Do You Know What Business You’re In?

Kodak film

What the Publishing Industry Can Learn From Kodak

Part 1 of 3

Last month one of America’s most venerable and recognizable companies, Eastman Kodak Co., filed for bankruptcy after a long, steady decline in revenue. I’ve been reading various business analysts’ explanations and deconstructions of what went wrong, and all I keep thinking is, holy cow, I hope everyone in publishing is paying attention.

Writers, agents and publishers can glean lessons from the mistakes Kodak made. I’m not a business analyst, but I’ve managed to put together a list of points I think we should keep in mind, if we don’t want to go the way of Kodak. (This is the first of three posts on the topic.) Today’s focus: Knowing our business.

Herewith, the first 3 things I think we can learn from Kodak.

1. We need to correctly identify the business we’re in.

Analysts seem to agree that Kodak operated as if they perceived themselves as being in the film business, long after film had been pushed out of the way in favor of digital. Even as they were rolling out new digital products, they marketed them as ways to support their film business. They continued on the idea that consumers wanted physical photos, as if “physical photos” were the core of their business.

In fact, Kodak was really in the business of “moments.” The Kodak Moment. Had they embraced this larger truth, they would have been asking themselves “How can we continue to help people capture and share their Kodak moments?” But instead they were asking “How can we get people to continue printing out their photos using our products?”

Publishers, agents and authors need to start from this very important truth: We are not in the “book” business. We are in the business of storytelling. This encompasses entertainment, information, ideas, creativity, inspiration, and intellectual exploration. It also comprises a social element—the relationship between reader and writer. We are in the business of fostering this relationship.

As we figure out ways to move into the future, we will only be successful if we stay focused on remembering exactly what our business is.

2. We can’t be afraid of cannibalizing our own businesses in the short run to make progress in the long run.

This idea of cannibalizing is a popular one among the analysts covering Kodak’s demise. It means that in order to adapt to developing technologies and market conditions, companies often have to put out products that compete with their own existing products—and usually these new products won’t be as profitable.

Publishers are steeped in the “printed book business” and may be reluctant to step out and aggressively market digital products that will detract from their print business. But they must, if they are to innovate and stay ahead of the curve (or at least on it) rather than fall so far behind that they can’t recover.

Agents have the same problem. Spending time helping our clients develop products outside the purview of the traditional publishers clearly subtracts from the time we have to spend on selling to publishers. But many of us already realize that “selling to publishers” isn’t our core business, but connecting writers with readers is. So we are exploring ways to help our clients connect with their readership in all kinds of ways, both inside and outside the traditional publishing model. Yes, it cannibalizes our original business to an extent; but if we are to remain relevant, we have no choice.

3. We should find new ways to generate revenue while serving consumers’ wants and needs.

Part of Kodak’s enormous success for so many decades was the sheer profitability of selling film. There was an insatiable demand for it; everyone needed it; there was no substitute for film—if you wanted a picture, you either had to paint one or you needed film. Film had high profit margins and was seemingly as necessary to humans as air.

Until digital came along.

Kodak apparently kept trying to hang on to the profit model of film, long after it was impossible to maintain or resurrect. They never fully believed that there would have to be a whole new profit model.

These days, revenues and profit are the biggest struggle for anyone involved in publishing. We’re in a tug-of-war as consumers become less willing to plunk down fifteen bucks for a reading experience when so much is available free or very cheap.

We need to be asking ourselves, “What’s valuable to a reader? What are they willing to pay for? What are they NOT willing to pay for? What do they want that they’re not getting, and how can we figure out a way to provide it (for a price)?” We’re faced with the challenge of convincing readers that the value of a “book” lies in the experience, not in the ownership of a physical product.

What we can’t do is assume we’ll all be able to continue indefinitely making a profit from the old printed-book model with its advance-and-royalty structure and physical distribution to actual stores. It’s going to end, so we’d better be ready with alternatives.

***

Those are some opening thoughts that occurred to me as I’ve been reading about the Kodak debacle. Some questions for you:

  • What business do you think we are in? If not “the book business,” then what?
  • Is there any risk for writers of cannibalizing their own businesses as they seek to keep up with changing market requirements?
  • What problems can you foresee for writers in developing new profit models, and what ideas do you have for possible solutions?

Tomorrow: What We Can Learn From Kodak About Knowing our Customer

Sources: Forbes, Forbes, CBS News, Tech Crunch, Information Week, Mashable.

  1. find a land says:

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  2. Joe says:

    I found this post fascinating and on the mark. I have to ask, how many examples like Kodak do people need before they begin to realize that, no matter their business, they need to understand what the true foundation of it is or they are going to end up in trouble if they focus too much on the form of their business rather than the substance. We have seen it with film, as you point out here–we have seen it with newspapers, which got into trouble because so many people in journalism kept thinking they were in the paper and ink business and not the information business; we have seen it with the video industry, with retail companies like Blockbuster, who used to be the 600 pound gorilla in the market, mistakenly thinking they were in the DVD business when they were really in the entertainment delivery business; we are seeing it in publishing, as you so wonderfully point out. I still love books as books, the physical object of them, and still prefer to buy them that way– but the market is the market, not what individuals in the market want it to be.

