Saturday, 20 September 2014

New Ways of Doing Business

Indie Publishers

In my last post (sounds like the army) I talked about profits per player being greatest in a growth market. And I talked about indie authors. But I forgot that there's another group of players also taking advantage of the growth market; that's indie publishers.

Indie publishers are an interesting group. These are the smart players that always emerge in a growth market, taking advantage of new technology and new processes. New players have a significant advantage; unencumbered by bureaucracy, they carry relatively little overheads and they don't have the tradition that can act as a stifler to innovation. These start ups usually operate in niche markets and often have deep knowledge and relationships within that market. These types of players are not unique to publishing - they are a consistent feature of all growth industries.

Start-ups like this are often balanced on a knife-edge. A lack of capital means that they are vulnerable to reductions in cash-flow and they can be take over targets by the big boys. Sometimes, they even operate in the big boys' space and this is really where you do not want to be, not if you're a startup. Unless, of course, you're an entrepreneur and you're wanting to be taken over, in which case you'll be happy to have an offer thank you very much and you can retire rich on your earnings.

The strength of the indie business model is demonstrated by the major players who have set up quasi-indie publication houses of their own. Examples of these can be seen in both the 'vanity' press of X-Libris and the like and the e-publishing arms of HarperCollins, or Swoonworthy, an imprint of Macmillian. 

As the e-pub market matures, which it will do, it's inevitable as death and taxes, there will be amalgamation of indie houses; some will go under; some will be acquired. others will merge. If you're a writer, pick your indie publisher carefully. They could be a ticket to a gravy train or a road to oblivion.

My gut feeling is that for me, searching for financial stability in this wide world of writing, indie publishers are unlikely to offer significant advantages. I don't write in a heavily niched space that would make them a useful partner. And an indie publisher's margins are too tight and they are too capital poor to offer me the carrots of the big publishers: security, advances, accolades and wide-scale distribution. 

However, for the start-out writer, I would really recommend the indies as an option. Because they are small, communication is easier, and because they are passionate about their niche they will be passionate about your work. Besides, you can learn a lot about publishing from them.

Publishers as Partners

In an earlier post I discussed how markets that are reliant on social capital - skills, creativity, talent - are much more stable than markets that are technology driven. Because if technology changes, the market changes. Writing is a social capital market, because good writing, great storytelling, cannot be substituted by technology. Publishing, on the other hand, has always been dominated by the technology of the printing press and the infrastructure of the distribution channels. And this technology is changing, shifting from physical to digital. I think we are only just at the beginning. See this article by Mark Coker in the Huffington Post.

Publishers are becoming commonplace. Good writing, however, is hard to find.

Economists would call this a relative scarcity.

With a shift in scarcity comes a change in price. And a change in price means a change in power.

Over the next five years it is highly likely that more and more writers will view their publishers as partners; even as suppliers. Publishers who can work with this paradigm shift will probably survive; those who don't, may not.

This means that writers now have options. We now have a variety of business models to consider - will we be supplier? or purchaser? Or a combination of the two?

I guess it depends on what we want. In my next post I'll talk more about goals and wishful thinking.

No comments:

Post a Comment