Digital Publishing

In a presentation on “The State of the Publishing Industry Today” in May 2019, the Executive Director at NPD Book hit the audience with some disappointing facts about books—in the US market, the first quarter of 2019 showed a 6% decrease in sales volume for print books compared to the first quarter of 2018 and the long-term books market, both print and e-books, was extremely flat, with a compound annual growth rate of -0.1% from 2013 to 2018 (Button, 2019). This is mirrored in the Canadian market, where sales of print books remained flat in 2018 when compared with 2017 (BookNet Canada, 2019) and the revenue of the book publishing industry has been declining over the past five years (IBISWorld, 2019).

In an industry that is meant to contribute to the knowledge, culture, and experience of a population, such stagnation is not good news. Ideally, the trade publishing sector should be growing a healthy percentage each year by producing new content but reports show that while Canadian trade publishers may not be flailing, they keep themselves afloat with sales from their backlist titles—the current norm being 60% backlist generated and 40% frontlist generated (BookNet Canada, 2019). So the question begging to be asked is—why is it so hard for to turn a decent profit on a new title?

It all boils down to the cost of paper. And the size of the Canadian market. And the audience for the book. Printing books is expensive for just one tenth the size of the US market. The fewer books printed, the more it costs to print. Even with a conservatively estimated print run, a publisher can never guarantee that the middling title they are planning to publish is going to find its intended audience and sell out. Additionally, the reality of the current system is that retailers return a significant percentage of unsold books to publishers, resulting in an automatic loss.

So why do trade publishers risk such an expensive activity that often results in cash flow issues and losses? Publishing a digital format first, specifically for fiction and story format non-fiction, seems a safer way forward. With this approach, publishers won’t have to pay for printing, spend on distribution, or contend with returns, which together would alleviate cash flow issues considerably. By going digital as a first resort, publishers can funnel resources that would otherwise be spent on printing into building an audience and increasing visibility for each title—in other words, create their own market.

Trade publishers can look to more profitable publishers in the education sector for proof that digital-first is a promising way forward. In July of 2019, Pearson, the largest education publisher in the world, announced that all of its active 1,500 US titles will become digital first (McKenzie, 2019). As explained by John Fallon, CEO of Pearson, “Instead of the digital product being adapted from the print textbook, the process will be the other way around.” Furthermore, a trend in Wischenbart’s Global 50: The World Ranking of the Publishing Industry 2019 report shows that educational publishers around the world are increasingly implementing cross-media strategies to maximize revenue from the copyright they control. In trade publishing, the success of a digital-first approach is evidenced by Wattpad launching Wattpad Books in 2019. Wattpad Books uses global reader demographic data from stories already published on the Wattpad website to publish print books in unique genres that have attracted a large untapped audience, such as Muslim romance. If trade publishers can incorporate a similar approach, it could spell a revival for sales.

During her talk at the 2017 Tech Forum on using data to spot the next bestseller, Ashleigh Gardner, Deputy General Manager of Wattpad Studios, noted that even though readers discovered and read whole books online chapter by chapter as the authors released them, they still purchased printed copies of the completed published product. In part, this is because the appeal of physical books is timeless, but it is also because Wattpad’s storytelling and story sharing model allows readers to follow along with the author and even contribute to the author’s writing by making suggestions and communicating approval and disapproval of the story’s elements. In this way, the author develops a following and an income from paywalled chapters and readers develop an investment in the author and the author’s content. If publishers successfully garner an audience for a title using a similar data-led, reader-involved, monetized digital approach, they can then estimate their print runs more accurately or print on demand, thus minimizing potential loss. If the book doesn’t find an audience, then not going into print is a forgone conclusion and the publisher preempts loss.

But is adopting a digital-first approach a realistic possibility for trade publishers at the moment? While the general structure of trade publishing houses is not built for digital-first, they do have the ability to move in this direction. As reported in The State of Digital Publishing in Canada 2017 by BookNet Canada, 94% of Canadian publishers were producing ebooks and 61% were producing audiobooks, the latter a significant increase from just 24% in 2016. Unfortunately, only 16% of trade publishers were producing enhanced ebooks—ebooks with integrated audio and video—and 43% had no plans to produce such formats in the future. The silver lining here is that publishers who reported higher ebook sales in correlation with enhancements increased 20% in the space of one year.

