Report from the Trenches: Spring Publishing Lectures

By Natanya Housman and Hannah Bennett

In recent weeks, the Pace University Publishing Program has presented two lectures for the benefit of publishing students, faculty, and staff.  The first, presented at the end of March, was the David Pecker Distinguished Visiting Professor Lecture, featuring Michael Healy.  The second, presented in April, was the Eliot DeYoung Schein Lecture, featuring Neil De Young.  Both speakers drew on their multifaceted publishing backgrounds to extend their opinions on this time of dramatic change.

Michael Healy presently serves as the Executive Director of the Copyright Clearance Center.  He assists in expanding market presence and refining business models to accommodate Backlist Rights.  Formerly, Mr. Healy served as the Executive Director of the Book Rights Registry.  For the last three years, Mr. Healy has been the David Pecker Distinguished Visiting Professor of Publishing.

Mr. Healy’s speech on March 29th, entitled Global, Mobile, and Personal: the Future of Publishing in Hazardous Times, was a broad discussion of the challenges and opportunities he sees in the future of the publishing industry.  In his analysis of the industry, Mr. Healy posed a series of questions, each of which highlighted a specific challenge for publishing professionals. What is the future value of publishers?  Does DRM help to reduce piracy?  If consumers only care about content and not brands, where does that leave the publishing industry?  These questions prompted audience members to evaluate their own potential roles in the industry, and the value publishers will have going forward.  Despite this inherent uncertainty, Mr. Healy’s final position was that now is a great time to enter the industry, and especially to start one’s own company.  He believes that the world has opened for new players, innovative and creative thinkers, and a new approach to publishing.

Neil De Young is the Director of Digital Media for Hachette Book Group, USA.  His responsibilities at Hachette include digital business development and strategy, eBook development, and website product management.  Mr. De Young reviews and assesses new business opportunities for Hachette, including contract negotiations and profit and loss assessment.  Prior to his position at Hachette, Mr. De Young held various positions at Scholastic, Inc.

Mr. De Young’s speech on April 11, entitled Disintermediation in the Digital Age: What Publishers Will Need to Do to Stay Relevant, discussed the digital transformation of the industry.  He did so through a series of parables.  In one parable, recounting the tale of a complacent pheasant and an opportunistic fox, Mr. De Young stressed the dangers of a lack of competition.  He later discussed the issue of competition in more detail when, speaking for himself and not Hachette, he answered an audience question regarding the agency model and the current litigation with the Department of Justice.  The government’s lawsuit poses questions about how to maintain healthy competition in the emerging ebook market – questions that professionals, like Neil De Young, must answer.  Other questions that must be answered are ebook pricing, DRM management, piracy, and disintermediation, which will require real innovation from Mr. De Young and his colleagues.  Based on his informative and thoughtful lecture, Mr. De Young is certainly up for the challenge.

These lectures, held every year, are unique opportunities for students to gain firsthand insight from brilliant publishing professionals.  They provide information that students cannot learn from the pages of a textbook.  Both inspiring and thought-provoking, these lectures encourage students to think creatively about the future of publishing and their places within the industry.

David Pecker Distinguished Visiting Professor Lecture!

All M.S. in Publishing students and faculty are officially invited to the David Pecker lecture presented by Michael Healy, David Pecker Distinguished Visiting Professor of Publishing for the 2011-2012 academic year.  The title of the lecture is “Global, Mobile, and Personal: the Future of Publishing in Hazardous Times.”

When all the traditional certainties have disappeared, when the past is no longer a guide to tomorrow, and when new competitors encroach at every turn, what type of publisher will succeed in the future and what type of consumer and marketplace will they be serving?  In what will be his final lecture as David Pecker Distinguished Visiting Professor, Michael Healy will offer a personal perspective on the future facing book publishers in a world that is no longer familiar, predictable, or safe.

Mr. Healy presently serves as the Executive Director of the Copyright Clearance Center.  He assists in expanding market presence and refining business models to accommodate Backlist Rights.  Formerly, Mr. Healy served as the Executive Director of the Book Rights Registry.  Pace is fortunate to have Mr. Healy in residence as the Visiting David Pecker Professor during this academic year.

His lecture will take place on Thursday, March 29, 2012 at the Midtown Executive Club at 40 West 45th Street from 6 to 8 pm.  We would appreciate your response as early as possible to assure you a place at this important event.  Please RSVP to puboffice@pace.edu as soon as possible.

