1. National Research University
Moscow – December 5 and 6
Paulo Faustino, MSc, PhD, PostDoc
faustino.paulo@gmail.com
Presidente of Media XXI/Formalpress
Porto University and Lisbon School of Mass Media
Centrer of Investigation in Media and Journalism/Nova University of Lisbon
Columbia Institute of Tele Information, Columbia University
THE EVOLUTION
OF BOOK PUBLISHING
- FROM THE PAPER TO THE DIGITAL BUSINESS -

2. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Is Print Dead?
Is Print Becoming Elitist?
Is digital Changing the Face of Publishing
Is Print Becoming Obsolete?

3. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Social Media * Users and Broadband Penetration
Worldwide, 2007 - 2012
2012
2011
2010
in percentage of
2009 broadband users
in millionsof
2008 broadband users
2007
0
500
1000
1500
Note * = MySpace, Facebook, YouTube, and Flickr
Source: Strategy Analytics “The People’s Revolution: Implications of Web 2.0 and Social Media Applications,” Dec. 12, 2007

4. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Harlequin’s Digital Media Strategy
Harlequin Romance Radio

5. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
The Challenges to Big Publishing
• Books judged on perceived commercial merit
– Difficult to identify potential bestsellers
• Readers decide this!!
– Reject many great authors
• Publishers deciding what readers can read
– Readers shut out
• Slow production cycles
• Books too expensive
• Cannot take a risk on every book

6. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
• Ebooks + Open Publishing
– Free ebook publishing tools
– Distribution to major ebook stores
– Promote publishing best-practices
– Power to the author

7. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
The Myth of Big Publishing
Publishers controlled Heaven
Promised Perks of the After life
– editing
– printing press
– distribution
– marketing
– royalties
– fame and respect
– readers
– “published author” inscribed
on your tombstone

8. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
IS BIG PUBLISHING DEAD?
No, though it has lost its way
You will decide the fate of Big Publishing
You can help it find its way, if you choose that path
WE LIVE IN UNCERTAIN TIMES
BOOK PUBLISHING IS CAUGHT
IN THE TURBULENT CROSS CURRENTS OF MULTIPLE CONVERGING
FORCES
TECHNOLOGY IS CHALLENGING BIG PUBLISHING

9. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Technology is a catalyst for rapid evolution.
Successful technology is that which satisfies human
desires for greater empowerment.
And for products and services that are
faster, cheaper, more accessible and more useful.
Technology can be disruptive by rendering old
business models and practices obsolete.
Let’s examine the changes

10. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Here comes technology

11. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
FIVE TRENDS TO ROCK THE WORLD OF PUBLISHING
- to prepare for the future, it’s more important you understand where
you’re heading, rather than when you’ll get there.
- Here, I will share macro representations of where your world is
headed

12. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
1. TREND ONE
Bookselling moving to the Web

13. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Percentage of book purchases made
online vs B&M - Print and E-Books
Web
Brick &
Mortar
Today?

14. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Bookselling moves to the Web
• The decline of brick and mortar
• Consumer drivers:
• Price
• Convenience
• Selection
• Self-published books displayed side by side with traditional
books
• Big publishers no longer control distribution

15. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
2. TREND TWO:
Reading Moving to Screens

16. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Screens are the new paper

17. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Ebooks to overtake print
Ebooks
Print books
Today?

18. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Ebooks as a percentage of US
30
wholesale trade market
25
20
15
10
5
0
2002 2004 2006 2008 2010 2012
Source: Association of American Publishers, publishers.org. 2012 Smashwords estimate

19. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Why ebooks are hot
• Screens offer better reading experience and they are improving
– Changeable font size
– Portable and compact
A A A A
– Screens will get better/faster/cheaper
– Amazon, Apple, B&N, etc
• Ebooks offer better consumption experience
– Lower cost than print
– Convenient sampling and purchasing
– Huge selection

20. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
3. TREND THREE
The Rise of Ebook Self-Publishing

21. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Number of books published indie vs.
traditional
Indie
books
New trad.
books
Today?

22. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Indie ebooks published at Smashwords
141,000 +
160000 (July 2012)
140000
120000 92,000 +
100000
80000
60000 28,800
40000 6,000
20000 140
0
2008 2009 2010 2011 2012

23. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
New tools open book publishing
….and distribution to all
• Tools such as Smashwords empower you to become your own
publisher
– Free printing press in the cloud
– Distribution to major online ebookstores, libraries
Self publishing advantages to the author:
– faster time to market
– greater creative control
– lower prices to consumers
– lower expenses
– better distribution to global market
– never go out of print
– earn more per book

24. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
4.TREND FOUR
Content Explosion Leads to
Downward Pressure on Prices

25. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Glut leads to price competition
$4.25
$3.15
October 2010 March 2012
Average price of Smashwords ebooks

26. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
5. TREND FIVE
Publishers Losing Primacy

27. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Big Publishers Have Lost Their Monopoly
• Printing press is free to all
• Distribution free to all
• Knowledge to publish,
distribute and market high-quality, professional books is
free to all
• Big Publishers overprice
• Professional authors asking:
– “What can a publisher do for me that I can’t do for myself?”
– “Will a publisher actually limit my ability to reach readers?”

28. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
Stigmas to Flip?
Aspire Aspire
Traditional Indie
Aspire
Indie
Aspire
Traditional
4 yrs ago Today? Future?

29. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
What is Success? The Success Flywheel

30. THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS
How Big Publishers can Regain the Faith
• Do for authors what authors cannot or will not do for themselves
• Change the publishing mindset
– Serve authors first
– Empower editors (the heart and soul of great publishers!)
– Develop long tail strategies
• Forget about selling - better: selling is important but focus on publishing
• Increase author royalties
• Abandon DRM – better: be more flexible

31. Impact of Digitalization on Industries
There is a very obvious transformation of industries
going on due to an ongoing digitalization.
For example:
- Banking Tourism
- Media
- Newspapers
- Music Movie
- Others
….but what about the book industry?
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

32. Digitalization in the Book Industry - Examples:
eBook, eJournal, eEverything?
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

33. Framework to Capture the Changing Value Creation
Structures Processes
Products Infrastructures
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

34. Value Creation Structures:
Re-Intermediation: Reinforcement of Existing Players
Traditional intermediaries have to redefine their business , namely:
- Book retailers
- Book wholesaler
- Publishing houses
And invest more in:
- E-Commerce applications
- Web 2.0' applications
Examples:
Catalogues, Online ordering, recommendations, reviews, blogs, book
charts, social tagging, communities of interest, additional information
about authors such as interviews, etc., search inside, whishlist, ratings, etc.

35. Value Creation Structures:
Cyber-Mediation: Emerging new Intermediaries
Amazon.com
Online-only bookseller scared traditional player in the mid 90s
Google.com
Digitalization of books, 'search inside'
Libreka.de :The answer to Google
Libreka.de: represents the German booksellers
- E-Commerce options
Goal: shall support traditional booksellers
but why should I go the bookseller anymore?
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

36. Value Creation Processes:
Bypassing Traditional Players
Process Description
Product Individualization of contents:
design'/ The reader as a co-author
text authoring
Collaborative authoring:
Provision of platforms supporting
authors
Utilization of wikis to integrate
readers into the authoring process
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

37. Value Creation Processes:
Bypassing Traditional Players
Google Book Search
libreka.de
Online book seller and
publisher
Online applications offered by
Product Booksellers, publishers: e.g., review,
MySpace.com Facebook.com: Virtual
search
book charts by readers, blogs, Bookshelf
Affiliate-Programs of
'search inside', background Online booksellers
information, forums, chats, etc.
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

38. Value Creation Processes:
Bypassing Traditional Players
Order Online orders through publishers
Production Book print to order
Distribution
Pure Online distribution as
e-books
Hybrid distribution':
free download availability but
version to buy
Direct distribution through authors
THE EVOLUTION OF BOOK PUBLISHING – FROM THE PAPER TO THE DIGITAL BUSINESS

39. Conclusions
-The book market is undergoing a major change
- Changes are driven by ICT
- Market interaction reaches new heights
- Booksellers have to redefine their business
- The reader is no longer only a buyer, but a reviewer, co-author, discussant
- There are plenty of options - but they have to be tested …
and there are plenty of threats
but no sustainable business models yet!
-The business models are changing. The new digital and networked online environment
simply does not support big intermediaries as we know today
- The revenues, moreover, can flow more directly to the authors than the intermediaries
TO AVOID THE BUSINESS DECLINE, THE BRAND, MARKETING AND RELATION
WITH THE AUTHORS IS A KEY FACTOR