Many would argue that getting rid of the middle man is the way of the future, but a newspaper has more brand recognition and still gets more eyeballs. The problem facing them right now is how to convert the readership into an effective revenue stream.

Most newspapers already have Twitter accounts and Facebook pages, and have had them for some time now. These accounts have quite a few followers and fans. The main concern is accurate calculation of the return on investment (RoI) in social media so that they can convince their advertisers to come back. One method to measure RoI is through tracking the click-through from the respective social media accounts and pages. Another method is to use social media to sell advertising space. Some newspapers are already exploring this avenue to generate more revenue.

One such newspaper is the Austin Statesman. Advertisers looking to tap into the Twitter follower base of the Statesman can do so. Mingled within the tweets of their twitter account, which include tweets on the local happenings in Austin, TX, and replies to their followers are advertisements from local businesses. The tweeted ads are distinguished by the hashtag ‘ad’, and it doesn’t look as if the newspaper has lost many followers over its decision to incorporate advertisements into its Twitter account. This probably has to do with the fact that each advertiser only gets two tweets in a day, one in the morning, and one in the afternoon, and that the paper has strict guidelines on what gets tweeted and how.

Another newspaper experimenting with generating ad sales in social media is the Wall Street Journal. In Sept 2011, they released their WSJ Social app on Facebook.  Since the advertisements appear in the app itself, and not on the Wall, it doesn’t violate Facebook’s policy. WSJ uses space within the app to advertise, and Facebook uses the right-hand side column to showcase its sponsored posts. Furthermore, readers are able to read articles written by the favored editors without navigating away from Facebook to the WSJ’s website.

For every newspaper trying to monetize its social media presence there are hundreds who are not. Social media outsourcing doubled from 14 percent in 2010 to 28 percent in 2011. Of all the tasks that marketers outsourced, design/development, analytics and content creation comprised the top three (Social Media Examiner, 2011). If a newspaper is already outsourcing its digital content production, it could leverage its service provider’s capabilities to create a Facebook app and sell advertising space there. Tweeting ad images is a viable alternative for advertising through Twitter accounts. To such effect, service providers, who serve newspaper publications, need to anticipate their client’s needs, and ramp-up their skill set to provide such services.

I believe that social media can be effectively used as a source of revenue for newspapers, as long as they don’t turn their accounts into one giant billboard space.

- Deepti Krishnan, Analyst, Sourcing Practice

These are some of the salient findings from our research on the state of digitization in the publishing world. The publishing industry underwent some drastic changes in the last couple of years – because of the global economic crisis and also, because of the rise of the digital market. This phase is also quite exciting. The report, sponsored by Qbend, has provided us with comprehensive insights on various aspects on how publishers are addressing the digital market. Based on over 200 responses from professionals working in the publishing industry, this report talks about the production, distribution, digital rights management and pricing of digital content.

I would also like to take this opportunity to announce the release of our report. The report titled ‘The Current State of Digital Content’ is available for download. [Download here]

Why should you download this report?

The digital market is still in its nascent stage. While the publishing industry has addressed more pressing issues (such as production issues), several aspects of the market still need to mature. This report provides insights into what publishers are currently doing and what they expect in the near term. The research will help publishing professionals from the STM/Academic, education, magazine, and trade book segment better understand the digital content market.

Key research findings indicate that:

• 4 in 5 survey respondents have indicated the production of print and digital content
• 60% of survey respondents have indicated that prices of digital content are 25% cheaper than print prices
• 25% of revenue contribution from the digital market for most of the publishers
• Strain on resources and lack of in-house expertise are significant challenge while producing digital content
• Most publishers are moving to a universal file format – one that is supported by most reading devices
• More than 80% of survey respondents are outsourcing or planning to outsource pre-press services
• Of those outsourcing, conversion (of content to various formats) has emerged as a high demand service
• India remains a preferred outsourcing destination, closely followed by the US
• Most publishers prefer third party digital bookstores/channels in addition to in-house bookstores and applications on reading devices while distributing their digital content

If you have any questions or comments about this report, do feel free to write to me at jui@valuenotes.co.in

“Technology will become a pre-requisite. And it is going to be a differentiator.”

