Transcript: Indie Publishing: Who Holds the Power?

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Recorded at Publishing University 2015
Presented by the Independent Book Publishers Association
April 10, 2015

Rana DiOrio, Little Pickle Press
Kelly Gallagher, Ingram Content Group
Jim Milliott, Publishers Weekly

KENNEALLY: Who holds the power in indie publishing? Questions of power and the struggle to find balance in that assertion of power are appropriate ones to ponder here in Austin, Texas. A mile and a half away stands the Lyndon Baines Johnson Presidential Library, adjacent to the University of Texas campus.

“President Johnson liked power. He liked the feel of it, the wielding of it. But that hunger was harnessed and redeemed by a deeper understanding of the human condition, by a sympathy for the underdog, for the downtrodden, for the outcast. And it was a sympathy rooted in his own experience.”

That’s what Barack Obama observed, exactly a year ago today, when he and the three living ex-presidents assembled at the LBJ Library for a civil rights summit, marking the 50th anniversary of passage of the 1965 Civil Rights Act. Indeed, LBJ liked power and he had a great deal to say about his own personal power and the power of the United States.

Not everything LBJ said is repeatable among polite company, but there is one quote of his on the limits of power that you, as publishers and authors and businesspeople, may identify with. “Being President,” he said, “is like being a jackass in a hailstorm. There’s nothing to do but stand there and take it.”

Once upon a time, authors and publishers, along with readers and booksellers, knew their separate places in the book world, and they stuck to them. The distribution of power was uneven, maybe even unfair, but the pecking order seemed to make sense.

Then, the revolution erupted and the digital transformation of books and publishing created a more level playing field. Authors and independent publishers, especially, rejoiced at this new-found freedom to write, publish, and sell books.

As with so many revolutions, though, the change has come at a cost. In 2015, who holds the power in the book world? Are the rulers wise and beneficent or crass and cold-hearted? Are we building a utopia for readers, or making their lives miserable?

Well, those are the questions that I want to put to the panel. As Angela Bole said, all of them are members of your board of directors. I will introduce them. I will also give you their Twitter handles. I understand that IBPA is looking for some tweets on this with that hashtag, #pubU2015, so if you would, try to remember to tweet with their handles. My own is @beyondthebook, after a podcast series that I host.

And I’ll start on the very far end and introduce our panel here. Rana DiOrio. Rana, welcome.

DIORIO: Thank you.

KENNEALLY: Rana is online, or at Twitter, I should say, @ranadiorio. She is the founder of San Francisco-based Little Pickle Press. She has written her way through life as a student, a lawyer, an investment banker, a private equity investor, and now as an author and publisher of children’s media.

Little Pickle Press is a 21st century publisher, dedicated to helping parents and educators cultivate conscious, responsible little people by stimulating explorations of the meaningful topics of their generation through a variety of media, technologies and techniques.

And then to Rana’s left is Kelly Gallagher. Kelly, welcome.

GALLAGHER: Thank you.

KENNEALLY: Kelly is vice president of content acquisition for Ingram Content Group. You can tweet for him @IngramContent. Ingram Content Group is a comprehensive publishing industry services company that offers numerous solutions including physical book distribution, print-on-demand, and digital services.

At Ingram, Kelly manages the content acquisition publisher team for North America, and leads Ingram’s selling and business development activities for print-on-demand and digital distribution products. Prior to joining Ingram, he worked for six years at Bowker, serving as vice president of publishing services.

And then finally, right to my right here, is Jim Milliot. Jim, welcome.

MELLIOT: Thank you.

KENNEALLY: Jim is editorial director of Publishers Weekly. Their Twitter handle is publisherswkly.

He is also vice president of PWxyz, the company that acquired PW from Reed in April 2010. Jim’s been with PW for 20 years, starting as the business and news editor, topics he still covers today, and prior to joining Publishers Weekly, Jim Milliot was executive editor at Simba Information, a publisher of newsletters and market studies on a variety of media segments, including trade and educational book publishing.

So we know who everybody is now. Let’s get down to the questions about who holds the power.

And Rana Diorio, you’ve been in this business for not a very long time. In fact, your timing was exquisite on this. You got into it right at the beginning of the Great Recession, so if you –

DIORIO: That’s right.

KENNEALLY: You only started at bottom, so there’s no place to go but up.

DIORIO: But up. That’s correct.

KENNEALLY: But your own background is, of course – well, I’ll put it this way – you were in finances, you were in the money. You were in the money business for many, many years. And I wonder whether people who hold the power in publishing, whoever they are, whichever the players are, are really the people with the money. How do you feel about that?

