When Johannes Gutenberg invented the printing press, he said it would give wings to truth so that it may fly with the word.
The latest volume of the industry’s revolution has come to printing houses relatively late. Book makers are scrambling to embrace ebooks and the rise of internet while fending off self-published ebook authors and online sellers.
Perhaps seeing this trend, publishers Penguin and Random House decided to merge their operations in a bid to leverage their size against these revenue-eroding threats. Of the deal, Penguin’s chief executive John Makinson said "We decided it was better to get in early rather than be a follower.”
With the only constant in this battle being the readers appetite for well-written content, publishing houses are challenged to produce best-selling hits while developing a forward-looking digital strategy. Getting this right will be crucial to their bottom line and their survival.
In recent years, the sale of physical books in Australia suggests the publishing industry is in decline. According to Nielsen Bookscan figures, national sales of print books fell 12.6 per cent to $1.078 billion in 2011. This followed a four per cent decline to $1.213 billion in the previous year.
The trend is expected to continue as online book sales rise and self-published ebooks become more common. According to Amazon’s unaudited sales figures in the United Kingdom, for every 100 physical books sold, readers downloaded 114 ebooks.
Local and foreign publishing houses have taken note of this change by learning to embrace digital content. Publishing giant Bertelsmann’s steps towards this trend helped its global revenues grow by two per cent in 2011 thanks to its burgeoning sale of e-books.
Publishers believe their competitive advantage rests in producing well-written, best-selling material. According to an industry insider, publishers see the value of their skills in editing, promoting and filtering material as adding value when compared to the haphazard approach employed by many self-published authors.
These authors often find their material lacks the credibility that comes with being attached to a publishing house. By choosing to submit their work through a publisher, authors see their works marketed directly to their intended audience.
Publishing houses are rising to the challenge of moving online. Today, hard copies of books are unlikely to be released without an accompanying ebook or pdf version.
Publishers have acknowledged the link between profitability and convenience. Online models offer ebook subscribers the chance to create a library of titles on their smart tablets. The challenge is to convince readers who have become accustomed to getting free content to now pay for it.
There are signs that consumers are beginning to understand that good content comes at a price, even if delivered effortlessly online. This was experienced by UK newspaper The Times, which recorded an 87 per cent drop in online visits to its website after it placed its content behind a paywall.
This trend is slowly reversing after the newspaper recorded a 7.5 per cent growth in digital subscriptions between September 2011 and January 2012.
New start-ups have also emerged on the back of this improvement, with online music publication Uncool Mag looking to offer readers well-produced content funded by donations from funding platform Kickstarter. Uncool Mags’ creators are so confident they envisage paying their writers rates comparable to those on offer at legacy music publications like Rolling Stone.
Of course the internet can be an enormous generator of revenue, as well as a destroyer. The way in which publishers source their material has also changed.
Hit-seller Fifty Shades of Grey was first produced as online fan-fiction before being picked up by a publisher. The book would later go on to sell 60 million copies worldwide in the first year of its release.
For publishers, securing a deal with an unknown author allows them to negotiate favourable royalty terms if they see the potential for a best-selling book. This adds to their bottom line, and allows them to continually reinvest in new authors. From the authors’ perspective, they consider the change positive as they no longer need to pay agents to submit their work to publishing houses.
As the proliferation of ebooks has seen the number of middlemen standing between publishers and readers disappear, publishing houses are becoming increasingly involved in the sale aspects of their books.
American publisher Macmillian led this shift in power by dictating the retail price sellers charge for their books. In exchange, vendors receive a 30 per cent commission for every sale.
While Amazon books first balked at the idea, their protests only lasted a couple days. Since then, every major US publishing house has adopted the practice.
Embracing online social networking has also allowed publishers to gain valuable insights into what their readers really want. The use of social networking accounts, managed by dedicated employees, has given publishers immediate and relevant feedback.
This practice allows publishing houses to focus on the wants and needs of their target markets. However, the suggestion that books can be written on the basis of audience consensus is unlikely. For every Fifty Shades of Grey or any other ebook shaped by fan forums, there are thousands of unread titles crafted by committee.
The tie up between Penguin and Random House was announced one day after HarperCollins revealed its takeover intentions for Penguin. Such an effort among three of the world’s six largest publishers to consolidate shows their need to do whatever it takes to stay relevant.
Publishing houses know turning online readers into repeat subscribers is crucial if they’re to avoid being written into the history books. Whether this change really benefits readers is still an unfolding story.