The discussion by Raúl Pérez, Michael Then, and Andrew Rhomberg in one of the most exciting sessions in Readmagine 24, collectively highlighted the evolving landscape of the publishing industry, marked by declining traditional readership, the rise of the secondary market, and the transformative potential of data.
The emphasis on collaboration, transparency, and a deeper understanding of audience behaviour is seen as vital for navigating these changes and leveraging opportunities in a rapidly shifting environment.
You can watch the video with the whole session and here is a written summary of the issues discussed and their opinions.
Raúl Pérez: Introduction and market overview
- Data as a tool: Pérez emphasizes that data is relevant but should be viewed as a tool rather than an end in itself. Understanding the environment and the underlying factors behind market trends is crucial for utilizing data effectively.
- Market performance: The publishing industry is experiencing stagnant or moderate growth in revenues but declining book sales. This trend is consistent across several markets including the US, Spain, France, Italy, UK, and Germany.
- Challenges in publishing:
– AI and Economic Pressures: AI’s impact on the industry and general economic pressures are significant challenges.
– Industry Changes: Changes such as Amazon’s growing power, TikTok’s influence, and declining sales in non-fiction genres.
- Significant events:
– KKR’s Acquisition of Herbie Media: Highlighting the rising importance of audiobook publishers.
– Spotify’s Entry into Audiobooks: Represents a major shift and potential disruption in the market.
– Platform Wars: The competitive landscape between major platforms like Spotify and Amazon’s Audible, which could lead to aggressive competition and «winner takes all» scenarios.
– Public Disputes and Industry Dynamics: Public disputes and clashes within the industry indicate underlying tensions and challenges.
– TikTok’s Influence: The platform has significantly changed book marketing strategies.
– OpenAI’s Potential Impact: The uncertain vision of OpenAI could lead to disruptive changes in the publishing industry.
- Audience and retail challenges: Pérez concludes by highlighting the importance of understanding and engaging with new audiences through data, as traditional publishing methods may no longer suffice.
Michael Then: Market dynamics and reader behaviour
- Market transformation: The publishing industry is in a state of transformation, balancing traditional and modern approaches. This shift is compared to «riding two horses,» which becomes painful when they diverge.
- Decline in traditional readers: The German market has seen a loss of 11 million readers over ten years. There is a distinction between book buyers and readers, with some people buying books but not reading them.
- Used book market: Companies like Momox dominate the used book market, which affects new book sales. Momox is a leading marketplace seller on Amazon, emphasizing the secondary market’s impact.
- Sustainability and mobility: Younger generations prioritize sustainability and mobility over owning physical books. Services like Circle Books, which buy back used books, cater to this trend.
- Collaboration and transparency: Then stresses the importance of collaboration and transparency between publishers, retailers, and authors. Sharing data and working together is essential for success.
Andrew Rhomberg: Leveraging data to understand audiences
- Improving data utilization: Publishers have improved in data usage, but many still focus solely on sales numbers rather than reader engagement and advocacy, which are crucial for long-term success.
- Audience engagement:
– Email Newsletters: Rhomberg recommends starting with email newsletters to engage readers and collect data. Offering book samples through newsletters can gauge reader interest.
– Segmented Data: Understanding different audience segments (e.g., age groups) is essential for effective marketing and engagement.
- Feedback loops: Implementing feedback loops to understand how readers consume and engage with books can help publishers better meet their needs and create advocates for their titles.
- Advanced Reading Copies (ARCs): The traditional distribution of ARCs to booksellers and journalists could be expanded to include more engaged readers who are genuinely interested in new releases.
- Collaboration with Retailers: Sharing information between publishers and retailers is crucial. Retailers often have valuable data on customer behaviour that can inform publishing strategies.
During the second part of this conversation the main ideas shared by Raúl Pérez, Michael Then, and Andrew Rhomberg provided insights into the evolving landscape of publishing, emphasizing the importance of data-driven decision making, the need for understanding reader engagement, and the strategic use of digital platforms and marketplaces. By leveraging data effectively, publishers can adapt to changing market dynamics, optimize their operations, and better meet the needs of their audiences. Here is a summary of their insights.
Raúl Pérez: Revenue models and engagement metrics in publishing.
- Transition from print to digital revenue models:
– In traditional print books, revenue is based on unit sales.
– In digital platforms, especially those offering «all-you-can-listen» models, revenue is based on the time spent engaging with content.
– Example: Spotify has influenced the music industry to produce shorter songs with choruses that come earlier to maintain listener engagement.
- Finishing rates and audience engagement:
– Finishing rates of audiobooks vary significantly, which affects publisher decisions.
– For example, Planeta’s best-selling audiobooks have finishing rates ranging from 30% to 70%.
– Sharing engagement data between platforms and publishers is crucial for making informed decisions about which audiobooks to publish.
- Application beyond audiobooks:
– Similar engagement metrics could be used for eBooks and even print books.
