A small publisher that thrives in a declining industry

By Steve Piersanti

Editor’s note: For the past year I’ve been serving on the board of directors of the remarkable little publishing company in San Francisco that will release my new book, The Business Solution to Poverty, in September. Berrett-Koehler publishes nonfiction exclusively, concentrating on business, personal fulfillment, and current affairs. Unlike so many other publishers, the company has been consistently profitable throughout the past decade, outpacing industry standards with rising sales as the book market shrinks. Berrett-Koehler was founded 21 years ago by Steve Piersanti, who continues to serve as editor and president.

In keeping with Piersanti’s inclusive style, more than 100 of the company’s stakeholders—board members, staff, authors, suppliers, service providers, customers, sales partners, and shareholders—as well as several industry experts unconnected to the company gathered on June 18-19, 2013, to participate in Berrett-Koehler’s strategic planning process. (Full disclosure: I also serve on BK’s Strategic Planning Team and helped prepare the event.) What follows is adapted from Steve’s opening remarks for the two-day event. He entitled his presentation “Secrets of Berrett-Koehler’s Success.” 

The article that follows is long (more than 5,000 words) but it’s well worth reading if you want to know what it takes to flourish in an industry—any industry, actually—that is experiencing disruptive change.

1.     Multiple Stakeholder Focus

This is really the foundational concept of Berrett-Koehler. This concept came before our publishing programs, our mission, our books, everything. It goes back to before Berrett-Koehler existed. Before founding BK, I had been president of Jossey-Bass Publishers during its challenging transition from being an independent company to becoming part of the media empire of Robert Maxwell and being placed as a division of Maxwell Communications Corporation. I quickly discovered that our new corporate parent was calling all the shots, and none of the other Jossey-Bass stakeholders really mattered. Not the Jossey-Bass employees who were central to the company’s success; not the authors with whom Jossey-Bass had longstanding relationships; not the suppliers and service providers on whom the company depended. All that really mattered was the call from my boss in New York City.

What was especially troubling about this new balance of power was that there was nothing our new corporate parent was doing that made Jossey-Bass more productive or profitable. Yet, without adding any value, the corporate parent presumed to unilaterally govern our company. It was easy to see that something was deeply wrong with this equation.

And so, when I created Berrett-Koehler’s founding document, “Vision and Plan for a New Publishing Business,” the starting place for my attempt to “rethink the concept of the publishing company” was what I called “Multiple Stakeholder Focus.” “Five ‘stakeholder’ groups – authors, employees, suppliers, owners, and communities (customer, societal, and environmental) – contribute to the success of publishing ventures. Each has a ‘stake’ or investment in the publishing business, whether that investment is time, talent, money, or other resources . . . Berrett-Koehler believes that more balance and equity is needed in the dealings among the stakeholder groups, so that the employees, authors, suppliers, and communities benefit more from the investment each makes and the value each creates for the publishing business. Berrett-Koehler also believes that the relationship among the stakeholder groups needs to be more of a partnership and more fair, open, humane, ethical, and interactive among all of the groups.”

An early manifestation of this focus was that our very first catalog in May 1992 listed many of our stakeholders by name in the catalog. We’ve done this in every catalog since then.

2.     Stewardship

This has gone hand-in-hand with multiple stakeholder focus from the beginning. We were deeply influenced by the ideas in Peter Block’s book Stewardship, which I started working on with Peter right after I began organizing Berrett-Koehler Publishers. In our first catalog I wrote: “If I were to choose one word to describe our vision, it would be ‘stewardship.’ By this I mean a deep sense of responsibility to administer the publishing company for the benefit of all of our ‘stakeholder’ groups.”

Block defines stewardship as “the willingness to be accountable for the well-being of the larger organization by operating in service, rather than in control, of those around us. Stated simply, it is accountability without control or compliance.”

So here was our role as BK managers and employees: to be accountable for serving the interests of all of BK’s stakeholders without needing to do so through control or compliance. Actually, we hope that all BK stakeholders will view themselves as stewards who are accountable for serving the interests of other stakeholders and the whole without needing control or compliance to do so.

3.     Community Engagement and Support

A couple of years into my service as president of Jossey-Bass Publishers I got a call from my boss in New York in which he said that there was a corporate-wide workforce reduction going on and all units were required to cut their headcount by 10 percent. Jossey-Bass had 68 employees, and we were instructed to reduce our headcount to 60 employees. This made no rhyme or reason for Jossey-Bass because we were highly successful and growing rapidly; we had just finished a year in which our sales were up 22 percent and our profits were up 46 percent. Moreover, our business plan of adding 8 more employees had already been approved, and now we were told that we had to instead cut 8 employees. This would have required us to lay off 8 employees, which was unjust and unjustified to me, given the circumstances.

Long story short, our management team fought this edict for two months and I refused to carry out the corporate order. On the afternoon of May 29, 1991, I was fired and told to clean out my desk. But the grapevine worked very quickly and the very next day at my home my phone started ringing with calls from Jossey-Bass authors, suppliers, and service providers who expressed their dismay at this chain of events, their belief in my work and stance, their encouragement to start a new publishing company, and their offers of support. These calls continued for many weeks, as one person who had heard the news would tell another person and encourage that person to contact me, and so on. It was through the support and engagement of all these people that Berrett-Koehler Publishers was born. Listed on the screen are some of the many people who became part of our original community in the first few months when Berrett-Koehler was being organized.

Today there are hundreds of ways that BK engages our communities and receives support from our communities. In the interests of time, I’m going to mention just one. BK authors and other community members are an army of scouts out searching for good authors and good book projects for us and recommending to those authors that BK would be the best publisher for their books. They are the most credible and influential scouts we could possibly have because they know so much about their fields and about BK.

Here’s how bestselling author Peter Block describes this engagement: “I have been a constant source of new authors. When someone comes to me about publishing a book, BK is the first place I send them. I do this partly because I know they will be treated with respect, and they will learn something about the market for their ideas. Most people I refer to BK get refused, but in a useful and sensitive way. So this publisher has a low cost feeder network for new properties, the life blood of the business.”

