Future Perfect Publishing

New Society Publishers is committed to facilitating social change and its mandate embraces a broad social transformation toward sustainability.  But New Society Publishers goes beyond simply publishing books on topics such as globalization, green building, renewable energy, conscientious commerce and sustinable living.  As a business, it walks the talk.  In 2005, New Society became the first North American publishing company to become carbon neutral.  The company has also received the Ethics in Action award in 1997 for ongoing social responsibility, and again in 2002 for environmental excellence.

All of this is not surprising, given the activist roots of its principals, Christopher and Judith Plant.  Chris Plant started his publishing career in the South Pacific as an organizer with the Nuclear Free and Independent Pacific movement and as an editor with the Institute of Pacific Studies in Fiji.  Judith Plant is a former adult educator who became an author with the release in 1990 of her highly successful book, Healing the Wounds: The Promise of Ecofeminism published by New Society.  We recently interviewed Chris and Judith Plant about the focus and direction of New Society Publishers.

FPP: How did you come to choose publishing as a way to express your activism?

Chris & Judith:  Getting the word out is a large part of activism of any kind; you need informed people to make a difference. We originally started publishing a magazine to enable communities scattered over a large geography to know what their issues were and how they were dealing with them. Oftentimes, they were facing similar struggles - forestry, watershed issues, toxic wastes, etc - and having to reinvent the wheel over and over again instead of being able to learn from each other. Sharing issues and solutions became the meat-and-potatoes of what we published.

FPP:  You have described yourselves as bioregionalists. Can you explain what that means and how that has affected your day-to-day operations and publishing decisions?

Chris & Judith:  The bioregional view sees the local as the focal point, the locus, of all action. We all live in a place, and caring for that place is the most immediate thing one can do. Understanding your place used to be the key to obtaining your water, your food, and your security. But in a globalized world, that all changed. However, as the global system crumbles through the pressures of Peak Oil and other long emergencies, the ‘local’ promises once again to become the most important aspect of most peoples’ lives. The Relocalization movement is all about this trend.

FPP:  New Society Publishers is on Gabriola Island in the province of British Columbia. Does that present challenges for you?

Chris & Judith:  Only if you miss the city! No, it’s an ideal life here. We’re on a beautiful Gulf Island in a quiet piece of forest, a short walk away from the seashore, connected to some of the best and most interesting people in the world through our work. My husband and I have a 30 foot commute, our staff often bicycle to work, and we give ourselves lots of time off. How challenging is that?! Seriously, though, publishing is the ultimate ‘electronic village’ occupation: it can be done from anywhere. And, to keep a balance, we do in fact venture out into the ‘real world’ every now and then, to rub shoulders with activists and authors and make sure we aren’t too cut off from most peoples’ day to day realities.

FPP:  Your company has a focus on publishing books that help to build an ecologically sustainable and just society. How has this focus developed over the life of New Society Publishers?

Chris & Judith:  In the beginning, in Philadelphia, the publishing operation was the propaganda arm of the Movement for a New Society whose aim was nonviolent revolution and opposition to the war in Vietnam, to nuclear weapons, etc. As times changed, the publishing element became autonomous, and we evolved the mandate of the publishing company around what we considered to be the key overarching issues of the day. Ecological sustainability and social justice remain the deep fabric of human habitation on this planet.

FPP:  What is the typical profile of a New Society Publishers author - or is there such a thing?

Chris & Judith:  Active, committed, eloquent, upbeat, capable, compassionate - and among the best human beings in the world!

FPP:  New Society Publishers has gone carbon neutral. This is a pretty major step for a book publisher. What were the hurdles you had to overcome as a print publisher to get there?

Chris & Judith:  When we took the step to committing to print all of our books on 100% Post Consumer Waste paper in 2001, it was a major commitment. No-one had done such a thing before. Every other publisher thought we were crazy because it added a significant cost to the production of a book - and who cared anyway? We had three tremendous allies in taking this step. First, New Leaf Paper from San Francisco who could provide the 100% PCW paper stock and who pulled out all the stops to help us do it. Second, our printer in Manitoba who had faith enough in us to order two truckloads of paper, not knowing if we would be able to actually pull off our commitment and use it all up. And third, the Markets Initiative group who were so totally convinced that change in paper use had to happen that they inspired us to take the risk of helping to change the publishing industry. After our paper commitment, going carbon neutral was a breeze!