Distiguished Visiting Professor Michael Healy Returns to Pace for Another Insightful Lecture

Michael HealyIn his lecture on March 31st at the Midtown Executive Club, Michael Healy, Pace’s David J. Pecker Distinguished Visiting Professor in Publishing and the Executive Director of the Book Rights Registry, spoke to students and publishing professionals about the position in which the publishing industry finds itself as a result of the digital revolution. The power of book distribution has fallen into the hands of only a few large conglomerates, fueled by digital growth and new technologies. The collapse of Borders bookstore and the falling share prices of Barnes and Noble serve  to consolidate the strength of companies like Apple and Google, who are reshaping the landscape of book sales. But they’re also playing a role in dictating the future of how authors, that most critical of publishing resources, are increasingly turning to self-publishing as digital avenues of distribution.

Professor Healy notes that the publisher is losing out on both its relationship with customers and therefor with authors as well. It is the retailer who “owns the customer relationship,” and is the “retailer’s brand or author’s brand that is being projected or promoted.” Authors, increasingly disenfranchised with the limited capacity of publishers to effectively forge lasting relationships with customers, are taking the initiative by opting for this self-publishing route. Healy points to Seth Godin and Barry Eisler as two great examples of this minor revolution, but I’m not entirely convinced. For now, marketing and promotion from publishers are by far the most effective and dependable ways for new authors to become introduced for the public at large. Big names like Seth Godin have a tremendous capacity for self-promotion as afforded by their status as public figures, but the vast majority of authors are not as well-known.

The future is what has both Professor Healy and publishing professionals concerned yet cautiously optimistic. With the digital transition comes a shift in how books are marketed. “Armies of sales reps are a thing of the past,” Healy says, “the traditional techniques of promoting books—co-op deals on window displays and table promotions—are disappearing.” So how can publishers promote books in a digital marketplace? If online communities of readers become the filter through which people discover quality content, how can publishers remain relevant and participate in this process? Especially larger publishers, for whom “that is much more of a challenge because the effort and cost required to make a meaningful impact across so many different communities is impossible to sustain.” It could be that authors might find that they’re better off appealing to these increasingly fragmented niche markets directly.

In order to work towards reconciling this fragmentation of the traditional manner in which books are sold and made available to customers, Healy suggests that publishers move away from the business-to-business model that has prevailed for over a century. Marcus Dohle, CEO of Random House, said that the move from B2B to B2C (business to customer) is the “most important challenge facing his company going forward.” Trade publishers have traditionally worked towards herding customers into the welcoming arms of the retailer, with whom the customer develops brand-recognition and loyalty. It is becoming increasingly imperative for publishers to cultivate a relationship with their readers as bookstores struggle with economic realities and as online retailers with a growing market share, build on their customer relationships to become publishers themselves. The potential for these retailers to siphon off the lifeblood, the authors, of traditional publishers only grows as time goes on. Publishers, Healy says, have been “caught napping by the speed with which every facet of reader behavior has changed,” and have a unique opportunity now to dictate their place in the future of bookselling. Whether that place is in the driver’s seat or the trunk has yet to be determined.

Michael Healy Expounds Upon the Future of the e-Book with Publishing Students

Michael HealyIn his lecture on November 30th at the Midtown Executive Club, Professor Healy, Pace’s David J. Pecker Distinguished Visiting Professor in Publishing and Executive Director of the Book Rights Registry, waxes philosophically and fatalistically about the current direction in which publishers are taking e-book technology. He proclaims that the digital reading experience can often be outright “horrible,” and gives a laundry list of complaints he associates with the platform. Reading devices are often single-purpose devices, designed only or primarily for reading—an aberration he believes is only a temporary one as devices with enhanced functionality ala the iPad continue to be developed. He also cites an acute feeling of exploitation as publishers and retailers grapple over wholesale and agency models of book pricing, which can result in being charged “28 dollars for the Kindle version of a book that costs a dollar less in hardcover.” Finally, for Professor Healy, both windowing (the practice of releasing the digital edition of a book months after the hardcover version has already been in circulation) and restrictive digital rights management also impede his appreciation for e-books. Of course, Professor Healy’s himself cautions that the pessimistic picture he paints can’t be taken entirely at face value. He notes that e-books are set to amount between 8 and 10 percent of total sales for publishers in 2010, “impressive figures” for a product category that didn’t exist four years ago.

What’s interesting to me is that so many of these faults lie with the publisher. Perhaps, speaking to a crowd of publishers, Professor Healy was less inclined to launch into a bitter polemic of the industry, instead criticizing the e-book as though it were an autonomous entity independent of the organizations that created it. In fact, he defends publishers by nothing that their work with developing electronic publications is only “the first step on a journey” and that several such “baby steps” are necessary to “stop them from falling flat on their face on this new playground.” The metaphor is a telling one—who among us can fault a baby for their developmental trials and errors?

