nach oben

Erschienen in:

2013 | OriginalPaper | Buchkapitel

Book Industry Business, Concentration, Internet and Social Media of Management and Marketing

verfasst von : Paulo Faustino

Erschienen in: Handbook of Social Media Management

Verlag: Springer Berlin Heidelberg

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

This chapter’s centrality lies on the identification of some disruptive elements and on the analysis of some trends, particularly from the business strategy point of view, including the business concentration movements, as well the changes operated in the value chain and in the book business model and the role of social media in marketing and promotion practices. Adopting a more systematic overview, we can say this work was developed with the aim of finding possible answers to two research questions: RQ.1—Is it possible to identify trends and characterize the business tendencies in the book sector, including the business concentration? RQ.2—Which are the main challenges and disruptive elements that publishers have to face in terms of their corporate governance and business models? In addition to the identification of some of the most frequent strategies, the Ansoff matrix (Ansoff, Implanting strategic management, Prentice-Hall International, Englewood Cliffs, NJ, 1984) was applied to the book sector; simultaneously, possible revenue sources associated with the book business were identified and systematized. In order to analyze the strategies and quantify the levels of ownership concentration in the publishing market, two indexes (the “Herfindahl–Hirschman Index”—HHI and CR4) were applied, based on the Portuguese market. Overall, the research methodology was largely based on documentary research, namely scientific articles, press articles, books on the sector, industry reports, etc. Taking into account that one of this chapter’s authors is an editor and a partner of a book publishing company, participant observation was also applied.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel Employees’ Conceptions of How Management Can Operationalize Employee Involvement

Nächstes Kapitel New Venture Creation in Social Media Platform; Towards a Framework for Media Entrepreneurship

In Comunicación y Sociedad, p. 8, 1999, University of Navarra.

However, and despite this growing appreciation, it’s important to consider this aspect on the basis of each market’s situation. For instance, in the Portuguese market, that importance is not clearly visible yet. And even in the case of more mature markets, it is not a certainty yet, because the weight of the new platforms, the e-books, is still much reduced, regarding the investment and the return. In Portugal, the digital book market, in what concerns the production and commercialization of contents, is still in an embryonic phase: there are only testing investments by Leya (with the digital books sold through Mediabooks), through an excessively closed platform, and a few “adventures” from small-sized publishers. Even Porto Editora did not invest seriously in the e-book yet, giving preference to scholar books, DVD (or other platforms) multimedia projects, on which this publisher bets for decades. But the impact already exerts an influence on the printed book distribution, to which the Internet has already found its spot, mainly with Wook and Mediabooks.

In terms of distribution policy, a critical success factor is the choice of the distribution channels, which, in turn, influences the promotion policy that is also related to the profitability generated by the channel chosen. In the book sector, this meant that, for example, the rise in online distribution of some publishers has been a very slow process. The choice of distribution channel is decided in the book sector also by the presence in the market and the total return of the publishing house.

However, in the case of some publishers, more proactive and more oriented towards new technologies, the Internet is not weakening the relationship between companies and readers, but instead it brought them definitely closer, as was never possible before.

In reality, and despite its popularization during the last decade, it can be said that audiobooks are much previous in relation to the e-books; they have existed for at least 40 years, since the creation of the CD.

In fact, (a) it was not yet possible to identify any trend, in any market, of people’s preference for the paper book instead of the e-book. The existing data on digital books sales in a relevant amount are almost exclusively from Amazon and the Anglo-Saxon markets. Amazon never reveals information in an objective way and uses it, indeed, to promote its store and Kindle. These are not generalizable data, and they must be treated carefully; and (b) these authors were, in first place, bestsellers in the paper edition, who sold—and earned—much more than the digital editions. It remains to be seen whether some successes in the digital versions of bestsellers are due to the fact that, first, they have gained reputation and audience in the so called “traditional” market, with the exception of John Locke, who is one of the rare examples of authors who have sold several author’s editions in digital format via Amazon and succeeded.

Michael Stern Hart (8th March 1947—6th September 2011) was an American author who became known for the creation of the Project Gutenberg. The initial digitalizations were made by him, with the aim of promoting the creation and distribution of e-books. His works are also available on Gutenberg.