FPP:  Do you see more publishers opting for this direction in the future?

Chris & Judith:  Yes. The Green Press Initiative - publishers who have taken similar vows - is growing all the time.

FPP:  Given the concerns about global climate change and all of its effects, are you seeing more demand for your titles than in previous years and changes in the readership for your titles?

Chris & Judith:  Absolutely! Our topics of concern have all of a sudden become mainstream. That’s what we were struggling to achieve all along and now that it’s a reality, it’s very exciting to be at the forefront of the trend. A part of our list was always designed to ‘mainstream’ the movement; now we’re seeing way more so-called ordinary people take on the key issues of our time.

FPP:  What role, if any, do you see technology playing in the way you will produce and market books in the future?

Chris & Judith:  As Peak Oil works its way through the system, shipping a heavy commodity like books around the universe is going to have to become a thing of the past. Physical books will occupy a special and sentimental slot in our lives. Electronic books’ time will come!

FPP:  What do you see as the biggest challenges for book publishers in the next few years?

Chris & Judith:  Coming to terms with Peak Oil and the restructuring of an entire industry. Publishing has to move from: books to e-books, from bricks and mortar bookstores to cyberstores, from shelves and warehouses filled with books to point of sale machines that print books on demand - if you really need to have a physical copy at all.

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Bruce Batchelor has long been a publishing pioneer, innovator and leading advocate for independent (”indie”) publishing.  He recently shared his experiences as a publisher, as well as the challenges and opportunities facing the book publishing industry today.  Bruce is the founder of Trafford Publishing, where he publisher more than 10,000 authors from over 100 countries during 11 years as the company’s publisher and CEO.  In 1995, while at Trafford, he invented print-on-demand (POD) based publishing. 

He is the author of numerous books, including his latest, Book Marketing DeMystified.  Always an entrepreneur, Bruce has been the recipient of an Award of Excellence from The Financial Post and recognized by Profit Magazine as CEO of one of Canada’s top ten fastest growing companies in 2004) and 2005.  Today he heads up Agio Publishing, his latest book publishing venture.  

FPP - Publishing has always been a tough business. How did you get started and what motivated you to enter the business?

Bruce - My first publishing was simple and profitable: our high school yearbook was a money-maker, then I published a monthly high school newspaper (also profitable). After university, I self-published a book of stories and maps of the Yukon River and that was a lovely income source for many years — and regional bestseller. Then, with a group of friends, we published The Lost Whole Moose Catalogue: a Yukon Way of Knowledge” in 1979 — that sold over 20,000 copies and stayed in print for 25 years and inspired two sequels and the creation of a northern publishing company. So I didn’t realize publishing was supposed to be a tough business — it was a fall-back source of money for me when I wasn’t doing other work-adventures.

FPP- At Trafford Publishing, you pioneered the idea of print on demand. What inspired this innovation and what hurdles did you have to overcome to put it into action?

In 1994 I was consulting to a number of provincial and federal (Canadian) ministries to help them cut costs on publishing technical and policy manuals. These documents need changing periodically, so are ill-suited to offset printing. That’s when I discovered print-on-demand technology existed and could be used to print a single copy “on-demand”. Up to this point, the technology was being marketed as suitable for short runs of 300 to 500 copies. The challenge was to be able to show a catalogue of documents, take orders (with payment) and submit up-to-date print files to the DocuTech device — all in an automated fashion so the clerical-accounting overhead wouldn’t be too onerous. Fortunately the world-wide web was just beginning, so we created one of the first on-line stores (in 1995) to display our wares, collect orders and credit card payment, and relay the printing instructions and shipping papers to our contracted print shop.

The next hurdle was getting books/manuals/whatever to sell. We began with a few government manuals but soon began to solicit new books from authors and publishers. From that point, the business grew exponentially until Trafford Publishing had over 140 employees, offices in 4 countries, and sales of about $1 million per month. By the time I left in 2006, we’d published about 10,000 titles for authors living in over 100 countries.

FPP- After leaving Trafford, you formed a new company called Agio. Could you describe Agio’s basic business model and what do you think is most unique about Agio’s service offerings for authors?

