vikas gupta is Managing Director of Wiley India and Immediate Past President of the Association of Publishers in India (API). He has led innovative product and business models for technology-driven learning solutions, research and faculty development, professional certifications and skills development. He has co-founded and led ventures in IT, medical electronics and publishing. Vikas is an ardent promoter of entrepreneurship and runs his own blog and video series to share his perspective on future business models and emerging issues in the technology, education
and learning industries. 3
E-COMMERCE AND ONLINE SELLING “Develop a book culture first and then the retail culture” Thomas Abraham
Q: Share your views on the evolution of the book industry with particular reference to pre and post e-commerce and online selling. Thomas: First, all my views will be confined to trade publishing only. It is interesting to see that for about 100 years, we have had a publisher to distributor to retailer model that broadly functioned in a linear unchanging way.The last decade and a half, however, have seen seismic changes that weren’t there in the century before.Yes, the change began in the early 2000s from two disruptive waves that India got quite late when compared to the west. First it was the chains (though Landmark began in 1987 as India’s first modern large format bookstore, the chains came into their own only about 12 years later) that were deep discounting, and at that time it was the Indies that were protesting. Post 2009, the disruption was from online sellers, and this time it was the chain that was hard hit. It’s reached a point where more stores have shut in the past five years than in the previous 50 years.We tracked this and we’ve found that in the last five years or so, over 176 bookstores have shut down, resulting in a loss of over 800,000 sq. ft store space. Distribution too has been brutally hit with just two main trade players left standing—both of whom are also doubling as online marketplace vendors.
Both disruptions had one thing in common—they ended up pushing the base discount up considerably. So today a predominant, and rather unfortunate, market characteristic is that it’s less about the book than about discounts and returns allowances.Whether publisher or bookseller, the focus is not how we should build and grow the market
but how each link in the chain can insulate itself against risk. Q: Is leisure reading moving online? Has India always been a nonfiction market or is this a recent development with the onset of ease of online access?
Thomas: Though it might not seem so, non-fiction has ruled the roost from the beginning if you’re talking of India-originated books, though fiction may have got the limelight. If you add in imports, then yes fiction was top of mind until the early to mid-1980s. From the 1990s there has been a decline that I personally correlate with the dying out of the neighbourhood lending library which was the go-to leisure choice in most towns. Non-fiction has always been and will always be a priority given our read-to-get-ahead mindset.Yes, online access has made a difference in the reference segment, particularly the dictionaries, encyclopaedias and travel guides segments, but core narrative non-fiction has remained unchanged.With the advent of cable TV and the internet explosion today with Netflix sort of options, leisure-time priorities are moving away from books. I hope this is a short-term phenomenon and once the newness wears off, reading habits will return.
Q:Talking about disruption waves, do you see a change in reading tastes (commercial fiction) or what’s being called the digital revolution in terms of reading—on devices, etc.? What do you see as its implications for the future?
Thomas: Yes, and these are not new. Every decade sees its disruptions but it will equally take a decade to decide whether it has any impact. So I don’t yet see these as disruptions and (digital or self-publishing variants) affecting industry or other companies.The disruptions and/or inflection points I would list in a potted history of English trade publishing in terms of being transformational are:Tagore’s Nobel; R.K. Narayan being published to acclaim in the west and launching Indian writing in English; the first distribution houses of India Book House (IBH); Rupa, etc.; Penguin India starting local publishing; Shobhaa De’s Starry Nights and Vikram Seth’s A Suitable Boy as commercial and literary bestsellers coming into their own, The God of Small Things winning the Booker; the
death of the lending library; Chetan Bhagat; Harry Potter, the low-priced
campus romance genre; the coming of Flipkart and later Amazon;Amish Tripathi’s Shiva series; to the collapse of the chains. Coming to digital, I’ve always been sceptical about that but was hoping to be proved wrong.There are two–three publishers essaying this route and let’s wait and see. In India e-books never really took off, though at Hachette we’ve beaten the average trend. But that I will admit is because of the sheer depth and range of our catalogue, and not from any market we were able to tap differently. So worldwide, where base readerships were high, the numbers skyrocketed over about five years (e-book contributions had reached as high as 32 per cent) and then declined and now have settled at 15–17 per cent levels. In India the average never went above 5 per cent, with just a couple of exceptions like PRH (Penguin Random House) and us, where we hit 10–12 per cent but have settled down to 7–9 per cent levels.
What remains to be seen is whether Amazon, with its heavy advertising for Kindle as e-reader, will be able to bring about a shift in default reading habits here which still prefer paper (the way soft-drink companies did, transforming India from a lemon-drinking country to a cola-drinking one) or whether Kindle will just end up competing as another tablet device.
