Looking Ahead: Predictions for publishing in 2012 and beyond

This year saw the emergence of several factors that could have a profound impact on the publishing industry in near future.  Newspaper revenues backslid into more losses, increasing through the first three quarters of the year, and digital revenues, while improving somewhat, are still far short of making up the difference.  A few papers found some success with semi-porous paywalls that encouraged more of their brethren to make the leap into subscription based sites, for better or for worse.  Ebooks moved up to nearly 20% of the overall book market in the U.S. and all signs point to a steady upswing in that sector.

Amazon encroached further and further into traditional publishers’ domains, and started a drive to lower prices and increased saturation in the tablet market.  Millions of new digital customers are set to enter the ebook market after Christmas thanks to robust pre-holiday tablet sales.  Traditional publishers, in conjunction with Apple, forced the agency pricing model on ebooks, driving their prices up 50% or more in many cases.  That effort also brought some backlash in the form of civil lawsuits and antitrust investigations in both the United States and Europe.  Finally, self-publishing and independent publishers made great strides toward establishing themselves as a viable player and overcoming long-standing industry bias.  All in all, 2011 was a year of great transition, and one that has served to set the stage for what’s yet to come.

Following the industry as closely as I have this past year, I’ve reached a few conclusions about what will happen now, and where the industry as a whole goes from here.  It’s nearly impossible to accurately predict the future, even the most educated guess is still just a guess.  All it takes is one new technological break-through and everything is thrust right back into a state of flux.  Some people don’t like that kind of uncertainty but, for me, I find it invigorating.

Newspapers Are Finished

I’m still amazed that there are people out there who believe that print newspapers have any kind of future at all.  I’ve even come to seriously wonder if news websites really have any kind of future, either.  The primary problem, as I see it, is that they are entirely too dependent on advertising revenue to support their business model.  We are only one more advertising shift away from this entire industry segment getting wiped off the face of the Earth.  I believe that shift will come soon, and the era of advertising supported newspapers will end abruptly.

There is not one single trait of the physical newspaper that gives me any belief that they have even the slightest capacity to survive long-term.  They are expensive, inefficient and extremely limited.  In short, they are an anachronism.  The most recent surveys I’ve seen indicate that the percentage of people in this country who get their information from newspapers is down to 14% and falling precipitously.

News websites are also at severe risk of obsolescence.  Paywalls, ultimately, won’t be anything more than a temporary block to stave off the inevitable.  I’m just guessing here, but I suspect we’ll see a combination of elements pick up the slack when the inevitable finally happens, including mobile apps, easily accessible streams and standalone digital publications.  All of this will be dependent on finding customers to pay for the actual content, and the innovative and best quality content will win out in the end.  It’s a shift that will decimate the larger industry players because total revenue numbers will plummet with the loss of advertising.  I also anticipate that we’ll see the rise of truly independent journalists producing and selling their own wares under their own banners rather than working for a New York Times or a Wall Street Journal.

I believe the long-view will see a reversal of sorts of the consolidation run that happened in the last few decades of the 20th century.  The industry will fragment back into many smaller and even individual entities that will create an extreme diversity in viewpoints, products and delivery mechanisms.  I suspect the small local newspaper will likely have a slightly longer shelf-life than the large metros or nationals, but even they will be on the clock eventually.

Basically, my belief is that, as bad as things have been for newspapers over the past decade, we haven’t come close to seeing the worst of it yet.  But out of that Armageddon will emerge the potential for a far greater, more independent, more democratic news and information ecosystem.

Print Books Aren’t Quite Finished, But Close

The way elements are lining up heading into 2012, if I were a book publisher who depended on 75% or more of my revenue coming from print sales, I would be scared to death.  Digital reader sales across all devices are up 200-300%.  Amazon alone has been selling over a million new Kindles every week leading up to Christmas.  Ebook sales were in the miniscule single digits as a percentage of the overall book market just two years ago and now, some estimates have that up to as high as 20% in the U.S.  Through agency pricing, major print publishers have pushed the prices of their ebooks up to three or four times that of the growing self-published sector and, simultaneously, brought antitrust investigations and civil lawsuits in both Europe and America down on their heads.

The big-box retailers they used so effectively are gone (Borders) or at risk (Barnes & Noble) after having weakened independent bookstores to the point that a rapid drop in print sales could be the final straw in wiping most of them out.  Christmas of 2012 is poised to see literally 15-20 million new ebook customers entering the retail market.  And none of this even speaks to the digital expansion into foreign markets that is coming but yet to really kick into high gear.

I suspect that losses in the print book sector will happen quicker and more severely than those of newspapers.  They won’t have 8 or 10 years to map out a gradual digital transition; more like 2 or 3 years, if they’re lucky.  All this being said, print books will not vanish entirely.  I expect there will continue to be a high-end boutique market for very high quality printed material.  The overall market share, however, will be miniscule in comparison to traditional levels.

What we have here is the beginnings of a vicious downward cycle.  Declines in print book sales will cause a loss of book stores and physical retail outlets which will cause more losses in print book sales which will cause more losses of bookstores which will cause more losses in print book sales, etc., etc., until this segment of the industry is virtually unrecognizable.  In the end, I suspect bookstores will be winnowed down a great deal, 80% or more forced to shut their doors.  The ones that are left will cater to the boutique end of the consumer spectrum, and will convert to more of a literary cultural gathering place generating revenue through principle means outside of strictly print book sales.

At the end of the day, I believe that we will end up with the creative destruction of the long-standing print book industry replaced by a much larger, vibrant, much more independent industry that exists principally in cyberspace.