Bruce - “Conventional” publishers incur all the expenses and have all the control over the content, appearance and marketing.

Agio and similar “collaborative” publishers share the costs and share the control.

Self-publishing on one’s own or using a service such as Trafford or AuthorHouse or Lulu means the author pays all the costs and has all the control.

At Agio, we only work with authors and books that intrigue and inspire us. The approach is collaborative. We insist on top-quality writing, editing and design. We contribute about half of the costs, and share the royalties with the author (Agio gets 20%; author gets 80%). We create customized marketing campaigns, and expect the author to be active in promotions. We don’t sell books to retailers on a returnable basis and we use short discounts to maximize royalties.

FPP- On Agio’s website it states that “Our company is committed to corporate social responsibility . . ” Could you explain how that affects your daily operation and management of the firm?

Bruce - Here are some of the things we do.

•  We print on-demand so there is minimal waste
• The paper stock is not from virgin old growth
• We generously support social and environmental charities
• We only work on books that are positive (or benign) about social and environmental change
• We don’t support ‘returnable’ book sales because this causes overprinting and wasted resources
• Zero commuting costs (we work from a home-office!)
• We share our ideas through presentations and my blog
  - we consult to other publishing companies to help them adapt to the changing business environment.

FPP - How do you see technology impacting book publishing over the next 5
years?

Bruce- The industry is being transformed — in much the same way the music industry is, only the book publishing industry is a few years behind. Rising resource costs and better technologies will accelerate the adoption of eBooks — regardless of what booksellers and old-school publishers might hope. Bookstores will fail, following the pattern of music shops and video stores. The books that are bought in printed editions will be produced using print-on-demand, with POD factories located in every major city and all countries.

Because the cost to “publish” is heading toward zero, the number of new titles will balloon from 2007’s count of 411,000 annually in the USA to 1 million.

The major publishing companies will lose their oligopoly advantages and will dwindle in scale and importance.

FPP- What Internet marketing tools have proven the most effective in your experience?

Bruce - Know your audience and target your publicity to them. Certainly selling on a short discount is a great help since you are gaining way more royalty per sale.

FPP- You are both a publisher and an author. Does being an author yourself help when you are working with Agio’s clients?

Bruce - Yes. I can relate well to their emotional and financial situations, and that helps both comfort and inspire them to push for clarity and quality in their books and marketing.

FPP - What is the profile of your ideal author client in today’s publishing environment?

Bruce - Someone with joy in their heart and a message to communicate.

FPP - What do you believe are the biggest challenges facing the publishing industry today?

Bruce - Inertia in processes and thinking. The US book publishing industry is wasting between $1 billion and $2 billion each year because of widespread paranoia about ending the practice of overprinting and selling books on consignment (”returnable”). That practice could be changed in months if a handful of publishers showed leadership and attention to the environment and their own financial situation!

The blockbuster top selling authors will soon begin leaving the big houses (as Madonna, The Eagles and Nine Inch Nails, for example, have left their music labels) to become “independents”. Cue the bankruptcy folks at the 6 biggest publishing companies. Those big companies have massive infrastructure to pay for — most of it will be without use soon. Smaller publishing houses might be more nimble.

A looming challenge will be too much control in the hands of a few retailers (Amazon, Barnes & Noble, Wal-Mart) who will drag us all through a time of their greed to grab outrageous margins and exclusivity — before they are toppled by the next wave of online retailing.

(FPP Note:  In addition to the text interview above, you my also listen to the extended audio interview with BruceBatchelor - 20 MB MP3 file.)

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Recently, HarperCollins announced the establishment of a new imprint that is structuring its business model in an effort to lower two key areas of risk.  According to the New York Times, the new imprint, headed by Robert Miller, will not offer advances to authors and will not accept returns from bookstores.  (Miller, 51, was the founder and publisher at the Walt Disney Co. publishing unit Hyperion.) 

Miller, speaking about the mission of the new unit, said:

Our goal will be to effectively publish books that might not otherwise emerge in an increasingly ‘big book’ environment, an environment in which established authors are under enormous pressure to top their previous successes, while new authors are finding it harder and harder to be published at all.

