I had mentioned that I am speaking on a panel in Salt Lake City on Friday for Publishing University. I am there as the newbie on a panel, Identifying Your Publishing DNA.
As a management consultant, I am familiar with processes to analyze the competitive atmosphere of an industry based on various “forces”. When I look at the “forces” squeezing the publishing industry (especially threats of new entrants, threats of substitute products and bargaining power of customers), I am not surprised to see major shifts like major chain bookstores closing and distributors going out of business after decades in the business.
Here are some thoughts on surviving in publishing given the current environment.
“Why” as Your Weapon for Surviving the Forces
Where I live, in a teeny tiny and remote mountain town (Sun Valley, Idaho), many of us fit together an intricate patchwork of jobs to make a living and keep us engaged as productive members of society. After all, unless you are an Olympic athlete or member of the US Ski team, you can’t really ski all day, every day (can you?). When I hit the lifts, usually around 10 to 11am, I have already put in a full half-day’s work starting in the dark hours of the morning. Then, after some fresh air and activity, it is back to the computer; and I find that that schedule is a typical one for folks around here that I call information entrepreneurs. We are thankful that we don’t work for The Man, but we know that in exchange for eschewing a steady paycheck and having tremendous freedom over our schedules, we must work our butts off to keep up with the rapidly evolving world of technology, fighting for some mindshare in the crazy, busy world of digital connectivity. I switch hats all day long, from radio show host, to podcast creator, to writer, to publisher, to blogger, to speaker/educator, to coach. And yes, I also run a non-profit organization and a household of husband, children and pets.
In my former life, I was a management consultant working around the clock for Fortune 500 companies on organizational strategy, structure, and growth planning. After a few “dark nights of the soul” moments (in the AT&T housing for consultants, as I recall), I traded my consulting badge to start a nonprofit organization (Nurture) to teach kids and families about healthy cooking and eating. It was around this time that the statistics were coming out about how a third of children born in the year 2000 will develop diabetes if they follow the Standard American Diet. The acronym SAD describes how I felt upon reading this news, likely because I was the new mom of a child born in the year 2000.
After working hard to grow Nurture’s programs in schools and with social service agencies, I became frustrated with the lack of high-quality, high engagement reading materials (books!) to inspire healthy eating, especially in children. So I hired my sheltie-dog as my marketing director and my mixed breed puppy (lab and border collie are definitely in there) to be a social media/productivity coach. They work for food. And that’s really all I can offer in terms of paychecks for my publishing arm. It is not a lucrative business.
In fact, I was so surprised how little money there is to be made in publishing. My first book, Mountain Mantras: Wellness and Life Lessons from the Slopes, has brought me great joy, winning several awards, hitting #1 bestseller in its Amazon category in two formats, and generally giving me great pleasure as I reflect on the whole project, except when I am looking at the income statement for the book (deep sigh). So, as I set out on my next publishing adventure, this time a children’s picture book titled Give It a Go, Eat a Rainbow, I was careful to put on my old and worn out management consulting hat first. Can I expect the project to be successful? And how is success defined?
If pure profit is the metric, my consulting logic urges me to run away, fast. Why? I dug out my Harvard Business School case study on Michael Porter’s Five Forces analysis of an industry. The framework analyzes the level of competition within an industry and therefore its attractiveness based on profitability. Here are the five forces and how they interact with authors and publishers:
The threat of substitute of products: HIGH. With millions of books on Amazon and other online retailers and volumes stacking up in brick and mortar stores, readers have more to pick and choose from that ever before.
The threat of established rivals: HIGH. With the “big five” publishers likely to become the “big three”, large established publishers (with media arms often inside their very own corporate entities) can put resources behind publishing projects that very few indie publishers can (or would want to) match.
The threat of new entrants: HIGH. As outlined in the recent online bestseller “Write, Publish, Repeat”, e-books and digital/POD printing means that now more than ever writers can get their words out to the buying public. While there is beauty in the freedom, the increase in supply (given a steady demand) means that prices and profits are under more and more pressure.
The bargaining power of customers: HIGH. With so many choices, why pay a high price for a book, when many books are sold for a penny on Amazon within months of their release?
The bargaining power of suppliers: MEDIUM. From the viewpoint of the author/publisher, suppliers would be editors, printers, design firms, publicity firms and other service providers. This area might be the most dynamic/in-flux of the forces, as the industry shifts from offset to POD (which lowers their power) while confusion in the industry forces the need for more coaching and intervention (raising the power of some suppliers). Stay tuned and on your toes.
Overall picture: If I was a consultant advising a player whether or not to enter this industry based purely on the results of the Porter Analysis, my answer would be to look elsewhere. Persistent players can seek out what’s called in Porter’s model a “competitive advantage” such as being the cost leader, differentiating oneself, and being focused; but even those strategies are highly populated (and therefore not as attractive) in the writing and publishing industry.
So why am I writing and publishing another book? Because I believe strongly that there is more to the writing and publishing industry than just profit. There is pure passion, a burning in the soul that makes every day a positive adventure. There is making a difference, getting started on a new trajectory in life, opening new doors, developing ancillary products that could indeed be very profitable in both the short and long term. There are many, many other reasons to be a writer and a publisher than simply making a profit (on the book/books), but you have to look hard and long for those reasons and continue to stay in touch with them.
The consulting advice I give to myself often (and I ask my dogs’ assistance to please remind me, too) is to continuously revisit the “why” and make sure that I have an answer that stokes my soul and puts a smile on my face.
What’s your metric? What’s your “why?”
See you at Publishing University. If you’d like to connect, send me an email at Kathryn@guylay.com, connect on Facebook or LinkedIn (Kathryn Kemp Guylay) or tweet to @kathrynguylay. I’m excited to meet you in person and hear your very own “why”.