If the basic infrastructure is already in place, why hasn’t digital-first in trade publishing seen an increase yet? We could blame the less-than-inspiring performance of ebooks in recent years. As Arnaud Nourry, CEO of Hachette Livre, the second largest trade publisher in the world puts it, “The ebook is a stupid product. It is exactly the same as print, except it’s electronic. There is no creativity, no enhancement, no real digital experience (Flood, 2018). ” However, by investigating a little deeper we can understand exactly why ebooks aren’t as popular as expected. Tim Hely Hutchinson, CEO of Hachette UK says, “E-book sales are not declining because people don’t like digital things [….] What people are really looking for with the digital world is more interactivity [….] you’re not just looking at something, you’re directly involved. And that’s where we want to be.” This level of interactivity in ebooks isn’t fully present yet and that’s why, even though Canada has a strong reading population, 42% of readers rarely read or never read ebooks while 31% read print books weekly (BookNet Canada, 2018).

So, while we know that Canadian trade publishers do have the capacity to put their digital foot forward, there is a noticeable resistance to the shift despite evidence that it is necessary. IBISWorld’s 2019 Book Publishing in Canada industry report expects that print sales in Canada will further decline in the coming years with ebook sales helping to offset that decline. It also notes that Canada has been especially slow in adopting online consumption (ebook reading in particular) when compared with other developed nations. So, if ebooks sales are to save the industry and make a significant difference to the numbers, the ebook format must undergo innovative, rather than simply cosmetic, changes to be better received by audiences than it currently is.

Unfortunately, moving to the digital sphere to gain an audience for trade publishing is a double-edged sword. Canadians spend 10 hours every day consuming media, with digital video on smartphones skewing the increase of digital media consumption over traditional (Briggs, 2019). If trade publishers are to make the digital-first approach successful and profitable, it is imperative that they offer services competing with digital platforms such as Netflix, Spotify, and other streaming and subscription-based media in order to attract audiences. This first step of the shift may be the toughest as capturing and maintaining an audience digitally is increasingly hard with multiple forms of media on just one device vying for consumer attention. Publishers will need to tap into the authentic reading experience and involve readers creatively to develop an audience that they can then confidently sell print books to.

Going digital-first in publishing is not a novel idea. In the digital era, it is an eventuality for every publisher. For Canada, where publishers create and influence culture by giving their authors voices, it is an important step to take to ensure that the industry remains capable of fulfilling its role.

 


Bibliography

 

“Print Book Sales Remain Flat between 2017 and 2018.” BookNet Canada. Accessed October 9, 2019. https://www.booknetcanada.ca/press-room/2019/1/15/print-book-sales-remain-flat-between-2017-and-2018.

“BookExpo Education: ‘The State of the Publishing Industry Today.’” The American Booksellers Association, June 3, 2019. https://www.bookweb.org/news/bookexpo-education-%E2%80%9C-state-publishing-industry-today%E2%80%9D-572763.

Hong, Grace. Future of Publishing: Challenges and Opportunities for Publishers, June 17, 2018. https://bisg.org/news/405374/Future-of-Publishing-Challenges-and-Opportunities-for-Publishers.htm.

“The Canadian Book Buyer 2018.” BookNet Canada. June 2019. https://www.booknetcanada.ca/canadian-book-buyer.

“The State of Digital Publishing in Canada.” BookNet Canada. May 2019. https://www.booknetcanada.ca/state-of-digital-publishing.

McKenzie, Lindsay. “Inside Higher Ed | Inside Digital Learning.” Pearson’s Next Chapter (blog), July 16, 2019. https://www.insidehighered.com/digital-learning/article/2019/07/16/pearson-goes-all-digital-first-strategy-textbooks.

Koronios, Eva. “IBISWorld Industry Report |Book Publishing in Canada,” June 2019. http://clients1.ibisworld.com.proxy.lib.sfu.ca/reports/ca/industry/default.aspx?entid=1233.

How Wattpad Uses Data and Discovery to Spot the next Bestseller – Ashleigh Gardner – Tech Forum 2017, May 15, 2017. https://www.youtube.com/watch?v=oL3Re9jvyEg.