DIORIO: Well, I’d argue that access to capital is an important part of being successful in publishing, Chris, but I think that the playing field has definitely changed. And I attest that change-makers have a lot of power. And I consider change-makers as those of us – I consider myself among them – who come into publishing to mix it up.

You know, publishing hadn’t changed a lot since the Gutenberg press. And the digital tsunami started coming in in the mid-2000s, and it created a lot of opportunity for new entrants to have a voice.

KENNEALLY: Well, I think we’ll talk about technology, certainly, but I do want to keep on that notion of the importance of capital. It was the point that you made for me and a light bulb went on.

It’s an approach to thinking about business, because after all publishing is a business like all the rest of them, and so many businesses really can’t grow entirely on revenue. They need capital. They need outside sources of funding to get their foothold. And you know that very well indeed, from having advised start-up companies in the course of your business experience prior to becoming a publisher.

Tell this audience about the importance of that. And the capital that you’ve got is your own.

DIORIO: Right. So I started my company with my own capital and scaled it for four years with that. And then I went and I sought outside investors, and I had the acumen to do that.

But I think it definitely takes capital to scale. I mean, you can start with a hardcore team and give them equity, but ultimately, if you’re really going to scale your business, you need capital. Revenue is certainly a great start, but to build a meaningful platform that’s scalable, you need capital.

KENNEALLY: And considering the competition today, I mean, we heard from Peter Hildick-Smith just about how difficult it is in this world where there’s only so few book buyers relative to everything else, and so many book titles, you need as many resources as you can possibly have at your command.

DIORIO: Yeah, and capital buys those resources.

KENNEALLY: Absolutely. And the question of who holds the power, Jim Milliot, I’m looking at you. You’re in the media. The media holds the power. It’s not the money, it’s the media, isn’t it?

MILLIOT: We like to think so, but it’s not as true as it once was. But going to what Peter – the presentation there before – goes to a lot of the stuff that we see at PW.

And discoverability, of course, is the buy word, or the buzzword, for the last two or three years, that you never really heard before. And I think what we’re talking a little bit about here with Chris is that to cut through the clutter, reviews and publicity and someway to get your book to stand out is important.

At PW, we do like 9,000 book reviews a year, which makes us the biggest review medium in the country, and most likely the world. So that’s one way to do it.

And our position has become in some ways more important, because a lot of the mainstream media, as most of you probably know, do far fewer reviews than they ever did before. Now, some of that has been picked up by bloggers and that type of other social media avenues, but we still like to think, people do look to see some sort of credibility, some sort of authority behind it other than, you know, some anonymous blogger who may or may not know what they’re talking about.

KENNEALLY: And I guess I was poking at you a bit, Jim, because we know that the story is that the media doesn’t hold the power, but they like to think they do, and they also like to tell a good story actually. That’s what the business of the media is. And the story over the last year had been this incredible rise of independent publishing, self-publishing, however you want to label it.

But your perspective, having been in the business for 20 years, is that there has always been a strong community of independent publishing. This new world order that we see may not be so new after all.

MILLIOT: Right. The new world order is a lot bigger than it was, but one thing that is definitely true, it’s always been easier to publish than to find readers.

Even before the digital revolution, I remember going to Ingram, with a new boss of mine and we were talking about this very thing. I mean, Ingram’s warehouse is really big. And so you stand there and you stare at everything and you think, wow, how is anybody going to find the book they want?

And again, even before the digital revolution, printing technology had been coming down, Ingram pioneered print-on-demand and all that. There are not many easier things to do than print/publish a book, then you have to face facts.

So the digital revolution, the big change has been, at least now, if you do an e-book you can actually get it in a distribution channel if all you do is post it on Amazon. And at least there, somebody has the chance to get the book. But as Peter, I think, frighteningly pointed out, if there’s 52 million titles up there, good luck.

KENNEALLY: Indeed. Well, Kelly Gallagher, I want to bring you in here, because we asked you about this question of who holds the power for a series of microcasts that we pushed out on Twitter. And your answer, I have to tell you Kelly, you wanted it both ways. You said, well, everybody holds the power but there really isn’t any power in any one place.

Talk about this kind of paradox of power that we are living in today when it comes to publishing.

GALLAGHER: You know, I think it’s the question begs a bigger question, and that is, it’s not so much about power anymore. There is a bifurcation – there’s a word for you – of the industry that’s happened where anybody can do just about anything. And so if you are a homemade publisher, you can go and source content. And you can go retail that content.

