In 1960 the economist Theodore Levitt wrote an influential essay in the Harvard Business Review entitled “Marketing Myopia”. In it he discussed the parlous decline of the US railways in the twentieth century. Decimated by the widespread use of automotive transit, by the 1960s the railways were a shadow of their former selves- broken and bankrupt.
Levitt argued that there was no fundamental problem with the railways contrasting the States with Europe, where to this day railways are thriving. Rather there was a problem with the attitudes of the railway companies. They had always seen themselves to be in the railways business and focussed their efforts as such. According to Levitt this was their mistake- had they realised from the beginning that what they were in was the transportation business they would have been much better prepared to respond to and piggyback on innovations like the car, the lorry, the highway and the airplane. In short, had they not had a bad case of “marketing myopia” they might have been in a much better state.
In contrast take Nintendo. In a recent article for the London Review of Books John Lancaster looks at the cultural status of computer games. He highlights the history of Nintendo as an interesting casestudy. Founded in 1880’s Kyoto, Nintendo originally produced hanafuda (Japanese card games). Throughout their history though they refused to define themselves as makers of card games- they saw themselves as facilitators of play, and so had a constantly evolving product set while maintaining a consistent purpose. It meant they were always ideally positioned to exploit new advances and could comfortably react to change. Moreover it has led to them being in the vanguard of innovation; just when their competitors Sony and Microsoft were beefing up their consoles for the hardcore gamer, spending mega bucks turning games machines into omnipotent media playing nodes, Nintendo re wrote the rule book.
The DS and the Wii, with their intuitive gestural interfaces and ludic game design, perfectly fit what legendary Nintendo games designer Shigeru Miyamoto sees as the defining goal of Nintendo: to create products grandparents and grandchildren can play together. Both consoles were colossal risks for Nintendo; both paid off handsomely.
There appears to be a fairly obvious moral for publishers in this story. There are certainly those like Booksquare who argue that digital is a new market, a new market in which publishers will have to redefine their approach in order to succeed. In 2009 I don’t think anyone is seriously pretending that this digital stuff will go away and no one really has to worry.
For me the real issue is that we obviously cannot be the railways. We cannot be myopic in ignoring the challenges, opportunities and changes of the internet and digital distribution. Here is the but- But neither is it realistic for publishers to be Nintendos. As much as we can say that we are curators of stories and information, people involved in the entertainment/education business pure and simple, we simply don’t have the scale, the expertise and the financial muscle to become full on web platforms, film studios, arts infrastructure bodies or whatever else moving beyond print matter might entail. Publishers cannot jeopardise their core operations by completely losing focus.
The question, then, for 2009 is how publishers can effectively steer the line between being a railway and being a Wii. Between myopic decline and radical re-engineering. It means doing this in a dire economic climate, with limited resources, managing what we do best with what we’ve not done before.
We’re working on it.
10 Comments
I love that you grasp onto the link between literature and technology. I hate hearing publishing folk go on about finding an “iPod moment”. Publishing must invent its own Wii, which will clearly be nothing like a Wii. Perhaps the blog is it? Perhaps not. But clearly thinking along the lines of how to sell ink on paper in digital format is not a path towards innovation. If more people start thinking along these lines (and saying/writing it) then perhaps finally someone will have that creative spark.
Nice post Michael, and a very appropriate set of examples. We can feel your pain…
There’s some great posts along similar black/white innovate/die themes today, as I’m sure you’ve read:
Jason Epstein in The Daily Beast (itself a very interesting model from a died-in-the-wool print publisher, Tina Brown)
http://www.thedailybeast.com/blogs-and-stories/2009-01-08/an-autopsy-of-the-book-business/
Boyd Tonkin, somewhat more optimistically (if not idealistically) in the Independent:
http://www.independent.co.uk/arts-entertainment/books/features/best-of-times-worst-of-times-does-the-credit-crunch-have-a-silver-lining-for-literature-1232961.html
and any other number of the blogs we both read, and the mailing lists we contribute to.
But you raise a very interesting and challenging point. If you can’t afford to invest in innovation – assuming that innovation is expensive, and that innovation is the key to survival and growth – how do you survive when the existing (train) model is broken and dying, and when “core business” – and the focus that comes with it – appears to have an increasingly short half-life?