Towards the end of his talk, he did touch upon one of the largest potential threats facing publishers today: online communities of readers acting as arbiters of quality, or “curators” who can “commission content … identify and nurture authorial talent, and apply skills and experience to the editing of a manuscript.” Publishers can no longer depend on their role as “authoritative gatekeepers carefully distinguishing the diamond hidden in the carbon,” as this function has the looming potential to be outsourced to those very same communities. But what he doesn’t mention is that the poor quality of the e-books that publishers are trying to sell (for inflated prices), coupled with the ease of retail distribution (see Google eBooks) and this loss of centralized control over quality content, the threat of authors publishing independently and circumventing publishing houses completely is pressing and significant.

Professor Healy ends on a positive note for physical book traditionalists, remarking that they have a “very distinctive magic of their own, a magic quite separate from the magic of the truth they contain.” This viewpoint is a positive one for the publishing industry, as a large portion of their continued success depends on consumers reading print books, the reading experience of which can never be replicated with e-books. At least, not yet.

Also, in case you missed it, Pace University’s Opportunitas newsletter published a wonderful interview with Mr. Healy, reprinted here for your viewing pleasure:

From Gutenberg to Google

When the dot com bubbled in the 90s, venture capitalists and internet startups around the world screamed that print was dead. While that wasn’t the case (and may never be), there’s no denying the impact recent strides in technology have had on publishing. Just hop on any plane, train, or automobile and look around—people are reading their Kindles, listening to the latest Audible.com download, catching up on current events via their iPad. On November 30, Professor Healy, gave one in a series of lectures on the future of the industry for the MS in Publishing Program and industry insiders.

Here, he shares some of his insight into the future of ePublishing.

You are involved in some of the seminal events that are shaping the future of digital publishing, such as working with publishers and authors on the Google Book Settlement. Can you tell us a bit more about that?

I am currently the Executive Director of the Book Rights Registry, a new organization that will be created as a result of the Google Book Settlement. As you may remember, there was a well-publicized class action lawsuit which was brought in 2005 by the Authors Guild and Association of American Publishers to prevent Google from displaying parts of books it had been digitizing through its relationships with a number of university libraries.  The authors and publishers felt Google’s display of the books was an infringement of copyright, a claim Google denied by saying it was “fair use”. The lawsuit was settled in October 2008 (although the settlement has not been finally approved by the judge). The proposed settlement contains several provisions: One is the establishment of a nonprofit Book Rights Registry that will represent the interests of authors and publishers in the settlement. The primary role of the organization will be to act as a place where authors and publishers can claim their books and register how they would like them to be used by Google and possibly others in the future.  When Google earns money from using the books, 63 percent of the money will go back to the Registry for distribution to the authors and publishers (once a judge approves the settlement). We have been waiting to hear the outcome since February of this year. In the meantime, my job is to prepare for the establishment of the new organization.

If the settlement is approved and the Google Book Settlement moves forward, how will this affect the publishing industry?

The settlement focuses on books that are largely still in copyright, but mainly out of print. These are an estimated seven to eight million somewhat obscure or forgotten books—books that you will find in libraries but not bookstores. One of the great benefits is that Google Books will create a mechanism for getting those hard to find, out of print books. It’s very good for both publishers and authors, as it gives them a new stream of revenue for books that were previously earning little or nothing, and great for scholars, students and other readers because it opens up a treasure trove of books previously hidden in the collections of libraries.

Healy
Professor Healy discusses how the industry is evolving in this interview with The Publishing Point

How did you get involved in the field of digital publishing?

I think I’m something of an oddity. I have been in publishing for about 25 years, in one form or another. Unlike many others, I never did much conventional print or book publishing. I have been in digital publishing my whole career. That can be surprising to people who think that digital publishing is only five years or as old… as old as the Kindle. It

has actually been around since the 70s. In the early days in the 80s, digital publishing was a phenomenon that mainly affected academic publishing—databases in library and universities, and ultimately journals. All of the excitement and controversy that’s now going on is because it’s affecting consumer and trade publishing, what many equate to the “publishing industry.” But there are other publishing sectors, such as academic, scientific, and medical, where digital technology is nothing new—those sectors have been grappling with its opportunities and challenges for some time.

You’ve been giving a series of lectures at Pace that focus on new developments in digital publishing. Can you provide some highlights from your most recent lecture?

