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Ten Challenges to Innovation in Publishing

In a new report out this week (A Tale of Tech City: The Future of Inner Easy London’s Digital Economy, Centre for London), we’re reminded of the important place that digital innovation plays, and will play, in the UK’s economy.

“We believe the Government is right to be ambitious for the UK’s digital economy. The future of advanced economies like Britain lies, in important part, in growing research-intensive, innovative, high-value digital companies. Britain’s digital economy already takes the biggest share of national GDP in the G20, and may increase that share by a third by 2016.”

Where does publishing fit into this digital innovation matrix? The publishing industry often gets accused of not leading enough, or not moving quickly enough when it comes to digital innovation, but there are still huge hurdles to overcome. While it’s the start-ups who appear to be more agile and bold when it comes to creating innovative digital publishing business models, our established publishers still hold the key to producing some of the best quality content.

We’ve listed ten things that we feel create the biggest challenges to publishers when it comes to digital innovation. This Thursday we’ll be holding the second annual FutureBook Innovation Workshop in association with The Literary Platform. Our Innovation Workshop speakers will demonstrate how they are currently dealing with some of these challenges.

1. Our audience is evolving

Some of the most innovative digital publishing projects launched in recent years have been deemed ‘ahead of the reader’. Our understanding of what a reader expects from ‘book’ now is changing all the time, and judging what a reader is ready to handle now, in a year’s time, in ten year’s time – can be hard to judge.

At the same time, the relationship between the reader and the writer is changing. Writers like Jeff Norton are experimenting with bold new narrative development processes that ask beta-readers to help inform the next stages of the story. Mike Jones’ Portal Entertainment (SXSW, Start-up Weekend London in September 2011 and Most Innovative Company) is already making immersive narratives where the audience takes part in the story. How do traditional publishers fit into this much more direct involvement between the writer and the audience and, importantly, how is a direct relationship between reader and writer monetised?

2. The convergence of media means our competitors are changing

Storytelling is everywhere – it’s a core component for television drama, film, videogames and advertising. These industries have been experimenting for a lot longer with taking storytelling across other digital platforms. Television programmes like Skins (Channel 4) have used writers to extend the life of the series into social media channels and beyond. Mindshapes’ Magic Town also takes readers into an exciting web environment engaging children with their favourite book characters on a different platform. There have also been some attempts from traditional publishers, such as Faber & Faber’s experimentation with John Lanchester’s Capital, which extended the life of the book into the email Inboxes of potential readers, drip-feeding gentle interactions on a daily basis with the themes of the book.

3. It’s too risky a business

Managing risk is a tricky business. In a FutureBook blog about managing risk in August 2011 Peter Collingridge wrote:

“Publishing is a creative industry, entering a moment of great innovation. And innovation is all about managing risk. Fortunately, the rewards can be bountiful and long-lasting, and there are many ways for well-executed digital projects to mitigate the risks of their print counterparts.  My advice to publishers who are interested in digital innovation is two-fold. Firstly to learn as much as possible, as quickly and as cheaply as possible, from everything they do; and secondly to channel their considerable creativity into making sure that their marketing is as polished, considered, and contemplative of their users as the products they have made.”

As an industry, publishing is not adverse to risk-taking – in fact, you could argue that most publishers are more than experienced in taking a gamble. Each commission is an investment in an author, a gamble that an advance will earn out – so how can we transfer more of this gambling spirit to digital innovation.

4. There’s no return on investment and we’re quick to throw in the towel

The problem with quality digital publishing projects is that the production costs are high – sometimes really high – and notably way beyond the kind of budgets publishers are used to paying from either editorial or marketing budgets. Throw into the mix the anxiety that these projects might not yield any profits it becomes a bit clearer why digital innovation is not a straight forward pathway for publishers. To date, the canniest publishers have worked in partnership with developers and created share-of-revenue business models, in order to get their foot in the digital innovation door.

The other frustrating thing for publishers is that no sooner has a new concept of digital innovation in publishing been announced, it’s almost immediately declared ‘dead’ by anyone who it hasn’t worked for. This is best illustrated by Evan Schnittman declaring enhanced ebooks and apps dead at the London Book Fair in April 2011, yet we’ve seen many financially successful projects since then – notably the Brian Cox iPad book app, reportedly selling 20,000 copies in the first three days. Similarly at the Frankfurt Book Fair in October 2011 all the talk was around social reading platforms, but by the time we’d reached New York in February 2012 some at BookCamp already dubbed social reading ‘over’. This crazed seesaw of enthusiasm vs. contempt for digital publishing initiatives only adds to the general anxiety of decision makers.

5. One Size Does Not Fit All

A huge issue for publishers is that One Size Does Not Fit All. Already a hugely diverse industry, it’s clear that what works for Brian Cox might not work for Salman Rushdie. Some genres appear to be adapting to digital more seamlessly than others and there are obvious reasons for this. Tor US and Tor UK were first out of the blocks to go DRM-free this year, but was facilitated by a Sci-Fi audience which was hungry for this to happen. As reported in The Bookseller,

“Our authors and readers have been asking for this for a long time,” said president and publisher Tom Doherty. “They’re a technically sophisticated bunch, and DRM is a constant annoyance to them. It prevents them from using legitimately-purchased e-books in perfectly legal ways, like moving them from one kind of e-reader to another.”