Q: How have e-commerce and online selling changed the landscape of operations? Is the burgeoning of online retail stores such as Amazon and Flipkart good or bad news for publishers? Do you see physical bookstores reviving at some point in the future? Thomas: Both good and bad.Their scorched-earth policy is bad news because they end up shutting down brick-and-mortar bookstores without offering the curated replacement that is needed; and the really bad news is the fact that they have become safe havens for pirates.There are over a hundred pirate sellers on online marketplaces today doing serious damage.The good news is that there is availability of any book and hopefully they will extend their outreach to serve non city-markets which don’t have bookshops. So we should see some market expansion
beyond the cannibalization that is inevitably the first wave. Yes, online can, up to a point, enhance bestseller sales and provide some cross-recommendations, but they can’t provide that browsing experience; so in the future I hope there will be space once again for the indie who manages costs well and curates books well; and is therefore not affected by any medium-term deep discounting wars. It’s the chain stores with the high rentals that need to rethink their strategy and reinvent themselves much like Waterstones has done in the west.You need to develop a book culture first and retail culture second if you want to succeed and create that differentiator.
Q: Do you feel a backlash in the conventional channels of the book trade? Should the government be intervening?
Thomas: This is not new and has been building up for some time.A decade ago, it was the independent publishing houses versus chains. Today, with the advent of the online market, it’s brick-and-mortar against online because things have begun to hurt much more than before. In a country like India, which disrespects intellectual property rights completely, I am sceptical that the government will do anything. Unless the government legislates otherwise and brings about a level playing field like France has done, nothing can really happen legally. Earlier this year, France passed a new law popularly dubbed as ‘The Anti-Amazon Law’, to protect its iconic bookshop culture from American e-commerce giants.This law has banned rebates on book sales and free shipping by online portals. France has around 3,500 bookshops, one-third of which are independent stores, struggling to compete in an increasingly monopolized market.This law follows 1981’s fixed book price law,‘The Lang Law’, which allows for a maximum of 5 per cent discount to ensure a ‘level playing field’.The government’s view is
bound to be that whether or not the industry is crashing, the consumer is getting books cheaper, so it can’t intervene. I doubt if it will see bookstores as cultural institutions that need to be preserved.
So online came in and created a huge wave with some stunning growth.Today they are estimated to be between 45 and 55 per cent of any
publisher’s business depending on the sort of books that are your oeuvre. Q:What about the role and involvement of the author in today’s new market. Do you notice a change?
Thomas: Yes, there is a big change as authors get savvier about leveraging an online presence and social media. It is interesting that in the last decade or so many authors have created bestsellers through their own efforts online. Many of them began online as self-publishing discoveries (from E.L. James in the US to Amish here) and all of those have amplified their sales by then being formally published. But I do believe that no amount of marketing can create a lasting bestseller out of a dud. In trade publishing it is finally about word-of-mouth.And everything you do as a publisher or author can only help build that tailwind.Today authors take a lot of care to build social media and online presence and why not. Finally, it is the most direct and interactive connect to their readers.
thomas abraham is Managing Director, Hachette India. He was CEO and President of Penguin India during 2003-07, before he started at Hachette. He joined the publishing industry in 1994 as an editor with Oxford University Press India. He thereafter moved to marketing and left OUP to join Dorling Kindersley as Marketing Director in 2000. He joined Penguin Books in the same
position following the buyout of DK by Penguin.
4 PuBlIshIng servICes In InDIa “Preparing for the perfect storm?” Anil Chandy*
Outsourcing of publishing services to India began in the mid-1990s, when international publishers began to replicate what other domains (such as financial services, medical transcription, IT services and customer care centres for global businesses) had identified as a strategy that bought great operational value. India seemed to have the perfect combination of business enablers—advantageous demographic trends (a young English- educated population), a never-ending supply of IT professionals at different skill levels, and importantly the ability to provide cost leadership.
In India, the information technology-business process management outsourcing (IT-BPMO)/ KPO (knowledge process outsourcing) services sector purportedly creates 4 million jobs directly and generates another 12 million in allied or indirect jobs. I focus here on a subset of the large and varied KPO industry—publishing services in the scholarly and science, technology and medical (STM) publishing domain, possibly accounting for less than 10 per cent of this IT-BPMO/ KPO market and revenue share.
The Growth Story
The Indian publishing services industry’s growth story involved the world’s leading English language publishers organizing their content creation and page production processes in India. Publishing services in India continued on the crest of a wave when the digital publishing moment arrived in the mid-2000s.The deep domain expertise the
*All views expressed in this article are the author’s own and do not reflect those of Springer
Nature or its subsidiaries. industry had developed by then allowed it to make a seamless transition from simply providing typesetting services to recreating electronic products for its customers. It implemented publishing workflows supporting generic content creation that was both human and machinereadable (for example xml-first workflows) and leveraging document management best practices.The speed at which adaptation, cost leadership and scale were created in a short period led to the industry gaining a competitive edge over publishing services businesses in Europe and North America.
