Time for a digital party

(This is a summary of the speech Victoria Barnsley gave at the London Business School, at their media summit on 4/11/05. This text also appeared in The Bookseller.)

If publishing was once a business of mass production, where one sold ever-increasing print runs of ever-decreasing titles to more and more people, the digital age will reverse this. It offers a world in which individual consumers will increasingly be heard, where publishers and authors can, for the first time, have direct contact and relationships with consumers.

At HarperCollins we’re pouring resources into online and relationship marketing and moving our blanket, one-size-fits-all, print promotions to targeted on-line communities.

It’s the interactive nature of the on-line world that we need to harness – a world where authors and readers communicate via websites, blogs and podcasts, where readers start influencing authors’ content and start generating their own. Where whole new genres emerge, such as fan-fiction. As a publisher, I’ve always known that as many people want to write a book as read one. So how do we leverage this?

Consumers these days want experiences as much as things. They want to be part of communities. We only need to look at the chart success of the Arctic Monkeys for proof. Here’s a band that reached the top of the charts, not through the savvy marketing of a record company, but via a self-generated forum on MySpace.com, that created an online community and forged an impressive fanbase. As one marketing company put it to me the other day: “Consumers aren’t listening to us any more, they’re listening to each other.”

Publishers must make sure they occupy this space. We can no longer see ourselves as simply the sellers of products – we need to muster all our creative talent so we can enhance, and manage, the relationships between authors and consumers as they interact in an on-line community.

Traditionally we’ve always acted as middle men, between the author and consumer. There is a view that in the virtual world, the intermediary’s no longer needed, that the publisher’s role is superfluous. The fear instilled in publishers by Google and Amazon is partly that they see them as having the capacity to supplant us in some way. Amazon, in particular, is already cultivating the agent and author community and, in a world where the traditional roles of retailer/publisher/marketeer/author and reader are blurring, it seems fairly clear that Amazon would like to occupy that relational space between author and reader. Why else have they launched Amazon Shorts - original commissioned short stories for which they charge 50 cents a download?

Meanwhile, Google is intent on digitising the world’s content, whether it’s in copyright or not. The search engine’s changing our world. Google estimate that 28 million people used a search engine to find a book in the last six months, and more than half of them went through Google.

I remain confident that the publisher’s role can’t be replaced by these internet giants. Their businesses are retail and search and they lack the creative skills to enhance the authors’ own work in the way that we do. However in the last few months many publishers and authors have become very exercised about search. So what are the issues?

First up, there are obvious concerns about security and copyright. I’m probably in a minority in that I’m fairly relaxed about this – without the hardware, I don’t really believe illegal copying is a big issue. Or not a big enough one to outweigh the obvious benefits of search. Or, to put it as an author did recently: “The biggest threat we face isn’t piracy, it’s obscurity”.

There are also doubts about the business models. Google’s is based on splitting advertising revenue with publishers. But if the experience of the US publishing companies who’ve already participated in the Google Print programme is anything to go by, advertising will not be a significant source of revenue, not in the short term. MSN, Yahoo and Amazon Pages are all talking versions of pay-per-view, and we feel this is potentially more attractive. However, until this model is tested, the real benefit seems to be in title promotion and the ‘buy the book’ link.

Mind you, it’s quite a price to pay to hand over all your content to be digitised by the likes of Google or Microsoft. To many publishers, this feels too much like handing over control. Obviously we want to work with the likes of Google and Amazon. We’d be mad not to. But we need to operate a fire-wall between the search-engines and our content, so that we can control its use and exploit its value for our authors.

With this in mind HarperCollins Worldwide has announced plans to create a global digital warehouse for our titles, which search engines will be able to visit by means of an index. This will allow us to meet the demands of the digital age while retaining control of our own digital files and thereby our intellectual property.

It’s by this kind of thinking that I hope publishing will take advantage of the fact that it’s rather late to the digital party. We might not’ve been catapulted into it as abruptly as the music industry, but it will fundamentally change our business, and we need to be as prepared as possible.

For me there are two big questions facing publishers in the 21st Century. How we bring added value to the author/consumer relationship in the on-line world – which still isn’t yet clear – and how we’ll make money out of it, which is even less clear.

Our USP has to be the linking of content and community, and somehow, we have to wrap this together with a viable business model. This is the space that we need to focus on, because whether the genuinely user-friendly e-book is developed this year (and Sony have come pretty close), or in 20 years – the internet is fundamentally changing the relationship between authors, readers and content.