Communication theorist, literary critic and one of the founding pillars of the study of media theory.

In any case, after some time and experiences following the emergence of this concept, we can say that the term “digital generation” is, to some extent, diffuse, and the theorization of “digital natives” has received different interpretations, in that the earlier contact with technology does not either form or deform—or guarantee—the speed of acquisition, formation or reformation of knowledge, nor the proximity of the new ICT affects the interaction with previous technologies or encourages a more suitable utilization, particularly in the relationship with variables such as age, education, geographic location, social inclusion, economic power, etc.

However, the current reality is that printed books continue to sell more and to represent much higher revenues when compared to digital books, even in mature markets such as the USA and Germany. Clearly, there is a trend and publishers no longer sell products (books), but contents (in formats adapted to their intended markets, or in several formats for the segments that sell already in different ways); but there is no market where the digital version sells more than the printed one.

In spite of being available for more than a decade now, the digital book, or e-book, was ignored by most people until 2007, when Amazon released Kindle, a device to read digital books. After that, Sony followed, then Barnes & Noble with Nook, and in 2010 Apple launched the iPad. All these devices serve one purpose, to read e-books, though now it is also possible to read newspapers and blogs. However, we have to take into account that iPad is much more than a simple e-book reader, as well as the new Kindle generation.

The distinction between the paperback book and the hard cover book consists in the difference existent in terms of product configuration, price and target audience. The paperback book is currently characterized by titles with many editions, low prices, paper cover and a homogeneous image in what concerns series. The paperback book has long been the classical form of the second or third publication in the chain of added value of the licenses of books.

For example, the author of this paper accessed to the contract of a small publishing house that put books for sale on a large surface and realized that the contractual demands were extremely high. That is, the entire risk of the business was transferred to the editor, including the payment for services of questionable added value, such as marketing and administrative support, for instance.

There are about 250 publishers, according to the Portuguese Association of Publishers and Booksellers.

Today it is possible for small publishing houses to specialize in a niche and position themselves in the international market. For example, Media XXI (publisher specialized in books on the fields of communication, media and the creative industries), based in Portugal, has made partnerships with various physical and virtual book stores, including Amazon and its own online store, and publishes books in many languages and for various markets, possessing representatives only in some international markets, namely in Brazil, USA and Angola.

Indeed, in some scientific areas (molecular biology, neuroscience, etc.) monographs were already totally replaced by digital documents, due to the ease of access and research, readability, content’s hypertextualization, price (substantially lower) and image and video insertion allowed by the e-books.

Original concept used by Anderson to describe a change occurred in the media industry, notably in the book sector. It is a passage from the sale of a small number of successful products in large quantities to sell a large number of niche content, each sold in small quantities. For Chris Anderson, there are three economic circumstances that gave rise to this Long Tail Phenomenon in the media industry: (1) democratization of production tools: decreasing costs of technology gave people access to instruments that years ago were prohibitively expensive, (2) Democratization of distribution: the Internet popularized the distribution of digital content, dramatically lowered the costs of inventory, communication and transaction, opening new markets for niche products, and (3) falling costs of research allow the connection between supply and demand: the real challenge of selling niche contents is to find interested buyers. This became easier thanks to search engines and recommendation tools, to ratings given by users and to communities of interest. In general, many sporadical sales can produce aggregate income equivalent, or even higher than the income produced by a focus on the most successful products. For this author, the new or additional value proposition aims to target a large number of niche customer segments, historically less profitable—which, at the aggregate level, are profitable. Improvements in information technology and operations management allows better value offers, at low-costs, and tailored to a very large number of new customers.

Less comprehensive than the concept of GRP (generation, compensation and sharing) used by Verstraete and Jouison-Laffitte (2009).

According to Porter’s (1985) concept of value chain, the primary activities include: inbound logistics, operations, outbound logistics, marketing and sales, and service; while the secondary activities consist of: procurement, technology development, human resource management and infrastructure.

A bestseller is a book that is regarded as extremely popular and sought after, in a massive way, by readers and that is inserted into the bestseller list.