And so as the topic was set up, it used to be very clear lines, and now it’s very diversified and the lines have been blurred. And so I think really anybody can hold the power for publishing. As Jim said, anybody can publish a book.

But what’s required of an indie publisher, and I’ll try to limit my comments just to this group here, what’s required of any indie publisher is so much more to be successful, in that you have to have this affinity with your author, and you have to take charge of in some sense the retail aspects of how books are sold, and you can’t just simply rely on whether it’s a big Amazon or a small local shop, you’ve got to be intimately involved in every part of the process.

Those that do that, I think hold a lot of power. And so I see that as an everything or nothing kind of thing, where you have the power, or if you are not exercising it in all of those areas, you probably hold little power.

KENNEALLY: Right, and we were looking for players, sort of who are the individuals or the roles that may be where power lies, but it struck me listening to Peter Hildick-Smith right now that the power is in the data. Without access to the data, without gathering the data, without understanding what kind of data we need in the first place, everything else you do is really kind of a shot in the dark.

GALLAGHER: You know, what I would say to indie publishing, and I apologize for my coughing and allergies here, is the single biggest thing you can do, beyond getting amazingly great content, is to invest a significant part of your time on the meta data and the discovery, more than anything else. Because you have the power to now affect that.

You now have the power to drive SEO, search engine optimization. You have the ability to place your book into places that, because of technology, you never had before, but if you’ve got crummy meta data – and I’m talking far more than just a good Onyx feed of basic meta data – but social meta data, various elements of the data. If you’re not spending time refining that and building your own discoverability, you’re probably going to lack the power to be able to sell.

KENNEALLY: Indeed. You know, Kelly, you were apologizing for allergies. We met yesterday and you said you had some seasonal allergies, and I understand what that’s like. I’m from Boston and we’ve been through the last six months of winter, so I’m allergic to all this nice weather, at least until this morning. So I know how you feel.

But Jim Milliot, when it comes to power, the other thing about Peter Hildick’s presentation that struck me, and as important as the data that Kelly was speaking about, and SEO, and all the rest of the search engine optimization, is the power of those bookstores still, the role that the stores play in getting books into readers’ hands and then selling them is tremendous. And so we should all really hope that the power of Barnes and Noble at least, and of course, the independent players persists for some time to come.

MILLIOT: Right. Everybody – well, I was going to say – if you’re in New York in particular, if you look at where does the power lie, the shift between – in terms of kind of the big picture – publisher and retailer has totally shifted to the retailer. And it’s partly due to Amazon’s domination in certain areas. And it’s also because of the consolidation.

I mean, not that – I mean, when I was younger, you had a lot more outlets, you had a lot more independents, and there were more places – well, there’s still a lot of places that sell books now – but it was a little more diffuse.

Today, the publishers could live in a world, if you talk to them, where Amazon and other online retailers exist, where there’s a strong group of independent bookstores, and in today’s, where we are sitting today, Barnes and Noble still exists. Because everybody – I live and work in New York, so I’m pointing to them a lot – everybody in New York thinks along the lines that Peter is talking about, in that Barnes and Noble and the stores still drive a lot of discoverability. And to have a really substantial, sustainable book environment, you really need a strong retail and you need a strong online.

GALLAGHER: Can I offer a dissenting opinion on that? With all due respect to Peter, and especially for indie publishing, I would contend likely that that ship has sailed.

The likelihood of getting into Barnes and Noble, or spending the amount of effort required to get into retail today for an indie publisher, I think that’s a lot of effort for marginal return, that I would still push back and say that publishers now have tools today that they can more directly go to where the readers are. And I would say, as you think about discoverability, you think more about topical discovery versus book discovery.

If you’re writing a book about cancer, don’t think about this is a book on cancer, think about people who have cancer and where are people going that have cancer today, and find those consumers in the stream. Place your rock in the stream of whatever topics you’re writing about and go and find them. And there are retail services today.

There’s still a lot of road to hoe on some of these things like retail services, but I would say just be careful. I’m not giving up if there’s retailers in the room. I love you. We need you. But for indie publishing, I just wanted to offer a little controversial common sense.

KENNEALLY: I don’t find that controversial at all because I was thinking the same thing, because if the story is, get your book into Barnes and Noble, for this audience and for so many people publishing today, you’re not the big five. That’s going to be a real challenge and may not be worth the effort, when you have so much other types of opportunity.

And Rana DiOrio, I think you recognize that. And so the power for you, as a publisher, is in the partnerships that you have formed and the approaches that you have taken to finding those readers. So tell us about an example.

