Why There’s No Innovation in the Publishing Industry

159064314_c696574d43_oJoe Wikert has just inadvertently proven that the book publishing industry drowned most of its innovators at birth.

Earlier today Wikert published a post titled Whatever happened to innovation in the publishing industry?, and proceeded to unintentionally answer his question by example. At the beginning of his post, he cites the Kindle as the last major innovation in digital publishing:

Remember the excitement surrounding the launch of Amazon’s Kindle eight years ago? It was a clunky device, even by 2007 standards, but it was revolutionary. One of the original Kindle’s breakthrough features was the ability to download books via cellular network. The eInk display and extremely long battery life also led to its popularity despite the device’s hefty $399 price tag.

That was eight years ago and it’s hard to name even two or three other innovations that have had as significant an impact as the first-gen Kindle. Sure, the iPad was noteworthy but it didn’t exactly reinvent reading. And while today’s devices are faster and cheaper than yesterday’s they feature incremental improvements, not groundbreaking innovations.

The same can be said for all aspects of the digital publishing ecosystem, not just devices. The most interesting development over the past few years is probably the all-you-can-read subscription model. But any momentum there has been halted as Oyster is about to disappear and Amazon’s offering has no Big Five content. FWIW, I still believe in all-you-can-read models but only if they’re focused around a topic/genre and they avoid the unsustainable business model that crushed Oyster.

The Kindle was a disruptive innovation, that is true. It wasn't the first ereader but it was the first truly successful one and it changed everything.

But there is a problem with citing the Kindle when talking about innovation in publishing, and that is the fact that the Kindle was developed by a retailer, and not by anyone in publishing.

And let's not forget this industry is dominated by five major players whose last great idea was to conspire with Apple to try to strangle Amazon's ebook innovation.

And to make matters worse, Wikert's other example of innovation, the all-you-can-read subscription model, was developed by a retailer (Amazon), a document hosting company (Scribd), and Oyster. So even that innovation came from outside the industry.

While Wikert wants to know what happened to innovation in the publishing industry, his examples show that by his standards there haven't been any major innovation in a long, long time.

But are his standards correct?

Andrew Rhomberg, founder of the ebook startup JellyBooks, has a different take. "Publishers will tell you that they are innovating like hell - but on their terms," he told me by email. "And there is some innovation through tech start-ups focused on publishing (as opposed to publishing start-ups using a bit of new tech), but a lot of oxygen has gone out of the room."

Rhomberg is referring to the general level of arch-conservatism that infests book publishing, an industry that never met a new idea that it didn't try to smother at birth.

That conservatism is why the Kindle was invented by a retailer, and it's also why Rhomberg says that "the start-ups that are thriving, like Wattpad, Lost My Name and others, do not depend publisher assets, content, or IP". Rhomberg's startup is a case in point. JellyBooks doesn't depend on publisher IP; instead it's focused on selling publishers reader analytics as a service.

All in all, it's rather pointless to ask what happened to innovation in book publishing when anyone who has attended a publishing conference can tell you what happened.

The book publishing industry is what happened to innovation in the book publishing industry. It is that simple, and rather than try to push this industry to be less conservative (what Wikert is trying to do), I think that our energies are better spent on looking for innovators changing the industry from the outside.

P.S. Here's one example, and here's another.

image by mrbill

About Nate Hoffelder (11582 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

22 Comments on Why There’s No Innovation in the Publishing Industry

  1. I must respectfully disagree with the idea that publishers didn’t invent the Kindle out of timidity. Publishers just don’t have the resources to invent entire platforms, even if they’re working together (and you’ll recall that when publishers do collaborate, the anti-trust laws get invoked.)

    Publishing margins are very thin, and this kind of expansion is too speculative an outlay of huge amounts of money to be even considered. We’re always being dinged for our conservatism, but what’s less widely understood is that we have to be extremely cautious. It’s very easy to make an annual loss if you’re not careful.

    What you will generally find re: innovation in publishing is that it happens in a business only when it is awash with unexpected money. When a windfall blockbuster has made the business millions of pounds of profit, that’s when some of the cash shakes out – ten grand here and there – to fund some speculative digital innovations.

