Soon large media conglomerates will scramble to address an inversion of their current publication model. Amazon’s straight to device self-publishing platform (Digital Text Platform) is sure to spawn competitors and these services may very well threaten the long and arduous print process that has existed for hundreds of years.
In this post I will give a quick overview of the traditional printing model, and follow it with what I envision as the print publication model that will follow in the age of the ereader.
The Traditional publishing market
The traditional model places the publisher at the center of the publication and sales of the books. The model begins with an author writing a manuscript. And the publisher either “discovers” that author or already has a contractual agreement to print the author’s next book. Once the publisher agrees to publish an author they bear the largest costs and risks, but they also reap the largest rewards from the product. The publisher bears the costs of editing, designing, printing, binding, distributing, marketing, and refunding booksellers for unsold product. They also provide the author an advance on sales.
And what does the publisher get for all this risk?
85%-99% of the revenue! The publisher traditionally will pay 1-10% royalties to the author on books, but they withhold about half of those royalties to pay for returns of unsold books. The interesting thing about this model is it heavily depends on the assumed marketability of a given author and her works. That assumption is made by a very small number of people at a publisher.
The benefit to this model is that many of the authors have been edited and the works are of a higher quality. Publishers serve as a filter. Granted there are still many books that are of poor literary quality printed, but this is easily explained by their assumed market value. A publisher has to balance headline grabbing authors with authors that may write nobel prize quality literature to ensure their solvency. The sad truth is that quality literature does not sell large quantities. There are some incredible writers that are also best sellers, but that is a very small percentage of authors.
The New Publishing market
Within the next few years the publishing market will suffer from the same thing that has occurred in other industries. The model must change. Publishers’ titles will have to compete with many more titles than they have in the past. Since these titles are self-published and perhaps less revised, the overall quality of works will drop somewhat. But these self-publishing methods will also allow many more talented authors to find a reading audience for their works. In fact this is already happening.
The editing model as I’ve discussed in another post will probably also have to change to improve the quality of these virtual books, and to address the volume of new ebooks in need of editing.
The database, filtering, suggesting, and marketing strategies will change for ebook seller and publishers because a crowded marketplace will demand new strategies to get found. ebook retailers will have to improve these abilities to retain high sales and publishers will do so to ensure their authors are still visible.
Publishers will switch to using ebooks to test the market rather than to improve their margins. As publishers realize the benefits of ebooks to identify large revenue generating titles and authors, they will abandon their current strategy of trying to preserve their margins on hardback books by raising ebook prices. They will realize that lower priced ebooks will help their company’s identify marketable talents that will sell more hardcover books before they tie up large sums of money into product. This will provide metrics to inform their publishing projects.
The unfortunate side effect will be the same one that Nicholas Carr identified in The Big Switch. Many professional authors who already have long contracts stand to lose the most. They may be forced from the marketplace because of lower cost books. Their royalties are mandated by their publishing contracts not the splits given by ebook retailers. So in the outset they stand to lose the most.
I think established authors over the next five years will strike out on their own and seek higher ebook royalties. They will leverage those ebook sales figures to get higher royalty contracts from established publishers to print their physical books and provide editing services. Or, they will contract with freelance editors for editing services and on demand printing services like Amazon’s Booksurge or CreateSpace for printing. Either way they will be forced into the business of publishing to a much larger extent. And I think it will produce new services for the self-publishing industry that are not connected to a specific publishing house.
This will be good for consumers. I imagine a future where a consumer would be able to choose a hardbound, paperback, or ebook. These prices will directly correlate to the costs of producing them, so each each would have a different standard price based on the effort of development.
Hopefully this new printing model will not consume authors to the point that they no longer have the time to write great books. Or that this inversion of the printing model does not compromise the quality of literature that consumers can find.