The publishing industry in the digital age
by Amelia Zak
Real World Context
In order to properly delve into the changing publishing industry, it’s important to begin at the start. One event that many publishers use to pinpoint the progression of changes the industry has faced is Steve Jobs’s introduction of the iPad in January of 2010. When the iPad appeared, publishers and authors alike expected Apple’s newest invention to bring electronic books, or e-books, to the masses and effectively make them more profitable. Prior to the introduction of the iPad, Amazon held the most control over the publishing industry. They were buying e-books from publishers at or around $13, and then sell these books at an estimated $9.99. Publishers were made concurrently annoyed and worried, left to either accept or deny the question: is a book really only worth $10?
With the introduction of the iPad and the services it planned to provide like iBooks, Apple saw Amazon as a competitor. Five of the six biggest publishers at the time agreed to sell their e-books through the Apple iBooks store. Publishers worshipped the introduction of Apple because it was in both size and finances large enough to compete with Amazon.
What are or, more correctly, were the traditional numbers for publishers when they, and still sometime do, sell books to stores. Take, for example, the traditional $26 hardcover book. For this, the publisher receives $13. Authors then are paid royalties at a rate of about 15% of their cover price, which in this case is $3.90. And then possibly $1.80 goes to the cost of the paper, printing and binding, another dollar to marketing, and then $1.70 to the costs of distribution. The remaining $4.60 must pay for other miscellaneous costs of the publisher: rent, editors, a sales force, and any write-offs of unearned author advances. Bookstores return about 35% of the hardcovers they buy, and then publishers write off the cost of producing the leftover, unsold books. So, at the end of the day, the profit margins are relatively thin.
This formula, at its core, isn’t necessarily sustainable in the digital age. They are operating on an agency model that involves little market research, have little data on their customers and have very limited experience in direct retailing. Instead of the agency model, these publishing firms could be using a wholesale model where the vendor buys the book from the publisher off discount, and then chooses how much to charge customer for the book.
And according to the American Booksellers Association the number of independent booksellers has declined from 3,250 to 1,400 since 1999. Independent bookstores now represent just 10% of stores sales. Chains make up 30% of the market, while superstores make up 45%.
So the bookstores are disappearing, and the publishing industry generally operates on a model that is unsustainable. The introduction of the e-book will transform the agency and wholesale models. Jason Epstein, a famous American publisher and editor, predicted these changes positively, saying, “Publishers will be selling digital books directly to the iPad. They will be using the iPad as a kind of universal warehouse.” This new “warehouse” will consequently create opportunities that will cut payroll and overhead costs. Furthermore, as Epstein explains, “When I went to work for Random House, ten editors ran it. We had a sales manager and sales representatives. We had a bookkeeper and a publicist and a president. It was hugely successful. We didn’t need eighteen layers of executives. Digitization makes that possible again, and inevitable.” When iPads entered the publishing atmosphere and provided enough competition to compete with the Amazon monopoly, the digital age permeated the publishing industry altogether. In tandem with Kindles and the rise of e-books, the technology started to and maybe even saved the publishing industry.
The New Republic published a study on how e-books have helped to sustain the publishing industry through all these changes.
The book business, in just the four years that new reading technology began to truly take form and hold in our society, has experienced some notable growth.
These very growths, in fact, can be directly connected to the rise of e-books and the profits that they are generating for publishers. Because e-books are more popularly sold and purchased in today’s technologically adept society, publishers can make much more money off of the buying and selling of these new technologies.
E-books are on the rise and have sustained the largest amount of growth in the four years between 2008 to 2012. In fact, while the others continue to fall, the e-book remains steady in its growth. The rise of Amazon, iBooks, and even Google Books and their various recreations of the “online bookstores,” in tandem with the fall of the physical bookstore, has accelerated these kinds of changes.
All this accelerated change has left many publishers in a rather worried state. The publishing industry has started to enter an era of disintermediation, meaning that we are edging on an era where the only necessary parties may be the author and the reader. We’ve begun to enter a time where the writer can post a novel online and have the revenue they make off of selling it pour in directly to them. We have entered an era where the publishing industry’s skill at making books and then selling them to bookstores, and then further managing their distribution is a lost, maybe even unnecessary form of industry and art.
This fear can take form and actual effect only with very popular authors with an established audience. The John Grishmans of the world will be more tempted to revert from a complex print distribution to a low-cost digital delivery system of simply uploading their work as an online e-book, and effectively removing the role of the publisher. Without the role of the publisher, however, new authors with smaller audiences are far more likely to struggle. In fact, without the role of Random House, another prominent publishing firm, the discovery and dissemination of the all too popular “Fifty Shades of Grey” trilogy by E.L. James would be lost. Without their advertising and support for the novel, it would not have emerged as the cultural phenomenon that it is today.
