0:00:05.668,0:00:09.116 Thanks everyone for having me up here 0:00:09.116,0:00:13.820 I used to come to Toronto to do presentations of individual book titles 0:00:13.820,0:00:18.808 at the sales conference for Publishers Group Canada. 0:00:18.808,0:00:24.398 It's sort of funny to be here talking about books in a much more abstract way 0:00:24.398,0:00:33.940 and I look forward to also being able to present titles to PGC sales conference again in the future. 0:00:33.940,0:00:43.598 An odd little personal anecdote: I suffer from a very very benign heart condition 0:00:43.598,0:00:49.005 that causes my heart to beat at 120 beats a minute while at rest 0:00:49.005,0:00:54.260 and I control it with beta-blockers, and I forgot to bring the beta-blockers. 0:00:54.260,0:01:01.766 So I'm going to be doing this presentation in a biological state akin to permanent stage fright 0:01:01.766,0:01:08.388 so bear with me if the adrenaline becomes too much. 0:01:08.388,0:01:15.885 For the recorded history of publishing, risk was about what books you acquired, 0:01:15.885,0:01:23.521 it was a supply-side issue: What product will we supply? 0:01:23.521,0:01:27.339 And that contained two questions, effectively: 0:01:27.339,0:01:32.290 What titles? and how much do we pay for them? 0:01:32.290,0:01:36.130 And Bob alluded to the "How much we pay for them?" problem 0:01:36.130,0:01:40.540 but I'd like to delve a tiny bit deeper for a second into understanding 0:01:40.540,0:01:46.579 the true pathology of unearned advances. 0:01:46.579,0:01:50.393 Because it was discovered in the early 1970s 0:01:50.393,0:01:55.826 that, when you're engaged in a competitive auction, 0:01:55.826,0:02:01.460 for something the long-term value of which is not clear 0:02:01.460,0:02:09.854 the winner always overpays. Not sometimes, but always. 0:02:09.854,0:02:17.404 It was three oil economists trying to figure out why they were always overpaying for drilling rights. 0:02:17.404,0:02:24.875 And they did exhaustive studies and comprehensive game theory analysis, 0:02:24.875,0:02:30.648 and, in fact, the rest of the world has figured this out. 0:02:30.648,0:02:38.432 When they were auctioning the wireless spectrum for 3G, back in the early '00s, 0:02:38.432,0:02:44.832 several countries structured their auctions so that the second bidder won, 0:02:44.832,0:02:50.710 because the assumption was the first bidder was going to so overpay 0:02:50.710,0:03:00.620 they would not have enough money left to build all the towers and infrastructure required to execute on 3G. 0:03:00.620,0:03:08.828 So this isn't just an accident of a couple of individual editors going slightly off the reservation 0:03:08.828,0:03:16.963 or sort of a little bit of a bad habit, it is a profound pathology in the industry that we are taking 0:03:16.963,0:03:23.702 our working capital out of what we do and handing it to authors, 0:03:23.702,0:03:27.438 and it is part of the deep structure of how we've been operating. 0:03:27.438,0:03:32.715 Even if we were to solve that particular miracle, however, 0:03:32.715,0:03:37.939 of transforming our capacity to not overpay, 0:03:37.939,0:03:42.395 the question with supply still becomes: Well, what do we publish? 0:03:42.395,0:03:47.300 And a fascinating thing of what's happened over the last hundred years 0:03:47.300,0:03:53.351 is that in a certain sense the supply... it doesn't matter anymore, because the supply 0:03:53.351,0:03:56.108 of content is going infinite. 0:03:56.108,0:04:07.484 The 20th century has been a history of supply of long-form narrative content increasing. 0:04:07.484,0:04:14.772 It began...-and it's a beautiful thing-, it began with reductions in the overall degree of racism, 0:04:14.772,0:04:17.306 and sexism in our society. 0:04:17.306,0:04:22.968 The so-called "Golden Era" of publishing in the 1950s consisted of white men in tweed jackets 0:04:22.968,0:04:25.644 publishing each other. 0:04:25.644,0:04:30.175 It was a golden age for them, it wasn't a golden age for the rest of society, 0:04:30.175,0:04:36.845 who were suffering from bigotry, and racism, and sexism all along. 