Advances and returns represent two of the largest financial risks with which a publisher must grapple.  Both risks originate in the uncertainty about whether an author can build an audience for his or her work.  If not, an advance is wasted and returns will follow. 

In lieu of advances, the unit will offer authors a share in the profits.  This sounds attractive, but there are potential issues.  First is the marketing investment made by the publisher.  Typically, less well known authors have used some or all of their advance to market their title.  According to comments by publishing consultant Laine Cunnigham, quoted in Book Publishing News:

A high profit split on top of zero advance means [authors] have to sell twice as many copies to achieve the same reach. If they have no money in the kitty from an advance, the book sinks without a trace.

While the new HarperCollins unit indicated it would utilize more online publicity, advertising and marketing for its titles.  But it is unclear whether the company’s new business model includes an overall increased investment in marketing to offset the loss of marketing dollars represented by author advances.  Cunningham believes more of the authors the new imprint wants to attract might instead opt for self publishing.  Another issue with the new advance policy is the fact that it is based on a percentage of profits rather than a percentage of revenue.  To put it politely, profits are easier to fiddle than revenues.  HarperCollins could wind up opening a new Pandora’s box of litigation and distrust if authors disagree with them over how profits were calculated.  Pub Rants weighed inwith some suggestions for HarperCollins to tune its model and make it more author friendly, including more timely royalty accounting and a faster cycle time for non-fiction works.

The proposed policy of no returns has, not surprisingly, been criticized by many booksellers.  Oren Teicher, the ABA’s chief operating officer, said:

. . . [bookstore] owners would likely want bigger discounts in exchange for books not being returned.” But he said he would be willing to listen to any ideas that might spare “the colossal waste of books being shipped back and forth.”

Returns have been a drag on the industry.  It is estimated that 30 to 40 percent of books are returned by bookstores each year, at considerable expense to publishers, who wind up having them remaindered or pulped.  The practice originated during the Great Depression as a way for publishers to help keep bookstores afloat in difficult times.   According to an article in the Souther Review newsletter, ending returns has been tried before - without success.  In 1980, Harcourt Brace Jovanovich Inc. announced it would provide retailers with larger discounts and end returns. When orders diminished, the publisher reversed itself.  Miller subsequently has waffled on the policy, saying non returns may not always be the case.  Not all the reaction from booksellers was antagonistic.  The story quotes Robert P. Gruen, executive vice president for merchandising and marketing at Borders Group, as saying in a New York Times article:

We generally support the idea of looking at potential solutions to a return system that is not working well for the industry as a whole.

It also recalled that several years earlier, Barnes & Noble Chief Executive Steve Riggio had said that he would prefer to mark down books rather than returning them.  Eliminating returns, he said at that time, would “revolutionize the book business and revitalize the book business.”

HarperCollins is running an intriguing experiment with its new imprint and the industry will certainly watch with interest to see whether and how its new policies work.  But does its new business model address the ultimate source of risk for publishers?  That risk is whether an author can attract an audience for their work in the first place.  Here is another way that the experiment might be conceived.

• Go with authors - whether previously published or not - who can demonstrate their ability to build an audience.  Blogs, podcasts and the other forms of consumer generated media may offer the simplest and most measurable way to do this. 
• Partner with these “investment grade” authors early to help them tune their content and better understand their audience.
• Use a marketing ramp for titles that builds on the audience the author has already established.  The ramp starts with lower cost, lower risk marketing initiatives and uses success there to fund higher cost, higher risk marketing campaigns.

Publishing is a constantly shifting balance of power between authors, publishers and booksellers.  Technology and the evolving economics of enteratinment are altering that balance.  HarperCollins’ new imprint is no doubt the first many experiments with established book publishing models that we’ll see int he coming years.  Think of it as the industry’s version of climate change.

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In an earlier post (”Non-fiction Blook Mechanics Part 1: Blook by Design“), we discussed several ways to structure a blog to resemble the structure of a book.  For example, using category labels that could double as a table of contents.  Taking content from blog posts and turning it into a readable manuscript can be a challenging task.  Especially when you have a large inventory of blog posts from which to draw.  In this post, I want to propose two tools - the post outline and post sequencing - that can help you organize your posts into a manuscript in a logical manner, without massive rewriting.

