Disruptive Innovation

A reply to Futurebook: Up with disruption!

15 December 2013
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From TeleRead:

Following the first Digital Publishing Xmas Fair, which apparently sought to bring digital startups and the publishing industry closer together, McCrudden took exception to the wholesale promotion of “disruptive technologies,” arguing instead that publishing was being unbundled, with its various component disciplines being split off and transformed piecemeal. “The formerly established well-understood supply chain by which books were written, commissioned, created, printed, marketed and sold has been broken up, with its constituent parts now managed very differently.”

. . . .

One slightly brain-dead point to make is that we never before had an alternative standard of comparison with what the publishing industry actually published. There were no comparables to indicate what the publishign industry might be missing or getting wrong, because there was no alternative. The remainder book trade and the periodic unearthing of great forgotten or ignored authors gave some hints, but nothing conclusive. But now there is. And the result? Self-published works cram the Top 100 list on Amazon, never having seen a publisher – only Amazon, and readers.

“The editor and publisher’s value judgement and appetite to take risks is the integral part of the process that hasn’t yet been disrupted, automated or unbundled out of existence,” affirms McCrudden, reiterating those first two qualities for emphasis. Well doesn’t a self-published author risk more, personally, when they put out a book? Let alone spend any of their own money on editorial services, cover design, etc. Mainstream publishing is not an industry that has exactly been renowned for edgy risk-taking.

Or rather, it has in one specific and not very flattering area. Mainstream publishing has a record of getting things wrong – misjudging reader appetite in spades. Remainder book trade again, anyone? It’s been cossetted in this through arrangements that gave it peculiarly favorable arrangements on product return.

Link to the rest at TeleRead

Smartphone Controlled Paper Airplane

9 December 2013

Nothing to do with books, but PG loved this on Kickstarter:

Link to the rest at Kickstarter

Don’t Major in the Minor

7 December 2013

From Steven Pressfield Online:

“Don’t major in the minor.”

Mellody Hobson said it, but I’ve thought it these last few days, since watching Jeff Bezos on 60 Minutes this past Sunday.

. . . .

In case you haven’t heard, Bezos unveiled a prototype for package-delivering drones at the end of the interview. Without missing a beat, the character-bashing, Jeff-Bezos hating, Amazon-vilifying tribes descended, with articles and comments from one site to the next.

They majored in the minor.

. . . .

There was much more to that interview than the last few minutes of drones.

. . . .

When Charlie Rose asked Bezos about worries of small book publishers and traditional retailers, and whether Amazon is ruthless in its pursuit of market share, Bezos replied:

“The internet is disrupting every media industry, Charlie. You know, people can complain about that, but complaining is not a strategy. Amazon is not happening to bookselling. The future is happening to bookselling.” (about the 9:15 mark of the interview)

He’s right. And the future isn’t just happening to booksellers.

. . . .

It’s easier to bash Bezos and Amazon than it is to look in the mirror and ask, Why didn’t my publishing house lead the charge to sell books online? Why did we focus on the chains as the future when we saw the indy stores struggling to stay afloat? Why didn’t we recognize the potential for the future?

It’s easier to hate Bezos and Amazon than it is to ask, Why didn’t my bookstore stock backlist, long-tail titles, and books from indy publishers in addition to all those big publisher frontlist titles? Why didn’t my bookstore create a model that could be tapped by indy publishers and authors, instead of requiring top co-op dollars that only the big guys could pay for prime placement?

. . . .

Neither the chains or the publishers or the indy’s of yesterday thought about fulfillment the way Amazon has, which was one of the most fascinating portions of the interview. And when I talk publishers, I’m talking in terms of movies and newspapers and albums, too.

It’s popular to say content is king. I’d give joint reign to content and fulfillment instead.

Content doesn’t matter if you can’t get it out in today’s I-want-it-and-I-want-it-now on-demand climate. Amazon figured out how to do it.

Link to the rest at Steven Pressfield Online and thanks to Pamela for the tip.

3 Things Holding Publishers Back

6 December 2013

From The Literary Platform:

Publishers are locked into legacy systems and mentalities on too many levels. It’s almost impossible to change this. What to do?

. . . .

Last week I was part of the Big Ideas panel at the Futurebook conference.

. . . .

One question at the end of our session prompted a more practical response. The question was: why don’t publishers change more? Now, I am the first to puncture the myth publishers don’t innovate.

. . . .

[O]nly now, 20 years after the adoption of the web, are we seeing the true contours of the challenge: the fact that a) anyone can be a publisher, that the monopoly we used to enjoy has gone and b) the Internet has created massively asymmetric intermediaries. Exhibit A: Amazon. Complacency is not an option over the long term. So how many publishers have radically restructured, tooled and skilled to meet this challenge? Precious few. Asking why is a good and valid question.

My answer started by saying publishers lack ‘slack’. By slack I mean something specific – the slack suggested by Sendhil Mullainathan and Eldar Shafir: the ability to absorb shocks and disruptions, a general surplus which might appear idle but is actually integral to running a system. This crosses domains. There is financial slack, mental slack, capacity slack. The common factor is that slack is hard to find in publishing. In this thin margin business there is little time for people to stop, reflect and pivot. There is little space or money for doing things beyond simply keeping the show on the road.