0:04:36.845,0:04:45.758 So, as our societies let the other 60 to 70% start writing, start getting educated, 0:04:45.758,0:04:54.373 get access to tertiary education, access to the social, intellectual, creative capital 0:04:54.373,0:05:02.210 required to just be able to write, and discover an agent, and discover a publisher, 0:05:02.210,0:05:09.968 that was really the first moment revolutionizing over the supply chain of publishing. 0:05:09.968,0:05:14.386 And the second moment is a digital moment that has nothing to do with the Internet, 0:05:14.386,0:05:19.425 and is something that enabled a lot of the people here in this room to be publishers, 0:05:19.425,0:05:22.828 which is good old Adobe Pagemaker. 0:05:22.828,0:05:28.045 The "desktop publishing revolution", as it was once called, 0:05:28.045,0:05:36.441 the Xerox, the Kinkos -you don't have Kinkos in Canada but... oh, you do? Ok- 0:05:36.441,0:05:43.315 Softskull Press started in a Kinkos in 1993, with two people who were employees 0:05:43.315,0:05:45.364 working the graveyard shift 0:05:45.364,0:05:53.906 laying out their book on Pagemaker, chopping it, chopping it, tape-binding it, 0:05:53.906,0:06:00.489 and, over the course of about 8 weeks, they had 400 tapebound paperbacks to publish, 0:06:00.489,0:06:03.075 and that the first Softskull book. 0:06:03.075,0:06:08.509 So the explosion that we've seen in the number of titles published in the United States, 0:06:08.509,0:06:16.920 depending on how you estimate it, about 25000 in 1990, and half a million in 2008, 0:06:16.920,0:06:19.898 is not at all even a function of the Internet, 0:06:19.898,0:06:24.705 because those were all print books. It is a function of goold old desktop publishing. 0:06:24.705,0:06:34.004 So we've barely even begun to see the effect of marginal cost of reproduction of digital narratives 0:06:34.004,0:06:40.509 and the fact that it goes to zero. We've not even begun to see the effects of that. 0:06:40.509,0:06:45.243 Everything we're contending with right now is a function of Kinkos, 0:06:45.243,0:06:49.887 and the aftermath of the Kinkos revolution. 0:06:49.887,0:06:54.253 The quote that you see behind me 0:06:54.253,0:07:01.393 is taken from an article in Wired magazine from about two years ago 0:07:01.393,0:07:10.680 it was an article about the Netflix prize. 0:07:10.680,0:07:15.670 Netflix -is there Netflix in Canada? I should have checked out. No, ok.- 0:07:15.670,0:07:22.958 So Netflix is basically a DVD rental service where you sign up and 0:07:22.958,0:07:26.118 you pick 3 DVDs, they mail them to you, 0:07:26.118,0:07:30.756 you mail back the DVD when you've watched it and it sort of cicles through like that. 0:07:30.756,0:07:33.591 It's a monthly membership. 0:07:33.591,0:07:38.684 And they've a very complicated algorithm that they use to try to tell people 0:07:38.684,0:07:45.738 well, the people who watched this movie rated these other movies 4 stars, 0:07:45.738,0:07:51.676 and since you rated this movie 4 stars and they did, then, these other movies you might also like. 0:07:51.676,0:07:55.115 It's "people who bought ... algo bought ..." in a more sophisticated level. 0:07:55.115,0:08:00.251 And they wanted to improve the algorithm by 10%. 0:08:00.251,0:08:03.213 And they announced a million dollar prize 0:08:03.213,0:08:07.967 for the person or persons who could pull this off. 0:08:07.967,0:08:18.625 It took about three years, and they got about 85% of the way there fairly quickly, 0:08:18.625,0:08:28.447 so they'd 1.5% left, and they looked at what was the other part of the 1.5, 0:08:28.447,0:08:34.586 the data points that were the components of what they weren't able to figure out 0:08:34.586,0:08:39.262 and it was basically Wes Anderson movies. 0:08:39.262,0:08:44.030 How would you characterize a Wes Anderson movie? 0:08:44.030,0:08:50.677 It's not very plot-driven, it's driven by voice and by character. 0:08:50.677,0:08:56.041 So, what's the contemporary novel 0:08:56.041,0:09:02.148 other than a not particularly plot-driven thing, driven by voice and character? 0:09:02.148,0:09:06.560 So basically novels break algorithms. 0:09:06.560,0:09:13.090 And when this guy who wrote the article interviewed one of the mathematicians 0:09:13.090,0:09:16.228 -he was actually an organizational psychologist- 0:09:16.228,0:09:24.203 he made a comment about media, and it was this comment here: 0:09:24.203,0:09:28.473 "The 21st century is going to be about sorting demand..." 