Publishing on the University of Michigan’s Campus
Here in Ann Arbor, Michigan, just off of the University of Michigan’s campus exists Michigan Publishing. They are considered the “hub” of scholarly publishing at the University of Michigan as they publish scholarly and educational materials in a wide range of formats. Michigan Publishing, in addition to other on-campus institutions like University of Michigan Press, is a part of the University of Michigan Library. They are all part of the overarching, on-campus mission to sustain the appreciation and diffusion of information science. Most central to their efforts, however, is the publication of journals and other scholarly materials by professors to be typically purchased by other scholars or students. I was able to speak with Allison Peters, the U-M Press Editorial Assistant (soon to be Associate) at the nearby publishing firm to get her first-hand perspective on the changing publishing mediums for this type of publisher. She was able to offer a lot of interesting insight into the inner workings of the publishing industry, as well as commit her opinion about the changing forms of literature today.
How did you get into publishing? What was your background in publishing before entering the field?
I love to write, edit, and teach, and I’m also interested in marketing and design. I was Editor-in-Chief of a biweekly newspaper for two years before getting my first work-study job in the publishing industry as an Editorial Assistant for the ESL/ELT division at the University of Michigan Press in 2009, my junior year at Michigan. My senior year I was a Digital Publishing Assistant with Michigan Publishing (formerly the Scholarly Publishing Office at Shapiro). While a student at Michigan, I interned with Dzanc Books, served as Editor-in-Chief of Xylem Literary Magazine and Associate Editor of the University of Michigan Undergraduate Research Journal, and also wrote and published articles online for Taubman College of Architecture and Urban Planning as well as the Institute of Human Adjustment. In 2011 I founded my own online literary journal called Orange Quarterly, editing and publishing four issues through 2012. I also served as Art Director and Poetry Editor of the Bear River Review (published via the University of Michigan Department of English Language and Literature) from 2011-2012. After graduating from Michigan with honors in 2011, I worked as an elementary school teacher assistant for three years plus numerous other part-time jobs—at a museum, a farmer’s market, a classic car insurance company, in retail—and did some freelance writing work before I found my current (first real full-time) job as an Editorial Assistant in Acquisitions at the University of Michigan Press.
When you started working at Michigan Publishing, what was your starting position?
My junior year, I was an Editorial Assistant (work-study) for the ESL/ELT division at the University of Michigan Press from 2009-2010. My senior year, I was a (work-study) Digital Publishing Assistant at Michigan Publishing (formerly the Scholarly Publishing Office at Shapiro) from 2010-2011. Now in my first full-time role (technically my starting position) with Michigan Publishing, I am an Editorial Assistant (soon to be Editorial Associate) in the Acquisitions Department of the University of Michigan Press.
What does your job as U-M Press Editorial Assistant require? More specifically, what does an average day as an editorial assistant include?
It’s hectic—I’ve worked dozens of jobs in my life so far, and this is by far the most demanding, fast-paced job I’ve ever had. It requires the ability to work quickly under tight deadlines, to collaborate with colleagues across departments regularly, and to communicate with authors daily, acting as the primary contact regarding all stages of the publishing process. A typical day involves a lot of hands-on work with manuscripts (formatting, running Profit & Loss (P&L) reports on each potential title, preparing files to “transmit” to Copyediting and Production, etc.), finding and finalizing cover art, writing and editing copy for our seasonal catalog, dealing with permissions issues, updating our staff-wide database, attending and participating in meetings across departments, preparing documents for our monthly Executive Committee meetings on Central Campus, sending out publishing contracts and published books to authors, tracking projects throughout a one-to-two-yearlong publishing process, and processing honorarium payments for scholars who review manuscripts before they become books. It’s a vast set of responsibilities and a ton of work, but it’s a phenomenal learning experience, and I get to work with exceptional colleagues every day.
Michigan Publishing produces monographs in both print and electronic forms; in what ways do these two forms of publishing compete? Do they both serve a different purpose and hold stakes in different markets?
I think, for students—many of whom can’t afford to buy expensive textbooks required for their classes—e-books are a smart solution. Students often buy books that they won’t want or need to keep after the class is over, so e-books are a convenient (and literally weightless) option as the sentimental value of a print book is irrelevant there. Having both options available is great for those who use e-book readers. Depending on the book and field in which it’s published, we tend to sell fewer e-books than print books, though this may change as our markets and scholarly readership become more representative of younger generations.