And here’s how bestselling author Richard Leider describes this engagement. “I have proudly referred dozens of would-be authors to BK over the years. So many that they have offered, partly in jest, to print a BK business card for me! Whether an author landed a contract with BK or not, EVERY single one of them thanked me for the care and insights that they received from BK. Now, that’s walking your talk!”

4.     Publish Books That Make a Difference

When our Editorial Director, Neal Maillet, applied several years ago to work at Berrett-Koehler, he wrote: “As a business and leadership editor whose titles frequently competed for shelf space with BK, I can only express my deep sense of admiration and, to be honest, envy, for the consistent sense of mission and values that BK titles communicate. BK books are for people who are determined to improve themselves and their organizations – not just to rely on corporatespeak or easy answers. BK titles always present a challenge and an invitation – the challenge to do the hard but rewarding work of making positive change, and the invitation to seek beyond self-gratification to community . . . More than anything, a BK book isn’t just a product to be sold. It is invariably part of a message that is consistent across the entire organization.”

It may surprise you but publishing books with a difference-making message was not part of the original concept of Berrett-Koehler. The original concept was more mainstream, which I described as “Leading-edge publications that make new contributions to professional audiences.” But this quickly changed. The books we attracted – and the books that most interested us – were books with big, path-breaking messages about changing individuals, organizations, and the world.

This started with Leadership and the New Science, which was one of the first three books BK published. When a former college advisor of mine sent me Meg Wheatley’s manuscript, I immediately saw that this was different from all the hundreds of books that I had worked on in my previous thirteen-year career as an editor and book marketer. The Library Journal review captured the difference: “Hold onto the top of your head when you read this book . . . Using exciting breakthroughs in biology, chemistry, and especially quantum physics, Wheatley paints a brand-new picture of business management . . . nothing less than an entirely new set of lenses through which to view our organizations.” A newspaper columnist called “The Lazy Literate” expressed the uniqueness of Meg’s work on her next book in a less flattering way: “Yikes! These folks have been eating too many avocados in their hot tubs!” Either way, Leadership and the New Science went on to not only sell nearly 400,000 copies but also to profoundly influence the work of thousands of other book authors, organizational thinkers, and organizational leaders.

In our 20^th Anniversary Celebration a year ago, I cited the case of how a single BK book, Future Search, has made a positive difference for tens of millions of people around the world through the many thousands of future searches in more than 90 countries that have been conducted by the more than 4,000 people who have been trained in the future search methodology.

To give a very current example, the annual meeting this month of the foreign ministers of the thirty-five member countries of the Organization of American States focused on drug problems in North America, Central America, and South America. This meeting was organized around the methodology of Adam Kahane in his new BK book, Transformative Scenario Planning. For the past year the president of Columbia and other country presidents and prime ministers have been working to develop new approaches to drug problems, and they turned to Adam Kahane and his book’s transformative scenario planning methodology to help create and articulate those new approaches.

5.     Eat Our Own Cooking

From the beginning, we have been striving to learn from the books we publish and to practice our book’s ideas in our own company and community.

For example, a central concept in Stewardship is to avoid class systems in management, employment, and compensation practices. One manifestation of class systems is that most organizations have two compensation systems, with the executive compensation system designed to pay those at the top as much as possible and the employee compensation system designed to control costs. Inspired by Stewardship, Berrett-Koehler has just one compensation system for everyone in the company, and it is designed to pay a living wage to everyone, to minimize the disparity between the lowest and highest paid employees, and to direct our company success to raising the whole boat. Accordingly, the difference between my salary and the salary of the lowest paid full-time BK employee has always been less than four to one from the beginning of our company until now. And the same benefit programs and incentive compensation programs apply to everyone.

Another example. Anyone who interacts with Berrett-Koehler soon learns that our culture is all about sharing information openly and freely, so that everyone knows everything. We are open source with authors, suppliers, customers, service partners, and even competitors. And I have always perceived my job to be continuously sharing information in many ways with all of our stakeholder groups. But you may not know the source of this culture and practice. It all started with internalizing the ideas in Chapter 6 of Leadership and the New Science, which is called “The Creative Energy of the Universe – Information.”  Read that chapter, and you’ll see what I mean.

BK has also been influenced by another of the first three books we published: Getting Things Done When You Are Not in Charge. Give up the illusion that you are ever in charge. None of us is ever in control. But we all can get things done when we are not in charge. Of course, this lesson applies to this event. We all can get important things done by acting on ideas that inspire us here even though none of us is in charge of others here.

Finally, here’s an example in the words of our tremendous Director of Subsidiary Rights, Maria Jesus Aguilo: “I was hired as a production and marketing assistant in 1996. At about that time we were publishing Managers As Mentors, so my boss at the time, Pat Anderson, took me aside and told me: I just finished this fantastic book and I really feel like I need to be a good mentor to you. Therefore, I would like us to talk about what it is that you expect from your work here at BK and help you all I can. I told her that I was very happy with my position and learning a lot, but what I would really like to do is rights licensing. A couple of years went by before an opportunity presented itself for me to do rights, but when it did, Pat offered me the position. I learned two things early on in my career at BK: that BK really walks the talk in ways that deeply affect others, and that my managers at BK really listened to my needs and acted upon them. Almost twenty years later, I still derive a lot of inspiration for my work from how the ideas in our books change lives in big and small ways. They changed mine!”

6.     Mission: Creating a World That Works for All

For the first eight years of BK’s history we were in search of a way to express our mission. A mission articulates the fundamental purpose of an organization or enterprise, succinctly describing why it exists. We tried many different ways of expressing our mission. Some are shown on the screen. All had good points, but we were not satisfied with any of them. So we made articulating our mission one of the central objectives of our strategic planning process in the year 2000. “Creating a World That Works for All” emerged from that process and has been our mission ever since.

