Publishing - an Industry Undergoing Monumental Change

Traditional publishing is a broken model. From a business point of view, most of the money from books gets sucked up by the publishers, agents, publicists and others. The authors are left with very little and unless they sell like John Grisham, can only make a pittance on their books even if they sell thousands of copies.

From the customer perspective, many books are overpriced. The classic example is textbooks, which still follow a traditional format, and students get charged between 1 and 2 hundred dollars for a beautifully bound book that in many disciplines is doomed to obsolesence within a year or two. The beauty of the binding does not necessarily bear a relationship to the quality of the content.

The growing phenomenon of e-books is not the answer, although they can provide a part of the solution. What we have creeping into the scene is a new type of publishing, often based on self-publishing, which channels publications to all the eBook technologies out there, like Kindle, Kobo, Mobo, even PDF. They also use print on demand techniques, which avoid the need to carry inventories.

The new types of publishers, like Createspace and Fastpencil (these two examples are quite different from each other) also pay the authors a lot better, more like 80% of the proceeds rather than 5 - 10% in royalties. Also, they can produce books much faster, a matter of a month or so, rather than the traditional year or two required by traditional publishers. Indeed, with traditional publishers many books are obsolete before they hit the street.

Public acceptance of this trend is lagging, but will undoubtedly catch up over the next year or so. People are looking for new ways to consume their books, and they want to pay less and have more flexibility. The new wave of publishers will meet those needs. In the process, the business models of the traditional publishing industry will be shaken to its very core. An interesting interview with Steve Wilson, CEO of Fastpencil, is featured in Knowledge @Wharton this week.