How popular are the online journals that Michigan Publishing produces? They contain open online formats for multiple people to access– what demographic typically accesses these portals and for what purpose? Does it vary greatly among students and adults?
My work at the moment is more focused on our print monographs and edited volumes, but I hope to get more involved in our journals program soon. We’ve just introduced a new feature for our journals called Altmetric that works like analytics but is remarkably more robust. Though the research our journals publish is certainly scholarly and discipline-specific, and therefore has a set audience of scholars (students and professors) who are more poised than the average reader to read these journals, it’s entirely apt that one interesting article could be shared by someone on social media and could spark a wave of interest—anyone who reads our journals can find a plethora of interesting research not only for purely academic purposes but for personal knowledge, too.
When you or others at Michigan Publishing interact with authors, professors, and writers who are in the process of publishing their work, what is the general sentiment surrounding the publishing industry? Bleak or positive or indifferent?
Our authors—most all of whom are university professors—are always enthusiastic about getting their research out into the world, so the overall sentiment is definitely positive.
In your experience with the publishing industry, how much has technology changed publishing? What kind of role does it now play?
Technology is changing everything about publishing, and I’m confident it’s for better, not worse. The internet gives us the opportunity to disseminate information instantaneously; it’s a publisher’s dream, really. As an industry, we’re still in the toddler stage of developing the best platforms for consuming this information. But the chance to get quality scholarly research out to a diverse group of readers across the world is a huge breakthrough not just for publishing but for mankind as a whole. We as humans now have knowledge at our fingertips like never before. It’s a revolutionary time we’re living in, and I’m confident publishing will do all it can to stay at the forefront of the technological innovation.
Are e-books going to replace books? In my research I have found that many readers, of both our and the early generations, are adamant in continuing to purchasing paperback or hardcover books. What is your take on this?
Personally, I don’t read ebooks, but I do read articles and journals online daily. And I have a free app that contains all of Shakespeare’s plays, which is, at the very least, cost efficient. Open Access (OA) is one of the most important concepts for publishing in the digital age. The OA idea of quality information that’s free for anyone to access is appealing on every level (except the moneymaking one), and I think we’ll see a lot more OA research published online as we progress. Nevertheless, as a reader I love print books. Take one step into Literati Bookstore on any given day and you’ll see a whole town full of people do, too. Nothing can replace the feel of a book in your hands, the intimacy of curling up with one in bed, or the preciousness of reading one to a child while they point at pictures and touch the pages and learn the magic of books themselves. In fact (based on my experience working at an elementary school for three years), kids are more enthusiastic about and enamored with books than most people I know; even in this digital age, children inherently understand the value of a print book. If I may digress: I started helping out with typesetting and printing at Wolverine Press, an old-school letterpress shop run by Fritz Swanson in the basement of the Michigan Publishing building, back in January. At Wolverine Press, each letter of the alphabet is a piece of iron tinier than your pinky fingernail, and you handset text letter by letter in order to print directly on paper with a letterpress machine from the late 1800s. Though this sounds like the most tedious process in the world, I find it both useful and poetic—sometimes we forget that our words have weight when we type them in the ether, but when we physically touch a word on a page, we feel something about the word and what it means. I don’t believe print will disappear completely, at least not in my lifetime, because we’ve learned from children as well as our own experiences that physically connecting with a book may have an effect on our brains that electronic reading simply can’t synthesize. Moreover, I’ve noticed a trend in trade publishers producing ultra-designed “box set”-style reprints of classic books; likewise, many new books coming out have high-design covers or other unique features (perhaps the book is leather-bound, or maybe there’s a ribbon bookmark built in, etc.) that make it hard to pass up purchasing. The digital side of publishing, in this way, may actually help print publishing push the boundaries of innovation with book production and design in never-before-seen ways. This is definitely an exciting, defining moment for publishing.
Other parts of my project are to be structured around the college student and the publishing industry. Michigan Publishing places immense focus on the diffusion of scholarly texts, reading and knowledge. How do you reach out to your demographics? And what specific demographics do you usually reach?
We hope our books find course adoption; if a colleague in the field might use our author’s book to teach his or her class, that means a considerable increase in sales and dissemination of the research. The job of the Acquisitions Editor is to know these “demographics” inside and out; our editors are considered experts in their fields—fields within which we publish strong lists of books each season, including Theater and Performance Studies, Political Science, Classical Studies, Digital Humanities, and more. Our editors, therefore, are the ones who cultivate initial relationships with authors, reviewers, blurbists, and those with information regarding potential course adoption for the text. Generating buzz around a book is a collaborative process between Acquisitions and Marketing, and it starts with the Acquisitions Editor’s breadth of knowledge and contacts in the scholarly field.