    I teach at a university and, although people are trying to ignore it, higher education is in the same spot, as universities keep acting as if they are in the real estate business, investing in new buildings, insisting that “real college education” can only take place when you have a professor standing in front of a group of students who write their notes into spiral bound notebooks–when they are in the education and personal development industry. Mark my words, that will be the next bubble that bursts and people will be surprised, although they should have seen it coming — because of Kodak, and newspapers and Blockbuster. .

    Thank you for a timely, insightful post. I came across it via another article I found through Jane Friedman’s twitter stream but I will be following your blog from now on.

    As Kodak, newspapers, and Blockbuster has found out, trying to keep an industry the way it is is like standing on the shore as a tsunami roars in, holding up your hand and shouting, “Stop,” and expecting it to stop.

  3. “We are not in the book business. We are in the business of storytelling.”

    YES! Yes! I said this years ago on my blog!

    Do I like it? Heck, no. No way. I like paper and ink and bookstores. I like bookshelves triple stacked with books. I like being surrounded by stuff I can hold.

    But that doesn’t change the fact that it’s TRUE.

    Great post.

  4. Jennie says:

    I am an “emerging” author in the midst of revising my manuscript. I’ve been doing all my research, forming a query letter for when the time comes, identifying my audience, etc. Honestly, the more I research, the less inclined I am to go the “traditional route” at all. I’m seriously considering bypassing it altogether and self-publishing.

    As I’ve been writing my novel, I’ve had this sentence constantly going through my head. “Respect your reader.” I have two goals: write the novel I’ve always wanted to read, and give my future readers an experience worth their time and dollars in a format they WANT. This isn’t (or shouldn’t be) about my ego, and condescending to offer my story to the world in the format I prefer because I’ve always dreamed of seeing my words in print. This isn’t about telling someone else what they should want to read because some editor liked it. I’ve been reading lots and lots of blogs and I’ve been shocked to read editor rejections that are incredibly subjective and along the lines of “Great story and writing, but personally wasn’t my favorite.” How short-sighted.

    Unfortunately, it seems to me that most agents and traditional publishers have the attitude of “I’m up here and you, little author, are down there. And if I like your work and all the stars are aligned, I might give you the chance to get your book into the hands of your readers. Because I’m gracious like that.” Amazon has reversed that dynamic. There, the authors and readers are the big guns looking for ways to get connected. Amazon is a service. Publishing should be a service. Instead, traditional publishing is acting like an elitist gatekeeper and that simply won’t work in the age of youtube and google and instant information that’s catered towards the customer.

    Personally, I would love to see agents focusing more on the “career management” aspect of the author/agent relationship. I’m not sure I’ll ever want a traditional publishing contract, but I will probably want a manager at some point.

    • Rachelle Gardner says:

      Jennie, it’s sad to me that you have this impression of agents and publishers, that they have the attitude of “I’m up here and you, little author, are down there.” It’s definitely not the case.

      We can only say “yes” to less than 1% of people who contact us, but it’s not because of a superior attitude, it’s simply a numbers game. Even if you were applying for a job at McDonald’s, you’d be in a pool with other applicants and would not be guaranteed a job, yet I doubt you’d think of the McD’s manager of having an attitude of superiority – you simply understand that he can only hire one person and he got 50 applicants.

      But because we have to say “no” to so many people, this view of agents has been around for a long time. It doesn’t surprise me but it saddens me! Especially since there are at least 100 agents who make themselves available and transparent through Twitter and blogs… it doesn’t seem to jive with the view that they think of themselves as superior.

      More accurately, we all feel like we’re in this together with you. It’s a tough business for all of us!

      As for your wish for agents to be about “career management,” it’s kind of funny you’d say that because that’s my mantra… I talk about it constantly with my clients. That’s totally the focus of our agency, helping to manage careers by staying aware of ALL the options available today for authors.

      • Jennie says:

        “We can only say “yes” to less than 1% of people who contact us, but it’s not because of a superior attitude, it’s simply a numbers game. Even if you were applying for a job at McDonald’s, you’d be in a pool with other applicants and would not be guaranteed a job, yet I doubt you’d think of the McD’s manager of having an attitude of superiority – you simply understand that he can only hire one person and he got 50 applicants.”

        I think the above example actually illustrates what I’m trying to say. I understand that you, as an agent, have to be picky about who you represent because you have certain existing relationships with publishers and editors and you need to take on work that you’re passionate about in order to be successful. I get that. However, instead of this being a service to the author, it’s become a requirement to getting into the industry at all until now. Instead of the author hiring YOU to represent them, it’s turned into you hiring the one-in-a-hundred author who contacts you. I think that dynamic needs to be reversed. And it IS being reversed.

        I just don’t think the “numbers game” has to exist anymore. At least not in this way. Just look at youtube – the crap sinks to the bottom and the gold goes viral. I think much of the media industry has been surprised by what people will spend hours watching (cat videos, anyone?). The only reason that can happen is because everything there starts out on a level playing field. I think Amazon looked at that model and decided it could work with stories. And it does. No one loses money if the book doesn’t sell except for the author.

        Honestly, I think traditional publishing companies could really stand to benefit if they realized that leveling the playing field and creating a business model that is more “on-demand” will actually increase competition between authors and result in better products and probably a lot of surprise hits. Which means more money.

        My two cents. 🙂 Thanks for this blog! Sounds like you’re looking out for your clients and their readers!