Post Outline

First, use your manuscript outline as a tool for cataloging your posts.  An outline is good writing practice.  But it can also help you organize your blog posts.  Here’s one approach.  Use a numbering scheme for each levvel of your outline.  (Most word processor or other outlining software does this for you automatically.  The top most level correspond to chapters.  Lower levels correspond to sections of chapters and content within sections.  The outline forms the basis for a numbering schema to identify the part of the outline to which your posts will be associated. 

Let’s say you are writing a bog about raising dogs.  Part of your outline might look like:

1.  Dog breeds
1.1  Hounds
1.2  Terriers
1.3  Herding dogs
etc.

2.  Dog grooming
2.1  Coat
2.2  Teeth
2.3  Musculoskeletal
etc.

3.  Dog nutrition
3.1  Diets for puppies
3.2  Diets for adult dogs
3.3  Diets for older dogs
3.4  Organic dogfood
etc.

Post Sequencing

Next, use tags to indicate the specific intended location of a post within the manuscript outline.  One approach to doing this is to use the sequence numbers from the outline.  For example, using the outline above, if you had a post about talking about the different types of organic dogfood, it would appear in the category “Dog Nutrition” and might be tagged as “organic-dogfood-3-3-4.”  Sequence numbers would be as long as the number of levels in the outline.  Blogging platforms accomplish tagging differently, but it is a fairly universal feature.  Such sequence tagging allows you to later use the post search tools of your blog to find and organize posts corresponding to each part of your outline. 

Of course, outlines are subject to change.  Chapters can be added, inserted or deleted and this can cause problems with post sequencing based on outline numbering.  An alternative approach might be to code tags with names that correspond to the outline labels.  Then, if the outline changes, the tags are still valid.  Again, using our dog manuscript oultine above, let’s say your organic dogfood post was about feeding your hound chicken flavored tofu .  Using this scheme, you might code the post as ”nutrition, organic, tofu chicken” where the tags are arranged in the descending order of the outline.  If you had multiple tags about chicken flavored tofu for your dog, you could assign a sequence number as the final tag, or find a label that distinguishes them further. 

The advantage of this approach to tagging is that should you decide to move dog nutrition to some other part of the outline, your post sequences remain valid.  If you make dog nutrition part of a chapter on dog health, you can simply add a tag “dog health” to the head of all your tag lists for dog nutrition. 

Creating an outline and using one of the post sequencing techniques above can greatly simplify the task of organizing your blog content into a manuscript.  Good organization is only the first step.  There are other editorial processes that must be applied to get a manuscript that doesn’t feel chopped up, but we shall save those for later posts. 

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Should we prepare for significantly higher book prices?  The signals from the commodities markets seem to be saying an emphatic “yes!”  Commodity prices are rising to new heights driven by a number of factors, including:  increased competition from rapidly industrializing economies like India and China; soaring energy costs; and, paradoxically from dislocations caused by the boom in biofuels.

Books require a host of input commodities for their production including:  paper, inks , chemicals used for coatings.  Here are a couple of examples. 

• As reported in PrintWeek, paper suppliers told printers earlier this year to expect price hikes of 8% or more.  In addition to increased manufacturing expenses, sky high energy costs are raising distributino costs. 
• Another commodity used in the production of paper is sulfuric acid.  This chemical is also used in the production of fertilizers.  The boom in corn planting, driven by the biofuels boom, is causing major shortages.  The price of the compound has shot a whopping 266% over the past 5 months according to a recent article in BusinessWeek. 

To date, producer price increases have been running ahead of price increases at the consumer level.  But as our current unpleasant experience with retail food and energy prices demonstrates, this won’t last long.  Unless there is a major cooling of economic growth, on a global scale, this commodities price surge may be longer lasting than previous cycles.  If real incomes continue to stagnate or decline, books may become a one of those discretionary expenditures that is the first to go when belts are tightened.

Many pundits have opined about the imminent demise of the printed book at the hands of technology - whether the Internet or e-books or books read on iPhones.  But, if, as author Richard Heinberg has suggested, we are witnessing “peak everything,” the real threat to the printed book might be ever increasing commodities prices, driven by scenarios outlined over three decades ago in Limits to Growth.