    The problem though is this: you can’t necessarily call yourself a publisher unless you’re publishing regularly, and if you can only afford to invest a few bob every few years, you’re just going to be occasionally popping digital things out into the market. In digital, most of them won’t make money, because in books nobody has found a way to make real cash out of anything that isn’t an EPUB yet, not even Amazon or Apple.

    Sure, there are some good book apps by book publishers, but they barely ever break even. Nobody buys them. There are innovative book-based digital startups, and very, very few of them become viable businesses. It’s not like people aren’t trying to crack this code, but the economics make it very tough.

    On the issue of subscription services: a huge problem here is that nobody has any idea of what a mature market will look like. What’s the value of these rights? That’s always the question in publishing. I’ve seen book contracts from the early 2000s, negotiated by top literary agents, which split a 5% ebook royalty between author and illustrator. Nobody had any idea what was going to happen or what those numbers would mean ten years later.

    Do subscription services cannibalize print or ebook sales? Who knows! Is it possible to nick Kindle Unlimited books quite easily and keep the files? Yep! What’s the appropriate monthly remuneration for inclusion in the KU (or Scribd, or Oyster) program? We have no idea! And all this stuff requires literary agents, publishers, and service providers to come to some kind of consensus in actual legal contract boilerplate before the books can be offered in such a way. Oh, and we need to do this for every individual author on a list, because every contract is different.

    I admit to being frustrated by the slow progress of digital innovation too, but it’s not just because all us publishers are dickheads with no vision. There are practical obstacles to be overcome before we can push forward.

  2. Actually, the publishers invented *two* ebook platforms in the last century. Then they merged them into a single platform, sold it Gemstar which was taken over by NEWS CORP and then run into the ground by running it like the big corporate publishers want Kindle to run.
    Very long, very ugly story.

    It has been summarized many times.
    This one I have “some” knowledge of:
    http://www.thepassivevoice.com/2014/10/the-story-thus-far-generation-zero/

    😉

  3. The Big Corporate Publishers want “innovation”.
    But they want “innovation” that doesn’t change a thing in their little empires. (And yes, little is exactly the word that applies. Unless you prefer “Petty Kingdoms”.)

    Having failed to do genuine innovation, of the obsolete-your-product-before-somebody-else-does-it-to-you, they have now spent five years looking for a magic silver bullet to “Kill Amazon” totally unaware that while they fight a losing rearguard war downstream, the real disruption in publishing is happening upstream.

    Keep an eye on the timid mutterings out of the US Authors Guild and the much louder grumbling out of the UK’s Society of Authors. That is the next battlefield for control of publishing.

    As always, losers keep trying to fight the last war, trying to undo faits accompli, totally unaware that the tide has passed them by.

  4. It seems to me that both examples, the Kindle and the subscription model have nothing to do with publishers. Even if publishers had thought them up they wouldn’t be publishing innovations. They’re retailing innovations.

    I don’t know enough about the publishing business to have any idea what innovating they’re doing. I doubt if we readers would be likely to see their innovations, although we might be indirectly effected by them. I would think that new printing or new editing methods or book acquisition techniques would be the sort of innovations publishers might do.

    Barry

  5. It’s basic human nature that when you control something (for example, have a monopoly), you only allow innovation where you control that as well. You see this pattern all through human history and not only in commercial history. The most significant innovations tend to happen outside the area that’s controlled – generally by outliers. This, then, is really just par for the course.

  6. I don’t think that the industry needs continuous innovation. Publishing stories is not the same thing as inventing a fuel efficient car.

    I think that it is also disingenuous to pin the entire ebook revolution all on amazon. If the publishers were not ready and willing to digitize their massive libraries in a short amount of time for kindle, nook, kobo etc., then the kindle platform would have been DOA. They were part of the process the whole time, it was an industry wide effort.

    • @DavidW

      ” If the publishers were not ready and willing to digitize their massive libraries in a short amount of time for kindle, nook, kobo etc…”

      Several of the majors didn’t digitize their catalogs until long after the Kindle launched. I recall getting annoyed in 2009 when I couldn’t even buy frontlist Macmillan titles, much less backlist. They gave away one book here or there when they launched Tor.com, but they had almost no ebooks to sell.