– Understanding reader engagement can help publishers better tailor their offerings and marketing strategies.
Andrew Rhomberg: Data-driven decision making in publishing
- Testing books before market launch:
– Use of digital advanced reading copies to collect reading data.
– Completion rates and satisfaction surveys help predict market success.
– Fiction books with less than 50-60% completion rates typically do not make it to bestseller lists.
- Understanding reader engagement:
– Beyond completion rates, it’s important to know if readers enjoyed the book and would recommend it.
– The concept of “Marmite books” (books with polarized opinions) highlights that even books with mixed reviews can become bestsellers due to strong advocacy from fans.
- Building franchises and series:
– Successful franchises require an understanding of reader engagement and satisfaction.
– Data helps in building and sustaining series with strong reader followings.
- Amazon’s role and data sharing:
– Amazon provides real-time sales data, which is valuable for publishers to assess the ROI of their marketing efforts.
– However, over-reliance on Amazon data creates a dependence that can skew broader market insights.
- Sustainability and zero pulping policies:
– Example: Vertebrate, an adventure publisher, uses data to minimize unsold stock and returns.
– They print small initial runs and adjust based on sales data, aligning their mission of environmental sustainability with profitability.
Michael Then: The role of data in marketplaces and digital platforms
- Amazon’s market dominance:
– Amazon doesn’t share broad market data, only data related to individual publishers’ books.
– Publishers often invest heavily in marketing on Amazon without detailed insights into overall genre performance.
- Marketplace Dynamics:
– Amazon Marketplace can be effective for selling exclusive materials and backlist titles.
– Metadata and visibility on Amazon are crucial as many buyers start their search directly on Amazon rather than Google.
- Trust in Online Reviews:
– Modern consumers often rely on star ratings and reviews from unknown individuals rather than traditional literary critics.
- Print on Demand (POD):
– Collaborative efforts with POD services can optimize inventory and reduce costs.
– Printing smaller initial runs based on predicted sales and using POD for subsequent orders has proven profitable and efficient.
- Subscription Platforms and Content Value:
– Platforms like Spotify focus on customer acquisition and retention.
– For publishers, understanding how content drives these metrics is essential.
– Backlist titles are important for retention, similar to how old TV shows remain popular on streaming services.
- Windowing and Content Bundling:
– Unlike Hollywood, publishers often make entire catalogues available on subscription platforms.
– Strategic windowing and bundling could enhance content value and visibility.
Andrew Rhomberg is the founder of Jellybooks, a London based publishing technology company established in 2011. Jellybooks provides audience insights, reading applications, and workflow automation tools to publishers and booksellers. The company also distributes ebooks and audiobooks to schools and young readers. Its clients include many of the leading trade and academic publishers and book retailers in the UK, US, Germany, and Spain.
Andrew is an alumnus of the Massachusetts Institute of Technology (MIT) and the University of Innsbruck. He considers himself to be a European, having been born in Denmark, grown up in Austria, studied in Austria, Italy and the US, worked in the Netherlands, and now living in London.
Michael Then was Born 1960 and is working for Weltbild GmbH since 2020 as Head of Category Management Media. Weltbild is one of the TOP 5 Booksellers in Germany, mainly focused on a D2C-strategy with a multi-channel strategy: from a monthly Catalogue over shops and a digital platform.
Previously Director Education at Elsevier; Head of Marketing at Piper, before that in a similar position at the Penguin Random House publishing group and Ullstein Heyne List. Career start
1988 at Callwey Verlag and before that at Ludwig-Maximilians-University Munich as a research assistant on the book studies program.
I have seen so many ideas, how content should be and what is the best way to reach book readers. All these models have failed since the internet appeared and new competitors entered the state of producing and selling books. Some people think, that the marketplace “Text” is losing against “Picture” and “Audio”. I don´t think they are right; I still believe in the power of storytelling, in reading and in the future of stories. That is why my motto is: We tell ourselves stories in order to live (Joan Didion).
Voluntary work: since 1999 Chairman of the working group Munich book show, 2015 to 2021 Honorary Chairman of the Association of German Publishers and Booksellers in Bavaria. Member of the Board of the Munich NS Documentation Centre Association.
Raúl Pérez has worked in media-related industries for over 20 years in companies like RBA, El País and CNN+. In 2011 Raúl Joined Grupo Planeta´s Publishing Division. As Digital Transformation Manager (Office of the CEO), Raúl was charged in 2013 of defining and coordinating a corporate digital strategy among all BUs. In 2016 he moved to an intrapreneur role and in 2018 was charged by the CEO to build Planeta´s Corporate Venture Capital Unit. Raúl rejoined the Publishing Division in 2019 and was appointed Managing Director of Nubico in 2020.
Currently, Raúl is Head of Digital of Planeta´s Publishing Division.
Raúl has completed studies in Management (IESE, Esade), Economics (Pompeu Fabra University) and Journalism (El País-UAM).