Hence change, always hard, is even harder.

Beyond that though, I think publishers are suffering from two related diseases: path dependence and lock in. Path dependence is the phenomenon whereby, because you have done something in the past, so your future actions are conditioned in a certain way, even when that conditioning works against your best interests. Even if there is no necessary connection, because you have done x, you do y. Because that is the way you walk to work, you will walk that way tomorrow.

. . . .

Coupled with this is system lock in. In the same way that many readers can’t readily shift from a Kindle unless they want to lose their purchased ebooks, so publishing systems and norms lock publishers into certain patterns of behaviour.

Rebecca Smart’s Big Idea on the panel is a perfect example. She argues the publishing schedule exerts a tyrannous influence. It locks us into inflexible practices and, to outsiders, inexplicably sluggish lead times. We are locked into bibliographic systems that prioritise a certain kind of product and release method. We are prisoners of our habits, methods and operations.

Link to the rest at The Literary Platform and thanks to Jan for the tip.

Afraid Amazon Will Crush Your Small Business? “Complaining Is Not a Strategy”

2 December 2013

From AllThingsD:

Charlie Rose: A lot of small book publishers and other smaller companies worry that the power of Amazon gives them no chance.

Jeff Bezos: You got to earn your keep in this world. When you invent something new, if customers come to the party, it’s disruptive to the old way.

Rose: Yeah, but I mean, there are areas where your power’s so great, and your margin — you’re prepared to make it so thin — that you can drive people out of business. And you have that kind of strength, and people worry: Is Amazon ruthless in their pursuit of market share?

Bezos: The Internet is disrupting every media industry, Charlie. You know, people can complain about that, but complaining is not a strategy. Amazon is not happening to book selling; the future is happening to book selling.

. . . .

Later in the segment, Bezos acknowledges Amazon’s own mortality, which could explain his determination to stomp out competition.

“Companies have short life spans,” he said. “And Amazon will be disrupted one day.”

“The companies that are the shiniest and most important of any era … you wait a few decades and they’re gone,” he added.

Link to the rest at AllThingsD and thanks to Josh for the tip.

TV Is Dying, And Here Are The Stats That Prove It

25 November 2013

From Business Insider:

The TV business is having its worst year ever.

Audience ratings have collapsed: Aside from a brief respite during the Olympics, there has been only negative ratings growth on broadcast and cable TV since September 2011, according to Citi Research.

Media stock analysts Craig Moffett and Michael Nathanson recently noted, “The pay-TV industry has reported its worst 12-month stretch ever.” All the major TV providers lost a collective 113,000 subscribers in Q3 2013. That doesn’t sound like a huge deal — but it includes internet subscribers, too.

. . . .

Time Warner Cable, for instance, lost 306,000 TV subscribers in Q3, and 24,000 broadband web subscribers, too.

And Tom Rutledge, CEO of Charter Communications, told Wall Street analysts he was “surprised” that 1.3 million of his 5.5 million customers don’t want TV — just broadband internet. “Our broadband-only growth has been greater than I thought it would be,” he said.

. . . .

This is the macro problem: Ratings are falling across the board. They have been for years.

It’s not too surprising that broadcast TV ratings are down. The major networks have faced increasing competition for years from niche-interest cable channels and the better-quality programming on places like AMC and HBO.

But ratings for both cable and the broadcast networks are down.

Link to the rest at Business Insider and thanks to Kris for the tip.

Big Publishing isn’t the only business being disrupted by Internet competitors and new ways of consuming content from new content providers.

Musicians’ anger at Spotify is like protesting the Sony Walkman

13 November 2013

From GigaOm:

Musicians who blame digital music services for declining income are lashing out at the wrong target, according to folk singer Billy Bragg.

. . . .

Bragg suggests that an outdated music model — and not technology — explains low payment rates:

“[R]ailing against Spotify is about as helpful to their cause as campaigning against the Sony Walkman would have been in the early 80s. Music fans are increasingly streaming their music and, as artists, we have to adapt ourselves to their behaviour, rather than try to hold the line on a particular mode of listening to music.”

Bragg also takes issue with analog-era record deals that have carried over to the digital era. He notes that such deals, which give the lion’s share of revenue to music labels, no longer make sense in the digital context where labels don’t do any of the distribution or other “heavy-lifting” that once justified their cut of the proceeds.

Link to the rest at GigaOm and thanks to Matthew for the tip.

Do Publishers Need Start-ups?

13 November 2013

From Digital Book World:

The environment in book publishing today is ripe for start-ups: New technologies have emerged that have changed the way money flows in the industry and what traditional players need to do to succeed. Yet, very few book publishing start-ups seem to make any headway. Why? And how can this be fixed?

I sat down with Mike Shatzkin to discuss.

Jeremy Greenfield: Publishers and start-ups seem to not get along. Why?