      And to be clear, we are talking Tor-Forge. With their Baen connection, they had no excuse not selling ebooks, other than the fact their corporate parent was and is a stick in the mud.

      That’s what we mean by conservatism.

  7. The publishing industry’s biggest innovations are coming from nano-presses. That’s where business models are changing, and where authors are getting better agreements with higher royalties, limited terms, more control, and greater agility.

    @davidw The ebook revolution was pretty much all due to Kindle (moreso than Amazon) and indie authors. Amazon didn’t need publishers’ massive libraries because it empowered authors to use the Kindle platform. Same thing with Kindle Unlimited, which Amazon launched mostly without the support of corporate publishers and which still doesn’t really include much in the way of corporate titles, last I heard.

  8. @ Nate – the speed of digitisation may have appeared slow from the outside, but we honestly weren’t dragging our feet.

    There were several significant brakes on the speed with which it was possible to do this:

    1) Contractual. A huge amount of the backlist simply wasn’t governed by contracts that included ebook rights, or where the royalty rate had been left as TBMA – To Be Mutually Agreed. For every book that we wanted to digitize, we had to have a separate negotiation, pretty much. Sometimes we could agree new boilerplate with big agencies, but this kind of thing can take months. Years, even. I can think of a few bestsellers that still don’t have ebooks editions because agreement still hasn’t been reached.

    2) Production. It seems mad, I know, but until quite recently the final version of a book wasn’t necessarily held in a digital form (like a PDF.) When I began in publishing, we would have a manuscript in Word form, but the actual printing of the final proofread corrected text was done from photographic film.

    There are two basic ways to digitize this – you either scan the book and run OCR, then spend hours fixing all the OCR errors, or you get a couple of typists to re-key the book. All this takes days of work per book, and significant costs.

    My experience of the Kindle revolution was essentially that as soon as it was clear that this was going to be huge – which wasn’t long after launch – all the publishers I know went as fast as they possibly could with digitizing. They tried to hit the best-selling books first, of course, but the more profitable the book the tougher acquiring the ebook rights can be.

  9. The next re/evolution in digital publishing needs to be an easier way to sync books to your device, and polishing of the UI and UX that makes reading an eBook on an ereader seamless. It seems to get completely overlooked, as users have just accepted the hoops of ADE and converting things in Calibre. Maybe it’s easy once you know how, but it’s always annoying that you have to sync with a cable, what if you want an ereader but don’t have a computer to sync it with?

    Also I think the ePub standard needs to be simplified, especially when it comes to straight forward prose. I could imagine a version of markup where the ereader or ereading app gives the plain text markup file styling.

  10. Anthony, I think your comment suggests industry blinders. I don’t think most readers have ever even used Calibre, and the two big digital platforms (Kindle and iBooks) already sync books across platform, nevermind devices (my iOS Kindle app automatically updates my Paperwhite, and vice versa, when connected to wifi).

    I think this gets at the problem with innovation coming from the publishing industry, though. I don’t think I see any publishers focusing on making readers’ experience better. It’s all UI and ePub standards and specialized software, and the vast majority of readers just don’t care about those things. Amazon and Apple are giving readers what they want, and that’s why they’re succeeding where publishers can’t if they’re not colluding.

  11. For all their public grandstanding publishers really do not want things to change. I got tired of developing video games and decided to look at the digital publishing space around 18 months ago when the big publishers were negotiating the new Amazon terms. Naively I believed the rhetoric and came up with a pitch that got customers paying more for ebooks and offered greater direct access for the publishers to the customers with the caveat of *very limited* book sharing within clubs with further monetization on borrows. Want to guess how many publishers got on board with the idea? Innovation never comes from dominant players.

    On a different note I would argue that Goodreads was innovative and could have made a dent in the ecosystem up until the point it was bought out and effectively shelved. If publishers stifle innovation by smothering them at birth, tech companies have always killed innovation through buy-outs and this was no exception.

  12. Let me compare this to dvds and blu-rays. Dvds took hold very quickly, but it still took many years for movies and tv to all be released in the digital format. Star Wars came out seven years after dvd was introduced! Blu-ray was even slower, it took many years the bulk of movies to come out on blu-ray. I’m still waiting on the Abyss! And most tv has not made it.