Part of your post suggests to me that publishers are almost resigned to terminal contraction in the same way that (as folklore has it) Kodak was unable to adjust to digital photography despite knowing about it for 30 years:
http://www.msnbc.msn.com/id/9261340/
and that you – big publishers – are “stuck” by not being able to execute those innovations when they do happen.
Surprisingly – I use this word as it comes from a corporate – the HarperStudio model is making increasing sense these days. I know Pan Mac to a degree did something similar with the New Writing, but that was somehow less visible – perhaps because the blog was limited to the Charkin Blog and tied up with all that entailed. Of course it’s not perfect, but it seems like a good evolution: small advances, lower print runs, profit share, buying books with an attached audience, transparent publishing (and error-making) in public. All very noughties. But is it possible for innovation to take place along side core growth. Does one answer lie in the notion of “skunk works” – low cost, innovation departments decoupled from the corporate hub:
http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=37067
?
Personally, I don’t think innovation (or necessarily execution of innovation) is always expensive, certainly not when compared to the costs of traditional publishing. If we look at some of the high costs of publishing – high advances tend to be in response to sought-after books, with everyone chasing the same book rather than those unearthed or curated – by more hyperopic editors. Similarly, other high costs – marketing – tend to come from a cookie cutter approach that says money (in the form of print advertising) is better spent than effort.
Time and effort spent marketing good books to people who will find them interesting is not limited to the web, but it does make it easier and eminently more traceable for assessing the return on the costs. Looking at 2008’s bestsellers, my former employer Canongate made some good choices for famously very low investments by looking outside the agented milk round and acquiring titles such as Homicide and Barack Obama and publishing them very well. As well as having some good luck. Is that innovative? It’s not a Wii, but it worked. How can/will they sustain that?
I think there are some wonderful new models for innovative (print and electronic) publishing that could hold some significant value without ridiculous expense. We’re working on some of these ourselves, around mobile and electronic (as are you) devices and distribution, but others depend on partnerships with willing, risk-taking publishers, which are still surprisingly hard to find.
As someone who has worked in the web and books for 11 years, and who is passionate and evangelical about innovation being the key to publishing’s future, I’m very excited by the opportunities of the next 1-5 years. It may not be pretty, but it sure is going to be different.
Thanks for you comment, Peter, which is both wise and challenging!
I agree with everything you say, although I think there is a sort of inevitable pressure of costs and complexity that increases the larger your company is and the closer your innovation gets to the big systems and processes that drive your business.
I’m most interested at the moment in a sort of ‘innovative integration’ (or even, integrative innovation… depending on which side you’re coming from), by which I mean not trying to hit the next hot online business model, or create a killer product, but rather to change and re-make how you work in order to better fit the online market/landscape and advance your priorities for publishing, marketing and selling. Which, at root, is what Harper Studio is doing, I suppose.
Hi James. Thanks for the reply. I agree with you about costs, although what I like about (my interpretation of) SkunkWorks is the ability for “insiders” in an organisation to work outside of the processes and systems long enough to create a proof of concept/ working model that can then be successfully replicated within the organisation… small within big, labs, whatever you want to call it. But obviously this can only be successful with an eye on integration.
By the way, when I say “innovation” I don’t mean “WiiBooks” or innovation for its own sake; it may be republishing a backlist, out of copyright / print title in a new way (as with Homicide) or it may be repackaging backlist material culled from an entire list into some kind of anthology or omnibus. There’s an opportunity cost, of course, but the “infrastructure” exists already. Or it may be something else – I’ve always been very excited by the high-value opportunity of customised (read: personalised) books. Yes there is capital investment involved in that, but it’s not like publishing books on the inside of car windscreens or something.
Really, I don’t think that the “survival” point for publishers (as regards the web) or even the point at which they thrive is very far away from where they currently are.
What does seem to be missing is company-wide skills and the knowledge/ability/confidence/inclination (and tools) to apply those skills across the business. i.e. The understanding by more than one person / department about the importance of each part of the digital publishing cycle for example – and, as you say, integration across the company. This is obviously much harder in larger, more hierarchical and structured companies, where people still seem to see the “web” as a function of IT or marketing (or anyone other than the person thinking it) than integrated in part into each division. However I’m sure that sure this is changing, and making that change is a priority.
Wonderful article, and great links too – esp the Lanchester piece in the LRB.