  5. John Kelly says:

    Excellent point. Well made. Publishers should be in the business of selling words and pictures, not paper.

    Thanks.

    Wish I could convince more of my fellow illustrators and writers. The majority just don’t seem to ‘get it’.

  6. Rachelle,

    Your post tied up, nice and neat, I might add, the factors I’d been mulling over since starting writing, beginning blog and considering publishing. I am reminded that when I walk into my local grocery store book department, I love looking at new releases and colorful jackets, but, I’m not willing to plunk down $15-25.00 for reading material, I may find on Amazon, a used bookstore (eventually),or a library. I like your point that our goal is storytelling and reaching the reader. Personal time is valuable and in this digital age, we simply need to be efficient. Thank you.

  7. All the recent changes in publishing have caused me, as a writer, to think of packaging my work in different ways. Full length novels will (hopefully) still be sold to traditional publishers–just like before.

    But I also have so many other options now. I can write novellas or short story collections in between my full-length novels, and self-publish them in digital form. That way my readers will be able to read new work, in between my novels, hopefully building readership.

    I’ve always loved writing short stories, so for me, this is an excellent opportunity–a way for me to do what I love and offer more stories to my readers.

  8. Debbie says:

    Just a thought. None of us are reading this excellent post via a newspaper, magazine, or letter. We search for reliable information in the same way we search for our reading preferences. For me, it’s both. But if Im honest with myself, more and more of my time is spent on this iPad or my computer than in traditional print. I loved a comment made by Allan Arnold in September. He said the role of the publisher is not to MAKE readers want one format over another. It’s to accommodate both formats- traditional and digital FOR THE READER. He is a visionary who has already figured out the important ingredient to this publishing recipe. Readers are the key element.

  9. Don Weston says:

    This is why I subscribe to your blog. Timely and thought provoking information about a subject we’re all insecure about.
    Denial is a cruel master. When I was in Real Estate, everyone said, there won’t be a bubble. Then it burst and look at the mess.
    You only have to look at the music industry for a model. CD’s replaced vinyl, and MP3/Itunes (digital) has all but replaced CD’s. There is a lesson here we want to ignore, but shouldn’t.

  10. Sherrie says:

    I guess this is not really answering the questions, but it does relate to being able to see where the future is headed.
    I saw the writing on the wall way back when film was big (so to speak). While studying photography at RIT, I was seeing people looking for the best resolution, including using film as BIG as 8 1/2″ by 11″.
    And there was Kodak making these tiny film images for God only knows what reason. Just to be different? Because they thought people were stupid? At about that same time, I was noticing that our colored pics were fading. And Kodak didn’t care.
    All this had me very concerned because my father worked for Kodak and had for some twenty years. Ten years later, Dad took an early retirement that probably saved his life (he was 62 at the time and turned 80 last year). But this was another mistake, they gave early retirements to the people who knew what they were doing in order to hire young people who knew nothing about making their product.
    And worse than that, they set up shop in Mexico where the workers were treated like slaves. The shops were dirty and were run like they were in the 3rd world. (surprise, surprise!)
    So, I have known for some time that Kodak on on it’s last run, and this at a time when other companies were quadrupling their net profit! It was sad to see.

    • Rachelle Gardner says:

      Wow, interesting insights from your insider perspective, Sherrie!

      • Sherrie says:

        Thanks, Rachelle, for letting my soap box speech stay here. And for appreciating it. Sometimes, it is hard for me to stay on track.
        What any of my ranting has to do with the writing business, I have no idea.
        Sherrie
        P.S. BTW, are you up in SF at the writer’s conference this weekend?

  11. Rose Gardener says:

    I want to pick up on something in today’s blog which I find very useful personally. ‘What are people willing to pay for?’

    I dabble in erotica and this question can be answered in one word- quality.

    But then I come to submit my literary short stories and an entirely different set of rules apply. Quality is taken for granted on even the free on-line magazine sites. I have learned to ask myself- is this something people would pay to read? If it is, I might try a competition or paying market. If it is publishable but simply not the sort of story many folks are buying right now, then I happily ‘cannibalize’ it and consider it a piece to give away for free for promotional and name recognition value alone.

    Re-framing our thoughts and expectations regularly should be viewed as a useful tool and not as an unwelcome burden.

  12. Rachel Hauck says:

    Here, here! GREAT post, Rachelle! So sad to hear this about Kodak. Not wanting to hear it about publishing some day.

    Rachel

  13. Jane Steen says:

    This business should be about providing the reader with the highest quality reading experience possible.

    Just after I finished my master’s, I ended up working for a large retail chain. Their ethos and staff training put the customer at the center of absolutely everything; I learned that if the customer gets what they want, sales simply follow.

    I hate to mention Amazon because it tends to annoy people, but they have built their business around this model. Their site is geared to giving me, the customer, what I want, and identifying what it is I want before I even know it myself.

    Really good writing – literary, genre, children’s, nonfiction – succeeds because it satisfies something in us. It lights us up inside or gives us a safe outlet for our fear or pain. The writer has cared enough to find the truth of their story and to learn how to tell that story well, and when that happens we get something from the book that’s hard to define, but we know we want more of it.

    It’s that quality experience that should trump “the market,” in my opinion. I believe that if we can give our reader-customer what they truly want, sales will follow. I don’t think that all publishers think that way, and therefore the publishing industry is going to undergo a serious rebalancing, with some companies going the way of Kodak.