DIORIO: Yeah, so I agree with you completely, Kelly. I think that connecting to your community directly is extremely powerful. And, you know, the analog to that is, consumers really care about the why. And so, for example, at Little Pickle Press, we are a mission-driven company, we are a certified B corp. We are the –

KENNEALLY: Tell us what a certified B corp. is.

DIORIO: Certified B corp. is a company that’s held to higher standards of environmental friendliness, being humanitarian, being good to our employees.

It’s adjudicated by a body of B lab professionals. Like Patagonia is probably like the most brand-name recognition as a B corp. So we’ve been a B corp. since inception.

Just recently, we partnered with another B corp., Cabot Creamery Cooperative, which is a 100-year old coop out of New England, another B corp., to raise awareness about where food comes from. We really care that our children really have no concept where their food comes from.

We have a book in our collection, “The Cow in Patrick O’Shanahan’s Kitchen,” that is a farm-to-table book and elucidates that point.

Cabot partnered with us to get the word out to their community, to our community, to benefit the One Campaign. The One Campaign is Bono’s humanitarian organization dedicated to ending extreme hunger in the world and raising awareness about food origins.

So the triumvirate came together. One Campaign with their nine million members, Cabot Creamery Cooperative with their nine million reached through their cheese board bloggers, and Little Pickle Press. And we’ve successfully sold 5,500 copies of the book, and we’re about to reprint it. So we found our consumer directly through communities that had their values aligned along an issue.

KENNEALLY: And I think actually that resonates with, again, it’s fascinating, the great presentation before our own discussion from Peter Hildick-Smith, talked about this blink moment, this moment when someone makes a decision about purchasing a book, and you alluded to answering the why question.

It’s not so much about the content – we’ll talk about the content in a minute, because that remains important – but why do I want to buy this book. We have to have an answer to that, and the why can come in various ways. It can be about because I’m a member of the community, because I want to know more, because I want my kids to wind up with a better planet when they grow up, that kind of thing.

DIORIO: Yeah, in this case, all three organizations really cared that most children think that milk comes from a carton in the refrigerator, and we had a problem with that. So that was the glue. That was the why. I mean, we really want to educate children and get them curious about where food comes from.

KENNEALLY: And, you know, Kelly Gallagher, the kinds of services that Ingram Content offers – we should tell people a little bit about them.

There’s Create Spark, and there is also a fascinating new one called Ingram Construct, which allows people to create essentially mash-ups of their own previously published works, a fascinating kind of twist, because if you’ve got any kind of backlist to be able to remarket it when there’s a particularly hot marketing opportunity is a great choice to have.

But really, all these technologies and all these digital distribution services, allow you to reach an audience that is not just the book buyer in the US, so the power may lie not just in our national audience but in a world audience.

GALLAGHER: Yeah, so I would say, especially for independent publishers, what you need to be good at and what you don’t need to be good at really should be clarified early on in your process. Or as you have time to go through a new strategy session, the things that you need to be good at – content – you’ve got to be developing excellent content. You’ve got to be good at messaging the content.

But most of everything else – at the end of the day, I don’t know that anybody is ever going to write on an independent publisher’s tombstone, awesome at supply chain, you know?

But we spend so much time trying to manage supply chain, and so whether it’s Ingram or someone else that offers excellent supply chain services, you should really not be doing a whole lot about distribution.

Until you’ve scaled large enough to care about that, what I would say is you’ve got enough to worry about focusing on content development and putting a voice to that content. That the back end, the back room, you should really be finding experts to be able to do that.

At Ingram, specifically, it works for us because we’ve build a whole wholesale business with 38,000 points of connectivity globally, whether it’s with digital or with print.

And so, that’s what we do. And our motto is not to make money until something actually sells.

KENNEALLY: Right. And I have to say, Kelly, you took it really well when I had you having purchased Amazon just now. I ascribed Create Space to Ingram, I was thinking of Ingram Spark. So just to clarify that.

GALLAGHER: But it’s about simplifying the process as much as you can.

We’re not perfect at it. You know, we are a business in transition too, which I would really want to make sure that it’s a fast-changing world that we are still trying to figure out along the way. Eight years ago, 90% of our business was traditional wholesale, putting books, buying books from publishers, putting books in boxes, and sending them to retailers. Last year, less than 50% of our revenue came from traditional wholesale. Talk about having to change a business quick or go out of business. You know?

So we are still trying to figure it out, but we think a distribution model that we can help publishers with makes a lot of sense.