Of course there are strategies to reduce or circumvent the dependence on bestsellers—and the associated financial risk—as, for example, the one used by Juan Grijaldo, a Catalan exile in Mexico who created a publisher and maintained a curious book catalog which alternated Marxist works with bestsellers, that he justified as being a very simple criterion of choice. He saw in Publisher Weekly (http://www.publishersweekly.com/pw/reviews/) the ten best-selling titles, dismissed the former for being, as he estimated, very expensive, and hired the third and the fourth. With such a simple method, he has achieved many sales.

In the book market, the distribution and communication policies play an important role to create bestsellers, helping to reinforce the trends that already exist in terms of best-selling books—that is, there are increasing and decreasing trends, according to the competitive level of the publisher in each of the factors mentioned (communication and distribution).

Still on the subject of the bestseller, Portugal has witnessed recently a curious phenomenon: people with professions other than writers, but with some media coverage, whose books become real bestsellers in the publishing field. The phenomenon has even greater preponderance when it is noted that many of these successes are by authors whose main profession is journalism. There are already many names that we can point to as editorial successes: Miguel Sousa Tavares, José Rodrigues dos Santos and Júlio Magalhães are recognized journalists that, having their main field of action on television, have become authors of real bestsellers.

For instance, in Portugal about 3.5 million people have already acceded to social networks, which represent 88 % of the universe of Portuguese internet users. The year 2009 brought deep changes to Portugal, and the Portuguese language is nowadays the second most spoken language in microblogging networks, according to the North American blog “Text Wise”.

For example, Press Officers and Public Relation Agents gathered in Palm Springs at the PRSA Conference. One of the panels was about media and their needs in today’s Web 2.0 world. After hearing that the press release is dead, it became necessary to discuss the matter, and the conclusion was that it most certainly is not dead—in fact reporters need information from public relations agents more than ever.

Branding plays an important role in the marketing management of a publishing firm. To this end, the brand is targeted at different levels or audiences. The publisher’s brand indicates a certain competence regarding the topic and the subject of the content. This can be supplemented, if necessary, with different sub-brands for particular series, so that it is possible to have an orientation adapted to the customer. In addition to that, the best known authors also have a brand nature, as they offer to consumers identification, confidence and experience. All brands have to be combined in character and in message, so that there are no contradictions in customer orientation.

The Law of Pareto (also known as the 80-20 rule) was created in 1887 by the Italian economist Vilfredo Pareto (1848–1923). This rule states that 80 % of the consequences emerge from 20 % of causes. According to Pareto, 80 % the world richness is owned by 20 % of people, 80 % of the pollution is caused by 20 % of the countries and 80 % of a company’s revenues come from 20 % of its clients. The percentages may vary between 85/15 or 75/25, depending on the issue, but they hardly escape this proportion.

Sometimes, books distributed with newspapers and magazines reach large runs; some books reach millions of copies. In turn, this practice adopted by publishers will support the distribution and, eventually, improve the rotation of the works in stock.

The Portuguese Association of Publishers and Booksellers—APEL—even states that the majority of the Portuguese people—about 66 %—buy their books in bookstores and newsagents. The super-and hyper-markets have also become a prime selling point, where 28.6 % of the Portuguese people stock up on books. Because they are not the place to buy books par excellence, in supermarkets the works are placed strategically in a passage, attracting the attention of potential buyers. In turn, book fairs gather the attention of only 19 % of Portuguese people, which might be explained by the fact that it is a very specific fair and that, for that reason, attracts few people; they are only attended by potential buyers, unlike what happens, for example, in hyper-markets.

Some publishers recognize several similarities between Amazon’s strategy and the one used by iTunes. The strategy of Jeffrey Bezos’s, such as the one of Steve Jobs before him, is to acquire the device and from 80 % to 90 % of the distribution for the device, ensuring in this way the business model; but the analogy with the business of music can only go so far. What iTunes did was to replace the CD as the basic unit of commerce; instead of having to buy an entire album to get the song that really matters, it is possible to buy just that track. But no one, with the possible exception of students, wants to buy a single chapter of most books. The real concern of publishers is that the low price of digital books will destroy bookshops, which are their primary customers. Burdened with space rentals and operating expenses, physical stores are unable to lower prices in order to compete with online sellers.