    I know that many writers and publishing industry professionals are stepping up to the new models of doing business, and if that involves cannibalizing or radically changing their mindset, that’s what they’ll have to do. Readers have been given the freedom to decide what they read, and we should never forget that.

  14. Laura Kirk says:

    I must say this is the most provocative, scary, but thrilling blog to date.

    I agree with the unfortunate and eventual demise of the big six. At least in terms of the need to downsize, restructure. It is a raw reality in this market.

    That said and leaving a few tire marks on our souls, I also trust the spirit of survival among book lovers and creators alike. It takes a lot of perseverance to write a novel on the writer’s part. And a steadfast desire to feel the vibration of the “reader street” on the part of the agents and publishers.

    In my humble opinion the number one need here is to send double naught agents (in the immortal words of Jethro Bodine) out into this new world that will bring back words of wisdom for an adept team that will use that information to explode the world of publishing much like a rebirth. Something so altering, the word “publishing” will not even be used in the slogan!

    A little dramatic, but I felt it was time to interject a little humor relief.

  15. Writers, agents, editors, and publishers might want to start with this question: “What’s at the heart of the matter?” If it’s ONLY money, then we’ve already failed. Maybe the question should be: “What’s the matter with the heart?”

    As Christians in the publishing industry, the needs of our readers should be at the core. How can we encourage them? Make them laugh? Give them respite? Help them heal? Show them change is possible? Give them hope? Keep them company? Be a good example in honoring God?

    Our books (print or electronic) are the tools we use; we are the servants who use them.

    If successful marketing is all about relationships, then Christian marketing is all about motive. A good place to start is by examining our hearts.

    And Valentine’s Day is a poifect day to start!

    PS: Sorry for preaching to the choir. 🙂

  16. I kind of bristled at the word cannabolizing. I know, its the business term. But I guess I see it as providing a wide range of products, like how Coke gives you an almost unlimited number of alternatives to itself. In that market, it’s seen as providing a larger shelf appeal. “Story tellers” should do this as well. It seems intuitive to me. I think the new digital media also allows us to provide a larger variety of story lengths and even genre. I love that I can watch Lord of the Rings or choose Lord of the Rings–Extended Version. I now have access to what the writer/producer had in mind in full. Could something like this be done on digital books? I have seen authors putting out shorter stories that in a totally paper book world would have been lost. I like this choice. Those writers and publishers who take advantage of the benefits of digital will be the ones to survive.

    • Rachelle Gardner says:

      Connie, providing a wide range of products is definitely part of a good strategy, you’re right. In our business, “cannibalizing” comes in when we provide various formats of the exact same product, but the newer format has a lower profit margin. (Format = hardcover, paperback, e-book.)

      • I see. Thus, the term :o). Which brings to mind a question I have that I’d love for you to address in a blog post sometime. How does the profit margin differ with e-books? From the novice point-of view, it would appear e-books would be less expensive to produce. But I’m sure there are factors I’m missing. I’d love to see a post on that if you get the chance. Thanks for keeping us in-the-know.

  17. Diane Yuhas says:

    Excellent post, Rachelle. As someone who has not written a book, I apply the principle to the purpose of my blog and my life. What am I here for? Is it to gain popularity through followers or to spread the fragrance of Christ? The latter, of course.

  18. Joe Pote says:

    Excellent post, Rachelle!

    I love how you used the Kodak example as a warning to the publishing industry.

    As someone very new to the industry, the transition period is all I’ve known. In some ways that may seem advantageous, because I haven’t locked into an old paradigm I must forget. On the other hand, it has made learning doubly difficult, because much of the advice is outdated.

    It’s a very interesting time to be involved, for sure.

    • Rachelle Gardner says:

      Joe, I’ve been an agent for four years but I feel much like you do — I’m too “new” to have gotten locked-in to the previous way of doing business. I think that makes me a bit more flexible. It has its advantages!

  19. Karen Jordan says:

    So, if I want to expand my platform, I’ve got to be willing to get out of my comfort zone and explore new territory. I’ve discovered that some writers are content to stay put. Others seem to be visionaries, exploring new frontiers. For me, I seem to be driven forward right now. So, I love that your post challenges us to get out of our comfort zones, taking the tools that still work with us and moving on.

  20. It’s a brillant post, Rachel. It couldn’t come at a better time. The misconception that had people to believe that there was a healthy relationship betwen the writer and the publisher was and, unfortunately, still is, the cause of many disappointments sustained by so many (established writers or not, including other supporting casts involved in the business. To the publishers, the writers are nothing but a product or by-product astucely packaged to be sold to bookstores. It’s interesting to see that the bookstores have a better return on your book, therefore making more money than you the author of the book!
    I’ve written an article on ISelfPub.com about the same phenomenon two weeks ago (1/31/12) called “Publishing: between dream and reality.
    Again, thanks for your excellent post!

  21. Excellent post. Excellent insight. Our goal as authors is to connect with readers. What matters is impacting their lives. It doesn’t matter whether it is through flipping pages or through a Kindle. It is freeing to have the goal clarified. Thank you!