0:09:28.473,0:09:38.150 because the supply side... the game is over, in a certain sense. 0:09:38.150,0:09:43.523 The genie is out of the bottle. We're going to keep at least doubling, 0:09:43.523,0:09:47.526 if not tripling or quadrupling the number of books published 0:09:47.526,0:09:51.516 in the English language on this planet every year. 0:09:51.516,0:09:57.707 And even in everyone here in this room said: "We won't be a part of it, we won't do it," everybody else will. 0:09:57.707,0:10:01.208 So this is happening. So how do we respond? 0:10:01.208,0:10:07.555 How do we manage risk now that we cannot manage it by controlling supply? 0:10:07.555,0:10:12.493 It's going to be demand, obviously. 0:10:12.493,0:10:22.706 What can we do, therefore, to manage demand? 0:10:22.706,0:10:31.797 One of the main things we did in the United States over the last decade was pray for Oprah. 0:10:31.797,0:10:37.243 She doesn't have the same effect here, I know, 0:10:37.243,0:10:40.746 but there's Canada Reads, right? 0:10:40.746,0:10:48.933 I saw a woman on the plane yesterday reading Lawrence Hill with a Canada Reads sticker on it. 0:10:48.933,0:10:57.397 Oprah's genius, though... -we used to think of her as the patron saint of publishing in a certain sense- 0:10:57.397,0:11:03.068 but I want to propose what I think is a relatively radical notion about Oprah, 0:11:03.068,0:11:08.908 which is that she needed books more than books needed her. 0:11:08.908,0:11:14.780 Because Oprah was in the broadcast business. 0:11:14.780,0:11:20.318 And the broadcast business is not really a very good business to be in. 0:11:20.318,0:11:22.997 It's one-way communication. 0:11:22.997,0:11:32.114 And Oprah had an hour a day, at most, with her audience, 0:11:32.114,0:11:35.835 and it was a one-way conversation. 0:11:35.835,0:11:43.175 So how does she own her audience all their waking hours seven days a week? 0:11:43.175,0:11:45.488 How does she get into their heads? 0:11:45.488,0:11:47.996 How does she get mindshare? 0:11:47.996,0:11:51.050 She starts a book club. 0:11:51.050,0:11:56.956 Books are cultural objects that take fifteen hours to read, 0:11:56.956,0:12:01.193 fifteen hours of another person's voice inside your head, 0:12:01.193,0:12:07.562 and so the commonality between two people who've read the same book 0:12:07.562,0:12:19.787 is a profound and deep intervention. 0:12:19.787,0:12:36.088 The genius of Oprah was to use the book as the platform to own her audience. 0:12:36.088,0:12:40.267 So if we actually get to be in the book business 0:12:40.267,0:12:45.938 the book business where you are inside a person's head for fifteen hours 0:12:45.938,0:12:51.657 and you own that proxy object, that cultural proxy object, 0:12:51.657,0:12:58.751 that connects two people to one another in a deeper deeper way than any other media 0:12:58.751,0:13:03.177 then you've got something going for you, 0:13:03.177,0:13:06.494 you've got something really really deep going for you. 0:13:06.494,0:13:16.290 About two years ago I had lunch with a guy called Michael Cader, 0:13:16.290,0:13:20.470 who runs a newsletter called Publishers Lunch in the US, 0:13:20.470,0:13:26.582 and he said to me at one point, our business, our industry... 0:13:26.582,0:13:33.766 (you'll see the slides go a little faster than I go, 0:13:33.766,0:13:37.190 consider that they took their beta-blockers and I didn't) 0:13:37.190,0:13:48.656 Michael said to me: we're a tiny industry perched atop a massive hobby. 0:13:48.656,0:13:57.198 And so I submit to you in that sense that what Bob alluded to in the Q&A earlier 0:13:57.198,0:14:06.118 the person who's going to self-publish their memoir on a Espresso machine in a bookstore 0:14:06.118,0:14:16.894 that's the bottom, that's the massive pyramid, that's the industry 0:14:16.894,0:14:25.227 if we only stick to the little triangle on top, and functioning as gatekeepers, 0:14:25.227,0:14:32.228 deciding which of the hobby bit stuff reaches the little triangle on top, 0:14:32.228,0:14:36.681 then we're going to be stuck in managing the supply side, 0:14:36.681,0:14:41.057 whereas if we can engage with the entire pyramid, 0:14:41.057,0:14:47.092 with the whole hobby, then we're in the business of managing demand 0:14:47.092,0:14:55.161 which is a somewhat sexier area to be in. 0:15:02.536,0:15:11.383 As I moved into my post-Softskull life, a year ago, when I resigned from Softskull 0:15:11.413,0:15:14.755 a number of writers would come to me and say: 0:15:14.755,0:15:17.237 How do I get published? 