13

Content and the new market players

Introduction

Publishers have developed expertise in content; finding it, nurturing it, developing it and producing it. Publishers see this as one of the important aspects of their role. In the traditional publishing value chain, content is one of the points of scarcity. Publishers are able to find and nurture authors and put their work into a format that can be distributed as effectively as possible. The crafting of that content is helped along by publishers, whether editing content at an early stage or preparing the content for publication, with the aim of achieving high quality where possible. The process of selecting content in the first place also involves a level of quality assurance: this could be by peer review to ensure scientific articles are accurate and valuable; or through testing books in the marketplace, such as educational texts; or by understanding market trends and finding the best books to reflect the interests of different readers. Understanding and managing content therefore is the lifeblood of publishers.

However, the digital age has introduced certain changes into the environment that render some aspects of the publishing value chain less critical than before. Clearly the ease with which publishing can occur on the internet means that some of the value that publishers traditionally added has become something most individuals can undertake if they wish. Distribution, for instance, can be achieved reasonably easily for all sorts of material, whether an academic posting up research on open access sites or via individuals self-publishing with Kindle.

The content itself is no longer scarce either. Matching content and readers is much easier to do on the internet; though it is not necessarily always straightforward and can require a fair amount of effort, nevertheless it can be done in a way that was not possible before. And content itself is everywhere – easy to identify and easy to get. It may be unregulated content, it may be unformatted, unchecked, badly written or inaccurate, but it is at least available and anyone therefore can get involved in ‘publishing’ it in some way. We can all be publishers, whether we post something on a blog or publish something more carefully constructed for a specific use; we can even simply publish the fact that we ‘like’ a photo on Facebook. So publishing has become democratised and content is publishable by anyone.

While this might be seen as a threat – who needs publishers if you can do it yourself? – it is content that is still central. Good content more so. Publishers understand their content and what it can do and offer, and how it can be used and provided to readers effectively. The way content is valued is changing, however; this theme has come up throughout the book. Different types of content have different, sometimes new, roles to play in the digital environment. New large players are entering the content marketplace from other industry sectors driven by motives very different from those of publishers. At the other end of the scale, individuals are able to take control of their own content and publishers. These issues are having an effect on the environment within which publishers operate.

New content players

We have seen that there are various reasons for some of the ways content is being re-evaluated. This is in part influenced by large internet and technology companies moving into the arena of content, publishing with different goals in mind; these can have distorting effects on the way content is conceived. Google, Apple and Amazon are three key players that in some way or other are becoming involved in the content marketplace. We will briefly look at each one and the effect it is having.

Google and digitisation of content

We have already explored Google’s desire to obtain access to a large amount of content in the section on the Google settlement (see the case study in Chapter 10). In the rush to content, its digitsation drive was by far the largest and most comprehensive attempt to gain a lot of content in one go. Some observers feel Google did it to gain a level of ownership over the content (for the non-copyright materials) by offering to cover the cost of digitising its services. It is expensive to digitise, however; as experiments in the early 2000s showed, it is difficult to develop a financial model that would make it self-sustaining; it is therefore difficult to digitise large quantities of archives without the sort of financial support available to a company like Google. Publishers obviously do digitise their backlist, but that is different from the wholesale digitising of vast archives.

However, there is a lack of selectivity in what is digitised (not only in relation to copyright). Google to some extent treats the content as a commodity – the more the better, without a need to distinguish between good or bad. The search engine distinguishes which content might be of interest by the search, and the user can then select as they want (in theory with the confidence that anything relevant is brought up by the search and so they won’t miss anything critical), even if it means sifting through lots of records to find it; in this way a user may stumble on something significant they never expected. Of course this content has been, at some point, endorsed by the mere fact a publisher did publish it. But the principle is that the user is free to find and select without the ‘censorship’ of any intermediary.

So in the Google approach to content there are benefits for Google that are clear. It drives more searches on its site; Google also becomes more key to certain communities for research (e.g. the scholarly community for researching large archives) and more central to researchers’ day-to-day work. This can help it in various ways: it directs those interested in buying an in-copyright book to publishers and other bookselling partners; it can sell an ebook to those interested in purchasing direct from the Google Play site (competing with other online sellers in many cases); or it can connect to key institutions via partnerships such as an initiative with the British Library, where Google will be digitising 250,000 out-of-copyright works from the 1700s to the 1870s.

This approach to content can be viewed from different angles. For Google and its supporters the ability to access content provides a ready rich source of material that is for the first time easy to get at. Material that would have gone out of print has been brought back to life and a highly sophisticated search engine makes it accessible, ensuring user-centred results with good levels of filtering. This represents the democratisation and freedom of content. Anyone can access it, not just a few academics (for instance) in a particular library; making content that, for instance, in the case of the British Library has been paid for by all of us and carefully curated at our expense and for our use, accessible for all to benefit from is a compelling argument. For owners of content that appears on the site, it can potentially drive more sales too.