  22. Brilliant, Rachelle. I keep pointing people to The Fantastic Flying Books of Mr. Morris Lessmore iPad app. As a writer and a public school teacher, I really believe this is what will happen to storytelling. Everyone, check this out on You Tube if you haven’t seen this app version of the children’s picture book:
    http://www.youtube.com/watch?v=z38EdtRHlnA

  23. Walt Mussell says:

    About a year ago, my son went on a field trip with his class. As we didn’t want to give him our digital camera, we bought him a disposable camera.

    We had to call around a lot to find a place that could actually develop the film.

  24. Brian says:

    I think the idea of paying for a single book whether it’s digital or not is a dated concept.

    I’d rather pay a monthly subscription to have access to an unlimited collection of books.

    Readers will then “stream” the books that appeal to them, and writers will receive a “subscription fee” for book views.

    Buyer’s remorse, I feel, goes up when I buy a digital book without being able to flip through it in a bookstore, but I really hate wasting time in a bookstore trying to find a book that the store might not have in stock. That’s such an old idea.

    Instead, with the subscription model, if I read through a couple of pages and don’t like it, I’m not out the cash for a single bad download.

    However, I don’t think the big publishing firms can survive a shift to a subscription model. They’ll have to eliminate a significant amount of overhead to make this work.

  25. I think writers are storytellers, but beyond that, we’re emotion-traders. Whatever we write: novels, essays, tweets, blogs, poems – the goal is to reach somebody who reads our words and says, “Wow, I share that feeling/thought/experience.” Repeat enough times, and the other person may be willing to buy our books or subscribe to a paying services, because they want to keep us in a position to keep feeding them *that* sensation.

    In the past, an author knew s/he had connected with others because people bought lots of books. A small number of those book-buyers wrote fan letters. Now, it’s the opposite way around – connect with potential readers first, possibly even interacting with them via Twitter, chat boards, Pinterest. I know as a reader when I have XX amount to buy a new book, I am more likely to buy a Twitterfriend’s new book than an unknown entity, no matter how well reviewed.

  26. joylene says:

    Oh boy, this is exactly what I needed to hear. I’m going through some changes in my attitude toward marketing. A little depressed, yes. But you’ve brought me back to what’s important by forcing me to ask myself the all-important question. Why am I doing this? Because I love to write and because I want readers to love my books. That’s it.

    What should it matter if my books are hardcopies or ebooks? It shouldn’t.

    Thank you, Rachelle! And not just for this post.

    Joylene Nowell Butler, Author

  27. When I try to click through, I get an error message saying I’m not authorized to view that website. But I read Between the Lines every day. So I went to my link for Between the Lines and got the same error message. Not sure what’s going on.

  28. Sharon L Reddy says:

    I feel sorry for most agents, but not you. You won’t be left behind. You’re looking for a place you fit to help push this art, craft and business into the future. See you there.

  29. Rachelle, what a thought-provoking post. I’m from upstate New York, the home of Kodak, and half of our church, community, and school worked there. From over 60K less than 30 years ago, to under 10K now. We’ve watched its demise, lost bright kids to other regions of the country and the loss of these jobs changed our demographic.

    BUT… We adjusted and that’s a crucial attitude in publishing, writing, marketing, etc. How much fun is it to read a book on a decked out Kindle Fire? Or on my cool Nook? Or in hard copy, like so many of my older readers prefer. But even they are switching to the lightweight, easy-to-use back-lit E-readers.

    SWEET. 😉

    Digital gives category authors a shelf life that rivals trade paperbacks. No longer are we “gone” after 30 days… I LOVE THAT.

    We gotta take the good with the bad and adjust our strategies and maybe our goals to meet the market.

    Kodak didn’t do that. Honestly, from a local perspective, I don’t think they wanted to, and that’s a huge difference:

    Because this author DOES want to meet the market, wherever it decides to go. Making people smile is the goal, and making my product readily available increases the likelihood of those smiles. 🙂

    “Good morning yesterday? You wake up, and time has slipped away…” Kodak used this lovely Paul Anka song as their commercial jingle. People CRIED watching these commercials… They were great.

    So we embrace these times, laugh, grin, smile and talk our way through them. Adaptable. And embraceable.

    Whatever it brings.

  30. Kaye George says:

    It’s refreshing that someone in the biz “gets” it. Thanks for the post. The “book” industry has indeed lost the way. Much as I lament the loss of Kodak, for purely nostalgic reasons, I agree with your observations. Exciting times!

  31. Steve Newman says:

    I saw an article the other day for a new Iphone and Ipad App called Cherry Tree. The idea behind it is to deliver new traditional children stories that teach lessons like the ones parents learned from watching TV in the 60/70’s. Recall “Conjunction junction whats your function? Hooken up words and phrases and clauses!” My thought, what a great niche marketing idea, targeting digital age savvy parents and bring traditional stories and values through the digital devices they prefer, like an Iphone/Ipad…

    To say accept Kindle and forget everything else is foolish. Think of that car that floated like a boat. Pretty good idea? Yep, But there were other ideas that came out, even better ideas.

    The way of the future is flexibility. Have the flexibility to target niche markets through all platforms especially new digital platforms as they come to market. And they will. Target the the audience with content suitable for the platform they prefer.

    The key is connectivity…

  32. Thanks for your thought provoking post.

    One question that occurs to me is what value will consumers place on digitally downloaded books in the future?

