What was especially fun for me in having bestselling thriller author Barry Eisler guest blog this week, was the chance to talk over some of these ideas with him and to see some of that thinking show up in part 3. Like Barry, I think there are serious shakeups coming and fascinating branding opportunities in the publishing area but they're going to take some guts to implement. - MJR
First Madonna and Radiohead; Next, James Patterson: Part 3 by Barry Eisler
In Part 1 of this article, I argued that distribution is flattening, and in doing so is undermining the most important competitive advantage of media companies. In Part 2, I discussed how flattening distribution will affect book publishers and booksellers. Now let's see how authors and agents will turn out.
First, we need to talk briefly about brands. Simply put, a brand is the emotional connection a consumer feels to a product or service. It's what the product or service stands for in the consumer's mind. What does Apple stand for? Virgin? Marlboro? Harley Davidson? Generally speaking, if you can easily and simply answer that question, you're talking about a strong brand. If you can't, the brand is weak.
(More on brands here)
Let's perform the test on publishers: Doubleday? Putnam? Random House?
Needless to say, with a couple possible exceptions (Knopf still stands for a certain kind of literary fiction and physical quality; Harlequin, for romance), publishing houses are weak consumer brands.
To put it another way: is there anything that would influence a reader to buy a book from, say, Ballantine instead of one from Dutton?
I can't think of any. The product lines are just too interchangeable.
What about booksellers? Pretty interchangeable, too, I'd argue. The big box stores, if they stand for anything, are only about prices (not a coincidence that Wal-Mart's slogan is "Everyday Low Prices"). Amazon does have a brand, mostly about the customer experience -- the links to related products, the comments, the recommendations, the ease of use, the immediate gratification. Independents don't really have a collective brand (or if they do, it's not terribly relevant to their success). But they do, or at least should have a brand in their community, a reflection of their individuality, you could say, related to expertise, enthusiasm, and personal knowledge of customer tastes, that should continue to offer them certain advantages in a flat distribution world.
So there are some factors beyond convenience and price that might influence a consumer to buy a book from one retailer rather than another -- loyalty to and the feeling of community at a neighborhood store, for example, or the chance to leave a comment on Amazon. But between B&N, BAM, Borders, the big boxes...? I don't think so.
No branding at all at the publisher level; weak branding among some retailers. Are there any strong brands at all in the book ecosystem? Today, only in one place: authors.
I'd wager that the average reader doesn't know, and doesn't give a damn anyway, who publishes James Patterson, or where Patterson's books are sold. The only thing a reader cares about is getting hold of a copy. In other words, the only brand that matters, and it's a powerful brand indeed, is Patterson himself.
Of course, there are plenty of other immensely powerful brand names in the business -- Stephen King, Nora Roberts, the list goes on -- but for me, Patterson is the most interesting because he's done more than any other author to extend his brand. I don't know how much Patterson contributes to his co-authored books, but I also don't think it matters. Patterson's readers trust his brand.
A brief digression to illustrate the point: the author's name on her own book is the innermost circle of branding. The only thing the brand is standing for, and selling, is you and the product you yourself created.
Blurbs are a modest form of brand extension. Blurbing a book implicitly says to a potential customer, "I've read this book [ha-ha] and I liked it. You trust me, so trust me when I tell you you'll like this book, too."
The next wider circle is what you see with Tom Clancy's Op Center series. Tom Clancy is a huge brand name, and you can think of Op Center as a systematic (and more profitable) extension of blurbing generally: "Tom Clancy likes this book so much that he's made it part of an imprint that bears his name. If you like Tom's books, you'll like these books, too."
James Patterson has simply extended his brand one step further still. It's not James Patterson's Thriller Center; it's his name alone. And it works -- I think he had five #1 NYT bestsellers in 2006.
The point is, Patterson's name sells books. So in a flat distribution world, what's to stop one of the chains from approaching Patterson the way Live Nation approached Madonna? An exclusive publishing deal and a 50-50 split (or whatever split it takes to make the arrangement more profitable for both parties than it would have been had they stayed with the traditional publisher approach).
Take it further. As retailers seek to develop and differentiate their own brands in a flat distribution world, what better route than adopting their own version of the Tom Clancy's Op Center or James Patterson co-authored approach? A chain tells Patterson: "We'll publish you exclusively, and we'll also exclusively license from you the right to use your name on a new imprint of 20 titles per year." If it works, other retailers will follow suit with other star authors. The draw of an exclusive new Patterson imprint would be valuable beyond the Patterson-branded books sold, because the customers the brand draws into the store would buy other titles, too.
Of course, exclusive licenses are expensive, and the question remains: could a single retailer offer Patterson enough to offset the sales he would give up by not having his books more widely available? I don't know the answer, but the experiment will be conducted, and given the technology and publishing portents, probably sometime soon.
If booksellers become exclusive publishers, the customer experience will become more akin to what you face today in deciding between an Apple retail store versus a Sony. It's the same generic product class, but the individual items are different. If this level of differentiation does come about, it won't be a positive development for independents, who would likely lose their ability to offer the bestselling titles that bring customers into stores.
No matter how it comes about, when distribution goes flat, booksellers will increasingly become publishers, too. Zero distribution cost probably means that even more titles will be published. How will readers know what to buy? Someone will have to cut through the clutter, the same as today: reviews, advertising, in-store placement, etc. I think of this cutting-through-the-clutter function as an element of marketing and sales, and I call it imprimatur value. Someone you trust attaches her imprimatur to a book, and that trusted imprimatur encourages you to take a chance and buy it.
Today, publishers offer imprimatur value to booksellers: Again, "We love this book and we're going to aggressively market it." This message increases a bookseller's confidence and encourages the bookseller to take a chance. Agents, on the other hand, offer imprimatur value to publishers: "You know me and trust me. I know your taste. I believe in this new author enough to take her on; you should take a chance on her, too."
In a flat distribution world, retailers will need publishers less, perhaps, eventually, not at all (or rather, retailers will become publishers themselves). But they'll still need someone to help them cut through the clutter. And someone will still need to represent authors to buyers. I expect agents will start selling directly to retailers, and that their business won't be nearly as affected by flattening distribution as will publishers'.
What should publishers do? After all, they're the ones most adversely affected by flattening distribution.
I don't know for sure. Media companies tend to look at technology as a threat rather than an opportunity (think Hollywood and Betamax, or Motown and Napster), and I wouldn't bet heavily on publishers' ability to adapt.
My guess is, as retailers become more like publishers, publishers will become more like agents. Agents and publishers both seek to leverage their imprimatur value, albeit currently to different audiences. Both have close relationships with authors. Agents are already editing; they're even moving into packaging and marketing, as evidenced by Trident Media's hire of Putnam marketing maven Dan Harvey. Take away distribution, and publishers and agents start to look an awful lot alike.
Another possibility: if I were James Patterson's publisher, right now I'd be trying to deal myself in by merging with one of the chains.
P.S. Thanks MJ -- not just for letting me guest blog here on BBH again, but for helping me refine many of the ideas in this series, and for providing others -- especially the idea of an exclusive James Patterson imprint at a retailer/publisher.