22 January, 2021 | Written by: Sam Missingham
Categorized: Telco Media and Entertainment
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As someone who has tracked the digital transformation of the book business for 12 years, I have always kept an eye on the wider trends across other entertainment industries. My personal view is, with the consumer at the heart of all of our businesses, there is always plenty to learn from each other. IBM have asked me to read their report, which is a very detailed look at the transformation of the news, TV, film and music industries, and the tech and consumer trends that are driving it.
The report clarified how drastic the transformation of the media and entertainment industries has been over the last 20 years, and as a consequence how much innovation has happened. When you see it all in one place it is deeply impressive.
I started my career in magazines, so am old enough to remember the reliance on classified advertising and how the internet disrupted this almost overnight. And since then media industry has responded to wave after wave of disruption, be that social media, new business models, new entrants, or mobile technology.
The book industry has ridden its own waves of disruption, although I would suggest they haven’t been quite as forceful or as frequent. The portability of books offered an easy option for Amazon to develop its ecommerce platform on its way to becoming the everything store.
Next came ebooks and ereaders, and an assumption that books would go the same way as other forms of entertainment to a digital-only world. The death of print books, publishers, bookshops and authors was all discussed. We didn’t transition to an ebook-only world, with approximately 30%* of revenues coming from digital formats, and print book sales continuing to be very robust. We also still have high street retailers. And traditional publishing still accounts for the majority of bestselling books.
There are few other drivers that have limited the transformation of the book industry:-
- Book publishing’s model is based on extracting the value from content (ie not reliant on advertising or other secondary revenues)
- Not being dependent on advertising revenues has removed all the need for any developments around paywalls, subscription options and the understand and tracking of consumers in real-time.
- Contrary to the music and TV/film industries, the book business has no subscription service for books that has scaled or become a dominant platform. (Book publishers have mostly been resistant to allowing their content on subscription services).
- A retail relationship with customers means there is still human curation and recommendation for books, so not all driven by algorithms or targeted online advertising.
- Content creation hasn’t been disrupted as much as other industries.
- Individual books cost less to publish, so we are able to take a lot more risk and accept a lot of failures.
- Book publishers have a very long track record, so have built, credibility and trust with consumers
- The other thing working in the book industry’s favour is that we are a very small industry in comparison to the other entertainment industries, so not as lucrative an opportunity for companies to disrupt or disintermediated.
And although it is true that the book business is small, we have always culturally punched above our weight. It is not an exaggeration to say that many of the titans of film and TV properties originated in books. Our stories travel, and our authors are where many stories begin. I see no reason to think we won’t continue to nurture the best storytellers and be the originators of great stories.
To all intents and purposes, the book industry is still a legacy business with legacy systems. This has naturally necessitated much less innovation. Our business model has prevailed. The book format has maintained its value. But I look at the sophisticated use of technology by the entertainment industries, the exciting start-ups and alliances in this space, and the desire to understand data at scale to deliver great experiences, with envy. Further disruption is always ahead, and we have huge lessons to learn from how media and entertainment have responded over the last two decade and more.
Thank you to IBM for letting me read this report before it was published, it will give everyone directly and tangentially in the media and entertainment industries plenty of food for thought.
Download the report and learn more: https://www.ibm.com/account/reg/uk-en/signup?formid=urx-48608
* Data is not available to give an exact percentage, this is an estimate.