Thursday, October 11, 2007

Frankfurt Supply Chain Meeting: Shatzkin & The Emergence of DADs

Mike Shatzkin of Idealogical company presented his research into Digital Asset Distributors in a speech entitled An Emerging Infrastructure of Digital Asset Distribution. Mike has presented this material on at least three occasions and I discussed it earlier this year here. He also has a copy of a similar speech from earlier this year on his web site here.

The publishing supply chain is changing and is no longer simple. In digital distribution even without ebooks they have more content to supply more trading formats, more trading partners and more customization. A lot of this content is about sales but also a lot about marketing. A little more than a year ago, Shatzkin saw a number of companies developing digital asset distribution (DAD) services who distribute content for digital asset producers (DAP) and pass the content to digital asset retailers (DAR). The role of a DAD is to get content delivered to a wide aray of content users. In his view there are more scale reasons for the development of DADs than there are/were for physical distribution which has been consolidating steadily for 40 years. Shatzkin went on to identify eight companies in the publishing arena he considers to be DADs: Biliovault, Bookbank, MPS Bookstore, Code Mantra, Ingram Digital, LibreDigital, Random House UK and ValueChain International. (These companies are also noted in the speech cited above).

In determining the need for a DAD a publisher should document all their use cases such as, files sent to printers including archiving and version control, files to merchants to support sale including covers, toc's etc., files sent for subrights reasons, files sent to websites and/or syndicators for pr reasons and files sent to online booksearch programs. Finally ebooks are the least important of the use cases as don't currently provide a lot of revenue but do provide promotional benefits. The objective of a publisher is to get a DAD that can support all their use cases and avoid retaining DADs that can only fulfill part of their use cases. New use cases arise all the time so the DAD also needs to be flexible.

In the long run Shatzkin believes that most DAD's will become industry resources for most publishers and publishers (with only a few exceptions) will forgo development of their own DAD capability.

There are a number of steps a publisher should take in beginning their DAD strategy.
Firstly, a publisher needs to develop a spreadsheet inventory of all their files, their locations and their formats. Secondly, the publisher needs to document all their use cases. Thirdly, understanding both the current costs of fulfillment and what is not getting done is also important. These three items are critical for the publisher to have a meaningful discussion with the potential DAD's about services and costs. If the publisher doesn't have the content in a form to distribute, the DAD will almost certainly work with them to transform the content for a fee.

Lastly no DAD is future proof and so you must get to know the provider not just the sales team. Be sure to build strict service level agreements into your contract which also includes an innovation clause enabling you as a customer to ensure the DAD continues to innovate and expand their services in line with your customer needs and requirements.

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