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Video games can now cost $20 million and up to produce.  Such high production costs raise the risk for bringing new games to market and have spawned a search for ways to extend a game’s IP via cross marketing in other media - notably books, merchandise and film.  Though long familiar to Hollywood moguls, this approach is now being pioneered by Electronic Arts in the gamer world. 

One example where this is being used in a new game due out in Fall 2008 called Dead Space.  A series of 6 graphic novels (or comic books) will be used as a prequel to the game to provide users with background information.   They will be offered for sale at $2.99 each, though a premium edition of the first issue with special cover art will be sold at a higher price point.  As reported on Kotaku, the series will be created by Image Comics with Ben Templesmith and Antony Johnston.  There’s even a book trailer that’s been created for the series.

This is somewhat the reverse of the journey made by Marvel Comics a few years ago, as chronicled in the New York Times.  Marvel’s comic books sales had slowed and the company almost went out of business.  But, like one of the super heroes it markets, the struggling publisher morphed into a Hollywood entertainment power with its own studio and licensing business.  Marvel has combined making its own super hero movies (where it can reap more of the rewards) with innovative financing (using its comic book IP as collateral) to emerge as a successful, profitable moviemaker.

Book to movie deals are continuing at a brisk pace, as evidenced by the regular reports in Publishers Weekly and industry sites such as Freelance Writing.  Major book publishers are also getting into the movie game.  This past fall, HarperCollins, a division of News Corp., announced a partnership with Sharp Independent to develop movies based on HarperCollins books.  These new collaborations, according to an article by Rachael Donadio, give publishers greater participation in movie profits (if there are any) and allow authors to have more say in the selection of screenwriters, directors and actors.   The closer ties with Hollywood may eventually change the nature of literary fiction as writers realize they may need to structure their stories for multiple mediums. 

Entertainment IP in the hgh stakes world of big media wants to be everywhere.  Look for lots more cross media collaborations (some might say contamination); and look for tomorrow’s most successful artists among those who are able to cross media divides and become multiple media “multi-talents.”

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At Future Perfect Publishing, I have often written about On Demand Book’s Espresso Book Machine(EBM) and the potential benefits of “print at the point of purchase.”  The EBM allows books to be downloaded and printed on demand, essentially at the time of purchase.   Now, according to BTW, Vermont’s Northshire Books is preparing to launch an in-store print-on-demand program. They are the first commercial bookstore in the world, to have one of the Espresso Book Machines on premises. 

General manager Chris Morrow told BTW that Northsire wants to:

. . . provide more choice for our customers.  We are bringing back into print local histories, and we will be publishing local authors. We will also have access to all public domain titles.

The store will publish titles under their Northshire Press imprint, and will also offer self-publishing services to customers under the Shires Press label.  Morrow indicated that most of the titles will be locally orientated, but sees the potential for significant expansion in the years ahead. 

An article in the Manchester Journalindicated that the store would charge between $.05 to $.08 per page.  The system is the first to be placed in a bookstore.  The other four installations have been at libraries and museums, most recently the New York Public Library.  While the system is not for commercial sale at this point in time, Morrow used his personal connections with On Demand Books to arrange to be a beta site.  Currently, only books that are out of copyright protection are available to be printed.  The founders of On Demand Books are working out arrangements with publishers to get greater access to copyrighted material as well.  The EBM has the potential to allow retailers to make less popular books readily available to customers without having to carry inventory.  From the publishers side, it could mean that stores could carry titles without the publisher having to pay for fulfillment, shipping and returns.  In both respects, it could take the “long tail” revolution to the next level.

Northshire Bookstorewas founded by Chris and Barbara Morrow in 1976.  The store opened its doors in Manchester Center, Vermont in  September, 1976 and has gone through two major expansions as well as the addition of a small restaurant called the Spiral Press Café.  On the store’s website, Barbara Morrow writes:

We will keep growing in the sense that we are always open to new ideas and interesting ventures. We live in a fast changing world, where one of the main constants is change itself. With your help, we hope to be able to respond.

By becoming the first commercial bookstore to use the Espresso Book Machine, they are continuing that pioneering spirit. 