Ask a literary fiction reader if they’d prefer a DRM-free option, and you’re more likely to be asked what DRM is. Yet we know that literary audiences are enjoying digital literature experiences: the T. S. Eliot’s The Waste Land app (Faber) is just one of the great examples of digital innovation in literature. Sarah Ellis from the Royal Shakespeare Company will explain how digital platforms has enabled the company to extend and engage with its literary audience.  For publishers running several diverse lists, however, these distinct differences between genre – and genre audiences – makes digital strategy very complex.

6. We don’t own the IP

Publishing has existed to date on a complex system of rights buying and rights selling. Throw into the mix technology and globalization and this system all starts to look a bit more complicated. Obviously it helps enormously to push a brand or an author across multiple platforms when you own the IP. This is best illustrated by the success of Pottermore – though it’s a difficult example to use because J.K. Rowling and Harry Potter in so many ways buck the general publishing trends.

A more interesting example is what is happening over at Penguin UK. The ‘Genesis’ project sees ideas being incubated in-house, and Penguin wholly owns these developed projects.

Speaking in September 2011, Penguin UK’s Tom Weldon said:

Books are not dying, but adapting and innovating. Media is no longer about format, but content, and consumers want brands and experience . . .”

How publishers manage this shift to developing IP in-house will be one of the most interesting things to watch over the coming years.

7. We’re not talking to each other

There are some clear reasons why publishers are not sharing more information with each other at the moment – competitive reasons, and sometimes even for legal reasons.  This situation is exacerbated by the fact that there is little sales data in the public domain attached to new digital publishing products. A project might be getting a lot of noise from bloggers and press, but what publishers really want to know is, “How much did it cost to make, and what was your return on investment?

At last year’s FutureBook Innovation Workshop, the digital agency UsTwo treated us to a refreshingly transparent presentation around the production costs and sales of their Nursery Rhymes app. Detailed graphs demonstrated the impact of PR, marketing, Apple promotions; how each of these affected chart positions and how price promotions drove sales.

If publishers were able to share more of this kind of information then perhaps it would make it easier to make informed decisions about digital publishing projects.

8. What’s the point when we’re competing with the technology giants

With Google, Facebook, Amazon and Apple on the publishing scene, what hope is there for traditional publishers? At the Tools of Change conference in New York in February 2012, a panel on investment in publishing agreed that while the big players are omnipresent, they also offer up huge audiences to work with and the opportunity for secondary businesses to cater for these audiences.

Christophe Maire, founder and CEO of txtr, is bemused as to why there isn’t currently more interest from investors in digital publishing. An active investor in the Berlin technology scene, Maire has been involved in the build-up of many start-ups including social reading platform Readmill. Maire believes that more investor attention should be paid to the publishing sector. He’s also keen to underscore that throwing in the towel with the big players might be premature, noting, “The world will not be totally dominated by Amazon.”

At Thursday’s Innovation Workshop, Chief Commercial Officer of txtr, Thomas Leliveld will share his views on balancing risk and innovation, and how txtr continues to innovate in digital publishing even in such a competitive marketplace.

9. Creating new business models is complicated

Publishers are being forced to make radical adjustments to their business models. The impact of these changes involves equally radical company restructures and these restructures are naturally complicated. Not throwing out the baby with the bathwater is becoming an oft-cited adage. There are experts in digital marketing and social media, and there are experts in books – who are best to communicate book projects to the outside world? Is it better to be first out of the blocks with a new business model, or is it better to take some time to consider the implications and risk being last onto the scene?

While traditional publishers adjust to digital, the start-ups are at an advantage. And Other Stories, talking this Thursday about their subscription model for books, is a good example of a start-up experimenting with a business model that lots of established publishers would like to try out.

Also sometimes the most effective business adjustments don’t make the most noise in the media. Best practice metadata might get a yawn from consumer media journalists, but getting fundamentals like this sorted out properly in-house often paves the pathway for taking other innovative digital projects forward more quickly and effectively.

10. Disruption can be exhilarating and terrifying

We’re told that we should be excited by the ‘disruption’ caused by technology, but for many there is still a hankering for the day when the main anxiety was whether a book had made it onto the Booker shortlist or not. While technology industries are well educated in how to rides wave of disruption, we’re still learning. Throw the word ‘disruption’ into the dictionary and you’ll get the following definition:

1. To throw into confusion or disorder:

2. To interrupt or impede the progress, movement, or procedure of:

3. To break or burst; rupture.

While we hear that staff at companies like Google are encouraged to embrace the idea of disruption, we’re not necessarily as exhilarated by the idea and perhaps a bit more terrified.

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