0:15:17.237,0:15:21.730 They felt more comfortable asking me now that I didn't have any direct influence 0:15:21.730,0:15:24.030 in whether they would get published. 0:15:24.030,0:15:26.431 And I told them the things I think a lot of editors here, 0:15:26.431,0:15:29.149 when they're on pannels, talking to would-be writers say 0:15:29.149,0:15:33.041 and agents would also say 0:15:33.041,0:15:37.143 which is: "You should submit your stuff to literary journals, 0:15:37.143,0:15:41.688 check out your favorite author's blog, comment on it 0:15:41.688,0:15:45.083 go to reading series, apply to reading series, 0:15:45.083,0:15:50.674 go to writers retreats, participate in your community." 0:15:50.674,0:15:56.342 I explained that has the opportunity to increase serendipity. 0:15:56.342,0:16:00.933 An agent might discover you, an editor might discover you. 0:16:00.933,0:16:04.603 But I realized over the last year, as I was telling them this, 0:16:04.603,0:16:08.855 that that wasn't really the reason they should do it. 0:16:08.855,0:16:13.780 The reason they should do it is that it would make them happy. 0:16:13.780,0:16:21.886 Because I saw what happened when I published writers in the conventional way in which we do. 0:16:21.886,0:16:29.204 We edit, design, print, ship, shelve their books. 0:16:29.204,0:16:33.665 The moment they're shelved, the post-partum depression kicks in. 0:16:33.665,0:16:42.684 They're not happy being published, in the sense of the publishing supply chain. 0:16:42.684,0:16:46.733 They want to connect. 0:16:46.733,0:17:01.231 And that is in a certain sense the massive sidetrack that we've gone on in the publishing industry 0:17:01.231,0:17:08.728 where we've allowed ourselves to believe that being published is the thing, is the end, 0:17:08.728,0:17:12.150 and it is a means to an end. 0:17:12.150,0:17:17.610 The end being happiness, the end being connection. 0:17:17.610,0:17:22.102 We're in the writer-reader connection business, 0:17:22.102,0:17:27.753 and the fact that we build this elaborate supply chain to effectuate that 0:17:27.753,0:17:33.962 does not mean that we have to remain prisoners of that supply chain 0:17:33.962,0:17:38.324 if it is not effectively connecting writers and readers, 0:17:38.324,0:17:44.470 or, to frame it more possitively, only to the extent that it enables us 0:17:44.470,0:17:54.936 to best connect writer and reader should we be using the supply chain that we have constructed. 0:17:59.644,0:18:03.611 The slide that I just put up is something I'm sharing with you, 0:18:03.611,0:18:08.093 I'm in the middle of launching a startup called Cursor 0:18:08.093,0:18:13.698 and, when you do startups in this day and age, you do a lot of slides, 0:18:13.698,0:18:16.698 you do a deck, they call it. 0:18:16.698,0:18:21.406 A guy called Guy Kawasaki says "ten slides". This is one of the ten slides. 0:18:21.406,0:18:27.646 No one's seen this yet, other than a couple of venture capitalists, and my co-founder. 0:18:27.646,0:18:34.644 But it is a way to try to describe the economic logic of what I'm saying to you. 0:18:34.644,0:18:39.925 In interesting ways it reflects something that Bob already alluded to. 0:18:39.925,0:18:49.064 Basically, it's a demand curve, 0:18:49.064,0:18:53.322 and it basically says that a demand for a given writer, 0:18:53.322,0:18:59.957 one person will pay ten grand, or a thousand grand, to have them wash a toilet, 0:18:59.957,0:19:04.502 to connect with a writer or artist in some personal way, 0:19:04.502,0:19:09.440 and then there's maybe ten thousand people who will pay a buck to connect with that writer 0:19:09.440,0:19:11.895 let's say, with a digital download. 0:19:11.895,0:19:14.926 And the demand curve basically is everything in between. 