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The warning signs of an imminent recession in the US are growing.  Forbes reported the weakest sales for the retail sector since 2002, indicating consumers might be financially tapped out and pulling in the reins on their spending.  The Associated Press, reporting on December 2007 retail sales figures released by the Commerce Department, said that sales of books, music and clothing - three consumer staples - had declined by 2 percent during the month.  Recession fears also seem to be spreading beyond the US as international stock markets today took a pummeling - some market indexes falling as much as 8 percent in single session. 

So how did book sales fare during the last recession in 2001.  According to a study by the Bureau of Economic Analysis, growth in books sales actually remained positive and then rebounded quickly to their historic growth rate (see table).

Books came through this recession better than other forms of reading entertainment - e.g. newspaper and magazines which have a dependency on advertising.  Perhaps people read more during a recession, since this represents a relatively inexpensive form of entertainment.  Recessions, like mass extinctions, often pave the way for the emergence of new business models and buying behavior as they wreak their financial havoc.   So what might we predict from this recession?

• More exports by US publishers as a weak dollar makes US titles less expensive for consumers in other regions with stronger economies
• Greater growth in the use of  the book rental services and used book sales as consumers migrate to cheaper reads
• Continuing growth in e-books and books via e-mail - though these will remain a relatively small markets compared to print
• Accelerated dismantling of media conglomerates which have not shown the ability to create synergies among media properties with widely divergent business models
• Continuing fragmentation of the book market, which could favor smalled, more focused publishers in the long term

What type of books do well during a recession?  Consumer tastes are always difficult to predict, but here are some guesses that are probably safe bets:

• Do-it-yourself books - why pay someone else to do it if you can figure it out yourself
• How-to and educational books - maybe a recession  is a good time to learn a new skill; schools often find their enrollments pick up during recession
• Self improvement titles - developing those aspects of character that will see you through tough times is the ticket

And for those watching in fear as the mortgage mess spreads, stock markets tumble and personal wealth erodes,  perhaps a title that offers spiritual uplift or religious guidance.

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• The Wisdom of Book Loving Crowds

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The idea that there are highly influential people who are trendsetters for the rest of us is very seductive.  So seductive, in fact, that it has held sway in marketing circles, in one form or another, for over five decades.  The media has picked up the concept by publishing lists of “top influentials” - e.g. The Atlantic magazine.  But this marketing orthodoxy is coming under greater scrutiny and being challenged by network scientists such as Duncan Watts. 

Fast Company, in its February 2008 issue, highlighted the new research and the ensuing debate among marketers in an article Is the Tipping Point Toast?by Clive Thompson.  The theory of “influentials” had its origins in the 1950’s with the work of Elihu Katz and Paul Lazarsfeld (authors of Personal Influence).  Its latest  proponents include Malcolm Gladwell (author of The Tipping Point) and Ed Keller and Jon Berry (authors of .Influentials: One American in Ten Tells the Other Nine How to Vote, Where to Eat, and What to Buy).    The influentials theory goes like this.  Target a sophisticated minority of  highly connected consumers (the “influentials”) and motivate them to talk up / recommend your product or service.  They will convince others to use the product or service and get a viral buzz going.

Duncan Watts, a noted network theorist and author of Six Degrees, has challenged these long held beliefs with some new studies he has conducted while on sabbatical from Columbia University at Yahoo Research   His conclusion?  He finds that viral buzz is as likely to be started by poorly connected ordinary Joe’s and Jane’s, as by in-the-know hipsters.  What matters, he argues, is the readiness of the environment to accept the messages delivered, not the messenger.  In a receptive environment, a weakly connected individual can spread a trend as easily as someone with a large Rolodex.  Without that receptivity, even those highly connected hubs of society may be ineffective in a viral campaign.

His findings were based on research that reproduced some of the original work of Stanley Milgram- arguably the father of the notion of six degrees of separation - except on a much larger scale.  Milgram had 160 individuals in Nebraska attempt to get a letter to a stockbroker in Boston by sending it to a colleague who they thought could get it one step closer to its final destination.  Only a small percentage of the letters made it to the stockbroker and these made the final step through the same three friends of the target.  Milgram concluded that the separation between strangers is generally 6 degrees or less.  Marketers concluded that the fact that the same three individuals appeared to act as gatekeepers proved that influentials were a critical part of communication among strangers. 