The segment has seen nearly uninterrupted growth since its inception, but post 2008 has had its forecasts curtailed. Here, I briefly touch upon the drivers of success and indicate what challenges the industry (and the academic publishing domain) is facing today to suggest some ways to outlive the trend of anti-globalization, disruption and market shrinkage.
Publishing services organizations in India arguably were original disruptors taking advantage of the opportunities in globalization.They picked up exactly at the point where European and American publishers found using similar services in their own regions expensive and restrictive in sustaining publishing volumes and growth. Outsourcing therefore became a critical component of the growth plan of most businesses to leverage efficiencies and move volume-driven and consistent tasks downstream and offshore.
The Indian publishing services industry positioned itself well, attuning to the pulse of this business imperative, and justifiably deserves praise on a number of counts:
• Actively utilizing available skilled human capital.
• Contributing to the IT-BPMO/ KPO India success story and
bringing in foreign direct investment (without any focused government support). • Leveraging technologies to build key business processes in dedicated offshore delivery centres.
• Designing workflows, increasing automation and performing
complex tasks. Pause for Thought
However, more recently a tone of negativity has crept into conversations and reporting on the Indian publishing services industry’s future.While not dramatic, companies in India during the growth phase had also gone through their own share of consolidation. Firms that had successfully partnered with global publishers or other service providers continued to grow, even acquiring smaller companies.The problem with market size as always is that when slowdown hits, the larger you are, the more it impacts you.
Nonetheless the slowdown has not been as drastic as some other domains. Unlike other KPO sectors, publishing (and especially academic publishing) by nature is a conservative business where growth rates hover consistently around the low single digits. But it is also characterized by comparative stability. Its primary customers are academic libraries, whose operational environment is a lot more stable. So while scholarly and STM publishing still has large global players, which also have corporate elements in the way they conduct their business, it is not truly a corporatized industry when defined as a business exclusively driven by profit.The industry collaborates closely with academia and so is bound by the latter’s normative and social traditions around creation, communication, dissemination and scholarly rigour.
Challenges Facing Global Academic Publishing
The STM publishing industry globally has also had to adapt—whether it is to increasing regulatory pressures (especially in Europe), the shift to Open Access globally, the rise of the internet search giants and ubiquitous nature of content, changes in business models, and more recently, organized piracy.The industry is possibly unique in that it’s a space where there is a fair amount of self-reflection, critical analysis and adjustments to meet the needs of readers/ end-users and customers.While criticism continually decries that academic publishing is thriving on a historical model, the many initiatives that publishers launch each year should call out that is far from the case (for example, specific programmes aimed at developing markets, and more recently committed content-sharing
initiatives, discovery support, and other services aimed at authors).As in all incipient approaches, there are examples which can undoubtedly be improved but taken together STM publishing continually demonstrates an ability to adapt and work with its key stakeholders. Since 80 per cent of the global STM publishing services market that supports this business may be in India, any tectonic shifts can directly impact industry players.
The potential impact of declining revenues from core publishing services should make industry leaders aware and adapt to the changes in the evolving STM market. By way of personnel, the industry in India has some impressive leaders who are as knowledgeable and aligned with global STM market developments as those operating upstream in the formal industry. For these leaders and their organizations, collaborating and expanding capabilities to solve critical challenges facing the STM industry will strengthen th
eir competitive edge and ability to address a shrinking market and outsail the perfect storm.
Providing Maximum Value
It is important to re-identify requirements of the STM domain and position the services sector as a valued partner and stakeholder.The analytical and problem-solving skills of the publishing services sector are universally recognized and esteemed—capitalize on it. Further, address some of the dominant narratives and negativity surrounding outsourcing. To take three examples:
Quality .The continuing story among many editorial and publishing personnel worldwide is that quality has suffered as a result of outsourcing. There is (and frustratingly so) some truth in this more so, if you define quality rather narrowly as the ability to fine-tune scientific communications (for example, in terms of language and grammar). Many service providers have tried to fix this issue by hiring experienced science editors worldwide (in a sort of reverse offshoring). However, what is neither easily measurable nor readily apparent is the quantifiable engagement of such editorial professionals. In short, publishing services companies seldom highlight what they do to address such perceptions.
This perception gap points directly at an important element in
such cooperation—managing the expectations of clients as well as transparency in process and work. Attrition Rates. The other issue that plagues the industry is the high attrition rate. Companies that move to manage attrition effectively will strengthen the industry’s authenticity creating an environment that is advantageous.
In addressing this challenge, publishing services by way of developing talent should continually skill and train their personnel as also give them, for lack of a better word—‘faces’.All publishing is relationshipdriven and it is always of intrinsic value to the client to know that the contact at the other end is a partner capable of supporting and solving issues. Speaking from personal experience, I have seen many cases where influential international academicians expressed their appreciation not just for us, their publishers but also for the services team for the value they had undeniably contributed.
Publishers On Publishing Page 4