As we greeted the New Year in 2009, we knew we were in for it economically and, as I suggested in my prediction post this time last year, one of the most obvious assumptions was that things would get worse before they got better. Contrary to expectations, publishing may have come out a winner in spite of the steady litany of bad news on the magazine, newspaper and television fronts that percolated all year. While recognizing the economic challenges in store for us back in 2009, I also suggested a resurrection of sorts could be had as businesses began to accommodate the fundamental changes that were taking place in the industry as they executed their business plans. Sadly, there have been few bright spots in media during 2009, and after having taken the pulse of views on the near-term future in publishing by speaking to a number of senior publishing executives, my belief is we will not see any appreciable improvements during 2010. While some of their collective views can be attributed to ‘hedging,’ external trends support the lack of optimism whether they be reductions in education funding and library budgets or the increasing reliance on “blockbuster” authors or pricing issues.
Many of the macro trends that I have noted in years past remain prevalent and in some cases have accelerated. For example,
- Educational publishers appear to be increasing – rather than decreasing – their investment in electronic media and more importantly, are beginning to think of their electronic products as distinctly different from their print precursors. In particular, educational publishers have started to talk meaningfully about “databases” and “subscriptions.”
- Newspapers – particularly NewsCorp – have been particularly active in attempting to build paid content models which support the separation of ad-based and subscription-based models. Newspapers aside, even trade publishers – notably Disney - are beginning to experiment in interesting ways with paid subscription models.
Prognostication being the point of this post, there are some newer macro changes I see that will define the publishing and media space more and more over the next three to five years and it will be interesting to see how these develop.
- Firstly, 2009 was the ‘year of the eBook’ as new devices seemed to launch each week. But the eBook, as we understand it today, only has three more years to run. By the end of 2010, we will be focused on the ‘cloud’ as the implications of the Google Editions product become clearer. This accelerated migration away from a physical good – even with an eBook, the title was ‘physically’ downloaded – will challenge our notion of ‘ownership’, rewrite business rules and provide the first true ‘strata’ for communities (or social networks) to develop around content.
The Apple iSlab (iSlate, iTablet, iEtc) will become a key driver in this development as the company becomes the first consumer electronics maker to apply their design expertise to multi-content delivery. (I don’t count SONY because they got it completely wrong).
- A closely related (but somewhat tangential) development will be the realization by publishers that the library market could become a threat to their business models as mobile and remote access is aggressively marketed by companies such as Serial Solutions and EBSCO. Currently, these products are not specifically related to trade and academic titles; however, the implications for all published product will become clearer as patrons’ ease of access to ‘free’ content grows and as the resolution services improve.
Remote access to information products by library patrons is obviously not new, but applied to mobile computing it will change many things about the library model. This trend coupled with the ‘cloud’ concept above, will require an industry-wide re-think of the library business model.
- There are hints that the silo-ing of content that has been endemic to information and education for many years could become a trend in trade as well. Examples remain sparse, though Harlequin and Tor are routinely cited as exemplars of this trend.
Subject-specific concentrations of content in trade will become a more broadly viable model; but simply concentrating content is not enough. Trade publishers will begin to license or commission ancillary content that adds a transactional element to their offering (not exclusively in a monetary sense). In effect, this additional content will provide a reason for consumers to return periodically to the site for free reference, news or dictionary content. Thus, this content will complement the subject-specific content that publishers generate themselves. As each segment develops, the ancillary content will also become core content to the publisher and may eventually be produced by them (although, initially, the content may be licensed). Over time other services will be built within each subject silo, and this maturity will replicate the product development seen in information publishing over the past ten years as those businesses established subject specific franchises around topics such as business news, tax and legal information.
- Certain segments (financial, legal and tax information and education, for example) continue to be challenged and any business that relies on the library market will face a very difficult time. Funding will be worse in the coming year (fiscal 2011) making retention, renewals and price increases problematic. By the end of this year, we could see some consolidation in the information media space.
- We will see the return of an old model of collaboration between magazines and traditional publishers as magazines look for ready-made content. Witness the return of the serial and short story to the pages of periodicals as their publishers look for low-cost content for their plodding (but suddenly more aggressive) migration to electronic delivery. In turn, electronic magazines will offer publishers a more effective, targeted and supportive mode of marketing than publishers have seen in years.
- 2010 will be a year of warfare: Publishers against retailers, wholesalers against retailers, retailers against retailers, publishers against consumers. It may be nasty, brutish and short, but will any of them truly understand the stakes? (See macro trend number one).
- Finally, we will see consolidation of at least two major trade houses. This is likely to precipitate another combination by year end. An outsider company (not a current trade publisher) may make a major move into the trade market.
- Last year, I predicted that out-of-work journalists would become ‘content producers’ and we have seen that develop as companies like Demand Media and Associated Content build market share. I see this trend accelerating during 2010. As magazines migrate to platform models, they become 24/7 publishing operations with a significantly increased demand for content far beyond their capabilities. Where they will succeed is in curating content for their specific audiences; however, much of this content will be produced for them, rather than by them in the traditional manner. In effect, magazines will outsource editorial.
- And in sports, Manchester United will retain their Premier League title, winning on goal difference over Arsenal; Barcelona will win the Champions League; and England will win the deciding fourth Ashes test in Melbourne in December.