What has happened over the past thirteen years is that “Creating a World That Works for All” has come to be shorthand for everything that BK community members love about Berrett-Koehler. It has come to signify – all wrapped up in one short memorable phrase – our multiple stakeholder focus, books that make a difference, stewardship, partnership, sustainability, and many other dimensions of BK. It has come to have great meaning for many BK community members, who use it frequently in telling others about BK and expressing their own connection to BK. It has also served to communicate to authors and others a BK point of view, and this point of view is one of our major competitive advantages, as book marketing consultant Todd Sattersten recently pointed out to us.

What does this mission mean in terms of seeking changes in the world, selecting publications that advance these changes, and striving to pursue these changes in our own company and community?

7.     Partnership

Partnership is the way we seek to run Berrett-Koehler and to interact with all of our stakeholder groups – with collaboration, invitation, dialogue, consent, respect, openness, integrity, and mutualism, instead of compulsion, force, violence, or hierarchy.

Partnership is at the heart of the relationship we strive to establish with authors. One manifestation of partnership is our publication agreement, which has many clauses that create a more collaborative relationship between the publisher and authors than is the norm in other companies’ publication agreements.

The fullest manifestation of our partnership with authors is the BK Authors Cooperative, the one-of-a-kind organization where our authors come together to help each other in many big and small ways to increase their success and impact.

We are now seeking to establish a Berrett-Koehler Foundation that would further extend our partnership approach to helping young leaders around the world put into practice systems-changing ideas and methods that help create a world that works for all.

This partnership approach extends to our relationships with our suppliers, service providers, sales partners, and other stakeholders, as I’ll describe in later examples.

8.     Quality and Value Added

All of our systems and approaches are designed to add value and create quality throughout the publishing process. For example, we create high quality in our books by forming longstanding, close, collaborative partnerships with about twenty of the best book production teams around the country, then by sending each new book to the book production team best matched to the unique requirements of that particular book, then by that production team, the author, and the BK staff all working closely together to customize and enhance the book.

Throughout the book publishing world there are constant lamentations about decades of decline in how much editorial guidance and support publishers offer to authors. In contrast, one secret of BK’s success is the extensive editorial guidance and support we provide to authors. We do this in three ways, of which only the third way is common today among other publishers. First, we do a great deal of up-front editorial coaching of authors to improve the core ideas, organization, and framing of books, even before draft manuscripts are written. Second, we send all draft manuscripts to multiple outside reviewers who provide readers’ views of how to improve manuscripts. And third, we arrange top-notch copyediting of manuscripts.

This quality pays off in helping many BK publications to be bestsellers, not just upon publication but for many years following publication. Three BK books have each sold well over one million copies: Confessions of an Economic Hit Man by John Perkins, Eat That Frog! by Brian Tracy, and Leadership and Self-Deception by The Arbinger Institute. In each case BK provided editorial guidance that made the book sell far more copies and have greater impact than otherwise would have been the case. For example, my and our manuscript reviewers’ guidance tremendously strengthened John Perkins’ messages in Confessions of an Economic Hit Man, anticipated the major challenges from critics, and helped Perkins add and clarify materials to address the challenges before the book was published.

9.     Author-Friendly Practices

When Corporate Responsibility Officer magazine gave Berrett-Koehler its award for “Stakeholder Accountability,” it told the following story in the article announcing the award. “At first, Howard Karger says, he couldn’t figure it out . . . A two-time Senior Fulbright Scholar, Karger is the author of multiple books. In late summer of 2004 he found himself working for the first time with Berrett-Koehler . . . [He said] ‘After 25 years of book publishing, I was suspicious . . . I was made to feel like a part of the organization. Almost like staff.’  He grew more wary when the publisher insisted that he travel to San Francisco to meet editorial, marketing, design, and publicity staff. Finally, he realized, ‘these were people doing what they believed in and producing books they were proud of. Democracy for Berrett-Koehler is not just a slogan.’ [The article concludes] In the rough-and-tumble world of book publishing, Berrett-Koehler stands out not only for its treatment of authors, but also for the manner in which it engages employees, business partners, readers, and community.”

This article is describing one of Berrett-Koehler’s many unique practices: launching each book with a full-day Author Day that connects the author to the whole BK staff, gets everyone excited about the book, and creates close collaboration between the author and publisher on all aspects of making books successful.

BK’s author-friendly practices include the following:

• Author-friendly publication agreement
• Collaboration in publication decisions
• Collaboration in cover and interior design
• Extensive sharing of information
• Open access to BK staff on ongoing basis
• Responsiveness to authors’ contacts and requests
• “Author Day” for every author
• “Bill of Rights and Responsibilities for BK Authors”
• and the unique BK Authors Cooperative, an independent nonprofit organization.

10. Integrity and Transparency

These are two elements of partnership. I’ve decided to feature them separately because they pull together so many other dimensions of what makes BK work, as does Jamie and Maren Showkeir’s book Authentic Conversations.

One example of the power of our sharing information openly is our how our partnerships have worked with our two principal book printers, Malloy and Hamilton. There have been times in BK’s history, such as from 2001 to 2003, when we faced severe cash flow shortages and probably could not have kept operating as an independent company without agreement from our printers to extend substantial additional credit to BK even though we were far behind in payments on previous printing jobs. Here is the explanation from Bill Upton, Malloy’s president at the time, for why Malloy continued supporting BK: “One experience that stands out is how open you were with financial information, both current and projected, as you worked with Hamilton and Malloy during the years of loans and past-due payables with us. That openness is what made it possible for both printers to hang in there and continue to support BK.” He continued: “The obvious integrity and commitment of you and the entire staff was a very important factor. We’ve had experiences with other publishers in the past where they expanded their trade credit by working with additional suppliers – our old invoices were left unpaid while the publisher worked with new suppliers on a cash terms basis. We’ve also had publishers simply throw in the towel. Those scenarios were unimaginable with BK.” Fortunately, this trust paid off both for our printers and for BK. For some years BK has been, in Bill Upton’s words, “a model of correct, prompt, complete, problem-free bill paying.”

