MY BEP EXPERIENCE

Publishing – a question of perspective

Posted on: January 15, 2009

It is my first week here at Random House and I am trying to get an understanding of what to expect from the month to come. Obviously I have a clearly defined schedule on a project that I will comment on later in the year. But at the same time I have the expectation to engage in the discussion on what the right way forward for the publishing industry is going to be. Obviously I don’t have an answer yet, but this post from the digitalist.com cought my interest and helped me to build some arguments. Everyone who ever took a course in marketing will be familiar with the “marketing myopia”.  Have a look at the post and also why I don’t agree with some points.

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 focused 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.

From a publishing perspective, the question here is:  “In which industry are we competing in” To me, the publishing industry competed for too long in the book industry versus the entertainment industry. Part of the successful turnaround will be based on broadening the playing field.

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 case study. 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.

I could not disagree more. “Jeopardising their core operations”…again, in which industry are we in. Is my core operation bound to the production of physical books? I don’t think so. If Nintendo would have stuck to their core operations, they would not be the company they are today.

Concerning the financial muscle, I am convinced that the leading publishing houses will play an active role in consolidating the industry. The current economic climate might even accelerate this. Once that happened, the power balance might shift in favour of the publishers again who now own and dominate “entertainment content”. Whether it is going to be necessary to own the assets of distribution, I don’t know. But by then, it might not be so absurd to build them.

Also consider all other players who seem strong at the moment. They are actually in a similar position. How much expertise in publishing and content has Jeff Bezos, or Steve Jobs? They need to build and redefine their playing field as well. So do we!

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.

You might think that my remarks are overly optimistic. Maybe you are right, maybe you are not. We will see. But learnings from mistakes in the past are there to learn from them and not to repeat them.


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1 Response to "Publishing – a question of perspective"

Fascinating perspective. Not sure I agree with you, but I will think it over. My problem with trying to play in the “entertainment” industry is that the numbers just aren’t there to scale. A blockbuster bestseller (4 million copies) takes at least a year to achieve and would be a bomb of a movie. As a result, we can’t market and spend in the same way as Hollywood or video games. Movie studios promote only a handful of releases each year. Video game companies not only have a smaller number of new SKUs, but they also continue to promote their products for far longer. Where you might have 5 or 10 marketing and publicity people devoted to working on one video game product (I’m guessing at the numbers, but can probably get you real ones if you like), the major publishers more often have 3 people working on well over 100 new books per year — and no marketing or promotion on most older releases or titles defined as “backlist.”

A possible solution to this problem would be the lengthening of the lifecycle of our products. Currently a book gets most of the marketing and publicity support in the first 4-6 weeks of publication. However, books take much longer to consume than a movie or video game, and so the word of mouth takes far longer to spread. Still, with the sheer number of products published per year by the major houses, coupled with the short lifespan of the marketing and publicity efforts, I just don’t see how books can compete in the entertainment arena.

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