KENNEALLY: OK. Well, let’s drill into that global audience just a little bit, Kelly, so the audience here can understand better whether their book fits into that. Talk about the kinds of books that do well and particularly where they do well.

GALLAGHER: You know, it’s really interesting. The global – obviously we know that in the US market flat is the new up. I think Angela Bole coined that phrase at BISG when she was doing book stats.

And we’re not seeing a lot of growth. I’ve got some interesting statistics I’ll share in a minute, just because you had hoped for me to share some statistic. But you know, where people are finding the growth opportunities is globally.

What’s interesting is, academic titles, nonfiction titles, business books and education books really have a global market. The demand for English language content globally – you know, English is the first language of business and education globally. And so if you are focusing on those areas, you have a reasonable shot at being able to sell globally.

KENNEALLY: You have some numbers to share as well?

GALLAGHER: Well, it’s just within some hope for the indie market. You know, we did an analysis on Nielsen data recently and what we discovered was what we’re calling now the thickening of the long tail, which is all about the growth of indie publishing in my mind.

We looked at titles that sold 10,000 or more units annually, titles that sold 100 to 1,000 units annually, and titles that sold less than 100 units through the BookScan data. Titles selling 10,000 units or more is in decline over the last four-year period by about three-to-five percent, meaning fewer big titles are selling. Same thing even for 100 to 1,000 units. That was in about a six-to-seven percent decline. But titles selling 100 units or less, 35% increase over this four-year period.

And when you look at who those are, it’s all of you. And so the market is open and ready to embrace more titles, I think. It’s just how you connect to those market opportunities.

KENNEALLY: Well, Jim Milliot, that makes me think of a question. You say you live in and report New York City, so you are close by the big five, formerly the big six. They have seen this attack on their power, at least I think that’s how they have viewed it. How are they responding and how do they view this group here, the independent publisher?

MILLIOT: Well, I think what they’re really seeing is – well, I think they acknowledge for one thing that things have changed dramatically in every house in New York, and a lot of the larger independents have all changed dramatically.

But I do think they are out there looking for different business models. They’re looking for different types of titles. They’re looking for new authors, and I think they very much have looked at self-publishing nowadays as really a possible farm team.

The London Book Fair starts next week, and within the past two weeks we have reported on three or four deals that self-published authors have signed with the major houses. And we’re talking big seven figure deals for every one of those.

So they certainly are not ignoring the new world reality, and they’re not building a wall around them. In fact, they are out there actively recruiting, looking at BookScan, looking at the numbers, looking at what’s selling, and certainly willing to use their capital to take, what they would say, the author to the next level.

KENNEALLY: But I think, Rana DiOrio, you would say that it’s kind of, if not too late, they certainly have come to this game late. And the situation you found six years ago when you started Little Pickle Press was of an industry that had kind of, if not fallen asleep, had sort of taken it easy for a while, particularly when it comes to technology.

And you were coming out of a world of start-ups, of sort of seizing the opportunity that the digital revolution provided and really moving very quickly and not worrying about business models.

Do you think the six years that you’ve been at it, that they’ve begun to come out of that, as Jim says, restful state and to act, or is there still an opportunity that independent publishers have to steal a march on the traditional publishers?

DIORIO: Yeah, I think there’s caution among the big five to go into technology. They’re definitely doing it, but it creates an opportunity for the indies to be the early adopters or on the vanguard of change. I’ll give you one technology example that for me kind of drives it home for indies and the potential.

In 2010, I was in Bologna at the Tools of Change conference before it closed down. I was on a panel with Dominique Raccah, and moments after that, the president of Disney spoke and I was in the audience and I was rapt.

And I was watching his Power Point about his book app, for “It’s A Small World,” and it was their most celebrated, most decorated, best-selling book app, that had given them, yielded them a lot of income.

That evening, I had my phone by my nightstand, because in California, we have the Appy awards, which was about honoring the best digital apps of that year. And our little app, “What Does It Mean To Be Global?” was up against this exact app, the “It’s A Small World” app in the multicultural category. And we won.

And we spent $5,000 building our app, and I’m going to assure you that Disney spent at least one zero, possibly two zeros mores with their marketing.

And to me, that is a perfect example of how independent content creators really can compete against very well-capitalized established old guard.

KENNEALLY: Right. It’s a good story because there was a point I wanted to ask you to make, which is that in the past, technology was a tremendous investment and you really needed to be a Disney to have the kind of technological power to make things happen.

Today, the technology is, if not free, very, very inexpensive that can get you to that awards ceremony.