Our focus on doing what we say we will do, not overpromising, creating systems to fulfill promises, and holding ourselves accountable is especially noteworthy in the area of sales and marketing. Publishers are notorious for making lofty sales and marketing promises in their early discussions with authors and then not fulfilling their promises. Berrett-Koehler has just the opposite approach, which begins with being straight with authors about “The 10 Awful Truths about Book Publishing” [which can be accessed by clicking on its title here]. The rubber really hits the road with the extensive systems that our Sales and Marketing Department has set up (1) to explicitly tell authors all the things we will and will not be doing to market their books, (2) to follow through on everything that we said we would do, and (3) to report back to authors that we have done what we said we would do.

We strive to create systems of integrity and transparency in all areas of the company. For example, our book production systems are set up to enable us to publish books almost always on the schedule laid out at the beginning of the production process.

All of this is extremely challenging in an industry as complex as book publishing. BK Editorial Director Neal Maillet reflects this challenge when he reports, “I once asked the manager of a publisher’s royalty department how she kept track of all the tricky contractual exceptions editors negotiated and was told ‘We don’t – we just use the boilerplate and apologize profusely when an author or agent catches the mistake.’”

BK’s approach is to only commit to things that we can deliver, to create systems that enable us to actually fulfill our commitments, and to share information with our stakeholders that show how we have performed what we promised to do.

11.  Sustainability

Here I am focusing on two dimensions of sustainability. The first dimension is the thrust of many of our books, such as those pictured here, to establish lifestyles, institutions, economic systems, environmental systems, and other ways of living and interacting that are sustainable for generations going forward. The second dimension is establishing strategies and practices that make Berrett-Koehler Publishers sustainable both in terms of being able to stay in business and in terms of the environmental and social responsibility of our own business practices.

One embodiment of our commitment to sustainability is that Berrett-Koehler is a Certified B Corporation. B Corporations meet rigorous standards of social and environmental performance. To qualify as a B Corp, Berrett-Koehler had to complete and pass a 230-question “Impact Assessment” that examined BK’s performance on measures of corporate accountability, transparency, compensation, benefits, employee training, worker environment, worker ownership, social benefit, community service, local involvement, diversity, job creation, and environmental practices.

12.  Multichannel Marketing and Sales

This has been part of BK’s formula from the very beginning. Our June 1991 “Vision and Plan for a New Publishing Business” listed 17 sales and marketing channels for the company. Today we still are active in all of the original 17 channels and have added many other channels, such as online booksellers and social media, which did not exist in 1991.

Our multichannel approach is good for authors and book sales because it increases each publication’s chance to succeed in the marketplace by giving each publication many diverse channels in which to find a market. For example, some books do poorly in bookstore sales but do well in special sales or foreign language translations.

Of course most publishers market through multiple channels. But most do not market as extensively in as many different channels as does BK.

The downside of BK’s approach is that it is very expensive. Berrett-Koehler devotes over 20 percent of our revenues to sales and marketing, which is far above publishing industry averages.

13.  Independence

In an age of corporate consolidation, BK has remained fiercely independent. Berrett-Koehler is owned by our stakeholders, including our employees, authors, customers, suppliers, service providers, and sales partners.

This independence allows us to chart our own course and to not have our unique values and practices submerged in a giant corporate bureaucracy. And it allows us to own our own future and to not be governed by short-term stock market pressures and shifting corporate edicts.

14.  Continuity, Constancy, Fidelity

One of BK’s great strengths has been our ability to keep good people and the resulting continuity of our staff. 18 of our 25 employees have been with BK for 5 or more years. And our average staff tenure with BK is 10 years. Love ‘Em or Lose ‘Em has not only been a bestselling BK book, it has also been a guide to our company.

Another secret to our success has been the constancy of our purpose, vision, and distinctive practices over many years. Our list of 11 “Guiding Concepts for Berrett-Koehler Publishers” was written 21 years ago. All of these “Guiding Concepts” are still our touchstones today – such as multiple stakeholder focus and environmental consciousness and action. This constancy increases our ability to move Full Steam Ahead!, as the title of Jesse Stoner and Ken Blanchard’s book proclaims.

When people ask me what about Berrett-Koehler I am most proud about, my answer is our fidelity to our mission and values during the many challenging periods we have had over the years. For example, when the great recession hit in 2008 and 2009, like most publishing companies we experienced a substantial revenue decline. However, we decided to respond to this crisis by doing more of what BK stands for – under the headings of Integrity, Mission and Strategies, Participation, and Efficiency and Effectiveness – rather than compromising our mission and values. Whereas Publishers Weekly reported that approximately two thirds of publishing companies laid off employees and cut back their publishing programs during this period, Berrett-Koehler did neither. Instead, we shared full information with all employees, and the employees collectively decided to take a 10 percent across-the-board salary reduction (except for the lowest-paid employees, who received smaller reductions), which the employees then lifted after revenues recovered. My hope is that our identity as a company and community is so deeply imprinted that it will be our destiny and carry us through the many other challenging periods that are surely yet to come.

15.  Continuing Innovation

The previous 14 secrets may make it sound like BK is in good shape. However, it is clear that we cannot stand still. Everything is going through continuous change around us in our business and publishing environments. Unless we are leaders ourselves in making the future, unless we do new and surprising things to leapfrog over obstacles that have constrained us in the past, and unless we continue developing new ways of doing business that bring greater value to our customers and other stakeholders, Berrett-Koehler will not survive over the long term.

Larry Ackerman, author of Identity Is Destiny, recently observed that BK is now 21 years old and that this age can be viewed as having reached “adulthood.” I think that is a good image for where we are now. At 21, it is time to turn more of one’s focus outward to contributing to a larger work and to making a bigger difference in the world through service to others. This can be true of Berrett-Koehler as well and this event can help BK reach out in new and better ways to make a greater positive difference in the world.

As we seek to innovate in new ways, it is my prayer that we will continue to be guided by the secrets named in this address. I believe that there is great power within these ideas and that they will make our innovations better and more likely to succeed. We can do more to create a world that works for all. Thank you.

Good news for book publishers—and readers of books!

