By Jonny Kaldor, Co-founder and CEO at Kaldor
Is the publishing industry about to go the same way as the music industry did a decade ago, and if so, what can we do to avoid it all happening again?
In 2014 the publishing industry needs to finally wake up to the very real danger it faces from its inertia in the face of digital change.
Publishers today talk a very good game about going ‘digital first’ but few seem to be putting their words into action, happier instead to watch as the world, and their readers, slowly but inevitably pass them by.
They’re refusing to recognise that consumer behaviour has changed. Forever. That their processes and products, built for an analogue age, are out of step with how people want to consume content today.
The last time I experienced such a situation was when I was at EMI Music back in 2002, where we all watched in dismay as an industry consistently and repeatedly failed to move fast enough in response to an ever changing set of consumer needs.
Back then, the music industry totally underestimated the importance of digital until it was far too late, focusing on fighting piracy (and at the same time alienating their audience) rather than giving consumers what they wanted. Arguably, it had an excuse, being the first industry to really be hit by the digital revolution in such a fundamental manner. The publishing industry has no such excuse.
Recent years have without doubt seen the acceleration of digital innovation from publishers but they’re now in danger of getting caught out yet again by the latest upheaval in consumer behaviour, mobile.
Mobile is fast becoming the platform of choice for consumers. However, publishers seem unwilling to accept this. Mobile requires more than a mere evolution of your product. It needs you to rip it up and start again.
So what were the big mistakes made by the music industry a decade ago, and how can we avoid them happening all over again in publishing?
Steeped in legacy formats - like the music industry before them, print publishers have an unhealthy obsession with continuing to focus on the physical to the detriment of digital. Of course print is, and will continue to be for some time to come, an extremely important channel for publishers, but its importance will wane over the coming years and we have to be ready for the switch long before it comes. If we’re not, then someone else will come and take our business away from us. It’s clear to me that in 10 years, print will be to magazine publishers as vinyl is to music companies a beautiful and timeless niche product. Don’t kid yourself into thinking any different. And if you think a digital “PDF” replica is going to cut it then you may as well give up and go home right now…
Failing to transition to structured content - before the onset of digital downloads, the music industry had almost no need for “metadata” (that is, information associated with content, such as details about the contributors, rights, track listings and so on). As a result, when the time came to try to sell music online, there followed a monumental undertaking for each record label in order to locate, clean up and sort out their repertoire so that it could be sold. Years of effort and tens of millions of dollars were spent by labels across the industry to clean up their back catalogues, and all because they weren’t properly structured in the first place. And while newspapers have been dealing with this for some years, magazine publishers are only just now getting to grips with structured content. If you are going to be able to get maximum value out of your content you have to tag it up and stick it somewhere you can get access to it whenever you need it and that’s not on your creative director’s hard drive. It’s time to take our content and manage it properly if we don’t, we’re missing a massive opportunity to really exploit it.
Too little investment in digital, too late - back at EMI in 2002 I remember vociferous complaints against the (sadly too small) amount of time and effort we were putting into digital when it only accounted for 2% of revenues at the time. Despite all indicators showing that digital was our only future, people were still reticent to properly invest and we can all see the outcome now digital accounts for over 60% of revenue and music companies are on their knees, controlled by those who took the time to do things properly. Again we see the same happening in publishing we regularly hear that print is still the dominant format and therefore large investment in digital is not yet appropriate. How each single title needs to prove an almost immediate return on investment as if it’s business as usual. If we are going to shift an industry from print to digital, we have to look at this strategically and make proper investments in the future. Not title by title, but at a corporate level. Now is not the time to be cheap.
Failing to put the consumer at the centre - you may be able to empathise with music companies who couldn’t understand their customers’ needs and instead allowed Apple to come along and show them how it’s done. Print publishers, on the other hand, have had plenty of time to think about this, yet they still seem to offer products that most readers simply don’t want (and I’m not just talking about shoehorning full page PDF replicas onto mobile phones something that is truly unforgivable). If we’re going to succeed in mobile then we have to create products that are designed for mobile and that means tearing up the print and starting again. Preferably in an empty room with a smart bunch of people who are willing to totally rethink the product. And maybe even some real consumers providing input. This is the way you’ll create something truly innovative and exciting. And you might even start to build a native digital audience on the back of it.
Missing out on making the most of their brands - in 2002, The “Robbie deal” was hailed at EMI as the future of the industry working in partnership with your artist to go beyond just recorded music and instead move into new areas of revenue such as live events, merchandising and so on. And while this approach might not have been embraced with the gusto it deserved, it’s a model that publishers could learn from. Mobile allows content owners to engage with their readers in a way that is not possible with print from shopping the page, to delivering personalised content and from fully interactive and transactional advertising to social media tie-ins. Content is no longer the only asset a publisher has to offer many editorial brands have ready-made vibrant communities of consumers who are ready to engage in a whole new way. The job for publishers is now to work out how best to exploit this to their advantage. If they don’t, someone else will.
It’s not too late; people still want quality content and they’re prepared to pay for it. Publishers just need to be brave, they need to stick their hands in their pockets and they need to reinvent their product for a new breed of digital and mobile consumer.