DIORIO: Correct.

KENNEALLY: Yeah. And so the capital that you are spending isn’t so much on technology.

Where do you decide to make your spending decisions? Is it marketing? If you’ve got that money and you want to make it work for you in the most powerful ways, what do you do?

DIORIO: We invest in content and people.

KENNEALLY: So you are telling me publishing is about content? (laughter)

DIORIO: (laughter) Yes. I know, there is something different.

KENNEALLY: But what do you mean, content people? You don’t just mean authors.

DIORIO: No, content and people. You know, whenever I have capital, I’ll spend it to develop new content. And we do it, we take risks, and we go after big projects for us. And then I think human resources are just invaluable, they are priceless. You get a like-minded person who really wants to change the industry with you, that’s invaluable and we’ll spend money on people.

KENNEALLY: Right. And also, you are emulating people. There’s a power in the heroes of this industry, that they inspire you. And we’ll talk to Jim about some people who are sort of future inspiration. But you’ve had experiences working with people or just being at conferences, I believe at this one, and hearing someone speak and really being inspired to want to follow in their footsteps.

DIORIO: That’s true. I think, you know, my background is technology. I was a technology corporate securities lawyer, then I was a technology investment banker, so I like the people who break the rules. I like the people who say you don’t have to do it that way, it can be done this way.

So, I admire those people in publishing who are doing that. I mentioned Dominique. I consider Dominique Raccah one of those people.

KENNEALLY: Dominique Raccah.

DIORIO: At Source Books. I consider Kevin Donohue at Epic one of those people. If you haven’t met Tim Ditlow, he’s here for the conference, you should meet him. He is the VP content at Epic. They are doing great things there.

LeVar Burton at Reading Rainbow. I mean, how cool to pull out an old brand out of PBS and make it this iconic splash in the digital world? Jeff Rosin over at Humble Bundle.

Does anybody know what Humble Bundle is? OK, three people in the room. Humble Bundle is this incredible platform that’s like the new flash retail for value minded people. They’re making hundreds of thousands of dollars for publishers. It is an incredible new platform. You should check it out.

F: What was that name again?

DIORIO: Humble Bundle.

Jeremy Thomas over at Ink Shares. Brooke Warner over at She Writes. They are solving problems in a different way, and it’s exciting. It’s a very exciting time to be in publishing.

KENNEALLY: Right. And Jim Milliot, one of the people that I have, if not had a kind of a hero crush on, but certainly have admired, is Paul Reynolds at Fable Vision in Boston. His brother Peter Reynolds is a very successful children’s author.

And they have been part of seeing books not simply as books, as that particular product, but looking at things as content and finding out, what’s the best way to tell that story. So sometimes it’s a print book, sometimes it’s an app. There are moments when they will work with a PBS to develop a TV show.

Is the book business, can we still call it that? And if there are people who are visionaries, are there anybody you particularly look to see more from?

MILLIOT: Well, it’s interesting because we were talking about that last night at the cocktail party with somebody, that it’s without question that the definition of a book is changing. You know, what is a book?

And for one thing, it doesn’t seem like it’s going to be an enhanced e-book. I was talking about that with Peter. At one point, two or three years ago, a number of people thought that, well, the future of publishing will be combining print with all sorts of interactive digital elements. While that’s true to some degree, at least in the adult world, that really hasn’t worked that well.

What I think they’re really seeing, and a lot of this goes to targets and communities and niche.

Last year, I was on a panel here presenting our fast growing – we do a fast growing publishers of the year, every year. And niche publishers had always been among the ones that were succeeding the best because they had a target audience, they knew who they wanted to publish, and it might have involved several different types of formats.

It could be print, it could be print plus, with kits or something like that, it could be sidelines, anyway, it could be like old-fashioned media like even calendars and that sort of thing where you really zero in on some type of community and then you just kind of blanket it.

KENNEALLY: Indeed. Kelly Gallagher, there have been a number of shifts in format that you’ve seen in your own business, and you’ve alluded to some of the flat growth, the sort of flat is the new up when it comes to digital.

Consumers are driving choices here, and they seem to have made a choice, and I got some nods in the room when Jim said they are not looking for enhanced books.

What do you know about the direction consumers are taking this business? They hold a lot of power as well.

GALLAGHER: Let me preface this with a cough. I apologize. I’ve never had to walk off stage before. This is a first.

KENNEALLY: Well, welcome back.

GALLAGHER: Thank you. You know, maybe it goes back to the original question of who holds power, and Peter, you’re getting a lot of quotes here because I think ultimately what Peter demonstrated is the consumer holds the power.