Watts’ study increased the size of the study by two orders of magnitude (61,000 participants) and used e-mail instead of postal mail.  He confirmed the six degrees, but showed that only 5% of the e-mails passed through hyper-connected individuals.  The bulk went through weakly connected participants.  He concluded that the apparent gatekeepers in Milgram’s study were a statistical artifact because of the extremely small sample size.  Watts has studied all sorts of human networks, from disease patterns to how rock bands become popular. 

So what’s the big deal?  Two things:

• Advertisers and marketers are spending billions of dollars annually targeting so called influentials who they hope will spark viral campaigns
• All of this money, time and effort may be wasted if what really matters is the receptivity of the general public to a new product, service or idea

One has only to think about the current presidential campaign in the U.S. to see how important Watts’ ideas could be.  In the world of book publishing, it may mean that we should find ways to gauge the receptivity of a market to a new author or title rather than hoping that some well placed book reviews will make the difference between failure and success.  Watts is the first to admit that some will find his conclusions counter-intuitive, but the science of networks and his carefully organized experiments appear to support them.  Relativity and quantum mechanics are counter-intuitive, but modern science and all the benefits it has bestowed would be impossible without these “unnatural” theories. 

Our intuition can be powerful, but it can be seduced and canalized by appealing ideas that don’t stand p under closer examination. 

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An interesting survey sponsored by the organizers of the 2007 Frankfurt Book Fair in October provides some insights into the group mind of publishing industry professionals.  As reported in the Independent Publsher reported the survey asked respondents to identify the specific challenges and threats facing the industry and to predict emerging trends and areas of growth.  Over 1,300 professionals from 86 countries took part. Respondents were predominantly European (85 percent), with 9% from North America and all other continents represented roughly equally.

Concerns about digitization were strongest in English speaking countries, with 71 percent of North Americans, 77 percent of Australasians and 68 per cent of UK respondents rating this challenge as the most important.

Respondents rated the following as the biggest threat to the publishing industry today:

1. Competition from other media and sources of entertainment (50 percent)
2. Over-publishing (31 percent)
3. Proliferation of piracy (23 percent)
4. Illiteracy levels in both western Europe and the developing world (17 percent)

Who is actually steering the book industry today, making the decisions that make publishing successful and generate the bestsellers?  The survey finds that 37 percent felt that publishers were still key to the success of the industry. Marketing professionals, at 31 percent, were not far behind. 22 percent see the consumer as leading the demand for books — only 8 percent felt that authors drive the industry.

Finally, the industry was asked where the major areas of growth are for the industry in the coming years.

1. 44 percent of respondents identified the use of e-books
2. 41 percent identified audiobooks, many of which are now available as downloads
3. As the world becomes increasingly globalized, 27 percent of respondents saw books in translation (much of the business of the Frankfurt Book Fair) as a growth area.
4. 27 percent identified educational publishing

You can view the entire survey on the Frankfurter BuchMesse site. 

So what should we make of all this?  The bogey men identified in the survey seem to be the usual suspects.  With the new year looming, I will make my own predictions:

• More publishing will not undermine the market for books.  To the contrary, it will expand it into new areas.  Though the market will continue to fragment into ever finer niches and sub-niches, we will find ever more efficient ways to aggregate the fragments. 
• e-books will continue to in sales, but like audio books, will remain a small part of the overall publishing market.
• The printed book, far from being eclipsed bydigital media, will become a type o digital media itself - think e-paper and conductive ink - and attain a new coolness factor.
• The hand-wringing over literacy will turn out to be misguided, much as each generation’s hand-wringing over evolving language usage patterns of younger generations. 
• Authors will become more important than publishers and the various elements of the traditional book marketing machine.  Savvy authors will use the Internet both as a vehicle to build an audience while they develop their work, and  as a tool to generate low cost, but highly effective market buzz and book sales.
• During the next decade or two, we will see the end (or the substantial diminshing) of physical book distribution and the end of book returns.  In combination with better analytics for selecting and managing titles, this will make book publishing a highly profitable business. 

I believe the future for books and publishers is much brighter than many of our colleagues who filled out the survey in Frankfurt.  Unlike many industries, publishing is limited only by the human imagination.  As for our fears about the challenges that face us - FDR said it best; the only thing we have to fear is fear itself.

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