By Tom Hallock

My friend Johanna Vondeling, editor of many of my books over the years, recently posted this article on Facebook. I thought it worthy of wider attention here. The author, Tom Hallock, is Associate Publisher at Beacon Press and a friend of Berrett-Koehler Publishers, where Johanna is Vice President. She reports that Hallock recently read Steve Piersanti’s “10 Awful Truths About Book Publishing” (posted here). He thinks Steve makes good points AND he wanted to point out some good news for publishers amidst all the recent change in the industry. “His ideas are spot-on and inspiring,” Johanna wrote. 

1. Publishing is generally maintaining revenue during its digital transition, something most other industries have been unable to do.

2. There is a new efficiency in the industry causing returns to be dramatically reduced. Digital content, short run and print-on-demand manufacturing, the rise of direct and online sales and an improved supply chain have all reduced the impact of an industry practice that has been a drain on profit. This reduction of waste has also lowered our environmental impact.

3. Our content can be monetized in more ways than ever: eBooks, other digital content, digital download audio, etc.

4. Media continues to be most responsive to big new ideas that are first introduced in book format.

5. The need for investment in physical inventory has also been reduced by all the factors mentioned in #2 above and because we are less reliant on physical display in bookstores.

6. Publishers do not require the physical display of books in order for readers to find them. The 24/7 availability of all books everywhere through our own web sites and those of online booksellers means that readers have instant access to our titles when events, or media attention, or broader shifts in the culture create interest in them.

7. The international market has opened up and is providing access to readers throughout the world whether or not they have access to a physical bookstore that carries English language books. Readers discover books through multiple sources, most of which don’t recognize borders.

8. There is almost a daily growth in tools to build community and reach readers. In particular our ability to aid readers in discovery through BISACs (a Book Industry Study Group subject heading classification), metadata, keywords—as well as social media—has to some extent freed us from the activities of intermediaries and empowered us to grow our businesses.

Top 10 trends shaping the future of publishing

By Johanna Vondeling   

1. Everyone’s a publisher

Now that digital content is popular and relatively easy and inexpensive to produce, millions of individuals and thousands of non-book-publishing media companies have leapt into the business of creating and distributing digital content (often coupled with print-on-demand options).[i] [ii] The near-elimination of barriers to entry into the publishing marketplace has produced an ever-increasing flood of information and entertainment options for consumers.[iii]

Moreover, publishers’ primary competition today isn’t other books, but rather other forms of media, such as social media platforms, games, and streaming media. As the presence and relevance of physical retail for books continues to decline, so too will the necessity for other entities — including authors and other content producers — to work with established legacy publishers to bring books to market.[iv]

2. Content comes first

All content producers now need to approach format as a secondary consideration. The innovators are designing work-flows that prioritize the development and (pre-publication) tagging of content irrespective of format, knowing that the eventual outputs could be infinite: Print book? E-book? Online course? Webinar? App? Blog? Tweet? Tagging must be “semantic” (tagged for meaning, not just coincidence of terms), to facilitate discoverability. Content producers must make it as easy as possible for content to be re-purposed by its curators and leveraged and shared by its marketers and distribution partners.

3. Content marketing is king

Content is still king. And content marketing (defined as “marketing without marketing, or building soft power and social gravity for a brand through shared values and interests”) is edging out traditional push-marketing practices. By disseminating great quality and immersive content through social platforms, content producers can market themselves without interrupting consumers with more explicit advertising.[v]

Content marketing facilitates reader engagement. Engagement, in turn, produces strong brand ties, leading to increased purchasing, product loyalty, and customer advocacy. But there is no standard definition or metric for engagement, nor do most organizations fully understand the migration from engagement to revenue. The challenges are 1) understanding what’s happening within the dynamic ecosystem of content and social media and 2) being able to make tactical changes to increase conversion and revenue.

4. Big data rules

The amount of data in our world has been exploding. Analyzing large data sets—so-called big data—has become a key basis of competition, driving growth and innovation. The increasing volume and detail of information captured by enterprises, and the rise of multimedia and social media, have all been fueling exponential growth in data.[vi] As a result, businesses now have broad and deep visibility into their stakeholders’ behaviors and values. But which information matters most? Big data offers promise in making sense of this complexity.

The few businesses that have successful migrated from print-first to digital-first models have invested significantly in building in-house data and analytics teams.[vii] While the growing importance of data analysts should not be under-estimated, the need for creative thinking in the changing world of marketing has never been greater. Note the rise in recruitment of ‘data scientists,’ who are savvy in computer science but – crucially – also able to apply creative thinking to data-driven challenges.

5. Mobile matters

The number of mobile-connected devices will exceed the world’s population in 2013.[viii] In 2012, mobile subscriptions in China surpassed 1 billion and mobile Web users overtook PC access to the web.[ix] Millions of people in developing countries may never own a book or a computer, but they do own a mobile phone.

To move forward in “mobile optimization” means content must be conceived of and designed explicitly for mobile devices. Every experience offered through digital channels – every web page, shopping cart and piece of rich content – must work well on any device in any location. Customers generally understand that concessions need to be made for the smaller screen, touchscreen input, and slower speed, but they won’t accept unnecessary hassle or delay. Apps are a part of today’s approach to mobile, but they are not a cure-all to this challenge, as use of the mobile web increases daily.[x]

6. The Internet is the classroom

The education industry is experiencing dramatic disruption. Profits and enrollment at for-profit colleges and universities in the United States are growing at a staggering rate.[xi] We’re witnessing the proliferation of “massive open online courses (“MOOCs”).[xii] Education start-ups are creating and offering online study groups, flashcards, lecture notes, and a wealth of other tools for free. Investment in education technology companies increased from less than $100 million in 2007 to nearly $400 million last year.[xiii] And while digital textbooks have been slow to gain adoption, many education providers are turning away from print textbooks in favor of digital devices in classrooms and lecture halls. In response, some publishers are diving head-first into the growing business of online education.[xiv]