For long, the pre-press services industry has always viewed technology as an enabler. However, that has since changed. As the publishing industry aggressively ‘goes digital’, providers will need to incorporate technology that is as advanced as the buyer’s – in some cases even more advanced. The need of the hour is to view technology not only as an enabler but as a service in its own right.

The publishing services industry has seen an influx of IT/BPO/ITeS providers, fully capable of offering pre-press services – with significant experience in offering technology services. While pure play pre-press service providers do have the added advantage of domain and process expertise, threats still loom large, primarily to do with the lack of expertise in providing technology services.

The buyer’s need is now centered on functional technology – technology that will help address issues with various functions in an increasingly complicated workflow. Providing functional technology provides a sizeable opportunity for providers. Almost all publishers globally have a requirement for such technology. While the technology could be packaged as a bundle, customized (outsourced product development) or off the shelf, it represents a market that could accommodate providers of varying types, sizes and skills.

Of the vendor groups, pre-press providers are best positioned to offer functional technology solutions to publishers. Having already developed a significant expertise in industry specific services, pre-press providers are capable of addressing various issues and challenges that publishers might face. Several pre-press vendors have already created proprietary solutions that are being offered to clients as a value addition.

For some publishers, the digital market has become a critical source of revenue, for others, a channel to augment existing revenues. Either way, technology has emerged as a pre-requisite. And in my opinion, pre-press  services providers have the home advantage…

On a completely separate note, I will be moving on from ValueNotes Sourcing Practice. I have thoroughly enjoyed researching the industry and have been fortunate to have interacted with such a vibrant community.  If you would like to get in touch with me, please contact me through LinkedIn.

Should you have any queries on ValueNotes’ Publishing Practice, please get in touch with Jui Narendran.

]]> http://www.sourcingnotes.com/blog/technology-in-publishing-what-next/feed 3 http://www.sourcingnotes.com/blog/why-is-the-outsourcing-of-publishing-services-still-taboo http://www.sourcingnotes.com/blog/why-is-the-outsourcing-of-publishing-services-still-taboo#comments Wed, 12 Jan 2011 11:14:25 +0000 Vivek http://www.sourcingnotes.com/blog/?p=677 In the recent months, we have been studying the effect of the digital market on the publishing industry. Across segments and geographies, publishers are experiencing challenges centered on costs, resources and technology that have made it necessary for them to re-invent their business models.

Of the 200+ publishing professionals we interviewed, we found that close to 4 in 5 publishers are either outsourcing or considering outsourcing publishing services. So, if the whole industry is pretty much outsourcing technology, back office processes and industry specific publishing services, why is it still taboo? Perhaps some context would help.

A couple of months ago (November, 2010 to be precise), ValueNotes was invited to participate in a speaking capacity, at the ‘Globalocal 2010‘ publishing conference organized by the German Book Office, New Delhi. In addition to speaking about outsourcing, our session included a discussion on the state of publishing BPO services in India.

My earlier interactions with the ‘buy-side’ (read: publishers) was peppered with hesitance, trepidation, and to some extent, hostility. When our session began, I could sense restlessness – as if publishers were ignoring the elephant in the room. Even if the elephant was trumpeting, stamping it’s feet, and begging to be acknowledged in general. Now I understand the political and cultural implications of outsourcing; I have read (and written) enough reports and spoken to enough publishers to understand that job losses are very much real. But what I don’t understand is why there is a stronger sense of taboo for the outsourcing of publishing services than IT-BPO services.

Our session had three other participants – a moderator, an IT-BPO provider, and a pre-press services provider. During the course of our discussions (and at times arguments) about outsourcing within the industry, the IT-BPO provider dropped all his client names at regular intervals. All the pre-press provider could offer was a meek explanation – “We have non-disclosure agreements with the client and are not allowed to reveal client names.”

So, for publishers – is outsourcing technology perfectly acceptable, and outsourcing of service not? Or is it where it is being outsourced to that’s the cause for worry?

If you are a publisher that’s currently outsourcing publishing services, I would really appreciate your thoughts on this. Do you freely discuss outsourcing of services?

Changing the ‘format’ of content

The publishing industry has progressively been going digital. While selling digital content is recent, publishers have used digital production techniques/processes that are reliable, stable and efficient. Such processes, however, ended mostly in the creation of PDFs – that doubled as print ready files and/or a product that was to be sold digitally.