0:19:14.926,0:19:19.098 And we in the publishing business, because we got so addicted to our supply chain, 0:19:19.098,0:19:22.635 have only ever captured the value 0:19:22.635,0:19:27.706 under that demand curve that lies between 10 and $30, 0:19:27.706,0:19:31.443 and we've let everything else on the table, 0:19:31.443,0:19:37.600 we have no products under $10, and we have no products above $30, 0:19:37.600,0:19:41.779 so whether there might be people willing to pay $1000 to connect to our writer, 0:19:41.779,0:19:47.093 we haven't figured out a way to get those other $970 from them 0:19:47.093,0:19:50.791 and we refuse to supply them with stuff for a dollar, 0:19:50.791,0:19:56.643 in the belief that all these products are completely interchangeable, 0:19:56.643,0:20:01.475 whereas pretty much humans beings have shown in every area 0:20:01.475,0:20:05.577 from fashion and cosmetics to furniture 0:20:05.577,0:20:10.115 that we don't actually consider these things interchangeable at all. 0:20:10.115,0:20:13.413 That we buy paperbacks because we buy paperbacks, 0:20:13.413,0:20:15.921 and we buy digital objects because we buy digital objects 0:20:15.921,0:20:21.860 and we go to dinner parties with Paul Auster because we want to go to a dinner party with Paul Auster 0:20:21.860,0:20:29.535 and a digital download is not a substitute for the $250 Pen Awards gala ceremony with Paul Auster. 0:20:30.720,0:20:38.076 So the only way we are going to be able to effectively get out from under the supply chain we've created 0:20:38.076,0:20:42.899 is discover all the other value that exists under the demand curve, 0:20:42.915,0:20:49.155 that is there either being fed in a half-assed way by MFA programs 0:20:49.155,0:20:54.626 or for-profit writing centers, or bittorrent. 0:20:55.718,0:20:59.031 But it's going to get supplied by somebody 0:20:59.031,0:21:03.072 and, for our sakes, it better be publishers, 0:21:03.072,0:21:09.641 if you're interested in finding out more about this particular endeavor, 0:21:09.672,0:21:13.835 this Cursor endeavor, you can go to ThinkCursor.com 0:21:13.835,0:21:16.748 and just stick in your email address. 0:21:19.825,0:21:23.956 This here takes a lot of work to do in PowerPoint. 0:21:28.479,0:21:33.465 And it's there because I believe that our industry has to face the same thing 0:21:33.465,0:21:37.208 that we ask our authors to face, 0:21:37.223,0:21:42.857 they have to face the blank page with the blinking cursor 0:21:42.857,0:21:45.343 and we need to do that too. 0:21:45.343,0:21:47.493 Thank you very much. 0:21:57.761,0:22:06.423 I'm happy to answer less abstract questions than the much more 30000-feet-style-thing that I just did. 0:22:08.177,0:22:16.029 All those questions that you asked Bob, I was like, I have to ask me something like that 0:22:20.275,0:22:24.816 I could just start answering some questions. 0:22:24.816,0:22:25.316 I will throw out one thought, in relation to enhanced books. 0:22:35.160,0:22:41.000 I lean towards the "enhanced digital books are the CD-ROMs" 0:22:41.000,0:22:45.705 there's absolutely no evidence that there's any demand for them 0:22:45.705,0:22:55.648 if there were, people have been making pictures out of words for a very very very long time 0:22:55.648,0:23:01.453 yet we still read long-form text-only narrative. 0:23:02.238,0:23:11.630 The absence of audio and video in text-only long-form narrative is a feature not a bug, 0:23:11.630,0:23:22.148 and thus far it's been treated as a bug by people who have basically hammers 0:23:22.148,0:23:29.448 and if that's the only tool you have, then you see an enhanced ebook, 0:23:29.448,0:23:37.273 which is not to say that there isn't a role for video and audio in relation to text, 0:23:37.273,0:23:40.395 but that's called a website. 0:23:41.370,0:23:45.765 Creating something that downloads is going to be kind of pointless 0:23:45.765,0:23:50.001 in a universe of 4 and 5G and Wi-Max 0:23:50.001,0:23:55.841 already there's 4G in Stockholm that works 60 feet below... in tunnels 60 feet under the ground 0:23:55.841,0:24:02.481 So we're going to be in a universe of completely pervasive always-on connectivity 0:24:02.481,0:24:07.653 where text and image and sound will work together in a device, 0:24:07.653,0:24:14.893 so the notion that we have to bundle it together into a downloadable file seems... 