Connect/explore/create – what does that really mean?
I have just come back from Tools of Change in New York. It felt like the quiet after the storm… Many of the formats and technical issues have fallen into place. Everybody now knows about metadata and understands how important it is to listen to customers and be customer-driven, but everybody also understands that business models are still a challenge. Lots of start-up companies were present, on stage and among the audience. They all had suggestions for how to solve part of the business model puzzle. The opportunities are great, but so is the fear among publishers of throwing away money on ideas that have only reached the PowerPoint stage.
Joe Wickert gave sound advice in his concluding speech: Publishers must identify the core of what they do best – and then do it wholeheartedly. Everything else they should have the courage to outsource and not necessarily only to start-up companies. Lots of well-established partners are ready to help too.
Among other things, we heard how Laura Baldwin, former CFO now President at O’Reilly Media, has closed their stock and entered a Print on Demand agreement with Ingram Content Group. They now save costs on inventory levels and no longer need to spend time on calculating the best print run because they have negotiated a price per page. In other words, Ingram controls the individual print runs. For O’Reilly it means that rather than spending money on inventory levels, they can spend it on developing their business.
New start-up companies keep turning up. This is a good thing – the industry must embrace the start-ups because they can help exploit the many new opportunities. Innovation comes from them. This step was greatly encouraged.
Javier Celaya from the University of Alcala in Madrid has investigated the cooperation between start-up companies and established publishers and found that it is practically non-existent. Celaya points at different reasons. Some publishers simply ignore start-ups. Others feel that their own internal resources and competencies are sufficient to handle the new digital challenges. The main reason, according to Celaya, is insufficient management experience in handling cooperation with newly established companies where employees are often highly skilled technically but find it difficult to understand the processes and put words to value creation in the established publishing company.
So 'connect/explore/create' does not have to be an expedition into unknown start-up territory… There are lots of well-established partners out there that can provide great value to publishers by outsourcing their processes rather than doing everything themselves.
What really hurts publishers is that they must let some things go. They still have an important role in publishing of the future – a future that looks bright. But it takes courage. It takes courage to start working with new partners. Sometimes a new partnership will not work and it takes courage to end it again quickly so that money and energy are not sapped from the projects that have a positive impact on business in the long run.
The conference left me with a feeling of a rapidly developing publishing market. The opportunities are manifold, and in every publishing house new positions and new business areas are created, depending on current trends. It must also be said that technology and start-up companies do not do it alone. If you want to change your business, as we heard from O’Reilly, you must rethink your business and decide who your customers are, what you want to sell, and how you want to sell – then you can start finding the right solutions to support your strategy. It might actually be a good exercise to establish a new publishing house from scratch.
One thing saddened me though – very few Scandinavian and European companies were represented at the conference. This is a shame because we Europeans can get a lot of inspiration from a market that is three to five years ahead of our own development.
Finally, a few words to sum up from the conference and what you have to do as a publisher: Refocus on editorial tasks. It is all about reach – global reach. Digital is not just about e-books, owning your rights, global rights, outsourcing, being customer-driven, multiple formats, and print on demand. It is about being a part of publishing of the future: Connect/explore/create.
- Kenneth Jes Juliussen
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