    Assuming digital is the future it is worth considering the ongoing changes in the music industry where piracy is a serious issue and market forces are driving prices down. Of course everybody wants value for money, When Radiohead released their album In Rainbows the download version was initially offered on the basis that customers paid what they thought it was worth. Figures vary, but surveys suggest that around a third of customers paid nothing, whilst Warner Chappell said that ‘most people paid nothing’ for the album. My friends in the music industry tell that there is now a perception (amongst consumers) that recorded music has a low intrinsic value; that people somehow expect to get their downloads or streaming for nothing.

    Digitally downloaded books are here to stay. It’s easy to see many positives in this However, it remains to be seen exactly how these changes will impact on the perceived commercial value of our beloved masterpieces.

    It will be interesting to see how the literary market evolves.

    Best wishes,

    Christian

  33. In discussion with a bookseller representative who toyed with the idea of digitally publishing any local author who came into his stores, I heard the words, “Because the more books, the better. Right?” But flooding the market with volume isn’t our ultimate goal. Sending out a stream of sweet, Living Water is…a supply with no limit and no aftertaste. Stories prematurely served leave an aftertaste that can spoil a reader’s interest in stories as a means of entertainment and education. As we adapt to and innovate for new means of connecting our stories with readers, we can’t lose sight of the need to retain creative energy for cooking up great stories worth serving. Great, thought-provoking post, Rachelle.

  34. Doug says:

    While I agree that the Big Publishing Houses have much to learn from Kodak’s collapse, it’s not that they’re focusing on the wrong thing.

    It wouldn’t have mattered if Kodak had decided that its business was “moments.” There simply isn’t enough money in digital moments to support a company anywhere near the size of Kodak. Snapshots are being taken with mobile phones (no camera or film needed) and sent to Twitter, FaceBook, Tumblr, or whatever (no processing or printing needed). There’s no place for Kodak in there. The “moments” business now belongs to small, low-cost operations like Hipstamatic and Instagram.

    There will always be film, and there will always be paper books (for some value of “always”). But the legacy medium is going to produce far less revenue than it has, and the digital medium will never produce enough revenue to compensate.

    According to statistics from the Association of American Publishers, e-book sales in the US have been flat at about $80 million (USD, wholesale) for the past six reporting months (June-Nov 2011). Those are sales from their reporting [established] publishers; presumably e-book sales are still going up at the small publishers. In the meantime, sales of printed books at AAP’s reporting publishers continue to slide.

    E-books are the province of small low-overhead operations, not of big multi-national multi-imprint publishing houses.

    For the ‘Big 6’, the party is over. If they want to survive, they need to start planning for massive down-scaling.

    • Firebyrd says:

      Doug-you have to take a sales figure like the one you presented with a grain of salt. You see, you’re describing the sales of people who are doing things like charging more for the ebook version of books than the paperbacks cost. Of course their sales are flat. There’s only a limited number of people willing to pay $10+ for a book. Amazon knows this. That’s why they wanted to do the whole $9.99 max price initially, but the publishers fought that until Amazon caved and allowed them to set the prices.

      Looking at the ebook sales figures from the industry that’s doing everything it can to kill itself is hardly an indictment against digital.

      • Doug says:

        Firebyrd: “Looking at the ebook sales figures from the industry that’s doing everything it can to kill itself is hardly an indictment against digital.”

        The point is that the Big Publishers *can’t* survive. People are reading fewer books, and they’re insisting on paying significantly less for each book that they do read. The money simply isn’t there to support the high fixed overheads and royalty advances of the Big Publishers, in the long term.

        E-books are the future, but they’re the future for small, low-cost publishers like Amazon who offer minimal (if any) advances, and for self-publishers.

        • Firebyrd says:

          I don’t think we have the information to determine that they /can’t/ survive. They definitely won’t with how things are, but that doesn’t mean it’s not possible. If they started to price appropriately for the format, they might be able to increase sales enough. Who wants to pay $16-18 for the ebook of the latest Stephen King? Many of the “cheaper” offerings I see for major titles are around $12. Paperbacks usually cost less than that! When they expect people to pay more for a bunch of virtual bits than they do for an actual, physical product that had to be manufactured and shipped, their business practices are so poor, they probably deserve to go out of business.

  35. Bill Swan says:

    Transition is the word.
    Think about it: fax existed in the 1960s — that’s how newspapers received daily photos. Fax in the 90s became the way of delivering business material. But fax was a transition: road kill by email.
    Email is still with us, the the transition is well advanced: every hear of the Cloud?

    This weekend, the newspaper told me of three books that should be read. I downloaded each onto my iPad for $30 in total.

    So the delivery system has ‘transitioned’. Will the ebook be the new normal, or is this part of a transition into some other new technology?

    Be prepared; be flexible; at least don’t plan on being road kill.

  36. Great post. Thought-provoking. I’ve always seen myself as a writer who wants to invite others along on a journey to intimacy and freedom with Jesus, using whatever method is at my fingertips–but this post reminds me to keep that central, and not to get too attached to any method for reaching that goal.

    • Rachelle Gardner says:

      Paula, that’s exactly what I mean. When you stay focused on the real goal, you won’t be so freaked-out if the methods are changing.

  37. Donna Pyle says:

    Thanks for re-posting this here – I knew it would be worth it. You hit the nail on the head. Publishers not willing to embrace the alternative methods of publishing will be going the way of Kodak. What’s valuable to a reader? Access, content, life-impact. Remove any of those and readers will look elsewhere. There’s no shortage of avenues.

