If publisher profits can be preserved at lower prices in an all e-world, why are publishers still worried about increased digital penetration of their businesses?
Publishers are concerned with a gradual decrease in control of their vertical channel from concept to production to distribution to the consumer. The more significant players will adapt to the change, while smaller players and bad actors will get culled from the industry, leading to a macro-level consolidation.
As operating costs decrease, so should the fees paid to publishers from authors. Besides, authors may feel the services provided may be above their willingness to sell (WTS). They may look to directly publish their content to a digital platform vs. a publisher, especially if publishers have less control over the production and distribution of the material. Furthermore, the auxiliary non-digital services publishers provide may become obsolete entirely with the emergence and maturity of digital platforms.
As digital platforms’ adoption by authors and readers increases, they will naturally want to improve their client-facing (the reader and author) value. They will start to shift more services from publishers to the platform to centralized and efficiently sell more books.
If a publisher fails to stay abreast of the digital changes or innovate on their end, a publisher can quickly become a second thought to new and emerging authors/writers. However, if a publisher remains agile to change, they can thrive with digital platforms. By decreasing their operation costs & services and leveraging their industry expertise, customer following, and resources, publishers can convert to a “digital storefront.”
With a digital foothold, publishers can continue to focus on providing value to readers, which ultimately leads to maintaining relevance and capturing revenue in the long-term.