Mike Shatzkin: Publishers sometimes say, “these start-ups come in, they don’t know what they’re talking about and they don’t know about our business,” and start-ups say, “these publishers are hopeless. They don’t want to change; they don’t want to experiment. We came and we offered them an opportunity to experiment for free and they claim they don’t have the time and that they are doing experiments already.”

You have these two constituencies — established publishers who know they need to change but are frustrated by start-ups and the start-ups who can help with change but don’t have the know-how and the relationships. We’re doing a survey of the start-ups and the business development people at publishers to understand what they expect out of each other and what their beliefs are themselves.

. . . .

JG: Do publishers need start-ups? 

MS: I don’t know if publishers need start-ups. What I do know is that if you’re a “big five” publisher, you can always wait.

For example, HarperCollins has thrown itself in with Scribd and none of the other major publishers have. If Scribd makes this work, they’re not going to tell Simon & Schuster, “you’re not going to get to come in now because you didn’t at the beginning.” So, big publishers know that they don’t need to move now.

The only thing that Scribd can do later [to reward or punish publishers that did or did not play ball early] is put their thumb on the scales [give more exposure on its platform to certain publishers]. Not all exposure is created equal. The risk for a smaller publisher is that you give up the opportunity to be special to a start-up and the benefits to having been special.

In most cases, publishers don’t need the start-ups and when they meet with them really all they’re doing is due diligence to keep themselves informed on potential disruptions in the marketplace. Occasionally start-ups come up with things that publishers want to use.

Inkling is developing tools that people are using. In that case, the start-up has immediate value.

Link to the rest at Digital Book World

Plateauing is hard to do

13 November 2013

From FutureBook:

Hachette’s August e-book bump appeared to come as a surprise to some. The group reported earlier today that August was a “record-breaking month” in e-books for Hachette UK, with digital sales up 80% year-on-year.

. . . .

Hachette UK also told us that e-book sales accounted for 30% of the adult trade market in the UK in the third quarter, up 10 percentage points on last year. That represents growth of about a third.

Both figures suggest what has been well reported for most of this year–that, statistically speaking, the rate of e-book growth is slowing down, even if growth of 30% remains a strong compensatory number.

. . . .

E-book growth has largely sustained trade publishers during the latter years of the big recession, and even if they do now, as some say, ‘plateau’, profit margins may continue to grow as publishers learn to better manage their inventories and working capital across the rest of their business.

Whatever the look of it, digital is more than just a growth curve. It is a complete re-wiring of the system. In this context the word ‘plateau’ is not inaccurate, but if it is taken to mean everything stops moving or that we are reaching a stable period, it is an unhelpful term. Nothing stops from this point onwards.

Link to the rest at FutureBook

Disruption 101

25 October 2013

Disruption 101 For Self-Publishers

By Suw Charman-Anderson, Contributor, at Forbes.


The publishing industry is undergoing significant disruption. Amazon is pushing down book prices and controlling the point of sale. Self-publishers are flooding the market with cheap books, producing some very high quality work that competes with traditionally published books, and proving a new business model that may well lure authors away from traditional deals.

The level of disruption cannot be underestimated, and it’s going to have a significant impact on publishing as we currently know it.

“Across industries, only 9% of disrupted organisations ever recover,” found Clark Gilbert and Clayton M Christensen in recent research into innovation in digitally disrupted markets.

“Of those, 100% created a separate digital unit to take on the disruption. Not one company […] succeeded trying to develop digital inside the existing company.”


Gilbert has produced six principles for how media companies must deal with disruption, which should be of interest to all publishers. I also think that it’s important for self-publishers to understand these principles as well, even though we are part of the disruptive force. The landscape is changing and will only change more as the the disruption truly takes hold.

Whilst some of these principles apply mostly to traditional businesses, there are some that are relevant to self-publishers.

1. Create a separate digital unit
Gilbert’s first finding, that only companies which created separate digital units survive disruption, is the one that he gets most push-back on. But, he says, the evidence is so compelling that to argue against it is “like arguing against gravity”. However, while having a separate digital unit is essential to survival, by itself it is not sufficient to guarantee success.


6. Don’t underestimate the magnitude of the disruption
Finally, Gilbert says that “magnitude of the disruption cannot be ignored”, and that’s just as true for books as it is for news. The publishing industry has multiple challenges facing it and is simply not going to triumph by nibbling around the edges with digital-only imprints, outsourced workforces and collapsing advances for midlist authors.

For self-publishers, this means accepting that change is ongoing. What works this year may not work next year, and visa versa. We have to keep on top of the transformations that our industry is seeing and not allow ourselves to be blindsided by future disruptions that alter the foundational assumptions upon which we have built our careers and businesses.


See the rest here.

I feel this is one of the best articles I’ve seen covering the changes in the publishing world. If you’re a self-publisher looking to do well in this landscape a good question to ask might be; “Have I set myself up from a business standpoint to take advantage of these changes?” I feel that the writers who have taken the extra steps to incorporate, own your own ISBN’s, and have their work available through multiple distributors, in every format, will be the ones who will thrive in the future.

From Guest Blogger Randall

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