"We've heard it before," my quotable neighbor said of this morning's CEO panel at a packed Digital Book World, "but they said it well." David Nussbaum, the ceo of the conference organizer F+W Media, led the discussion with Jane Friedman (Open Media), Mike Hyatt (Nelson), Brian Napack (Macmillan) and David Steinberger (Perseus).
In contrast to the same time a year ago, the panel's executives were generally pleased to find themselves in the middle of a digital market that is broadening. Echoing Steve Jobs' remarks on the introduction of the iPad, Brian Napack said, "Amazon did us a great favor by proving there was a market for paid content," while underscoring that "now that Amazon represents a significantly lower percentage of our business, call it 60 percent, is a wonderful thing." (He added that "we've seen Kobo have a real uptake with Borders in the past few months.")
Steinberger agreed that "we're in a much healthier environment" in the digital market now. "It seems like there are new opportunities every day." One of the biggest, which Steinberger mentioned at the very end of the session, is "the international market for English-language books, which is a tremendous untapped market." He acknowledged that "there's going to be a lot of hard work on the rights side," but "the audience is going to be there. (Immediately following the CEO panel, conference programming chair Mike Shatzkin picked up on this theme as well as "another big thing that's going to happen in the next year." He said, "In the next 12 months publisher are going to wake up to the fact that they need to get those open-market territories. If it's possible to get those rights, it's worth going back to the agents.")
As a group the panelists were optimistic--as Forrester's James McQuivey told us would be the case based on their recent survey of publishing executives, even as they focused on different opportunities and challenges. While Forrester reported that executives believe half of all book units sold will be digital by 2014 (though, ironically, they also believe it won't happen to their companies until the following year), Nelson's Mike Hyatt noted that for now "a bigger shift that we're all facing is the physical distriubtion of books through online retailers. This last year we saw a marked increase in that shift. Borders' plight is an example of what's happening with bricks and mortar."
The most contentious point came during question time, when blogger Sarah Wendell asked Napack about Macmillan's policy of not allowing libraries to lend their ebooks. Napack underscored that Macmillan "believes in libraries" and their "critical role in society" and said that the company has "spent a heck of a lot of time searching for an appropriate business model that will allow us to work with libraries." He said the issue "has not fallen by the wayside" and they "continue to wrestle with it," even though they have not arrived at a solution yet.
On this point, Friedman disagreed with Macmillan's approach, arguing that "the library consumer has not traditionally been the book buyer. Now because buying books is so easy and so reasonable, my goal is have those books in the library and maybe you'll make a new customer.... If she likes what she reads, she is one click away from a sale."
Among some of the other subtle points of distinctions among the panelists, Steinberger looked away from impact of ebooks on big fiction bestsellers and said that "fundamentally digital is about lowering the barriers to market and sell books." He "sees a giant wave [coming] where the book that has a more modest audience is going to reach people in a way that's more seamless than ever before."
Nelson's way of reaching those audiences reflects Hyatt's own experiments and engagement with social media (through initiatives like their BookSneeze program), and the company's focus on particular reader communities. "The trust and attention of that audience is critical in my business," Hyatt noted. He remains a believer that publishers still need to "focus on creating great content first... It was never more important that now, with social media. the word gets out quickly...and is amplified and leveraged."
Napack reminded the audience that "there have always been retailers who published books." The essential question for publishers is "are we doing what we really need to be doing to attract authors?" Saying that "we're entering the golden age of publishing" with "devices in the hands of tens of millions of people," Napack's other question was "is it the golden age of publishers?" One answer involves acquiring complex "new skill sets that move well beyond our [existing] skill sets," at a time when lots of companies and industries are competing for the same people.
Friedman scored emotional points in noting that "what we're talking about today is community" and indepenent booksellers "been practicing social media since the begin of time, we just weren't calling it that." She thinks the world has come "full circle" and indies "have an opportunity." Those stores are "going to be a very small portion of sales," Napack replied, "but their role in bringing books to market is essential." He added, "the challenge they face is being the showroom for online" purchases.
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