But, the rise of the digital market (especially in the context of reading devices) has led to the increase in the number of formats – consumers were spoiled for choice. Each reading device had its own proprietary format and publishers underwent a period of packaging content in every possible format – a period that led to immense pressure on the resources and  the workflow of a publisher.

What is happening now?

Our survey on ‘The Current State of Digital Content’ suggests that there is a shift in how publishers are addressing varying digital formats. Initially, publishers had adopted an all inclusive format policy – one that increased workload, decreased quality and led to dampening of consumer expectations. As the digital market becomes more mature (and it is still a long way from becoming a mature market), publishers have started formulating digital format strategies.

Source: ValueNotes Research, The Current State of Digital Content, 2010

Please note: This was a multiple-response question

Most publishers we surveyed have indicated that universal accessibility is a driving factor while choosing formats. The increase in popularity of e-book reading devices and mobile devices (smart phones, tablets, touch screen PCs, etc.) has led to publishers consciously identifying formats that are easily supported. Formats such as PDF have emerged as a universal and standard format for the industry. Publishers are also supporting formats that are popular with their respective consumer base, and are actively incorporating such formats. For example, with the introduction of Apple’s iPad, several leading publishers have created content that is specific to the iPad. This content, rich in multimedia, is optimized for the device.

This is not to say that publishers aren’t considering proprietary formats. Such formats (often bundled with reading devices or standalone software) are part of publishers’ digital offerings – the ratio may vary. While some publishers have indicated issues with creating content in proprietary formats, the biggest concern remains creating a unified user experience. Content in one format often does not provide the same experience in another.

Will device-specific formats die?

While there is a move by publishers to produce content in universally supported formats (such as PDF), publishers will still provide content that is device specific or proprietary. Creating multiple formats is not a challenge – almost all publishers we surveyed having indicated as much.

Source: ValueNotes Research, The Current State of Digital Content, 2010

Creating content in multiple formats is manageable for close to 3 out of 5 publishers – challenges of scale, resources and infrastructure being very much under control. The issues and challenges do not lie in the isolated task of conversion, but in the workflow and processes that lead to it.

So, will device specific or properietary formats die out? Unlikely.

Will they be easier to create and manage? Definitely.

• Participating in our online survey by following this LINK.
• Participating in our telephonic survey. Do send me a mail – vivek [at] valuenotes [dot] com
• We would love to know more about what you think. Do leave us a comment.

As always, we are appreciative of any insights we get and as a token of our gratitude we will share our research with anyone and everyone who is part of the publishing industry.

]]> http://www.sourcingnotes.com/blog/device-specific-formats-are-horrible-to-support-and-i-hope-they-die/feed 1 http://www.sourcingnotes.com/blog/e-book-prices-set-to-drop http://www.sourcingnotes.com/blog/e-book-prices-set-to-drop#comments Tue, 12 Oct 2010 12:50:07 +0000 Vivek http://www.sourcingnotes.com/blog/?p=608 In August 2010, the attorney-general’s office in Connecticut, US began investigating pricing of digital content by Amazon and Apple – expressing concern over pricing agreements with publishers and its possible implications on consumers. The attorney-general’s office went on to find identical prices for titles distributed by Amazon, Apple, Borders and Barnes & Noble. So, what’s the deal with e-book pricing?

How do publishers price their digital content?

The publishing industry relies heavily on intellectual property – either developed in-house or procured through agreements with authors and creators. This in turn implies a value based pricing – the more popular the author is, the higher the price a publisher can charge. With printed content, publishers have to contend with additional cost overheads of printing and distribution. More often than not, pricing of printed content is cost based than value based. With digital content, however, publishers do not need to bear the costs of printing – a significant cost contributor. Marketing and distributing digital content is marginal compared to print. Digital content is very much priced on its value.

To substantiate this, we are conducting a survey on ‘The Current State of Digital Content’ (click here to take our survey) – which has already provided interesting insights on how publishers price digital content. Initial responses from the survey suggest that most publishers do base their pricing on the value of the content.  Publishers also consider competitor pricing and existing print prices as important factors while deciding the price of their content.