    • Rachelle Gardner says:

      “What’s valuable to a reader? Access, content, life-impact. Remove any of those and readers will look elsewhere.”

      Exactly!

  38. Deb says:

    Story-telling is the business of entertaining people – what format people prefer to receive their entertainment determines the format. I prefer paperback. Makes for much easier tub reading, which is my preferred reading place. Electronic devices and water don’t mix; I drop my paperback in the bath, I lose one book; drop a Kindle in the sudsy water and you lose potentially hundreds. Doesn’t make financial sense to me. There are many like me, who prefer books over e-readers. There are many that don’t. And on the reduce/recycle end of things–books are paper. Paper can be recycled and more books made (and jobs created through the recycling end of things). Kindles/computers/ebooks are toxic plastic and other what-not–not easily recycled and like other electronic waste end up polluting some poor city in a third-world country. There’s an argument for both sides, and we each have to live according to our beliefs. I believe in paperbacks. 🙂

    • Rachelle Gardner says:

      I hear you, Deb. But we all need to realize that our personal beliefs and desires aren’t driving this train. We are in the minority.

    • Peter Dudley says:

      Deb, for a self publisher, it costs about $0 extra and a few hours to make a print version of an ebook available through Amazon. This isn’t really about print versus digital; it’s about the role of agents, publishing companies, and bookstores, isn’t it?

      Those of us old enough to remember DOS before Windows, and a world without PDF and Netscape, remember these same discussions in other industries and other products. Did you know that Smith-Corona still exists and is today “innovating and creating its own chaos in the label market”? Yeah, neither did I until I googled it just now.

      In business, success breeds growth. Growth creates burdens of structure and group-think. Only someone free from those burdens can innovate. Amazon was not born from publishing; it was a technology and distribution company at first, which meant its employees weren’t wearing the blinders of the publishing industry.

      I don’t think agents and publishing companies are in the business of telling stories. Authors are in the business of telling stories. Agents and publishers are in the business of connecting people (I hesitate to say “readers”) with the stories they will enjoy. There are many aspects to this–finding great stories, polishing them, packaging them, distributing them, and elevating the “best” to high market visibility.

      All of these things Amazon (along with others) either is doing better, faster, and cheaper; or is enabling the author to do him- or herself.

      And with the rise of 99-cent ebooks (maybe it is a little about digital versus print, Deb), we may see a growth in individual short story series. Publishers think in novels and anthologies, but I’m beginning to think in chapters.

  39. Rachelle…I really like this comment you made:

    “Publishers, agents and authors need to start from this very important truth: We are not in the “book” business. We are in the business of storytelling.”

    When you look at it from that perspective, it opens up entirely new worlds of possibility and probability. When we get too overly narrow in our focus, we lose perception about who we really are and what we’re truly meant to do.

    Good stuff.

  40. Marie Force says:

    I’ll never forget the moment, early in my career as a published author, when I realized that publishers consider booksellers, rather than readers, their primary customer. I remember thinking how totally messed up that was, followed soon after by discovering how doubly messed up the return policy is. I couldn’t agree more that we are all in the business of connecting readers with stories, and those who keep the focus there–whether authors, agents, publishers or booksellers–are the ones who will survive the transition and succeed in the future. As a now primarily self-published author, I’m all about my readers. But then again, I always was.

    • Rachelle Gardner says:

      “publishers consider booksellers, rather than readers, their primary customer”

      Insightful!

  41. Erin Ivy says:

    Excellent post!

    Just to help with bug detection (based on other posts of trouble reading): My google reader would not let me click over with “finish reading this post” either – gave me a “no permission” statement of some sort. I had to click on “read original post” instead.

  42. Like Emma I’m having trouble clicking over, but fortunately I memorized the post word for word after I read it this morning. 😀

    It’s an excellent perspective on learning to be relevant and getting to the core of why we do what we do.

    I’m a truth teller. And I like to start conversations. I’ve discovered the creative act of story-telling provides a fantastic playground to do both.
    ~ Wendy

  43. Connie says:

    Excellent post! Thanks so much. I’ll be thinking about this for a while, and I’m looking forward to the next installments.

  44. Timothy Fish says:

    More than asking what business we are in, I think we need to ask ourselves why. I think Kodak lost track of why they were in the camera business, so when low-end consumers went one way and high-end consumers went the other, Kodak was sitting there pumping out stuff that no one wanted. The more I see of the publishing industry, the more I am convinced that why has long been forgotten. I don’t think that is as much true of authors, but I suspect that is just the nature of what we do.

    • Rachelle Gardner says:

      EXACTLY. “Why are we in business?” The question we need to know the answer to, and keep in front of us at all times.

    • They needed to watch the epiosode of Mad Men where Don Draper sells the photo carousel, in which he essentially takes a clunky piece of tech no one wanted it and connected it to people’s collected memories. Kodak needed Don Draper.

  45. JP Kurzitza says:

    “Originally, the purpose of a publisher was to connect writers with readers. Lately, publishers are more concerned with selling as many pieces of paper as possible. Ebooks are priced high to protect paper sales. The agency model forced on Amazon is to protect paper sales. Windowing is to protect paper sales. If publishers truly wanted to connect writers and readers, there is no better way to do it than digitally. Writers are essential. Readers are essential. Publishers are not.” ~ Joe Konrath.

