Tuesday, March 20, 2012

The Future of Publishing, As Seen In A Fuzzy Crystal Ball

I was walking in the mall this week, noticing how strange the world of retail has become (they were selling salon hair care products out of a vending machine) and thinking about disintermediation and the overall point of the market place in human culture, when a vision hit me.....

I think I have something to say about the Future of Publishing.

First a Few Words About Intermediation

Once upon a time a farmer grew a strawberry, and a hungry person bought that strawberry and ate it. End of story.

The problem was that much of the time the farmer and the person who most wanted that strawberry were not in the same location. Especially if it's, like, December and strawberries are in season in South America and people in Michigan are really hungering for a nice fresh strawberry dipped in chocolate for a Christmas party.

To get that strawberry (or toy or book or widget) from South America, you need a whole lot of people in the middle: intermediates. Retailers, wholesalers, distributors, packagers, transportation companies of multiple kinds. There's a whole lot of planning and studying and coordinating, making sure that strawberry is in the right place at the right time.

And everybody gets a cut. Which bloats the heck out of the transaction.

The term "Disintermediation" refers to the trend of cutting out more and more of the middleman, and making the whole process more efficient. Getting back to that point where you buy you fruit directly from the farmer.

But even today we don't cut out all of the middlemen. We still need some -- but those middlemen who survive in this kind of environment are the ones who don't see their job as coming between the farmer and the foodie, but rather those who see their purpose as bringing them together. They enable that direct transaction.

Some examples: the farmer's market where the farmer can sell goods in the city, the internet provider where the farmer can let people know where he's going to be and what is fresh. The transport company which can deal with small orders over long distances -- without the need for the planning of wholesalers.

This is the key to Amazon's success. They're an enabler of disintermediation.

Publishing has a way of looking only at itself for models, and that's where they're missing the boat because the whole publishing system is built on heavy intermediation. They can't understand what Amazon is doing because their goals are different. They think it's a trick to compete with others, and not a basic (and lucrative) way of doing business.

It doesn't occur to them that they should be doing the same thing.

But it will. Eventually. If not to the existing publishers, then to small publishers or people in other industries who see an opportunity. Because it's the only way for an intermediate to survive in the coming wave.

So given all that, here are my predictions of the future of publishing.

Publishers Will Go In Two Directions

Direction One - The Entertainment Industry

I predict that most of the major publishers -- that is, the big corporate ones -- will be largely absorbed into their parent companies. They may keep their names, but their main business will be acquiring subsidiary rights. That is, they'll acquire already successful properties to make movies, games and other products out of. (Including, quite possibly, those rare and exotic paper editions people collect as mementos, like posters and action figures.)

This group will also be hiring writers to do work-for-hire media books. This may be where a lot of non-fiction is too. (I don't know enough about non-fiction to predict this part, I admit.)

They'll look something like they do now, but they won't really be in the book business. They'll be in "media."

Direction Two - Aggregation

This is where I think most of the book business will go. It will take many forms, and may be the hardest to get our heads around until after we see it, but we are already seeing the start of it, and there are some older models to help us see it too.

The key thing to remember about this part of the industry, though, is that they won't actually be publishers any more. Their business won't be about producing, or even distributing: it will be all about acquiring a platform. The thing that makes Amazon so important in the industry is not that it has power, but because they have a HUGE audience. Their customers are their asset.

Same with Huffington Post -- some writers may grumble that they don't pay for their content, but many would kill to be aggregated on the Huffpo site, because it gives access to Huffpo's vast audience.

Though Baen Books is still very much a traditional publisher, they have long been working on their position as an aggregator too -- a place with an enthusiastic audience. They take their job of putting writer together with reader very seriously.

The thing that makes aggregation work is partnerships. It's about cooperation, not competition. And many of the masters of the aggregation industry are people who grew up with Game Theory, and other newer ideas where they understand that the best way to compete may well be to cooperate. This is where publishers have the hardest time, because they are afraid to cooperate and therefore companies like Amazon find them of less value.

The thing about aggregation is that you need content -- but only as far as it keeps your customers happy. It's better if someone else provides the content... but if you can't find a partner smart enough to cooperate, you do it yourself.

And some aggregators are built on a do-it-yourself model anyway. Consider syndication -- that is, work-for-hire franchise books. They may be spin offs of movies and TV or they may be an in-house brand, like the Stratemeyer group (Nancy Drew and The Hardy Boys). Or heck, James Patterson. Old time book clubs.

These kinds of publishers don't consider their customers to be booksellers. They don't think in terms of best sellers or shelf space. They think much more like a magazine, and they have an ongoing relationship with their customers. They're almost like a subscriber base.

Such publishers/syndicators already exist, but in the coming world they will thrive. They will undoubtedly hire writers to churn out branded pulp. Some on a work-for-hire basis, some with royalties, but I would not be surprised if some of them didn't hire staff writers to work like a newspaper reporter.

Like a newspaper or magazine -- or a TV network -- they have an audience and they need a steady supply of direct content to give to that audience.

There are many many other aggregation models out there, and I expect more to arise out of book-related non-publishing areas. Colleges and research institutions, professional organizations all have a need for "approved" work -- so it would be natural for them to become a gateway between the academic reader and the material the institution approves of.

And then, of course, there are booksellers....

Booksellers -- Two Directions Here Too.

Some booksellers will just drift into general retail. Book and story-oriented gift shops. Or they will be smaller parts of larger stores.

But the bigger force will be in aggregation as well. Like publishers, their main stock in trade will be an audience. They will be bloggers, and book forum operators. They too may move into something approximating a magazine -- where they buy content to make their audience happy. Though, like Huffpo, they may be able to get their content free, since it will provide an audience to the writers.


I think writers are the clearest of the group: writers will write.

I expect most will have to deal with being an indie writer -- even if they hope to be picked up by a major publisher. I expect they will be doing less marketing, because they will use the aggregators to get more access to an audience. But it will mostly be similar to what it's like now.

And yes, some will hire on to a syndicate to write for a salary, or write freelance for them (as with magazines). That will actually be a great way to build your skills and perhaps an audience.


The thing to remember about agents is that it really isn't the writers who need them -- it's the publishers who need them. Publishers use agents as freelance acquisitions editors.

What agents do now is useless in the new paradigm. (Except for that leap to the major entertainment industries, as I mentioned at the top -- but that requires a specialized type of agent which already exists.) Aggregators don't need them.

But successful authors will always need support services: a concierge, a Jeeves, a Smithers, a Mary Poppins. A handyman. A kerfuffle wrangler.

And I don't just mean hiring a freelance editor and a cover artist and a publicist, I mean an assistant. Not every author will need all that much help. Some will be able to make use of a full time staff, and some will just need a little outsourcing. Businesses and individuals which provide a concierge service for authors will do well.

Existing agents generally do not hold those skills. It will be a very different job; the job of a servant. Some agents will retrain and take to it, but I suspect that this job is more likely to be filled by people who already have the skills to do the job, or skill and experience at coordinating a team of others to do it. Art directors. Editors. Maybe some smart publicists.

And yeah, some of these businesses and individuals will deceive the writer: they'll pretend to be aggregators -- people who give the writer access to a great audience. But that's a separate job, and the writer will need to beware.

The key for the smart writer will be to hire someone as a salaried assistant, or hire a company which presents itself as a concierge service, and not a ticket to the stars, or a business partner.

That's all my crystal ball tells me, and I have no idea if it's a delusional crystal ball which has hallucinations or if it's a bright eyed and clear view into the future.

But I suspect that's where it's all headed.

See you in the funny papers.

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