Pricing of digital content also varies as per the segment the publisher operates in. A large multi-segment publisher we interviewed prices their STM/Academic content at par with its print counterpart while certain titles (mostly trade) can have up to 25% difference in pricing.

Will prices for digital content drop?

The short answer – yes. Even though publishers are considering digital revenues as a critical aspect of their business, pricing of digital content is expected to decrease. As publishers optimize production of digital content and efficiency increases, pricing of digital content would become more competitive (issues such as uniform pricing across competing distributors would be addressed). And, most importantly consumers would be the single most important drivers of change.

Consumers are still skeptical of digital prices – and consumer expectations are not in line with digital content prices. Revisiting price models (such as publishers siding with Apple’s agency pricing) has not helped address the misalignment. Will consumers continue to see merit in buying digital content? The answer to that probably lies in how low digital content can be priced…

If you are a professional working with a publishing company that publishes for the STM/Academic, education, trade book or magazine segments, we would appreciate your insights. Please take time to participate in our survey (click here). This survey covers production, distribution, digital rights management and pricing of digital content. To read more about why and how we are conducting this survey click here.

Your responses will be analyzed only in the aggregate, and your responses will not be shared with anyone. As a token of our appreciation, we will like share the findings of our research with you. If you have any questions about the survey, please feel free to mail me at vivek[at]valuenotes[dot]com.

In the last few years, the publishing industry witnessed tremendous change – a change that centred around revenue and cost challenges. For publishers, the digital market presented a holistic solution – one that opened a channel of revenue with non-linear growth, while ensuring minimal costs of production & sales. Publishers worldwide are either producing digital content or are considering it as a service area.

Why are we running this survey now?

• The publishing industry has moved past discussions on the potential of the digital market. Publishers are now including digital offerings in their content mix.
• Consumers are responding well to digital content. Sales of e-books in the US for the first two quarters of 2010  have been in excess of $150 million. For the same period in 2009, revenues in the US were a little over $ 60 million – the segment has experienced more than 200% growth  since then (source: IDPF)
• Many publishers are already creating digital content – failures and successes will provide insights into what works and what doesn’t. These insights will help establish challenges, issues and solutions while producing, distributing, pricing and assigning rights for digital content.

The digital market is no longer a nascent one; it is steadily growing and  has been given impetus by publishing businesses all over the world. We thus chose to run this survey now – to establish how the industry must operate, and to determine how it will evolve over the next few years.

What will the survey establish?

A comprehensive understanding of the digital content market.

If you are a publisher from the STM/Academic, Education, Trade book or Magazine publishing segment, we would appreciate your insights. The survey can be accessed through the link below:

http://www.surveymonkey.com/s/surveydigitalcontent

As always, we will share this research with all respondents and professionals from publishing companies.

If you would like to know more about this survey, please do contact me via e-mail vivek[at]valuenotes[dot]com

Got any thoughts/opinions? Do leave us a comment!

So, why did Seth decide to self-publish?

Seth Godin had an agreement with Portfolio (an imprint of Pearson’s Penguin Group USA). The agreement entailed Portfolio bearing costs of printing and promoting the books, while Seth got advances and royalties on his titles. His flagship title ‘Linchpin’ sold 50,000 copies (according to Neilsen Bookscan).

Image credits: KarlSakas.com, Amazon.com

In spite of the successful partnership with Portfolio, Seth decided to move onto self-publishing. His plans include:

• Releasing titles using various digital channels and print on demand
• Leveraging the community (his blog), which is 438,000 member strong
• Using a ‘good quality’ editor

Publishers offer authors quality editing, the ability to bear costs, and leveraging their distribution and marketing channels to promote the book. Seth had outgrown his publisher.

So, how much does Seth Godin stand to earn?

The figures here are purely illustrative and offer an insight into the potential of self-publishing. The calculations are based on a  few assumptions :

• All calculations are made for the title ‘Linchpin’
• Print and Kindle prices for the title are from Amazon.com as on 01 September 2010 (Print – $ 17.13, Kindle – $ 11.99)
• Value of print and Kindle are calculated on 100% basis for number of units sold (For example, what is the value of 50,000 units sold in  print version or e-book version)
• The size of Seth’s community is a constant at 438,000. % refers to units sold as a percentage of community members. This is an assumption of the scope that his community has to offer
• The first calculation is based on actual sales of the title

(Of course, 40% of the community buying Seth’s titles might be a tad bit unrealistic. However, as his community grows, a 10% conversion rate will mean that many more units in the absolute value.)