Flood, Alison. “‘Ebooks Are Stupid’, Says Head of One of World’s Biggest Publishers,” February 20, 2018. https://www.theguardian.com/books/2018/feb/20/ebooks-are-stupid-hachette-livre-arnaud-nourry.

Wischenbart, Rüdiger. “Global 50 The World Ranking of the Publishing Industry 2019,” September 2019.

Briggs, Paul. “Time Spent with Media 2019 Canada,” 2019 https://www.emarketer.com/content/canada-time-spent-with-media-2019.

Wischenbart, Rüdiger. “Ebooks 2018: Phase 02. The Many Faces of Digital Consumer Books. A Global EBook White Paper.,” 2018.

As I am writing this essay, Katy Evan’s Racer went live on Amazon. I have been following the author’s social media promotion from the conception of the book; right from announcing the book, revealing the cover, teasing excerpts, pre-ordering and finally, the release day. She has a burgeoning group of close 70,000 followers on Facebook and close to 18,000 on Instagram. It’s been two days since the release of the book. It has already got close to 200 reviews on Amazon and just as many on goodreads. Her Facebook group, run by her fans, has close to 5000 members, including scores of bloggers, who are sharing and hyping about her book. The book is close to reaching ‘Top 100 paid’ in Kindle store and is already at #6 in Romance/Sports sub genre, which means she is selling high numbers. There is one detail though; Katy Evans is a self-published author.

 

Katy isn’t the only one riding this thrilling wave of digital publishing. Hundreds of self-published romance authors have managed to break into the market and establish a popular brand identity. Who are these authors?

 

Alison Baverstock, an associate professor in publishing at Kingston University, Surrey, said her research showed a clear gender split, with 65% of self-publishers being women and 35% men. Nearly two-thirds of all self-publishers are aged 41 to 60, with a further 27% aged over 61. Half are in full-time employment, 32% have a degree and 44% a higher degree (Brown 2014).

 

These authors—men and women, come from all walks of life and life experiences but have one thing in come—they have successfully bypassed the traditional publishing channels and incumbent middle men, after being turned down everywhere else in most cases, to reach their target audience. That is, kind of, priceless. Self-publishing has created a brand new, level playing field where romance authors are blooming unchecked. It’s a romantic wilderness.

 

Romance publishing, for long, has been a highly lucrative, but moderated genre of publishing. Romance has evolved. It has been the money-maker, albeit underrated, for the publishing industry. If we look at the romance publishing life-cycle to date, we’ll be able to ascertain that the innovation and content, in romance publishing, has been driven from the reader’s side. The publishing industry has been forever playing catch-up to the market demands. It could be the move from traditional ‘sweet romances’ produced by Harlequin for decades, to the uproar of spicier historical romances termed as the ‘bodice-rippers’, to the tsunami of 50 Shades of Grey, which singlehandedly revived the bookstore sales across the spectrum. The audience has been ahead of the publishers (Markert 1985). The content has reflected the path of self-awareness in women. According to best-selling author Jenny Crusie, ‘‘the romance industry is more responsive to reader feedback than any other genre … Romance novels do not determine what readers think; readers determine what romance novels get published” (Crusie 2007).

 

An editor is a hunter-gatherer—a person who scrounges through the slush piles, networks with agents, actively looks for writers and ultimately gives the publishers the actual content to publish. This is a vital role. The editors are the gatekeepers. They keep track of the market’s wants and needs and calibrate their searches accordingly (Williams 1993). One of the reasons that romance has remained relevant in the era of globalization is that romance publishers have shown a unique willingness to diversify their offerings, along with a stalwart refusal to flinch away from social, cultural and demographic change (Tapper 2014).

 

The romance market is a different ball-game altogether; unlike other genres of publishing. It’s a demand driven market. Where an average American reads about 12 books a year, a romance reader devours about 15 books a month. That figure alone, should give you a pause. To put things into perspective, according to the Romance Writers of America’s annual report, the estimated total annual romance sales amount to $1.08 billion. Romance novel share of the U.S. fiction market is 34%, of which, eBooks is 61%, Mass-market paperback is 26%, Trade paperback is 11% and Hardcover is 1.4% of the pie. The readership constitutes 84% female and 16% male (RWA 2015).