My interview supported my research: the publishing industry is changing as a result of the digital age. And although the industry was particularly slow in coming to terms with these changes, even here on campus, they are all slowly starting to assume these roles. In addition, it reiterated the popularly pitched mantra that tangible books are superior, especially to the older and millennial generations, and the glory of visiting the local bookstore hasn’t died. But as the younger, more technologically savvy generations enter society and the economy, these stubborn standards may start to fade.
The Author’s Perspective
It’s important to also take into account the opinion and perspective of one of the major players in all these changes: the authors themselves. What is their process in deciding between a digital, indie publisher, like Gumroad or Sellfy, rather than an actual physical publishing firm? What factors must they take into account?
Paul Jarvis, a popular Web designer and writer, has worked with several best-selling authors and has self-published three books. Selling close to 10,000 copies total, Jarvis gave an informational podcast about his self-publishing victories with The Next Web, an online publication delivering news and stories on the latest Internet technologies and business. In this podcast he offers insight and experiences that could encourage or deter authors from doing the same.
To summarize Jarvis’s thoughts, he believes that the process of self-publishing can take less time and can provide more liberty to the way in which the author prices his or her material. Amazon provides easy access for authors to sell their content at a one-stop, one click option, as do online forums of publication and purchasing. In essence, Jarvis is predicting and supporting the emergence of a more entrepreneurial atmosphere within the world of publishing. Authors will be more able to steer themselves, and their careers, to the best of their abilities. These venues of distribution and promotion, however, are more popular and, therefore, may be too common to produce a large audience for every individual author.
I was also able to catch up with Dan Zak, a feature writer and general assignment reporter based in the Style section of the Washington Post, who is currently working on his first book. In response to my question as to whether or not he was confident in his decision to sign with a publishing house, he stated:
Okay, so, I’m pretty lucky for a first-time author: An agent reached out to me, we worked together on a proposal, she shopped it around, and a great publisher (Blue Rider Press, an imprint of Penguin/Random House) made an offer. The advance money allowed me to take a year off work — without going broke — to focus on the book. So I definitely appreciate the benefits of a publishing house; I would not have been able to do the book without time off. Plus, when the book is finished, I’ll have the force of a legitimate publishing house behind the editing, the cover design, the distribution (both print and digital), the publicity, and so on. Perhaps all these things are possible when self-publishing, but I wouldn’t be equipped to handle them!
Authors exist on both ends of the spectrum: those who use the power of technology and the Internet to the best of their abilities, and those who still trust and rely on the power of the traditional publishing house to support their work.
A last Word from Professor Fritz Swanson
Professor Fritz Swanson is a popular professor in the English Department here at the University of Michigan. He is the inventor and director of Wolverine Press, a publishing exploratory project here at the University that provides MFA students, as well as undergraduates, with the opportunity to experience publishing history in a hands-on forum. The central mission of the Wolverine Press is to “create opportunities for people to encounter the traditional craft practices of printing, and discover that the labor of publishing is physical as well as intellectual.” They are beautifully reverting to a time when publishing was a much more delicate, precarious, and detailed occupation. Professor Swanson has dedicated himself to these feat and continues to maintain its success with the help of other scholarly individuals. I was able to ask him a question or two regarding the topics my project touched on. His response was almost poetic:
The Wolverine Press focuses on forms of word press that no longer popularly exist in the modern publishing industry. And yet those projects that the press produces are beautiful, intricate, and widely appreciated. What is your take on the balance between the old and new forms of publishing and word press? Do you believe that technology will overtake the industry as a whole, or do you think that those with a distinct appreciation for the older, hands-on forms will keep the more archaic forms alive?
With Professor Swanson’s ideas in mind, the final deliberations on the subject of publishing in the digital age are relatively clear: these changes are happening, and, although rather slowly, no matter what. The publishing industry must catch up and keep up with the changing times. There are three basic ways that publishers can support these shifts. The publishers should adopt the new technology platforms that will help to shift the existing industry structures. This will make sure that there will be a sustainable, viable options for monetizing long-form content. In addition, publishers can ensure that all their digital content is quality content. Photo galleries and extra links to articles could expand the stories and publications in a way that would attract more readers. And lastly, in order to fully embrace the shift into the digital age, the present publishing industry must make sure to stay up-to-date on the latest visual trends. This means that publishing houses and firms should start to adapt to the streamlined, focused and perfected design styles of our generation. A sleek and innovative design, in most if not all popular technological forums, will help to create more readers and then retain them in the digital age. These are important changes and thoughts to maintain if the publishers of our age want to survive and then thrive in the digital age.