    Sadly, now isn’t the time to start re-examining the publishing model. It was in 2007.

    • Rachelle Gardner says:

      JP, you’re so right. In part 3 of this series, I mention that NOW — or three years ago — is the time to be changing. Anyone who waits is going to be left behind.

  46. After writing a long response to the question, your server crashed or did maintenance, so it was all lost. Therefore, rather than repeating it, I will simply get to my idea.
    Since publishing companies are 1. In the business of sharing the mind’s creativity. 2. Publishers must see the future and pour all possible resources into becoming linked with E-Books.
    3. Kindle is going to be the format, so stop arguing and get on the bandwagon of the E-book “Windows.” Work a deal with Kindle to have a Harper Collins Kindle that will sell for a huge discount, but will have adverts and promos on it. Ta-da!

    • Thanks for your email, Rachelle. No problem with the crash as things like that happen, but it made my day that you cared enough to send a personal email.

      As for the above comment, the third idea is basically from the cell phone companies. We get discount phones if we buy the plans, so why should publishing companies not do the same?

  47. Ooooh, it’s working now! 🙂

  48. I don’t like this new system… I tried to click to read the rest of the article and received an error message saying you’d reached capacity.

    I’m disappointed; this looked like a good post.

    • Sabri says:

      Thanks for the info Hon Xtra funds are always nice, but I’m also tyirng to get myself and my work out there and known. Have a good day.

  49. Susan Bourgeois says:

    I think you stated it well when you said we are in the storytelling and entertainment business.

    How many times have you stressed the importance of building a platform?

    A part of me wants to move forward in a big way without waiting for the completion of my book.

    I have numerous ways to build a platform outside of waiting to complete the book. I’m not talking about a non-fiction platform.

    Am I holding myself back from not moving forward with many of the ideas I have in mind? I could be doing just that.

    A great example of this is the movie Julie and Julia.

    In an attempt to take control of her life, Julie Powell, trapped in a dead end job, forges ahead and focuses on re-creating hundreds of recipes from her idol, Julia Child. Julie creates a blog where she describes her daily attempts for an entire year.

    Maybe I’m off base here, I tend to do that at times, but this was yet another way of taking an idea and turning it into four forms of entertainment or storytelling.

    1. The blog
    2. The book
    3. The screenplay
    4. The movie

    I don’t know if this is the correct order but many times, it’s not the book that comes first, it’s the idea in general.

    Once again, one of your posts makes me take time to think about what direction I want or need to take as I continue to complete the novel.

  50. Amanda says:

    “Is there any risk for writers of cannibalizing their own businesses as they seek to keep up with changing market requirements?”

    I think it helps to view it as a transition period, working to remain relevant and reachable in the evolving storytelling business, rather than viewing it as competing with our own products. I’m beginning to view this print vs. digital era as somewhate of a Venn diagram, where most of our marketing actions must dwell in the happy overlap area where the two worlds “collide,” but some marketing actions will inevitably (and should inevitably?) lie in each of the the far reaches of the solitary circles, to be either phased out or embraced fully as the industry continues to change. Risk? Sure, but an exhilarating (though sometimes frightening) time, to be sure.

    • Rachelle Gardner says:

      Amanda, good points. This definitely is a transition period. I wonder how long it will last, and when we’ll settle into a “new normal.”

      • Emmly Jane says:

        I believe we are already well past the halfway mark of the transition. Today libraries are already acknowledging the digital age by offering their customers digital versions of books.

        As an aspiring writer, I would love to see my work in book form one day. But I also realize that my main targeted audience are will be those embracing the digital age. I am an avid Kindle reader for the past two years. I am still taken by surprise occasionally when a publisher has not made the book available in digital format.

        Only a rare occasion will a break down and purchase the hard copy of an item. When I do, you can believe it must be something of exceptional value in my opinion.

        Publishers of children’s and young adult book especially need to realize that kids today expect things in digital. That age group is “programmed” for technology in mind. My 9-year-old’s favorite Christmas present this year was her Kindle touch.

      • Dozie Nzewi says:

        Follow the Bible. It’s always up to date with technology, since the days of Gutenberg. There have been audio bibles forever. Big print Bibles, chronological Bibles, red print Bibles, subject Bibles and indeed interactive bibles. The Bible is very successfully distributed on new media.For the first time lay individuals can own bible resources that could only be found in the library of Bible schools.For the first time the individual can own almost all the translations and versions of the bible in existence along with a great array of support literature. And be able to carry this library everywhere in a phone. This is what is going to happen with books, people will own books much more easily, on a similar scale as music and film. All kinds of books, even school books. Also books will join the media fusion: today telephony, social interactive media, video and email are retailed together on Google, Yahoo, Facebook etc. Books are lagging a little. It already is a reality that all these media forms can be consumed on a single device. The KJV may be the first book to go virile. We’re waiting for the next. An easy sweet book by a very popular person could easily go virile. As a matter of fact todays technology accords an opportunity to relaunch those series that every child read in the course of growing up. How many Agatha Christies did you read? James Hardley Chase? If this happens I hope somebody gives me credit for these potentially multi-million dollar birthers. The Bible will show us the way.

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