 

You can love self-publishing or doubt it, but you cannot ignore it. The numbers speak for themselves. Kim & Mauborgne conducted a study of 150 strategic moves spanning more than a hundred years and thirty industries and argue that companies can succeed by creating blue oceans of uncontested market space, as opposed to red oceans where competitors fight for dominance, the analogy being that an ocean full of vicious competition turns red with blood (W. Chan Kim 2005). Traditional publishing has been a red ocean for long, primarily because of the checked flow of content and the restriction on volume.

 

Digital publishing, by the way of its business model, has opened the doors to blue oceans, where independent writers could get their books to the intended audience without having to go through the traditional distribution network. Considering the behemoth size of the romance field and the new wave of self-published or indie authors, the editors today have a new avenue to find their next big find. These relatively unknown authors, who do respectable amount of business and have a ready-made following are the perfect candidates for the traditional model of romance publishing.

 

The hunter-gatherers in the romance publishing have finally caught up the insurgence of self-published contemporary romance, YA romance and adult fiction. Scores of self-published authors have been signed up by publishers to capitalize on the ready-made market. To find the next best-seller, maybe the editors need to analyze Amazon’s sales data (how much ever it is). The publishers have been cognizant of the changes. Harlequin Mills and Boon (HMB) ventured into a self-publishing imprint in 2009, but received severe flack from the publishing world for exploiting unsuspecting writers, as they charged ‘for services’. It was argued that what HMB were offering was NOT self-publishing but vanity publishing (Friedman 2009). Following the furor, HMB changed the name of the venture from Harlequin Horizons to DellArte press (Gardner 2009). But that too died a slow death over the following 4-5 years.

 

Jane Friedman argued, “Harlequin is clearly at an advanced stage of considering how it will evolve—or devolve, considering on your perspective. But most writers and writer organizations (and publishers) have NOT grappled with these questions yet. Publishing has often been slowest to change and adapt of all industries. Some argue Harlequin should’ve been better prepared and planned more strategically to respond to the criticisms that would arise. But when you’ve already moved on, like Harlequin—and are seeking solutions—it’s tough to backtrack to the mindset of those people who are stunned, angry, and indignant, and can’t even conceive of adaptation” (Friedman 2009).

 

Friedman also quoted Shatzkin in her blog post.

 

A friend of mine in the financial business wrote a book 20 years ago and wanted to get an agent to sell it. He knew the advance would be low, but he also knew the book would add credibility to his business. He wanted it sold. An agent told him that the agency only handled books on which they thought the advance would be $25,000 or more, yielding a commission of $3,750 at the normal 15%. This friend told the agent, take the first $3,750. The agent took the book, sold it for $6,000, and everybody was happy. This kind of arrangement, as well as others where the agent actually charges a fee for helping an author manage self-publishing options, are going to have to become more common in the future. Let’s not be too judgmental about the pioneering agents who change the paradigm. (Shatzkin 2009)

 

This is tricky. Because the market is flooded with self-publishing options for budding writers. Author Solutions is well-known for this. But the publishing industry is not quite ready to give their stamp of validation to the party crashers—the self-publishing authors. HMB tried to bridge the gap between the two forms publishing, but weren’t successful. They have, since then, launched Carina Press, a digital-first publishing platform, where they publish new authors in digital format and later go into print.

 

It ought to be simple; this amalgamation between print and digital platforms; this meeting of hunter-gatherers and the romantic wilderness. It isn’t.

 

Even though the scenario is well laid out, the integration between the two isn’t as simple. Consider this: Author Marie Force has 50 titles in her backlist—30 titles self-published and 20 titles with traditional publishers. She took her early works to numerous publishers, got published in 2008 (very small release) and made no waves. Around 2010, she took the plunge into the self-publishing and has been swimming strong, since. She prices her books between $4.99 and $6.99. She is consistently ranked in the Top 100 best-selling authors on Amazon and does decent business in print. But nothing compares to her returns on Amazon. She is digitally present in a market that primarily reads eBooks. Also, Author Kristen Ashley, who routinely tops the Amazon charts. She has the attention of her audience and even managed to get her books into Wal-Mart, which is no small feat. She has small team handling her editing, design and PR. Her focus is solely on writing. These authors also have presence on Kobo, iBooks and Createspace. (Observer and Dale 2016)

 

Now consider the pricing model of these self-published books. Most self-published works are priced between $2.99 and $6.99, with most authors pricing the earlier books low and progressively going higher as a series evolves. Collectively, these authors are looking at a $30 proposition in each customer (assuming it’s a 5 book series). It makes sense to reel in the reader early on with lower prices. Romance readers are extremely price sensitive, so the authors can only play around so much.