The consumer holds the power in format. Publishers felt when the digital shift was going to happen that they could drive consumers to a more efficient, cost-effective model, which was e-books. And I don’t know that it’s backfired, but what has happened in the last couple of years with zero percent reported growth last year in e-book consumption means that the consumer has essentially said, don’t tell me how to consume. I will consume how I wish to consume.

One thing we forget about a lot of times in publishing is, and again Peter was good to point this out, was it’s a limited subset. And even within that subset, the people who make up book buying have preferences and habits. And so, to embrace just the digital strategy, or to embrace just the print strategy is likely a fatal error today.

Back to that word bifurcation, you have to have all three, and so how do you afford that is a big question.

You know, you’ve got to find ways to be able to, that’s one of the things I think manufacture-on-demand offers for not necessarily investing thousands of dollars on big long print runs anymore.

We’ve got large publishers today that essentially will do an offset print run for preorders only, and then they will move it into manufacture-on-demand, sometimes with us, sometimes with other manufacture on demand printers.

But what that affords them is access to capital, to be able to do a digital version, a hard cover version, a soft cover version, and kind of make that global accessibility.

So it’s a 30-30-30-10 world of format, and it’s your job to figure it out and to make sure you can do it.

KENNEALLY: Well, it’s tough things move so fast, and Jim, you mentioned that consumers have, for the moment at least, rejected the so-called enhanced book, the e-book with various non-text elements, I guess we could summarize it that way.

And that’s a surprise to people who saw the tablet arrive and really thought it was going to drive just that very format. And your own reading and your own reporting at PW of the situation is that ironically the tablet has probably played a role in slowing e-book growth. Can you tell us about that? Why would that be?

MILLIOT: Well, there’s always been a lot of speculation that as more digital reading moved to tablets, where you can do lots of other things, that people would in fact be doing those other things. And on the last numbers I saw, the dedicated digital readers, a Kindle or a Nook, have gone down and the tablets have become the device of choice.

And I think that’s definitely what we’ve seen, that people are maybe not reading so much on the tablets as they used to, and we all know what you have access to on a tablet, and you may have every intention to start reading a book that all of a sudden, some game pops up and off you go. So.

And it reflects something that we haven’t quite talked about much, I mean, what book – we’ll call it books for now – what the book world is up against. I mean, this is something else that people have talked about a lot in the last few years, is the competition for time.

I mean, there is television, a huge time suck, but with video games and all the online things you can do now, books are competing in an ever more competitive environment for the entertainment dollar.

KENNEALLY: Indeed. And before we go to questions from the audience, I want to go back to Rana DiOrio because you started by talking about the power of this industry and when you made that decision to get into book publishing at that particularly opportune moment, right as the Great Recession began, one of the first things you did was, well, tell us.

DIORIO: I joined the IBPA. It was the first thing that I did, and that was in 2009.

And I’ like to make the point, Chris, that there is strength in numbers and this is a very, very powerful community. So you should leverage this entire experience because it will inure to your benefit in order of magnitude.

But IBPA – can I just tell a quick story about it?

So one of the first member benefits that I took advantage of with the IBPA was the Baker and Taylor program. There’s loads and loads of member benefits. Like Net Galley, you could never get a Net Galley account with one or two titles. You need the IBPA to help you. Publishers Weekly, you can’t advertise in Publishers Weekly today on your own, most probably. Or if you can, my hat’s off to you.

But IBPA has an amazing program for that. So there is strength in numbers.

I had my Baker and Taylor account and we started selling a lot of books to Baker and Taylor. It was awesome. But then we weren’t getting paid.

MILLIOT: I was going to say, did they pay you?

DIORIO: So there was that. And so then it wasn’t until we were big enough to have our own distribution with IPS, and publishing services took us on about a year and a half ago, and there is strength in numbers there too. And guess what, Baker and Taylor listens to IPS and all of a sudden, the checks started flying in, and I was really grateful to be part of a bigger community that had strength to look out for our interests.

KENNEALLY: Indeed. Well, Kelly, a last word on that power of community. There are multiple communities. There is no single independent book publishing community. This is one such community here. You speak to and see people from a variety of those communities.

Do you see that? Does that ring true for you, that the community has a great deal of power in this as well?

GALLAGHER: Yeah, absolutely. We are a lot of little islands here, but we have one continent called IBPA, and what I’ve seen happen to basically co-opt the opportunity – you know, Rana talked about IPS – we can stand in a much different place in the line and again, whether it’s there is a lot of good distributors out there, IPS is just one of them – Cardinal, Perseus – others, but belonging to a community makes a big difference.

