| Trade publishers and outsourcing: What do they think? |
| Wednesday, 28 April 2010 | |
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Trade publishing is the most commercially focused category among all publishing industry segments. Trade books are targeted for the general consumer and are sold through channels like bookstores, libraries and wholesalers. The target consumers of trade books range from children to adults and include a variety of works ranging from fiction and nonfiction with hardcover or paperback books. Publishing industry: break-down by segments 
Source:
ValueNotes Research
It
is difficult to estimate the exact contribution of trade publishing
to the overall publishing industry. A significant portion of 'other'
in the above exhibit is contributed by trade publishing. We estimate
that the size of trade publishing industry (English language) could
be anywhere between USD 30 to USD 45 billion in 2008.
The trade publishing segment has been an early adopter of the digital media. The pressures that publishers faced in the wake of economic recession stimulated the e-book market. In the US alone, trade wholesale electronic book sales amounted to USD 167 m according to the International Digital Publishing Forum (IDPF). The e-book segment is growing and has witnessed serious attempts by publishers to make it a strong revenue source. Outsourcing by Trade publishers
Trade
publishers have been outsourcing parts of their functions for over a
decade, not just as means to tackle cost pressures, but also as part
of their business model. The exhibit below represents the responses
of respondents that have rated the challenges they face in their
publishing business vis-à-vis effective solution/mitigation via
outsourcing. This is based on a comprehensive survey of publishers
conducted recently by us.
Is outsourcing the solution to challenges?
The challenge to adapt to new technology can be very effectively dealt with by outsourcing, as indicated by the responses. Trade publishers also consider outsourcing to be highly effective to address lack of in-house capability. Addressing new geographies is also considered to be a constraint that outsourcing can mitigate very effectively.
Cost and margin pressures can be successfully mitigated by outsourcing, yet not all respondents believe so. Diversifying into new areas of business and providing value-addition within current offerings is another area where outsourcing is yet to be viewed as a complete solution. In spite of the pressures, current level of servicing does not offer publishers a strong reason to outsource. Outsourcing for cost arbitrage and value-addition has not been successfully mitigated while outsourcing. Interestingly, a small percentage of respondents feel that outsourcing cannot mitigate any challenges!
This article is based on the report “What do Trade publishers think about outsourcing”. To view a detailed Table of Contents of the report click here.
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Source:
ValueNotes Research
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