The disruptive power of information technology may be our best hope for containing the soaring costs that are driving a growing number of students into ruinous debt or out of higher education altogether. It is also a potential boon to those displaced workers under pressure to become “life-long learners.” But this disruptive power also poses a potential existential threat to many physical universities and traditional textbook publishers.[xv]

7. Get used to strange bedfellows

Legacy industries, like book publishing, are realizing that they can’t go it alone if they hope to survive and thrive. Many are forming unlikely alliances or funding start-ups to help them adapt amid the present flux and strategize for the future. In 2012, Pearson bought Author Solutions, one of the leading providers of self-publishing services. In 2013, Pearson and Kaplan have both launched incubator programs to help vet and mentor education-tech start-ups. Macmillan has been aggressively investing a fund of over $100 million in ed-tech start-ups.[xvi] Other publishers are leveraging ties with other branded media platforms and content providers. Hyperion is selling its backlist and will focus exclusively on content tied to its sister companies Disney and ABC.[xvii] Wiley is distributing material from (former competitor) OpenStax College, an open-source platform that makes introductory college textbooks available as free downloads.[xviii]

8. Set up high-value networks

Platforms like Craigslist and eBay engage in “commons-creation” by establishing virtual spaces in which strangers can pool their ideas, sell products or services, and make social connections. The platforms that can provide real value gain users (and often revenue) quickly. We’re also witnessing a dramatic rise in the use digital personal assistants networks like Task Rabbit.

And Amazon successfully launched Audiobook Creation Exchange, a platform that connects freelance narrators of audio books with the owners of content who are looking to publish audio books. As workers experience less job security and turn increasingly to independent and task-based employment options, such platforms provide value by leveraging the sponsor’s “right of way” to create credible networks that connect people seeking products and services with those eager to provide them.

9. Crowdfunding has come of age

Digital crowdsourcing platforms like Indiegogo, Kickstarter, Unbound, and Pubslush are proliferating, gaining both users and donors at a remarkable pace. Now, content curators can use these platforms to locate content that readers are attracted to and willing to pay for – before it is produced and distributed. Combined with the boom in self-publishing, this trend means more opportunities for cultural producers to identify content with proven market demand, and more ways to identify the hardcore fan base for a particular set of content, before making the decision to invest.[xix]

10. The means of production is going hyper-local

Paradoxically, globalization is both making it easier to purchase a product on the other side of the planet and moving the production of goods closer to the site of purchase. The emergence of “additive manufacturing” and 3-D printing holds the promise that individual creators and users can “make” anything in their own homes. Book and magazine publishers are printing closer to their customers through globally dispersed printing operations and print-on-demand programs. Espresso machines facilitate the printing of out-of-stock and self-published books in physical bookstores.[xx]

All these developments offer the opportunity to bring production closer to the customer, facilitating just-in-time sales and providing more sustainable alternatives to current distribution practices.

Johanna Vondeling is Vice President for Business Development at Berrett-Koehler Publishers. 

Notes

i.         “Shatzkin: Soon, Most People Working in Publishing Won’t Be Working at Publishing Companies.” Digital Book World. March 19, 2013.

ii.         “Ecco, MLB Team Up for E-book Series.” Publishers Weekly. March 20, 2013.

iii.         “The Ten Awful Truths About Book Publishing.” Steve Piersanti. March 6, 2012.

iv.         “Book Publishers Scramble to Rewrite Their Future.” Wired. March 19, 2013.

v.         Adobe/Econsultancy Quarterly 2013 Digital Intelligence Briefing. January, 2013.

vi.         “Big data: The next frontier for innovation, competition, and productivity.” McKinsey Global Institute. March, 2011.

vii.         “The FT has ‘crossed over’ to become a digital business—but can anyone else replicate that feat?” paidContent. March 18, 2013.

viii.         Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2012-2017. February 6, 2013.

ix.         “2013: The year nothing but mobile matters for any business selling in China.” MobiThinking. December 20, 2012.

x.         Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2012-2017. February 6, 2013.

xi.         “The Rise of For-Profit Universities and Colleges.” University World News. July 15, 2012.

xii.         “Massive open online courses: Time and a little money are a worthy investment.” Financial Times. March 11, 2013.

xiii.         “The Siege of Academe.” Washington Monthly. September/October 2012.

 xiv.         “Wiley Launches Digital Classroom, Video and Ebook E-Learning Site.” Digital Book World. March 19, 2013.

xv.         “The Siege of Academe.” Washington Monthly. September/October 2012.

xvi.         Publishers Lunch. March 7, 2013.

xvii.        Publishers Lunch. March 7. 2013

xviii.        “Wiley, OpenStax Team on College Biology Textbook.” InformationWeek.com. March 11, 2013.

xix.         “Veronica Mars Lives again: Lessons from a record-breaking Kickstarter campaign.” paidContent. March 17, 2013.

xx.         “Just Press Print.” The Economist. February 12, 2010.

The top 10 most-read books in the world

Thanks for this link to my friend Jeevan Sivasubramanian at Berrett-Koehler Publishers. I borrowed this item from his superb newsletter, the BK Communique. Hats off to Jared Fanning for creating the infographic, too!

The 10 Awful Truths About Book Publishing

My friend and publisher, Steve Piersanti, founder and president of Berrett-Koehler Publishers, wrote a widely-quoted article some time ago under the title above. He updated the piece this month, adding a list of seven useful tips for writers to respond to the “awful truths.” Here’s the updated version . . .

1. The number of books being published every year has exploded.  Bowker reports that over three million books were published in the U.S. in 2010 (May 18, 2011 Bowker Report).  The number of new print titles issued by U.S. publishers has grown from 215,777 in 2002 to 316,480 in 2010.  And in 2010 more than 2.7 million “non-traditional” titles were also published, including self-published books, reprints of public domain works, and other print-on-demand books.  In addition, hundreds of thousands of English-language books are published each year outside the U.S.