Amazon Won’t Be The 10-Ton Guerilla For Long

Read any blog, news site or publishing industry pundit and you’ll hear all about how bad Amazon is.  I, as an independent writer, am perplexed by other self-pubbed writers frequently ripping Amazon and their business practices.  They have done more for us than any other entity in recent memory, possibly ever.  The argument that self-published writers should somehow support traditional publishers in this perceived battle with Amazon simply defies logic.  If traditional publishers could squash all of the developments and advancements Amazon has brought about for us in the past few years, they would do it in a heartbeat, make no mistake.  To now turn and ridicule them for continuing to press their advantages against traditional publishers is not only hypocritical, it’s short-sighted and potentially self-destructive.  Big Six publishers aren’t really our friends, and they don’t deserve our unquestioning support in this conflict.

Amazon itself, no matter how large or powerful they get, is not any more immune to the disruptive forces that exist than the traditional publishing industry.  This isn’t simply an age marked by a sudden dramatic shift from one paradigm to another.  We’re at the very earliest stages of an era of constant, ever-present disruption.  No one in the internet age is too big to tumble.  Long-term monopolies, like the traditional publishing industry maintained, may well be nearly impossible to establish in this new era, and the only way in which they would keep that control and influence is to represent the values of the people they aim to serve as best as possible.

I believe that retail alternatives will emerge as the ebook market continues to expand and mature.  Formats will become more standardized, or at least easily transferable from device to device.  They will have to; customers will ultimately demand it to be so.  I expect we’ll see some specialized, genre specific retail and self-publishing outlets emerge over time.  Take romance fiction, for instance.  Imagine a retail site that caters specifically to readers and authors in that genre.  Or mystery.  Or horror.  Or science fiction.  Or historical non-fiction.  Or journalism.  The possibilities are endless.  As long as writers and publishers maintain the ability to publish across all retail outlets and platforms, there truly are no limits to the retail alternatives that could and will come about.  Today, they may well be the dominant player, but the history and nature of the internet itself suggests that will not always be the case, especially if they get too large or too onerous in their business practices.

In the end, I expect what we’ll see is a few large retail ebook stores in the vein of Amazon, and many, many smaller, very targeted retail options all over.  I also fully believe that, as authors themselves fully realize the potential of maintaining connections to their own fan bases, there will be an array of direct sales possibilities developed, as well.

Following “The Rules” Will Be Even Less Important

If you read enough online about publishing on any side of the spectrum, you will see that nearly everyone is going to tell you about “the rules.”  There are rules for breaking into the traditional side and rules for breaking into to the independent side.  There are rules for how you should write, what you should write and what you should do with your material afterwards.  The main problem is that if you read enough of those, you’ll find most of the rules stated out there conflict with other rules somewhere else.  The thing is, we are well on the way toward a time when, basically, there are no rules.  There are an ample variety of ways to go about getting what you want done, and the only thing that matters is what you find works for you.  And even then, things are changing so rapidly that something that works today may not work tomorrow.  Hard-and-fast, overly rigid ways of thinking can hang about your neck like an albatross, wherever you stand in the current publishing ecosystem.

As I said earlier, we now live in an era of constant disruption.  Flexibility, adaptability and experimentation are today’s ultimate keys to success, and that will only get more important, whether you aspire to traditional print publishing or independent digital publishing.  The great thing is that writers are generally pretty creative people.  Who could be better poised to take advantage of a circumstance where all the lines have been blurred and there are multiple paths to your desires than the creatively minded?

The next few years will likely see the final death of the old, established ways of doing business.  The transition will continue and we’ll eventually have a system that is very different than what we’ve been conditioned to expect.  The future, in many ways, is very bright.  Change can be frightening, but it can also be liberating and exciting.  Don’t weep for the things lost to the shifting sands of progress, revel in the new and innovative possibilities instead.

Read more about the digital disruption to the publishing industry and what all the changes mean for the future with author Dan Meadows’ new book The Decline and Fall of the Publishing Empire, available now.

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Published in: on December 24, 2011 at 7:58 pm  Comments (2)  
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  1. Like you I remain astonished at the denial those in the publishing business exhibit. Newspapers have been mostly content-free for years, and thus I have not subscribed for years. They’ve become curiosities. I pick them up from train seats to/from Philadelphia to kill time, and inevitably the articles are what I read online earlier in the day. Why waste my time and get my hands dirty?

    The Cecil Whig has maybe 1.5 reporters covering local news. They’ve gone to 3 days/week home delivery. Their website is now poor instead of appallingly bad. And they seem to be on the broken paywall bandwagon that the Baltimore Sun jumped upon earlier this year… broken in the sense that if you’re willing to experiment a little, it appears that the paywall can be defeated or worked around. But is it even worth the effort?

    So what comes next? It looks like the Chestertown Spy is the best local example I can find, but that’s not saying much. The line between reporting and op-ed seems pretty blurry, and neither the editing nor the reporting is what I would call thorough. But hey, they give it away. Often the best part is the comments after the articles, where the folks who think the New Deal and the Great Society would have worked if only they’d been given more time break into full song. And they had their 15 minutes of fame with coverage of the arrest of Frosty the Snowman, which was picked up by the AP.

    Good luck with your new book!

    • I heard the Whig was cutting back to three days a week a few days ago. It doesn’t surprise me at all, you could see that move coming a mile away when they first started calling Friday’s paper the Weekend Whig.

      I had an interesting discussion with a friend of mine who still subscribes the other day, as well. Apparently, they’re saying the Tuesday and Thursday papers will be online only. My first question was will they either give refunds or extensions to current subscribers and is the cost of a subscription going to drop. After all, they’re eliminating 40% of their product. I suspect that’s behind the framing of the two online only days, so they can pretend the customers are getting the same value and don’t have to cut refund checks.

      I wouldn’t be happy if I was a subscriber and there wasn’t at least an extension offered for free. After all, it is essentially trimming the equivalent of three and a half months off of a year subscription.


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