Published on: August 9, 2010In times of trouble, companies like to utter phrases like, “It is time to get back to fundamentals.”
Except that sometimes, people simply don’t understand what the fundamentals are. Or that sometimes, what is fundamentally important to the business may not be fundamentally important to customers.
The good news is, sometimes they do.
Over the weekend, the Wall Street Journal reported that Dorchester Publishing, a small, four decade-old publisher of books and magazines, “is abandoning its traditional print books and making its titles available in digital format and print-on-demand only.”
The reason is that the writing was on the wall (to use an old world cliche). Book sales were down 25 percent last year, and CEO John Prebich says that “it wasn't a long, drawn out decision, because we've been putting in the effort but not getting the results.”
Now, this isn’t to suggest that print books - especially the mass market paperbacks in which Dorchester specialized - are going away anytime soon. There will continue to be publishers out there that make money in the format, because there will be people who will continue to use it. (The Journal notes that the wonderful Travis McGee series by John D. MacDonald continues to be available only in paperback, as the publisher resists the lure of the Kindle.)
But clearly a shift is taking place. The e-book format has been a huge game changer for Amazon.com, and other companies in the book business are taking notice.
For companies like Dorchester, making the big commitment to the e-book format means that management there recognizes that publishing fundamentals may not so much be about paper and ink, but about content...
Interestingly, there was a story last week in Newsweek about how publishers may be becoming an anachronism, noting that “new writers and established authors alike are increasingly taking publishing into their own hands, and the publishing establishment is paying attention. According to a recent Bowker report, the market for ‘nontraditional books’ in the United States grew by more than 750,000 new titles in 2009 - a 181 percent increase over 2008. Five of the top 100 bestsellers in the Kindle store - which now produces more sales than Amazon’s hardcover list - are currently self-published ... In a traditional paperback publishing deal, the author keeps a mere 8 to 9 percent of royalties. Under most self-publishing agreements, authors keep 70 to 80 percent of their profits, with the remaining cut going to their distributor.”
The message is this: Unless you are John Grisham or Dan Brown, the sense is that traditional publishers offer a diminishing return on investment because e-books and self-publishing have leveled the playing field. If they don’t offer better service and more services to both writers and readers, their role as middle-man, as gate keepers, could be threatened.
The fundamentals are changing.
It would be naive for anyone in any business to think that he or she is immune from such changes, that “this couldn’t happen here.”
Formats change and content changes, just as surely as customers change. The businesses that survive are the ones that recognize this, prepare for it, and act on it while still viable and vital enough to reap the rewards.
And that’s my Monday Morning Eye-Opener.
- KC's View: