which will satisfy customer needs better than traditional products. (e.g think about a travel guide created by a new wave digital developer that recognises your location, makes recommendations, and earns revenues by partnering with local businesses). Publishers that focus their digital efforts on e-books in these categories will be exposed.
In other categories of publishing, there is potential for a new wave of digital products to be created for ‘Superfans’ of authored IP who are hungry for more content linked to their favourite franchises. Publishers can choose to systematically serve this need, or let others benefit from this market opportunity.
Whilst it is true that the commercial case to support investment in these areas remains unproven, a failure to embrace these opportunities risks damaging the future earnings potential of the business. This requires a change in mindset around the management of risk which should be led from the top down.
As a starting point, I would encourage publishers to think harder about how they can deliver new digital products that surprise and delight, and take full advantage of current technology. In the LBF showcase of digital products , a children’s talking book was featured. Similar products have been around since the CD-ROM boom of the mid 90’s, which does beg the question whether some publishers are fully committed to innovation.
My panel session focused on Mobile , and what was in store for publishers. I shared my prediction that there will be a shakeup in the market with power transferring from Mobile Network Operators to the owners of the smartphone operating systems, and digital storefronts. My forecast was the market would consolidate around a limited number of players with Apple, Google and Microsoft being the likely winners in the OS space, and I-Tunes, Android Marketplace and Amazon the likely winners in digital retail. Other players would, in my view, either struggle to reach scale or would focus on serving narrow market segments.
I also talked about the emergence of new $billion businesses which exploited mobile’s unique ability to offer social, local, & personal experiences, and a trend for consumers choosing to own a variety of mobile internet devices (e.g a smartphone for general use, a mobile gaming device for social & multiplayer gaming, and tablets for entertainment and information on the move).
These trends matter to those in publishing and other categories of the media & entertainment market.
The potential consolidation of Operating Systems and digital storefronts means content owners may have less bargaining power in the future. To counter this threat, consideration should be given to seeding & supporting new digital storefronts on open platforms like Android.
The changed device ecology also raises important questions of whether content should be delivered in the cloud for consumption across a variety of devices, or whether effort should be focused on delivering a high quality native experience on the device where the majority of usage is expected (e.g tablets for books and newspapers)
The choices publishers make now (in these and other areas) will have a significant impact on the structure and dynamics of the future market.
The good news is that the book industry is early enough in its digital transition to shape its destiny, but a single minded focus on e-books will not in my view deliver the best outcome.