The list of the 20 largest publishers in the world shows a profoundly changing landscape in book publishing. The chart below is provided by Rüdiger Wischenbart from Publishing Perspectives in Germany. He has contributed some good insights into the transformation of the publishing industry. I offer my analysis on the state of the industry and its future.
Some publishers are fairing much better economically, while others are steadily sliding downward in revenue and in their global standing. The changing dynamics between the professional information, education and trade sectors has affected this year’s ranking. The good news is that publishers that have reinvented themselves (responded to market demand by listening to the customer) have done much better than most.
Pearson, Thomson Reuters, Cengage are identified as star performers on the list. Four out of five dollars is generated through the digital integrated value chain. The digital content and e-book industry for professional information content is the high growth segment of the publishing industry. As an industry, we are weak in our recognition of the current size and opportunity of the digital marketplace. Education publishers and trade publishers are having trouble evolving. There is broad need for knowledgeable skilled digital workers, experienced strategic thinkers, scalable and flexible technology infrastructure, and streamlined workflow/processes that allow publishers to execute on updated strategic initiatives.
Asian publishers are becoming a force, as they are in many other market segments. They include companies like Korea’s Kyowon and China’s Higher Education Press. Their strong suit is “localizing” content (i.e. cultural adaptation), and the power and economics of a huge growing audience. They are hungry. They want their piece of the pie.
Trade publishers, experiencing a steady decline in revenues, are poorly positioned to compete. However, the strong performance of Penguin and Hachette are current exceptions in this segment. It remains to be seen if trade publishers can transform into a sustainable business model. Trade’s poor performance and outlook is due to several reasons, beginning with the fact that they have the farthest to go to find and serve today’s and tomorrow’s readers.
We have seen endless debate in trade on digital pricing and searches for new business models. The best solutions will leverage and be respectful of the stakeholders…all of them! That includes, but is not limited to; authors, agents publishers, libraries, distributors, wholesalers, physical bookstores, digital bookstores, printers, service providers, the media, reviewers, technology companies, etc. If publishers burry their heads in the sand by refusing to experiment with new content, pricing models, and sales channels, then there will be serious trouble.
On the bright side, if publishers aggressively discuss new ways to sell content with their channel partners, and seek out non-traditional channel partners that have the audiences with the demand for their products, there is the potential, not to just maintain current revenue, but to actually grow the size of the pie. I know that is a radical statement to make, yet the ‘book’ is being redefined, and publishing is becoming something new.
Several key findings:
- The majority of Top Ranked Global Publishers are based in Europe.
- Professional/knowledge, STM publishers have course corrected and are doing well.
- The first major Asian Publishers are positioning towards competing as top global players.
- Education sector is unstable.
- Trade Publishers are, and will be, hit the hardest in the rapidly emerging digital marketplace.
- Publishers that have reinvented themselves…are prospering!
I have high hopes for the publishing industry. However, until we can meet Peter Drucker’s market-centric definition where he says “…the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.” Are we there yet? When we achieve this value statement the industry will once again be healthy. As for me…being part of the solution? I am passionate about helping our clients build a stronger publishing industry that is focused on improving the reading experience.
What are you thinking now?
*The “Global Ranking of the Publishing Industry” is an annual initiative of Livres Hebdo, Paris, researched by Ruediger Wischenbart Content and Consulting, and co-published with buchreport (Germany), The Bookseller (UK) and Publishers Weekly (US).
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