2. Book industry sales are declining, despite the explosion of books published. Adult nonfiction print unit book sales peaked in 2007 and have declined each year since then, according to BookScan (Publishers Weekly, January 2, 2012).  Similarly, bookstore sales peaked in 2007 and have fallen each year since then, according to the U.S. Census Bureau (Publishers Weekly, February 20, 2012).

3.  Despite skyrocketing e-book sales, overall book sales are still shrinking. “Print Declines Outpace Digital Gains” was the Publishers Weekly headline of September 19, 2011.  For the full year of 2011, a 17.1% decline in print sales outweighed a 117.3% increase in e-book sales, resulting in a 5.8% decline in combined print and e-book sales, according to the Association of American Publishers (Publishers Weekly, March 5, 2012).  Similarly, combined print and e-book sales of adult trade books fell by 14 million units in 2010, according to the August 9, 2011 BISG BookStats report.  The total book publishing pie is not growing, yet it is being divided among ever more digital and print products.

4.  Average book sales are shockingly small, and falling fast. Combine the explosion of books published with the declining total sales and you get shrinking sales of each new title.  According to BookScan – which tracks most bookstore, online, and other retail sales of books (including Amazon.com) – only 263 million books were sold in 2011 in the U.S. in all adult nonfiction categories combined (Publishers Weekly, January 2, 2012).  The average U.S. nonfiction book is now selling less than 250 copies per year and less than 3,000 copies over its lifetime.  And very few titles are big sellers.  Only 62 of 1,000 business books released in 2009 sold more than 5,000 copies, according to an analysis by the Codex Group (New York Times, March 31, 2010).

5.  A book has less than a 1% chance of being stocked in an average bookstore. For every available bookstore shelf space, there are 100 to 1,000 or more titles competing for that shelf space.  For example, the number of business titles stocked ranges from less than 100 (smaller bookstores) to approximately 1,500 (superstores).  Yet there are 250,000-plus business books in print that are fighting for that limited shelf space.

6.  It is getting harder and harder every year to sell books. Many book categories have become entirely saturated, with a surplus of books on every topic.  It is increasingly difficult to make any book stand out.  Each book is competing with more than ten million other books available for sale, while other media are claiming more and more of people’s time.  Result: investing the same amount today to market a book as was invested a few years ago will yield a far smaller sales return today.

7.  Most books today are selling only to the authors’ and publishers’ communities. Everyone in the potential audiences for a book already knows of hundreds of interesting and useful books to read but has little time to read any.  Therefore people are reading only books that their communities make important or even mandatory to read.  There is no general audience for most nonfiction books, and chasing after such a mirage is usually far less effective than connecting with one’s communities.

8.  Most book marketing today is done by authors, not by publishers. Publishers have managed to stay afloat in this worsening marketplace only by shifting more and more marketing responsibility to authors, to cut costs and prop up sales.  In recognition of this reality, most book proposals from experienced authors now have an extensive (usually many pages) section on the authors’ marketing platform and what the authors will do to publicize and market the books.  Publishers still fulfill important roles in helping craft books to succeed and making books available in sales channels, but whether the books move in those channels depends primarily on the authors.

9.  No other industry has so many new product introductions. Every new book is a new product, needing to be acquired, developed, reworked, designed, produced, named, manufactured, packaged, priced, introduced, marketed, warehoused, and sold.  Yet the average new book generates only $50,000 to $200,000 in sales, which needs to cover all of these expenses, leaving only small amounts available for each area of expense.  This more than anything limits how much publishers can invest in any one new book and in its marketing campaign.

10.  The book publishing world is in a never-ending state of turmoil. The thin margins in the industry, high complexities of the business, intense competition, churning of new technologies, and rapid growth of other media lead to constant turmoil in bookselling and publishing (such as the bankruptcy of Borders and many other stores).  Translation: expect even more changes and challenges in coming months and years.

STRATEGIES FOR RESPONDING TO “THE 10 AWFUL TRUTHS”

1.  The game is now pass-along sales.

2.  Events/immersion experiences replace traditional publicity in moving the needle.

3.  Leverage the authors’ and publishers’ communities.

4.  In a crowded market, brands stand out.

5.  Master new digital channels for sales, marketing, and community building.

6.  Build books around a big new idea.

7.  Front-load the main ideas in books and keep books short.

The 10 awful truths about book publishing

Thanks to my friend Jeevan Sivasubramaniam, who edits the extraordinary “BKCommunique,” the newsletter of Berrett-Koehler Publishers, I’m reprinting here a recently updated list of no-holds-barred observations about publishing written by Steven Piersanti, the company’s President (and also my publisher and friend). You’ll be surprised by what Steve reports.

1. The number of books being published in the U.S. has exploded.

Bowker reports that over one million (1,052,803) books were published in the U.S. in 2009, which is more than triple the number of books published four years earlier (2005) in the U.S. (April 14, 2010 Bowker Report). More than two thirds of these books are self-published books, reprints of public domain works, and other print-on-demand books, which is where most of the growth in recent years has taken place. In addition, hundreds of thousands of English-language books are published each year in other countries.

2. Book industry sales are declining, despite the explosion of books published.

Book sales in the U.S. peaked in 2007 and then fell by nearly five percent between 2007 and 2009, according to the Association of American Publishers (April 7, 2010 AAP Report). Similarly, bookstore sales peaked in 2007 and have fallen since, according to the U.S. Census Bureau (Publishers Weekly, February 22, 2010). The major bookstore chains have been especially hard hit, with a 12 percent sales decline between 2007 and 2009 (Publishers Weekly, April 12, 2010).

3. Average book sales are shockingly small, and falling fast.

Combine the explosion of books published with the declining total sales and you get shrinking sales of each new title. According to Nielsen BookScan – which tracks most bookstore, online, and other retail sales of books (including Amazon.com) – only 282 million books were sold in 2009 in the U.S. in all adult nonfiction categories combined (Publishers Weekly, January 11, 2010). The average U.S. nonfiction book is now selling less than 250 copies per year and less than 3,000 copies over its lifetime.