For example, in the Portuguese case the main groups (Porto Editora, Leya and Babel) are moving to the Portuguese-speaking countries, especially Brazil, Angola and Mozambique.

In Portugal, on the contrary, libraries buy little or even nothing—they get everything for free due to legal obligations (take the example of the compulsory legal deposit and the State’s divestment on the Directorate General of Books and Libraries—DGLB).

And it would be expected that there is also a huge reduction in government expenditure in public libraries, to the extent that digital books are far less expensive.

For example, some books published by Media XXI, previously mentioned in this paper, which had a public presentation generated more revenue than the sales from traditional bookstores. Of course the amount of sales is also dependent on the ability of the author and of the publisher to mobilize people to attend the launch: marketing communication is essential, including social networks. Even if the author does not have a good network or even if he is not well known, there are alternatives: for example, to join a conference or convention related to the content of the book. Either way, launching a book can be a rewarding experience for the author, not only to discuss the work but also for a mere necessity of socialization, including being with friends which, in some cases, constitutes a good argument and rare opportunity. This publishing company has also made presentations of books in streaming, providing the experience with an international logic, as was the case with the book “Value Creation and the Future of News Organizations” by Robert Picard, who traveled to Lisbon to make the presentation, which was discussed and debated by local experts.

These partnerships involve the recognition of the added value that each partner can provide, for example, Apple is in the business of the device and not in the content business. Steve Jobs (who passed away in November 2011) aimed to ensure that those who produced content were his partners. In fact, it has to be noted that in mid-2010 Steve Jobs met in separate meetings with executives of The New York Times and Time Inc. to demonstrate precisely the potential of the iPad to generate money for newspapers and magazines.

Miller and Washington (2009, Chapter 11).

Datamonitor report—Book Industry Profile: France, p. 15.

Datamonitor report—Book Industry Profile United Kingdom, p. 15.

Datamonitor report—Book Industry Profile: Germany, p. 15.

Kindle is for sale on Amazon for a price of about 170€ and it stores more than 1,500 books. These can be acquired from a set of more than 400,000 books, which only take 60 s to load. Similarly to Kindle, also Nook from Barnes & Noble presents a light e-book reader with a broad array of books at the customer’s disposal. In this context, the following question emerges: is it possible to compete with e-book? Despite some criticism of the e-book from people who prefer the classic format, it can have some advantages. First of all, the e-book responds to the growing concern about the environmental issues (an aspect that should not be devalued); if the book printing wastes lots of paper, which leads to the tree-cutting, the digital book seems not to raise that problem—this might be the publishing industry’s key to change. On the other hand, and although the e-book doesn’t cause waste of paper, it drives to a huge waste of electric and electronic devices, due to the fast changes in these products, a mandatory characteristic of these markets (Apple launches a new iPad once a year as part of a business model that depends on those constant launches, for instance).

In this context, and in a simpler way, it can be said that disruption is associated with a radical change that completely alters the way in which a certain economic activity is conducted. From the perspective of firms and their business models, this concept, rebuilt in 1997 by Clayton Christensen in his book “Innovator Dilemma”, can be understood as the impact of new technologies in the existence of a company. On the other hand, this concept is closely related to a classical theory by Joseph Schumpeter, Austrian-American economist, addressed in his book “Capitalism, Socialism and Democracy” (1942), in which the author considers that companies and other forms of productive organizations should become competitive through new goods, new technologies, new sources of supply, new types of organization—competition drives a decisive advantage in cost or quality and not reach the hem of the profits and of the outputs of existing firms, but their foundations and their own lives.

The result was an increasing focus on the big hits—biographies of celebrities, cooking books and great fiction franchises (Harry Potter, Twilight)—as the medium authors saw their income decline when retailers started reducing orders.

For example, the editor in chief of the Canadian Harlequin, a publisher of novels with annual sales of 500 million U.S. dollars, indicates that the digital world makes allows a number of opportunities to obtain more content, in more ways, to more women. In 2009 the bill for the digital activity was around 6 % of global sales, so it was already ahead of the market. In 2012, the publishing company believes to be about 15–20 %. Harlequin first started using e-readers to provide stories only in digital format that would not have the chance to be printed: erotic literature in a small format, priced at 2.99 dollars each. But Harlequin is also developing new formats. In Japan, for example, its novels in English are first translated to Japanese, then converted by a manga artist to BD for printing. These are then scanned, originally for mobile phones in Japan, but find also new functions as iPhone applications.