I think you are right that the publishing business can’t become, for instance video game makers. While Nintendo has been successful because they have recognized that their job is to help people play, I think publishing likely can only succeed if it recognizes that it’s job is to help people read “books” (rather, than, say, to “sell copies of physical books.”). For all the gnashing of teeth in the publishing business, here are three things that should give everyone hope:
1) the two biggest-selling books of the last 5 years have been for kids/teens (Harry Potter & the Myers books), meaning there is a a whole host of book fans waiting growing up who will continue to love books
2) despite all the doom and gloom about declining reading, the US National Endowment for the Arts has just published a study indicating that there is an INCREASE in reading of fiction: http://www.mediabistro.com/galleycat/on/166_million_more_us_adults_are_reading_fiction_105497.asp
So I think it’s safe to say there are readers out there hungry for books. There are writers hungry to write, and I don’t think that will change any time soon. The passion for books runs deep indeed.
The big change, and the challenge for publishing, is adapting from the model: “we sell these objects to bookstores, who then sell to consumers” … to a model where publishers truly see their role as getting “books” to the eyeballs of readers who want them.
Hence digital of course … and I can say from personal experience, and that of my friends, that the iPhone has been a revolution in reading. 2008 was the year the tide turned in favour of mainstream adoption of ebooks, in part because of a new device *not* dedicated to ebooks. Interesting.
There is more than just this change coming, of course, but if you break down the publishing business, there are really only four elements: acquisition, development, production, and distribution. The true value the publishing business brings is acquisition on the one end, and then marketing on the other.
But with ebooks, production and distribution become trivial matters (though it gets complicated when people tie everything up in DRM), and I believe the development of books (that is, getting them from manuscript to finished product) is going to become more decentralized, at least for smaller books.
So in some sense the role of the publisher is to find new ways to find the best stuff and get it out there, which implies encouraging new modes for creation and providing new kinds of platforms for readers and writers to interact.
So yes, stick with the book, but also set the book free … Maybe! X-fingers.
Really interesting discussion here, and just to add to the mix, writers need to be innovating, or at least thinking about innovating, too. Very few of the Creative Writing MA programmes up and down the land pay any attention at all to this stuff; this is probably because, like everything, these courses are market-driven and most aspiring writers aspire to write books. This may change as the born-digital generation comes of age. Of course, not all writers pass through the MA programmes, and there are plenty of writers out there who are at home in the digital environment. But it would be good to see already established writers coming up with ideas that, in turn, push their publishers to innovate.
@ Kate – There are many! Even “established” ones! Cory Doctorow comes to mind first and foremost, largely because he’s outspoken on the importance of new publishing models (including Creative Commons licensing and non-DRM formats). Via non-DRM “crowd sourcing”, he’s had fans translate his book, Little Brother, into some 13+ languages, and countless digital formats–it’s hard to find the precise number because a new language is added seemingly every other week. But he’s not a fluke, either. There are many others working in a similar vein that are perhaps not as well known… yet.
Speaking from my own point of view as a writer, I would say that personally I feel dissuaded from pursuing alternate models because of publishers. I don’t simply wish to pass the buck back. In my writing I innovate; I feel this is a direct, strategic element of writing, the inalienable bond between the form and the content. From my perspective as a relatively unpublished writer, I am confronted with the rigidity of submission guidelines and the often fruitless, no-feedback process of sending out work, compounded by publishers lauding over the Oprah format and making statements like “no new authors until further notice”. As such, my impetus to send out creative and innovative types of projects is about zero. Why should I go out on a limb only to receive a blank, negative response? If I am seeking to be published, I’m going to try and submit what I know gets published, because… well, otherwise I’d just keep it on the desk (or put it online myself)! This is what publishers need to think about, in my opinion. Setting an example, and inspiring innovation by saying, yes, send us your crazy, un-orthodox digital project, because if we find creativity in it, we will stand behind it and help make it work.
These sentiments have led me to self-publishing, because frankly, I have much more confidence in my own abilities to push my digital projects than I have with mainstream publishers. Of course, things might be different for established authors with existing relationships with publishers (unlike myself). But then again, why would an established author seek to innovate? S/he is already established, and already has a defined creative method and format. I think this is the key of the Nintendo argument: if the folks with the resources don’t take some creative risks, then it doesn’t matter how many innovative, ludic video games I can invent, because they’ll only ever exist in my head, and the games that are produced will always be the status quo.
cheers, Adam
A very interesting article and comments too.