But, as we have seen, there are downsides. Some commentators do not trust Google’s motives; while the side effect can beneficial, Google’s main aim is not really dedicated to the furtherance of publishing as a process of cultural enrichment. Google can appear to be getting much more control than was wanted in some cases and taking huge sweeping steps in the interests of accessibility. The value for the search is in quantity not in quality, so there is a risk that mass producing content can devalue it. This dilution of information quality is enhanced by the search, where hits and misses are all mixed up. And while a search engine can be sophisticated, a person’s search is still only as good as their search terms, as they are using an engine which may in fact be distorted by the search algorithm designed to search for more of the same to suit you. There is also a slight risk of deteriorating copyright as the market is swamped with non-copyright material. Many argue, too, that we are always paying for content in some way or other, even if not explicitly.

Apple driving usage

Google has not been in the business of creating content so much as getting it from other arenas. It is, as such, not directly in the business of publishing. Apple, however, is much more involved in the process of publishing. We have seen its involvement in both selling content (with agency pricing) and creating platforms on which to publish content. Apple’s aim to continue to produce high-quality hardware, creating trends and leading the market both in application and design, maintaining a lead through innovative software and hardware but ensuring it remains robust and trustworthy, allows it to price reasonably highly and maintain its higher-end products. In doing this it has managed to build a market that appears loyal to its devices and with a certain consumer demography that means, as we have seen, that its customers spend more money on their devices than those with equivalents. This makes Apple an important consideration. While Google develops its software for devices around Android, decisions for publishers continue to focus around building materials for Apple first and Android second.

However, with Apple, like Amazon, as we shall see in the next section, acting as an intermediary to the market, this can cause publishers problems in two key ways:

• controlling access to the market via its bookstore and app stores
• providing free tools for users to publish without the need for publishers

In the first case, publishers need to go via these stores for their books and apps to be made available on Apple products and they need to abide by Apple’s rules – which can be changed quite quickly (such as the percentage levied on in-app purchases) or can cause limits to publishers’ ability to negotiate elsewhere (e.g. on prices that must not be lower with other sellers). These rules can be subject to regulatory scrutiny and may well change again, but the key point is that the publishers are rarely in the driving seat in any arrangements and may have to change and adapt business models as quickly as Apple changes its own.

In the second situation, software such as Apple Author means individuals can make their own books and sell them direct via the Apple stores. Publishers can use these systems too and work with Apple to adopt this sort of software for their titles, but the more individuals produce their own school textbooks (for example), the more problems this can cause for the educational market by reducing the market. In any case many publishers will prefer to produce titles in proprietary software so they can manipulate the content in more sophisticated ways and are able therefore to sell the product elsewhere, but the costs of cheaper authored titles may well prove a problem, pushing prices up further.

Amazon and its publishing

This dependency on the intermediary to reach the market and having to play by its rules is a problem also with Amazon. Contracts are negotiated regularly between Amazon and publishers over the various sales arrangements for books and ebooks and, as we have seen, this can cause problems for publishers. It is important for the larger publishers to act together, therefore, as individually it can be difficult for them to have much clout against a large organisation like Amazon. However, while publishers can go elsewhere to sell their print books, if their books are not available in Kindle they lose access to a considerable portion of the market. While it is also in the interest of Amazon not to antagonise publishers, as they do want their content, it can also be quite robust in its negotiation.

Amazon, of these big three market entrants, is the one most actively engaged in publishing. It has arrangements with publishers to print Kindle titles, arrangements to publish its own print titles, as well as publishing activities directed at producing online content professionally (e.g. its purchase of Marshall Cavendish). Amazon’s main publishing activities centre around genre publishing such as sci-fi and cult writings, with 47 North, mystery and thrillers with Thomas & Mercer and romance with Montlake Romance; it also has specific areas such as translated works with AmazonCrossing.

These are publishing divisions centred around publishing for ebooks but Amazon has been driving growth in self-publishing by allowing authors direct access to publishing titles within Kindle. This has been driven in various ways such as the Kindle Singles programme, where books longer than long-form journalism but shorter than most short books can be published; here it is encouraging everyone, not just individuals as yet unpublished, but well-established authors to participate – bypassing publishers for certain types of writing. This is tapping into one of the advantages of electronic publishing: the short story format is a difficult one for publishers as readers have proved to be less interested in them, so making a viable print book has been difficult. However, the cheaper ebooks make this possible.