    In contrast, by the time I bought a kindle, in 2010, you could buy pretty much anything it seemed. That was just a few years since the kindle released. We’re talking millions of books digitized, proofread and professional layout in just three short years.

    When the kindle came out indies had no marketshare. The kindle is just a device. Without anything to read on it, the kindle would not have taken off.

    Look, I hate agency pricing, I hate collusion, I hate propping up paper sales, I hate the propaganda pieces in the NY Times. There is alot I hate. But I mean c’mon you those publishers some credit.

  13. The e-ink display was not an Amazon innovation, neither the “read-all-you-can” subscription.
    The former was thought of in the ’70s, and the latter is nothing more than a oversized library.
    As for the publishers, sure, there are economic constraints and a small profit margin. But this is now, when authors and literary agents started to make a dint in the autocratic control of the publishers. But what about the ’50s? Where was the innovation then? The ISBN and the barcode for books started from the idea of a retailer, a bookstore chain trying to improve their logistics.
    So, both sides are quite full of crap. Amazon, for assuming innovation it didn’t made, and publishers for complaining that economic restraints blablabla.

    • @ raul

      I think you’re getting too granular as to the parts that go into a whole. Almost no one invents all of the parts that goes into a new device; instead they assemble existing tech in a new and innovative way. Absolutely nothing that went into the Kindle hardware was innovative, but the platform – or the way it all came together – was.

  14. We tend to be blinded by the glitter and glare of the word “innovation”. But why does innovation have to be the measure of success? It isn’t. Business success is measured by dollars, and if you can make these by doing what you’ve always done, why is that a bad thing?

  15. In 2009 there were 39 different ebook formats and a lot of the corrections had to be done manually. The digitization innovation has happened because of companies like Atomik which could take a large backfile like Penguin and digitize it on a massive scale. That still wasn’t a cheap process to do.

    As mentioned earlier nearly every publisher I know outside of education (where you see a lot of innovation) is running lean. Let’s look at how Amazon manage to innovate, they did it by making loss year after year and having very understanding investors. Book publishers rarely have that.

    And also don’t forget names matter. Pearson is frequently described as a education publishing company. Most people I know refer to it are accurately as a technology company in the education industry that doesn’t realize its not in publishing anymore.

  16. I think we’re making a very basic, but invisible, assumption here, and I think that this assumption is wrong.

    Publishers are not a single entity. They not only can’t act together legally, but they’re like a bunch of cats — all heading in wildly different directions. But we talk about them using the one word — as if they’re one entity.

    No one publishing imprint, not even any major house, has big enough “numbers” to get a revolutionary change off of the ground. They don’t have the market share, the working capital, the profit margin . . . They never have had that, and it seems highly unlikely that any of them, or any legal coalition of them, ever will.

    That said, sometimes a small startup will take flight. That’s amazing, and amazingly profitable, for the inventors and their venture capitalists.

    Publishers are like venture capitalists in many ways. Like them, they face some failures (fewer for publishers, but some), loads of break even investments, and a few rare breakout products.

    Any venture capitalist will tell you that the key to success is to stick to investments in an area you understand — you have to understand what’s out there, and why it works or doesn’t work, before you can judge whether the new thing will do well.

    Publishers understand content. They’re not so good at delivery systems. They didn’t invent paper, or the printing press, or POD printing, or any of a dozen other things. But they’re pretty good at figuring out how to use those things to deliver content in new and innovative ways that their market segments love.

    They’d have to be dumber than dirt to risk their (very scarce) excess capital in an area where the disaster frequency is higher, and where they’re not very skilled. It’s usually smarter to let other folks invent the systems and then learn how to maximize the potential of the success stories.

    The exception would be if the innovators could corner the market quickly. That’s not the type of business that the content industries are. There is a huge market for variety, but not a huge market for any particular product. The platform and delivery system innovators need the content. Coming in after they’ve proven the concept will always be possible.

    That is, I think, why publishers don’t rush to invest in developing the next generation killer app for delivery of text-based content (aka books).

    Or it’s one possibility. Maybe.

  17. I heartily agree, Marion Gropen. Elegantly put.

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