On this topic, the reading of Schmitt (1999): “Experiential Marketing” is suggested; the concept is presented and described in the context of the new trends in marketing and consumer behavior.

AAP—Association of American Publishers [Internet]. Disponível em http://publisherlookup.org/ 10th July.

Afuah, A. (2003). Business models: A strategic management approach. New York: Irwin/McGraw-Hill.

Albarran, A. (2009). The handbook of Spanish language media (pp. 278–292). New York: Routledge.

Albarran, A. B., & Mierzejewska, B. I. (2004, May). Media concentration in the U.S. and European Union: A comparative analysis. Paper presented at the 6th World Media Economics Conference, Montreal, Canada.

Albarran, A., Chan-Olmsted, S. M., & Wirth, M. O. (2006). Handbook of media management and economics. Mahwah, NJ: Lawrence Erlbaum.

Amazon Annual Reports and Proxies [Internet]. Disponível em http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsAnnual 11th July.

Anderson, C. (2006). The long tail: Why the future of the business is selling less of more. New York: Hyperion.

Ansoff, H. I. (1984). Implanting strategic management. Englewood Cliffs, NJ: Prentice-Hall International.

Chesbrough, H. (2003). Open innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press.

Christensen, C. M. (1997). The innovator’s dilemma. Cambridge: Harvard Business School Press.

Darnton, R. (2009). The case for books—Past, present, and future. New York: PublicAffairs.

Epstein, J. L. (2001). School, family, and community partnerships: Preparing educators and improving schools. Boulder, CO: Westview Press.

Faustino, P. (2009). The potential of content industry in Iberian American & African Countries. In A. Albarran (Ed.), The handbook of Spanish language media (pp. 278–292). New York: Routledge.

Faustino, P. (2010). Estudo Prospectivo sobre os Media em Portugal. Lisboa: Colecção Media XXI/Formalpress.

Gaymard, H. (2009). Pour le libre – Rapport sur l’économie du libre et son avenir. Paris: Galimard.

International Digital Publishing Forum [Internet]. Disponível em http://www.idpf.org/ 10th July.

Linder, J., & Cantrell, S. (2000). Changing business models. Chicago, EUA: Institute for Strategic Change, Accenture.

Magretta, J. (2004). O Que é a Gestão – Como Funciona e Porque Interessa a Todos. Lisboa: Actual Editora.

Miller, R. K., & Washington, K. (2009) The 2011 entertainment, media & advertising market research handbook (p. 5).

Noam, E. (2009). Media ownership and concentration in America. Oxford: Oxford University Press.

Osterwalder, A., & Pigneur, Y. (2010). The business models generation. Hoboken, NJ: Willey.

Picard, R. (2002). The economics and financing of media companies. New York: Fordham University Press.

Pimentel, M. (2007). Manual del Editor – Cómo Funciona la Moderna Industria Editorial. Madrid: Berenice.

Porter, M. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.

Porter, M. (1989). Vantagem Competitiva. São Paulo: Editora Campus.

Schmitt, B. (1999). Experiential marketing—How to get customers to sense, feel, think, act and relate to your company and brands. New York: The Free Press.

Thompson, J. (2010). Merchants of culture—The publishing business in the twenty-first century. Malden, MA: Polity Press.

Verstraete, T., & Jouison-Laffitte, E. (2009). Business Model pour Entreprendre, le Modèle G.R.P. Bruxelas: Editions De BOECK Université.

Wirtz, B. (2011). Media and Internet management. Alemanha: Gabler.

Titel: Book Industry Business, Concentration, Internet and Social Media of Management and Marketing
verfasst von: Paulo Faustino
Verlag: Springer Berlin Heidelberg
Buch: Handbook of Social Media Management
Print ISBN: 978-3-642-28896-8

Electronic ISBN: 978-3-642-28897-5

Copyright-Jahr: 2013
DOI: https://doi.org/10.1007/978-3-642-28897-5_7