Self-publishing

The area of publishing where Amazon’s Kindle has made the most impact has been the self-publishing aspect, not just for short works but for full-length works via Kindle Direct Publishing (KDP). Amazon is not the only place for self-publishing but it has developed a self-publishing environment that has proved very successful. Having a ready marketplace also helps, and third party self-publishing sites will help authors get their books into the Kindle format as well as other ebook formats. While it does require some effort, it has proved to be a place where people can publish their own titles and make money from it. Kindle has a simple pricing structure where it takes a percentage of any sales and authors keep the rest and keep copyright. The titles will appear within categories on Amazon rankings and rise in the rankings as they are bought. Books that are difficult to categorise suffer. However, there is no other intervention with the book so the authors themselves need to ensure they are well edited (most self-published authors agree that a good edit is essential and something worth paying for as a service), produce cover artwork and do any additional marketing to help their title along up the rankings.

Many are not successful but some are, and the high-profile authors have generally become successful from Amazon’s self-publishing programme rather than others. Kerry Wilkinson sold over 250,000 ebooks in six months for his crime fiction. Amanda Hocking is another example of someone who became very successful from her self-publishing activities. These particular examples are clearly the exception rather than the rule. Nevertheless, the barrier to entry is low – as long as they have some time to spend on getting things right and loading them up, anyone can have a go – if they are not successful, and after all many are not, it has not cost a large amount of investment. Even small sales can be satisfying, though to get to any quantity of sales can take a while. One hundred sales may seem a lot to an individual, but if each book is priced at £1.99 (a typical price for a self-publisher), at a 70 per cent royalty this leaves £140. It’s nice to have but not necessarily the roots of a writing career.

For any self-publishers that are successful, there is still the attraction of going mainstream with publishing. In both the cases outlined above the authors subsequently found publishers to take them on. Certain features of self-publishing this way can ultimately put individuals off self-publishing. The attractiveness of a publisher for these high-profile authors is based around:

• good editing
• having the publisher deal with the technical side
• high-profile, professional, comprehensive marketing
• access to wider distribution routes
• being able to get some protection against piracy
• above all, being able to write instead of do all the other stuff

The self-publishing community

There is no doubt, however, that the self-publishing phenomenon has taken off with digital publishing. Amazon’s KDP has helped develop a critical mass of self-publishers but the marketplace does not just involve individuals loading their files into KDP. There has been a proliferation of companies involved in helping individuals with as much or as little of the process as possible. With its roots in vanity publishing there are now many ways to publish directly, whether one wants to simply get easy digital print copies of titles or to buy in a variety of publishing services depending on specific need, from marketing to layout, from editing to levels of copyright protection.

Companies offering a variety of these services, such as lulu.com or matador.com, will also undertake the preparation of the ebook files so you do not have to manipulate the software and load the books into sales sites. They can manage bibliographic details and sales relationships as well, thereby taking the books wider than the Kindle-only products. However, this is an expensive and time-consuming process. Studies of self-publishing show that it can be a satisfying and effective way to publish, allowing authors much more freedom; they can avoid many of the frustrations of being published by a large publisher, who may not treat them as they hoped. Nevertheless, many also see that the attractions of being chosen by a publisher are still compelling: it can put its weight behind a book in production and marketing, allowing the writer just to write – which is one of the key things a publisher can offer an author.

A community has grown up around self-publishing, with many self-published or ‘indie’ authors providing guides and blogging on websites dedicated to showing you the best ways to market your book, keep a book’s profile up in the rankings or get it well edited. This market is growing, and the numbers of readers and writers of self-published fiction are increasing, particularly on Amazon. Any changes in the Amazon business model would impact directly on this market, however, as the authors are dependent on Amazon.

One of the key things that the success of self-publishing counters is the argument that publishers know best what to publish. In the self-publishing environment the market can choose, and if a book is good, so it is felt, it will rise to the surface. Are so-called experts needed as gatekeepers or to arbitrate on the cultural importance of some books when the crowd can choose? Here there are arguments about the democracy of the internet, but it also raises issues about lack of selectivity, problems of trustworthiness, the need for some sort of curators/arbiters of culture.

It is noticeable, though, that the self-published books that are successful are those that have the characteristics of good books: good plot, well written, compelling characters, etc. This could be an argument for the fact that good books will still rise: there is no need for a publisher to select them. However, a lot of books have to be read for the good ones to rise to the surface. The recommendation/rankings software tries to help this process, but for some readers having titles selected by trusted sources (which could be via a reading group blog or by them being published alongside someone they recognise) rather than crowd rankings may mean they find more quickly the books they want to read.

Finding content: harnessing the power of the crowd

Finding new talent is also one of the traditional areas of expertise of publishers. The digital environment can facilitate ways to identify new content sources. Sites that bypass publishers, focusing on a model of crowd recommendation – writers can post up novels, or parts of novels, for others within the community to read, maybe comment on and ultimately recommend – encourage writers to continue with their work if there is enough positive reaction from the community.