Considering the title will be released mostly in digital form and with the option for POD, there will be fewer expenses to contend with. So, how much money will Seth Godin earn by self-publishing? A lot.

Are you an author or writer?

If you are, we would like to know your opinions on self-publishing. Please take a few minutes to answer our survey. As always, we will share a copy of our findings.

The traditional relationship between authors and publishers centered on the capital outlay required to create, print and sell books. Publishers would provide authors with advances, bear the expenses of producing, printing, distributing, marketing and promoting the books. Proceeds from the sales of the book were largely the publisher’s and a portion of it goes to the author as royalty. The value of the publisher, thus, centered on printing and selling the books.

For authors considering self-publishing, printing and selling books are a challenge. But the rise of the digital market seems to have made it easier. The rapid growth of e-book sales has demonstrated the potency of the digital market and printing to distribute content is no longer a necessity.  Are authors and writers confident of selling books by themselves? And it they are, have they outgrown the need to have a publisher?

We have decided to run a survey on what authors and writers think about self-publishing. This survey will answer questions such as:

• By what means do authors and writers currently publish their content?
• Are authors and writers moving to self-publishing?
• What are the driving reasons to do so?
• Has the digital market made it easier to self-publish?
• What are the inhibitors for self-publishing?
• Do authors and writers rely on other parts of the industry value chain to self-publish?

If you are an author or a writer, your inputs will be valued very much. Please follow this link to answer the survey.

http://www.surveymonkey.com/s/self-publishing

Once we have collected enough responses for the survey, we would be happy to share a copy of the findings.

We would also like to know your thoughts or opinions. Do leave us us a comment!

]]> http://www.sourcingnotes.com/blog/survey-is-self-publishing-increasing/feed 3 http://www.sourcingnotes.com/blog/google-this-number-of-books-in-the-world http://www.sourcingnotes.com/blog/google-this-number-of-books-in-the-world#comments Wed, 11 Aug 2010 11:32:54 +0000 Vivek http://www.sourcingnotes.com/blog/?p=521 Google has the answer to a lot of questions we ask. And looks like it has the answer to this one too.

The company has been trying to digitize books through its Google Books initiative for a few years now, so it is surprising that they didn’t answer this question at the outset.

How did they do it?

There were four classification systems that Google looked at. Each had their own set of shortcomings.

(The following infographics are based on this post by Google)

Identifying various limitations with other classification systems, Google Books decided to use metadata and compile a list of only unique books. The metadata that Google used was provided by more than 150 providers.

The weeding out of duplicates and exclusion of non-books left Google with a list of approximately 130 million books – a number I feel is definitely going to rise.

Google’s vision with its Google Books project is highly ambitious, to say the least. And considering it plans to digitize all possible books, it is a mammoth task! On the other hand, if there is one company that can do it, it is Google…

An interesting side note:

Last week I wrote a post on reCAPTCHA, a tool that prevents spam and digitizes books. While I am still in the process of getting someone to from the reCAPTCHA team to talk to me, I found that Google has bought reCAPTCHA and is using it to enhance its digitizing process.

So, how has reCAPTCHA worked for Google?

Estimates by the reCAPTCHA team suggest there are 200 million CAPTCHAs solved around the world every day and it takes 150,000 man hours to solve them.  If a book has 100,000 words in it (average size of a novel), it would take  little more than a minute to digitize.

If each page in a book had 250 words, Google would need to scan 400 pages of said average sized novel. Considering the company is capable of scanning 15 pages per minute (~1000 pages/hour), it would take a little more than 25 minutes to scan the book. Add to it the minute or so required to digitize the content using reCAPTCHA, and Google can create a digital copy in a little less than half an hour.  This does not factor in time for loading the book, manual intervention or that the 100,000 words inputed using reCAPTCHA would not be happening simultaneously. However, these are impressive numbers nonetheless.

So, if Google does manage to digitize a book in half an hour, how long would 130 million take? A little more than 7400 years…

I don’t expect Google to wait that long

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