The other thing it does is you start collaborating and you start sharing ideas, and if you’re going to get anything out of this apart from us just trying to impart knowledge in these workshops, it’s you ought to meet and make it a goal to get 20 business cards from fellow participants here.

If you don’t get 20 cards, you’ve failed in your mission here at coming here, because it’s not just about listening to really great workshops, it’s about making these points of connectivity, because they are going to learn and do something different than you are, and that’s really where I see the strength in numbers in really coming through.

KENNEALLY: Well, I hope everyone gets a card from each of these three panelists before they leave. I want to thank Rana DiOrio, Kelly Gallagher, and Jim Milliot for their contribution.

In the time we have left, about five minutes, I’d like to get out into the room here and get some questions directed to the panel from the floor. And raise a hand and I will get to as many as I can. Tell us who the question is for and maybe tell us your name as well.

F: Yes, I’m Leanne Mancini (sp) and my question is for Kelly. Ingram Spark division for the Christian section? Do you allow independent publishers to sell their books on their websites in addition to you being the distributor?

GALLAGHER: Yeah, absolutely. So with Ingram Spark, which is really a platform to both publish your book, print your book, or digital, we will put it out into the wholesale channels, both digital and print, and then also it offers you services to actually sell your book through your own website.

We’re enhancing that. Within the next couple months you will hear a lot about retail services. Retail services give you the opportunity to in a much more expedited way sell. We’re partnering with a company called Aerbook, A-E-R-B-O-O-K, where you could actually start doing that in a more simplified way. But yes, absolutely, you can sell your own books as well.

KENNEALLY: OK thank you, Kelly.

M: My name’ Aaron Barnhart (sp?) and I also have a question for Kelly, just to clarify something you said very early in your remarks.

My understanding from what you’ve said is, if you choose a good distribution partner, if you don’t over think the availability part, the part of the talk that we didn’t get to today with Peter. Don’t over think that, find a distribution partner who will make sure there is availability for your titles to the audience you are reaching and concentrate on discovery and conversion.

GALLAGHER: Absolutely. So again, a lot of people think their job is done when they get their books into Baker and Taylor and Ingram, and we are not a marketing company. You have to have a good distribution network, but your focus needs to be on putting your rock into the stream of where customers are. And so, make the content and then make the content discoverable is what we would say.

Retail services, marketing it, but then also offering that opportunity for sales. We will distribute it, and we will sell it, you know, ultimately get it to the consumer, but really that’s the job that you can do best.

KENNEALLY: And Rana DiOrio, I would imagine you have found that to be true and you’ve really had to spread your bets around.

DIORIO: Absolutely.

GALLAGHER: And I’ll just, while you’re running to the next question, Harper Collins is now selling books direct. I never really thought I would have seen that anytime soon, but Harper Collins is now selling books direct because they understand that they’re going to gain a better margin and they’re going to gain a different access to customers than Amazon or anybody else can deliver for them.

And so the day and age of going direct is here when even the big guys are starting to flirt with it.

KENNEALLY: All right. Well, I want to ask Peter Hildick-Smith a question. Can I do that? Bring you back Peter, for a question.

So you’ve been hearing us talk about all these different power players in the publishing business. You dive into the data. Does the data tell you, if you push in one direction or another of all these various areas, you’re going to really get a result? I mean, you were talking about covers and just the small tweaks you can make, but if you put your efforts into the consumer side more, that’s probably going to have an effect, but what about the other areas that we’ve heard about?

SMITH: Yeah, I mean, I guess the comment was right on target. Invest in discovery and conversion and let Ingram and other partners do the availability piece.

Are there any magic bullets on this thing? Not really. But I think that having new channels besides Amazon with their 52 million titles is a really good thing, because you have a better chance of being seen. And the more you can support those other channels, the healthier the business is overall.

And Amazon is certainly not going to sleep on this. They’re dealing with a whole lot of other new growth strategies that we didn’t get to talk about, but they’re going to continue to grow market share, so I would encourage everybody to find other partners that can get you that less cluttered access to your customer and build those relationships.

KENNEALLY: All right. Well, I want to thank again the panel, Rana DiOrio, Kelly Gallagher, Jim Milliot.

I’m reminded of something LBJ said at a campaign stop in 1964. He said he was for a great many things and against damn few. (laughter) So when it comes to selling your books, I think that’s how you should approach it. My name is Chris Kenneally, thank you very much.


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