I just got back from the Charleston Conference – a lively mix of publishers and librarians discussing digital transitions in information access. It was the first time I attended, and I was struck by how many other friends in trade publishing were also there for the first time, ranging from Smashwords and Safari Books Online to the Frankfurt Book Fair. O’Reilly also organized a premier Tools of Change Charleston with Mitchell Davis, the local entrepreneur behind BookSurge and BiblioLabs.
One thing that immediately struck me was how much the conversation about trade publishing seems increasingly to leak into discussions about other sectors of publishing, including Charleston’s focus on academic and A&I resources. Part of that was intentional by the organizers, and part because it’s hard to open a newspaper without reading about the titanic shift towards Big 6 trade consolidation. The combination of Random House and Penguin seems inevitable to everyone, and most pundits and prognosticators agree that more combinations are on the way. Additionally, there seems to be strong concurrence that the merger’s primary achievement is to buttress a strong arm against the market power of Amazon, giving ever larger publishers more heft in negotiations, and heading off ultimatums from Amazon’s perceived monopsony power.
One critique of this trend is that there may be little benefit to making publishing businesses ever larger through M&A because internal coordination costs for larger firms grow faster than the benefits of output efficiencies. At Charleston, there was speculation that inevitably one would see a dissolution of the great houses, and a re-emergence of their imprints as stand alone publishers. In an age of networked production and ebook distribution, the strong countervailing argument against consolidation is that there is no better time for Alfred A. Knopf and Panthenon to take themselves out of megalithic houses and re-assert editorial and business independence. I must admit, as a literature geek I find this scenario romantically appealing, and I would love to see these noble brands born anew and ascendant.
However, I think that the opportunity for those organizations to resurface is gone. That’s not due to change in the brilliance of their staffs or their aspirations – it’s a result of wholesale changes in publishing. Once we start producing literature without traditional firms, even born-again, smaller and nimbler houses based on traditional publishing structures are not going to be successful. It will take an entirely different model of publishing to succeed – one that recognizes that the costs of literary production are plummeting; distribution occurs on the network; and that entry points into story-telling are growing increasingly diverse. New publishers are as likely to be independent videographers or game companies as trade houses, and a growing industry meme focuses on how likely it will be for film producers to commission books, rather than see traditional publishers managing 360 deals. With tools like Mozilla’s Popcorn, transmedia production is reaching the hands of technically unsophisticated creators.
Making strategic choices about optimal organizational form based on a desire to achieve effective market position against the dominant retailers of the existing industry will not be successful. Newly emergent publishing models are going to develop on the periphery of the existing publishing industry, often wholly independent of it, with both large and micro actors emerging to produce a wide range of new forms of content. The consultant Mike Shatzkin has persuasively argued that everything but traditional text narratives in trade is merely an experiment, and that’s a logical analysis. However, it’s not in trade that those experiments are going to be successful.
During the Charleston Conference, I grabbed a quiet morning and toured Fort Sumter, site of the start of the U.S. Civil War. One of the things I learned was that the war bridged a great transition in artillery technology, with field bombardments shifting to vastly more deadly and accurate rifled cannons. It seems a similar transition is amongst us within publishing. As armies in this war, Random House and Penguin have reached for a bigger musket to arm themselves in order to retain financial independence. Unfortunately, more innovative firms have started to adopt Kalashnikov AK-47s.
The Confederate Army abandoned Fort Sumter in February 1865, as Sherman swept his way through South Carolina.