Ten years ago, we were living in a beautiful apartment in Paris and
sending our kids to private school there. This was all subsidized by generous
ex-pat benefits from BusinessWeek, which was then one of the richest
magazines around.
Last winter, McGraw-Hill sold
money-losing BusinessWeek, at a firesale price to Bloomberg Inc. And
after 23 years at a business that made its money by printing and
distributing tons of paper, I left.
Despite our
efforts, BusinessWeek never figured out how to adapt the age of data.
As luck would have it, I covered the very forces that were destroying the
magazine’s business and, eventually, my job: Blogs, social networks, and the math-driven data economy.
Here’s why I’m writing this now. A couple days ago I was on a panel at Book Expo America: Are eBooks Good for Authors? (Here’s one account that identifies me, for some reason, as “Murray.”)
More Read
The
discussion left me thinking that some in the book industry aren’t ready
for what’s going to hit them. When the data economy plows into an
industry, we learned at BW, it lays siege to the part of a business
based on secrets and unmeasurable values. As advertisers
gained experience online, they started to demand ever more performance
metrics for their ad buys. Google and other Web players could provide
the numbers; paper magazines couldn’t. The old model, which was based
on relationships and the mystical and unquantifiable value of
advertising, crumbled.
Now, look at publishers. Much of what
they do is based on the same problematic long-standing,
person-to-person relationships. The sales teams pitch the books to
buyers at the books stores and to Amazon. The marketers prod their
media contacts to get their authors on radio and TV, and to get
reviewed. As the digital economy takes over, these relationships count
for less, while the importance of Google rank and Facebook buzz grows.
For
authors, high Google rank will matter more than good table displays
in bookstores. Yes, they’ll still want to get on TV and radio (No amount of viral marketing bumped my sales as much as a BusinessWeek excerpt, a Wall Street Journal review and an segment on NPR’s Fresh Air.) But
the buzz they generate online will be crucial in winning that mainstream attention, too.
What
can publishers offer in this changing world? They have tiny Web
presence and they lack tech teams to come up with cutting-edge apps for
the next generation of books. Their one trump card, as I see it, is
good editors–people who can help authors create the best possible
books. But what’s to stop good editors from jumping to Internet
companies?
As atoms shift to bits in the industry, the Internet
companies are positioned to assert their power. Apple and Amazon, of
course, are already busy, as is Google. I would expect Microsoft, Yahoo
and Facebook to join them, each with a different approach. I can
see a few of those companies hiring editors, cutting revenue-split
deals with authors, and plowing into ebooks themselves. It’s a business
that plays to their strengths–and not to those of traditional
publishers.
One common question is when the industry will reach
a tipping point. Will the dynamics of digital take over when it
accounts for 25% of sales? 50%. I don’t know the number, but it doesn’t
have to be that high. Even while sales remain relatively strong in
paper, the momentum will shift when the most influential readers–the
reviewers, top bloggers, investors–make the move to digital. After
that happens–and it’s coming soon–the perception will grow that paper
just a legacy market. Perception will precede reality, and ultimately
shape it.