Publishers are getting involved here too as they develop sites like authonomy that work in this way, with the possibility of those successful titles being creamed off and considered for publication. These are often small operations but they aim to provide a direct relationship with readers that is not just based on the purchase of a title.

Finding sources of content that may be cheaper than the traditional route is important. Though few would see this as the major strategic stimulus behind such sites, they do provide a way to access authors without agents. Agents remain key to the publishing environment, but publishers are always looking at ways to manage the ‘slush pile’ and digital options to encourage a certain level of market research are another tool for them. For some of these initiatives the impetus is setting a contractual arrangement with new writers that avoids some of the pitfalls of the potentially unearned advances and overpriced manuscripts at auction, which add considerably to the financial risk that publishers take on with new publishing.

Publishers are also getting involved by providing writing courses and advice services (such as those of Faber and Bloomsbury). In an effort to develop these relationships further many publishers are re-emphasising their interest in book events, creating and running all sorts of events, fairs, reading groups and educational activities to create an environment for loyal customers.

The agents

While the publishers seek ways to bypass the agent sometimes, the agents also see ways to bypass the publishers. Most agents have left publishing companies in order to avoid having to do the publishing, and instead to focus on the authors and the ideas. However, agents feel that the digital options for publishers should mean that authors get better deals for digital sales. As authors get used to models on Amazon and Apple for 70 per cent of the total revenue, so this increases an author’s expectations of what they can get for digital sales – particularly digital-only sales. Some agents, too, feel that there should be clearer recognition of higher earning potential for authors within ebook contracts. Agents’ roles are also expanding as they look at further ways to exploit the content they have on behalf of authors given the opportunities for digital products as the case study illustrates.

Threat from big name authors

It is worth reiterating, too, the threat to publishers from published authors, who can, once famous, go it alone. Pottermore, mentioned earlier, is an example of this but there are other cases where authors have launched digital versions themselves. Clearly a bestselling author with a large budget can produce something highly sophisticated and innovative; they may well employ experts from publishing and other industries (web developers, social media experts, etc.) to do it but they have put the investment in themselves, knowing that they are not taking a huge risk now that they are well known. The publisher took the risk when taking on the title when they were unknown.

Even authors and agents that are unknown may decide to withhold digital rights if they feel they can exploit these better themselves. Bloomsbury never did have the digital rights for Harry Potter. This leads to the question that many ask: publishers have a role in discovering and breaking new authors (with the help of agents), which they do very well, but if those authors (or maybe their agents) then do everything in the digital environment themselves once they are established, how does the publisher benefit from the risk it took to break the authors in the first place? Publishers will not want to see themselves as only the print outlet for an author. Self-publishing can happen therefore at both ends of the spectrum – new authors can emerge via self-published works, a publisher may take them on to invest further in them and then when they become extremely famous they can self-publish again. The role of publishers therefore gets squashed in between and the benefits of the low costs of taking on an unknown author, as well as the higher returns if they are successful, are eroded at both ends.

Conclusion

As we look at the changing nature of content we see both large and small market players emerging: huge conglomerates used to operating in markets well outside the traditional publishing arena and commanding huge investment capabilities at one end, with individuals taking risks and making their own success by exploiting the freedom that Web 2.0 allows for anyone to ‘publish’ at the other.

Publishers have to revise how they treat content and compete with others who have very different approaches to content. They need to re-evaluate their own role: what in the value chain can they offer where so much of what they used to offer has slipped away? Debates of this sort centre around the need for gatekeepers to help sift through the flood of information that is available, using editorial skills to select and bring to the surface ‘good’ content. Though does that debate hold as true for a ghost-written celebrity biography as for a Man Booker Prize winner? Publishers can add value because they understand the structure and intricacies of content; they know how to manage it effectively as well as preserve it. These sorts of skills may need to be reinforced with a consumer that is finding content in all sorts of other places within the digital environment. Publishers may need also to re-evaluate how they can ensure the quality of their content, as that may well be a defining feature of what they can sell.

Further reading and resources

Books

Baverstock, Alison. The Naked Author: A Guide to Self Publishing, A&C Black, 2011. Keen, Andrew. The Cult of the Amateur. Currency, 2007.

Websites

There are many books and blogs on how to go about self-publishing. Some self-publishing sites include:

kdp.amazon.com/self-publishing/signin – takes you to the page on Kindle self-publishing www.authonomy.com

www.completelynovel.com

www.faberacademy.co.uk – Faber is an example of a publisher diversifying to offer publishing services to the individual (Bloomsbury is another)

www.lulu.com

www.troubador.co.uk/matador.asp

Questions to consider

1. How should publishers respond to each of the big companies with regard to their approach to content?
2. What threat does self-publishing pose for publishers?
3. What are the benefits for authors of going to publishers rather than self-publishing?
4. What can publishers do to prevent lead authors going it alone once they are big enough?