 

Now consider the traditional publishing pricing. Hard covers are priced at $25, paperbacks at $14 and eBooks at $9.99 (averages). There has been a raging discussion about publishers increasing the rates of the eBooks, which in turn has hampered them from making any headway into the digital market, although it has led to the resurgence in print sales. Even if successful self-published authors wanted to go through traditional publisher, there is no room for potential agreement when it comes to pricing. The readers will not pay $9.99, if they know they can get comparable books for less. This has been a key deciding factor for many authors, who don’t see merit in publishing only through traditional methods.

 

Also, the traditional model of publishing allows for maximum 15% royalties for the author, as opposed to 70% they earn when publishing with Amazon. That is a big chasm to fill. So what does it mean for the hunter-gatherers and the blooming romantics?

 

Traditional publishing and self-publishing are not mutually exclusive. It would be erroneous to think that in the current market you can do either-or. Publishing is transforming organically, hence, everything is changing. Digital and print publishing, as we know it, are transmogrifying. The market is turning a new leaf. Although, the market is more dynamic and price sensitive; the good news is—there is plenty of demand.

 

Publishers have an incentive for hunting in the self-publishing field, for newer, yet tried and tested content to meet the high demand of the romance readers. It would be wise to skim the top, but  focus on the next tier of writers who are on the verge of breaking out in the market. On the other hand, the self-publishing segment can gain more ground with print sales. Even though it is a digital market, 30% of readers still read print, and only print. There is no other way of reaching these people, but through traditional publishing.

 

Ultimately, publishing industry needs new talent and the authors need the validation that can be achieved only through traditional forms of publishing. It could be a win-win situation, but only if the wheels of publishing can align. As is the nature of business, in due time, it always re-calibrates itself. It would be interesting to see how this unfolds.

 

Anumeha Gokhale

Master of Publishing, Fall 2017

Simon Fraser University, Vancouver

Works Cited

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Crusie, Jenny. http://arghink.com. 04 14, 2007. http://arghink.com/2007/04/please-remove-your-assumptions-theyre-sitting-on-my-genre/ (accessed 09 25, 2017).

Friedman, Jane. Writer’s Digest. 11 03, 2009. http://www.writersdigest.com/editor-blogs/there-are-no-rules/digitization-new-technology/harlequins-self-publishing-venture-is-it-the-future-of-publishing (accessed 09 26, 2017).

Gardner, Suzzane. Quill & Quire. 11 26, 2009. https://quillandquire.com/omni/harlequin-bows-to-pressure-changes-name-of-self-publishing-imprint/ (accessed 09 23, 2017).

Markert, John. “Romance Publishing And The Production Of culture.” Poetics Vol.14(1), 1985: 69-93.

Observer, The, and Brady Dale. Titans of Kindle. 03 16, 2016. http://observer.com/2016/02/kristen-ashley-digital-author/ (accessed 09 28, 2017).

RWA. Romance Writers of America – Romance Statistics. 2015. https://www.rwa.org/p/cm/ld/fid=580 (accessed 09 28, 2017).

Shatzkin, Mike. The Idea Logical Company. 06 29, 2009. http://www.idealog.com/blog/the-evolving-role-of-agents/ (accessed 09 26, 2017).

Tapper, Olivia. “Romance and Innovation in Twenty-First Century.” Publishing Research Quarterly 30, no. 2 , 2014: 249-59.

The Observer, Brady Dale. Titans of Kindle. 03 16, 2016. http://observer.com/2016/02/kristen-ashley-digital-author/ (accessed 09 28, 2017).

Thompson, John B. Merchants of Culture. New York: Penguin, 2012.

  1. Chan Kim, Renée Mauborgne. Blue Ocean Strategy. Boston, Mass.: Harvard Business Press, 2005.

Williams, Alan D. “Who is an Editor?” In Editors on Editing, by Gerald Gross, 3-9. New York: Grove Press, 1993.