This lecture is called “Building a Better Mousetrap: Form, Function, and the Evolution of eBooks.” It’s based on the observation that technology is radically changing the way books are promoted and delivered, and the way people are consuming with readers and tablets. The way we consume, market, and distribute books today—everything in the supply chain is subject to change. However, the books themselves are changing much more slowly: the content is not changing, only the format is changing… in a very superficial sense. A lot of eBooks are electronic facsimiles of printed equivalents. So I wanted to examine, with all the technology and innovation available to us, why that is occurring, is the text remaining largely unchanged?

It’s an interesting point that, in their current form, eBooks are little more than electronic versions of the print. Are there any areas where you are seeing innovation?

There are pockets of experimentation, and that’s what I want to explore—what they are, what they reveal about publishers and readers, what the next generation of digital books might look like. For example, I read a lot of books electronically and when I’m traveling, instead of buying several guide books, I load them onto my iPad. What struck

me about using these new types was how imperfect they were, how they were inferior in functionality to the ones I would have traditionally bought in print! Why are publishers so reluctant right now, to experiment in new forms? Travel, cookery, and all sorts of non-fiction books could be enhanced so easily and cheaply with digital technology, but it’s not happening in a significant way yet. There are one or two trade publishers who are starting to enhance books with video, and some, like Penguin, have been linking text to websites, TV adaptations, and video on the web. In cookery, you’re starting to see links to videos where you can see the finished recipe, or where you have the ability to enter information, such as ingredients, into the device to find a recipe. Interesting things are being done, but these are the exceptions rather than the norm. However, I think that will change. The appetite for digital books is high at the moment, so publishers are growing in confidence, and that builds more confidence in the medium.

How do you think this ability to “publish” affordably online is changing the industry? Do you find more and more people are deciding to just do it themselves?

Self-publishing is taking off—that’s an extraordinary phenomenon. I think the stigma is disappearing and it’s becoming more acceptable to do it. We’re going to see a great deal more of that going forward, particularly as more big-name celebrity authors start asking: Do we need traditional book publishers? For example, the well-known writer Seth Godin,

has recently announced he will be self-publishing his next book. That calls into question what is truly distinctive and valuable about the modern publisher. It used to be that authors needed publishers for production, distribution, and sales, but technology now is forcing everyone – publishers, authors, agents and booksellers – to ask where the distinctive contribution of a publisher really lies.  It’s a fascinating time to be in the industry for these reasons.

You recently came back from a conference in China about the future of digital publishing. Were there any surprises or new developments there?

They are grappling with many of the same sets of issues as we are in the United States. We may be a little further ahead in the process, but we’re all on the same journey. It was striking how similar the challenges are. The world really has shrunk.

The original interview can be found here.

Michael Healy discusses the “Future of Publishing” during his Lecture series

Michael Healy gave his second lecture entitled, “The Google Book Settlement in Context,” on Monday, February 22nd at the Midtown Executive Club. Healy, who serves as the Executive Director of the Book Rights Registry, did not focus on the settlement but instead looked on current trends and shared his predictions on the future of the publishing industry.

In his first lecture in Fall 2009, Healy focused on the Google Book Settlement. He referred to the settlement as an “achievement we will look back on as one of the defining moments of digital book publishing.” Healy talked about how Google plans to digitize 35 million books, sell individual digital books, get revenue from advertisers, and allow one free copy to be available for every public school and university. He also discussed how digitizing so many books would open up collections to some of the greatest libraries in the world. For out of print books, it gives authors 63% of royalties for every book sold.

So far, Google has been able to digitize 12 million books, and a vast majority of those books are out of print. And even though Google is dealing with legal scrutiny, one thing that is irreversible, according to Healy, is Google’s commitment to this project. Even with some of the backlash, Google will continue with its plans.

Healy’s second lecture was a glimpse into the future. He discussed the industry’s “limitless enthusiasm with all things digital.” Last year, sales of electronic books counted for 2% of entire book sales. Although that doesn’t seem like much, Healy believes that this is a large breakthrough considering how far the industry has come in such a short time with the Kindle, the Sony E-reader, the Nook and now the iPad. “The ways in which we read are changing because of the devices on which we read,” Healy said. “We are reading more, but what is changing is what we read and how we read.”

What concerns Healy is how complacent publishers are even though the industry is changing. Healy mentioned that today’s consumers have no loyalties to publishers or imprints. “Success in the future will be in direct proportion to publishers who are willing to let go of old business practices and models,” Healy said. “Publishers who want to thrive better understand what their added value is to the industry.”