The United States of Publishing 2010: Status and Predictions

Information Media Partners – Michael Cairns – infomediapartners.com

The United States of Publishing

Michael CairnsInformation Media Partners


Introduction and Agenda

US Publishing Today Trends by Segment Publishing in the Digital Age Closing Comment


Publishing: Like Any Other Industry

Change Dislocation Speed Technology


Characterizing the Marketplace today

Subdued Anxious Retrenchment Confusion Jealousy


Key Segment Business Drivers

Trade Big author block

buster Technology –

Products Technology –

Distribution Retail stability Media tie-ins

“Celebrity” Conflict over

‘attention’

Information Practicing

professionals Macro economics Library budgets Government

investment Workflow

applications Technology

innovation

Education Government spending –

NCLB Education Policy

Local & state Adoptions Taxes

Enrollments Economy

Continuing education Community colleges Long distance Vocational/Technical

Workflow tools Evaluative Administrative


Revenues Look Healthy

$39,936

$40,321

$41,040

$42,028

2007 2008 2009(E) 2010(E)

Source: BISG Trends Report 2009

($,Millions)


New Book Titles and Editions: 2003-2010(E)

764,448

288,355

215,138

2003 2004 2005 2006 2007 2008 2009 2010

SelfPubs Traditonal

Source: R.R. Bowker


Publisher’s Net Dollar Sales By Segment

0

2000

4000

6000

8000

10000

12000

14000

2007 2008 2009(E) 2010(E)

Adult Trade Childrens Religion Professional

Scholarly Elhi CollegeSource: BISG Trends Report 2009

($,Millions)


Sectors Share of Book Industry, 2008

Adult Trade, 27%

Childrens, 9%

Religion, 8%

Professional, 22%

Scholarly, 4%

ElHi, 18%

College, 14%



Sales by Format 2008: Percentage of Total

Hardcover, 44%

Trade Paper, 37%

Mass Market, 9%

Electronic, 2%

Other Print, 8%

Audio, 1%



Channel Sales 2008: Percentage of Total

Specialty, 6.7%

Internet, 11.4%

Education, 32.6%

Other, 5.1%

Public Lib, 4.0%

Bookstores, 15.8%

Org/Direct, 7.5%

Wholesale, 10.6%



Growth Leaders and Laggards, 2007-8

Adult Trade, 9.0%

Childrens, -2.0%

Religion, -3.2%

Professional, 3.4%

Scholarly, 1.7%

ElHi, 3.5%

College, 4.2%

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%



Forecast Compound Growth Rates 2008-10

Adult Trade, 1.6%

Childrens, 0.6%

Religion, -0.5%

Professional, 2.4%

Scholarly, 1.5%

ElHi, 3.0%

College, 3.5%

-1.0% 0.0% 1.0% 2.0% 3.0% 4.0%



Sales of Trade E-Books $ Millions

$11.2

$90.0

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

Source: IDPF


Sales of Digital Textbooks: Percent of US Market

0%2%4%6%8%

10%12%14%16%18%20%

2010 2011 2012 2013 2014

Source: Misouri Book Company


Many publishers have been publishing in e-Formats for

many years.


Pearson: Digital is 31% of revenues in 2009.

Wiley, Elsevier, Wolters Kluwer have similar statistics


18

Publisher Education Trade Info/Academic Other Total

Reed Elsevier $8,525 $1,006 $9,531

Pearson $2,905 $1,573 $760 $562 $5,800

McGraw Hill $2,388 $954 $2,610 $5,952

Wolters Kluwer $4,562 $4,562

Houghton M H $2,000 $500 $2,500

Kaplan $2,636 $2,636

Cengage $1,437 $297 $224 $1,958

J. Wiley & Sons $230 $413 $969 $1,612

Scholastic (US) $400 $1,165 $1,565

Informa $461 $577 $380 $1,418

Random House (US) $1,280 $1,280

ETS $900 $900

Harpercollins (US) $840 $840

Simon/Schuster (US) $730 $730

Macmillan US $667 $667

Hachette (US) $670 $670

Harlequin $500 $500

Total $43,121

Counting the Publishers: Increasingly Difficult

Source: Publisher Web Sites and Publisher’s Weekly


Nothing is clear or clear cut: Significant Confusion


So if we can’t really rely on the reported numbers, then

what?


Can real experience be a guide?


Lessons learned from the Evolution of Information

Publishing


Information Publishers were trailblazers

CompetentMaster Learner

EducationInformation Trade

20031990 1995

20102015 2001

Rapid InvestmentNew Dangers Caution


Information Publishers Took Nothing for Granted

Where are the boundaries? Who is the customer? How to reach them? What is the role of technology?

Information Media Partners – Michael Cairns – infomediapartners.com25

In The Beginning: Lexis

Secondary Legal

Content

Secondary Legal

Content

Primary Legal

Content

Primary Legal

Content

Books, Journals,

Directories

Transcripts,Proceedings,

Opinions


Success in Information Publishing

Build deep, narrow content verticals Eliminate the distance to the customer Integration with workflow and activities


The LexisNexis Model

Secondary Legal Content

Primary Legal Content

News & Business Content

Public Records

Company & People Information

Global Application of Platform and ContentGlobal Application of Platform and Content


Critical Success Factors

Direct sales effort fuels product development Core to basic functions: Doctors, lawyers, and

business analysts, etc Raise job performance Improves worker productivity Topic specific vocabularies and thesauri


From Print Monographs to Integrated Solutions

Development of ‘platforms’ Expanding the Market Subscription Revenue Model Database Marketing


Education is next to adopt the strategy

Consolidation: Segment and subjects Investment supported by margin growth Reduce distance to customer Expand value chain Broader definition of ‘customer’


Publishing in the Digital Age

Thoughts and predictions


Remember the Characterization?

Subdued Anxious Retrenchment Confusion Jealousy


Are things really that bad?

During 2009 Book Publishing a winner No ‘resurrection’ during 2009 Executives guarded about immediate future Short to medium term problems with

education and library funding No industry bail-out


What hasn’t happened?

No trade consolidation Far less Merger/Acquisition activity Collaboration across the supply chain Stable physical book retailing environment


Change is Coming

Trade Re-evalution of

value chain Direct to

consumer models Publishers as

retailers, retailers as publishers

Information Software as a

service Application

providers Service

outsourcers Embedded

content

Education Expanded value

chain Solutions

providers Custom

production Content,

Assessment, Remediation, Management


eBooks and eContent holds center stage

2009 ‘Year of the E-Book’ Apple’s (Hardware) role in book/media

content will be defining Google Editions: “The Cloud” Content ‘rights’ challenged: Concept of

ownership E-Content rather than E-Books E-Content another format option


How Trade Evolves their Communities

Subject specific content silos Exchange titles/imprints with other publishers Publishers license ancillary and related

content: Drive repeat traffic Become sites within sites: Build community

with consumers Build other services


Forecasting Publishing In The Digital Age

Publishing and technology will become synonymous

Web delivery, xml based and ‘open’ social network orientation

Expansion of solutions based publishing Education publishers rapid adoption of

solutions based applications Slow publishers will loose to new entrants


THANK YOU.

The United States of Publishing

Michael [email protected]

Blog: personanondata.blogspot.com