Did you know that a big part of BEA involves authors and their fans? Apparently I don’t, because I keep spending all my time downstairs in the conference room area listening to business presentations. Yesterday I attended “New Business Models for Publishers” to see if any of the ideas involved pushing more aggressively into digital.
The panel included CEOs from F+W Media, Sourcebooks, and Safari Books Online. While their strategies differ on specifics, they can be summed up in the four points below.
Own the community. David Nussbaum of F+W pointed out that only about 10% of a hobbyist’s budget for the hobby is spent on book purchases. F+W has been building or acquiring verticals (or passionate communities, to use another popular business phrase) in categories like heirloom sewing and illustration, then selling those hobbyists things like supplies, training webinars, and conferences.
Diversify from print. This community approach affects how the company approaches book publishing now; “We don’t acquire or publish a book, we acquire or publish content,” said Nussbaum, his point being that F+W now repurposes the content across multiple formats to get it in front of more customers. Dominique Raccah of Sourcebooks pointed out that their membership-based romance community offers not just books but access to parties and events, so fans can meet up with each other.
Collect and Use data. One of the biggest benefits of having direct access to a community is that it gives the publisher valuable data on their customers — something you’ll never get from a self-interested retailer like Amazon. Nussbaum said that they’ve used their in-house data to improve their marketing, which has even helped move books at the retail level. Raccah agreed, and said that by switching to a more data-driven marketing model, Sourcebooks has seen its mass market print sales up by double digits, in a market where the category as a whole is seeing double digit declines. Savikas said it also gives Safari something valuable to offer to partner publishers (again in contrast to what a retailer like Amazon offers).
Develop a subscription model. Finally, all three publishers talked about how profitable a subscription model can be. Savikas said after the first five or six years of operation, Safari became the second most profitable channel for O’Reilly. Raccah said it’s enabled Sourcebooks to make backlists more profitable than ever before. Nussbaum said it generates more revenue for authors, too, by creating more ways to sell content.
Talk of publisher business strategies may sound a little boring, but what I found interesting was how closely the strategies of F+W and Sourcebooks match Techdirt’s CwF+RtB model: connect with fans, then give them a reason to buy. More important for publishing, all three companies are demonstrating business models that don’t depend on the largesse of Amazon or Apple, or on Barnes & Noble’s retail survival. One audience member asked what the CEOs thought would become of them if B&N went out of business, and all three responded matter-of-factly that they’d deal with it.