I believe the key aspect about digital publishing is the ability to participate. It is great fun sharing and I can see and hear the fun that my children have when they are sharing games on the Nintendo DS’s. Books provide, by their nature, solitary moments while you read them and my wife often does not see the similarity of the moment when she drifts off in the world of the book she is reading and when I play a game.
However, when you share the moment with someone, whether synchronously or asynchronously, which you experienced through the book then they become far more fun, useful or meaningful.
Thanks for the comments.
Peter- I couldn’t agree more. It always seems to me that the focus on newness inevitably turns to digital, whereas it could equally be applied in any aspect of publishing. One example I think was the Pocket Penguin 70- taking small texts and making them more desirable. So then the challenge becomes just finding the right digital strategy to go with it. I also think there is innovation has an obsession with the eye catching when actually what will probably be more important this year is boring innovation, by which I mean under the hood projects that save money.
The idea of a skunkworks is enormously appealing. To a certain extent I think this was a model pursued at the Nature Publishing Group, with some spectacular results. What would be really interesting would be a retailer skunkworks, a unit that basically worked on new, more effective and interesting ways of selling books. This would then mean that a) every publisher had a stake in making it work b) every publisher could benefit c) would be good for the book trade as whole.
Hugh- I make that two reasons to have hope!
Still I agree that 2008 was an important year, that the iPhone is spearheading digital reading and the gnashing of teeth perhaps premature. However I would not be so sure that digital distribution will lead to less centralized publishing. I think there will be a proliferation of small publishers through the web- however at the top pressures on publishers will probably increase the intensive consolidation there industry has witnessed over the past twenty years. Still, that doesn’t change the basic challenge of finding new ways of doing what we do.
Kate and Adam- this is a difficult chicken and egg area. Ebooks were chicken and egg 18 months ago- now we are more chicken than egg. I think that something will give. Publishers are generally not risk takers because they cannot afford to take risks. Once someone achieves success with a project then they will start coming on board. If J.K. Rowling were to engage with the web and seriously innovate with ehr storytelling for the next book, then before long everybody will be scrambling for digital writers. So maybe it’s futile hoping for that, but I have confidence that something will emerge. A parallel issue though is that publishing can be too self referential, in that publishers are not taking their cues from computer games and digital media, they are taking them from other books and possibly TV and film. This makes it difficult for new forms of writing to gain a toe hold.
The decentralisation that digitisation offers (in all industries, not only publishing) forces most companies to choose what to automate and what has to be done by human beings. In other words, what can be templated, and what requires project-specific creative input. In general, technological progress creates a flow towards automation, as creative ideas are captured in templates and automated. (For instance, right now the epub ebook format is so new that this line is blurred, with some companies automating conversion and others writing and tweaking code by hand. Before long, hardly anyone will look at the code any more, that will be automated by tools that allow editors and designers to focus on purely creative work.)
This flow is like a stream that publishers must keep swimming against. Only by continually moving your skills (and value-adding activities) up the flow towards the creative end can you keep your job in publishing. Any jobs at the automation end of the flow will be one by robots of one sort or another. In the same way, in order to add enough value to the publishing process to earn revenue, publishing companies have to offer creative, human input. Publishing companies that don’t will be operating at the automation end of the flow, employ fewer and fewer highly skilled staff, and eventually become no more than data-scrubbing clearing houses.
It is a common misconception to think that ebooks do not require as much human creative input as print books (for proof of the prevalence of the misconception, just look at how badly many ebooks and ebook readers render type; Mobipocket’s defaults are among the worst). Acquisition, editing, design, and the continuous, creative improvement of automated systems for distribution will remain as important and competitive as ever. What will change in time (perhaps several years or more), I believe, is that the distinction between ebooks and the Web will fall away (see Kevin Kelly’s big vision for the Web at TED talks, http://www.youtube.com/watch?v=yDYCf4ONh5M).
Should that happen, what will publishers be doing then? They’ll still be finding new authors, editing their work for new tastes, and designing its presentation structurally and aesthetically for new fashions. The key is ‘new’. Only humans can innovate for humans. Innovation cannot be automated. Publishers will be companies that gather good, creative innovators. When I think of my favourite publishing companies today, that’s exactly what they do right now. For them, they should just keep doing what they’re doing already.
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