4. A book has less than a 1% chance of being stocked in an average bookstore.

For every available bookstore shelf space, there are 100 to 1,000 or more titles competing for that shelf space. For example, the number of business titles stocked ranges from less than 100 (smaller bookstores) to approximately 1,500 (superstores). Yet there are 250,000-plus business books in print that are fighting for that limited shelf space.

5. It is getting harder and harder every year to sell books.

Many book categories have become entirely saturated, with many books on every topic. It is increasingly difficult to make any book stand out. New titles are not just competing with a million recently published books, they are also competing with more than seven million other books available for sale. And other media are claiming more and more of people’s time. Result: investing the same amount of effort today to market a book as was invested a few years ago will yield a fraction of the sales previously experienced.

6. Most books today are selling only to the authors’ and publishers’ communities.

Everyone in the potential audiences for a book already knows of hundreds of interesting and useful books to read but has little time to read any. Therefore people are reading only books that their communities make important or even mandatory to read. There is no general audience for most nonfiction books, and chasing after such a mirage is usually far less effective than connecting with one’s communities.

7. Most book marketing today is done by authors, not by publishers.

Publishers have managed to stay afloat in this worsening marketplace only by shifting more and more marketing responsibility to authors, to cut costs and prop up sales. In recognition of this reality, most book proposals from agents and experienced authors now have an extensive (usually many pages) section on the author’s marketing platform and what the author will do to market the book. Publishers still fulfill important roles in
helping craft books to succeed and making books available in sales channels, but whether the books move in those channels depends primarily on the authors.

8. No other industry has so many new product introductions.

Every new book is a new product, needing to be acquired, developed, reworked, designed, produced, named, manufactured, packaged, priced, introduced, marketed, warehoused, and sold. Yet the average new book generates only $100,000 to $200,000 in sales, which needs to cover all of these expenses, leaving only small amounts available for each area of expense. This more than anything limits how much publishers can invest
in any one new book and in its marketing campaign.

9. The digital revolution is expanding the number of products and sales channels but not increasing book sales.

We are in the early stages of an explosion in digital versions of books and digital sales channels for books and portions of books. However, early indications are that the digital revenues are replacing traditional book revenues rather than adding to overall book revenues. The total book publishing pie is not growing, but it is now being divided among even more products and markets, thus further crowding and saturating the
marketplace. And although some digital costs are lower, other costs are higher while price points are lower – making digital profits even slimmer than print profits thus far.

10. The book publishing world is in a never-ending state of turmoil.

The thin margins in the industry, high complexities of the business, intense competition in a small industry, rapid growth of new technologies, and expanding competition from other media lead to constant turmoil in book publishing. Translation: expect even more changes and challenges in coming months and years.

The future of books

The summer after I finished fifth or sixth grade (I forget which), my photo appeared in my home-town newspaper along with a two- or three-paragraph story. In the photo, I was carrying a teetering stack of books, my weekly haul from the public library. The story quoted one of the librarians about my seemingly unquenchable thirst for reading. As I recall, I would have won the prize as the library patron who had read the most books that summer — if there’d been such a prize.

I still read lots of books — 100 or more a year — and I’m not even a particularly fast reader. But something has changed in the last half-century. I now read books almost exclusively on my Kindle or my iPad (mostly on the former).

I love these new reading devices. Amazon.com has reported a substantial upsurge in book sales to its Kindle customers — about 50%, I believe — and I’m very much part of the pattern. I read more, I read faster, and I find myself remembering more of what I read. So, I’m always puzzled when friends tell me they HATED the Kindle they bought or wouldn’t be caught dead reading a book on an iPad.

In fairness, I’m an early adopter of new technology. The iPad promises a new reading experience? Sign me up! The new Kindle offers a screen with higher contrast? You’ve got me! I’ve never thought “new” was always better. But in my experience it often is, and it’s certainly worth trying.

It’s occasionally tempting to accuse the Kindle-haters among my friends of being Luddites. Then I recall that the Luddites were workers whose jobs were being consumed by the mechanical monsters they confronted, so that analogy would be unfair to them.

Yes, I too lament the protracted death of bookstores. I’ve always loved to wander at a leisurely pace through the aisles of a well-stocked independent bookstore (or even, I confess, a Borders or B&N at times). I used to appreciate the feel in my hands and the unmistakable smell of newness of a new hardcover book as I opened it for the first time. But my life goes on even though I experience these pleasures so much less frequently these days.

Many people seem to equate the advent of the e-book as the death-knell of books and publishing. Of course, it’s certainly true that the publishing industry is restructuring in major ways, but that’s a process that began years before e-books became widely available. It has as much to do with the rise (and now the seemingly imminent fall) of the major bookstore chains and, perhaps even more so, with the increasingly large role played by the big-box discounters.

The problems of publishers aside, it’s nonsense to think that the printed book is a dying phenomenon. Last year, according to a friend who runs a publishing company, one million titles were published in the U.S. — a much larger number than had been the case only a few years ago. Apparently, there’s been a spike (or flowering, depending on your point of view) in self-publishing, which accounts for hundreds of thousands of titles. As far as I can tell, Americans may be buying fewer books, magazines, and newspapers, but I’d have to be convinced they’re actually reading less.

So, the world is changing. What else is new? Growing numbers of people now read e-books in addition to, or perhaps instead of, printed ones. But the e-book itself is obviously a transitional format. When it costs no more to print in color, or to include photos or other illustrations, the black-and-white age of the typical printed book will certainly fade. And it’s only a couple of steps further to the multimedia “book” that incorporates audio, video, and interactive features.

If you’re one of those people who can’t part with the feel and the smell and the heft of a printed book, five or ten years from now you may still be reading in the age-old format that began (shakily, it now seems) with Johannes Gutenberg.I expect to be navigating my way through the colorful and engaging content of a multimedia “book.”

Books on paper aren’t going away, at least not anytime soon. Eventually, probably decades from now, the book will become an artifact of a time long passed. What will have replaced it? What is the book of the future? I won’t begin to speculate. But I’m convinced that billions of educated people will be “reading” at least as much as we are now, learning a lot, and enjoying it immensely.