0:24:14.893,0:24:20.866 Bob says it's only ($)10000, but only 10000 is only 10000 if your marketplace is the United States 0:24:20.866,0:24:26.162 10000 is not an "only" number for a Canadian independent publisher. 0:24:26.275,0:24:34.946 So my little advice there is don't waste money on elaborate video in relation to text, 0:24:34.946,0:24:37.216 just make a website. 0:24:39.939,0:24:43.493 Are there non-imaginary questions? Shawn, thank you 0:24:43.493,0:24:47.542 [Q: Can you talk about Print-On-Demand, Publishing 3.0, 0:24:47.542,0:24:51.278 and the opportunity to explore under-served, unknown markets through digital?] 0:24:54.432,0:24:58.775 My belief is that if you're in the demand management business 0:24:58.775,0:25:01.017 then you've got to own the community. 0:25:01.194,0:25:03.408 There's just no other way around it 0:25:03.408,0:25:06.742 the price of digital content is going to zero 0:25:06.742,0:25:08.546 it has already in music 0:25:08.546,0:25:10.870 you can get any song you want for free 0:25:10.870,0:25:14.605 and at a certain point you'll be able to get any text you want for free 0:25:14.605,0:25:18.315 it's just not going to not happen 0:25:18.315,0:25:21.693 and it's delusional to think it's not going to happen simply because it hasn't happened yet 0:25:21.693,0:25:27.133 the only extent to which it has not happened is frankly lack of demand 0:25:27.133,0:25:34.906 as Bob pointed out, 2000 pirated whatevers is a good sign, it means somebody wants the damn thing 0:25:34.906,0:25:40.545 most of our problem in the publishing industry it's been people don't want the things that we create 0:25:40.545,0:25:47.320 So the price of digital content is going to zero, so how the hell do you make money? 0:25:47.320,0:25:49.740 Well, you make money by owning the community. 0:25:49.740,0:25:51.656 How are you going to make money under that demand curve? 0:25:51.656,0:25:58.496 You've got to own the community. You've got to know who's going to pay the ten grand to take a workshop 0:25:58.496,0:26:02.468 a personal tutorial with Miriam Toews, 0:26:04.514,0:26:11.004 People are already doing this. The British publisher Faber has launched something called "Faber Academy" 0:26:11.004,0:26:16.115 which is basically Faber writers teaching writing workshops. 0:26:16.115,0:26:20.920 Miriam Toews is going to be the first writer doing that in Canada. 0:26:23.012,0:26:28.767 That works, Faber is a brand, people think: "'Faber Academy', I want to write like a Faber author" 0:26:28.767,0:26:31.263 therefore there they go. 0:26:31.263,0:26:38.136 So it's by really establishing mindshare over your audience, 0:26:38.136,0:26:44.343 either at the level of the author, which would be the case of blockbuster publishing, 0:26:44.343,0:26:49.515 with the Gary Vaynerchuks and up, where he's got mindshare of his audience. 0:26:49.515,0:26:52.985 Or if you're not in that business, if you're not in the blockbuster business, 0:26:52.985,0:26:56.222 everything below that, everything midlist and below, 0:26:56.222,0:26:59.091 you're going to have to basically circle everybody together, 0:26:59.091,0:27:06.631 and cluster everybody together, so that you can really get to learn who the hell is reading these books. 0:27:07.693,0:27:11.470 The role of POD [Print-On-Demand] in that? It's a tool 0:27:13.132,0:27:16.708 It's certainly a tool for reducing your working capital outlay, 0:27:16.708,0:27:20.646 to the extent that you're still participating in the supply chain 0:27:20.646,0:27:31.748 and it's also a tool... You could say a 25-copy artisanally-made limited edition 0:27:31.748,0:27:37.600 that you've printed the 25 copies of because you've already got 25 credit card numbers 0:27:37.600,0:27:39.831 and you're going to charge them 250 bucks 0:27:39.831,0:27:44.809 because the author is going to put his bloody thumbprint on the title page 0:27:46.117,0:27:48.673 is a kind of Print-On-Demand. 0:27:53.519,0:27:58.149 I know almost everybody in this room has to think very concretely about what do you do tonight, 0:27:58.149,0:28:01.286 what do you do tomorrow to address some of these things? 0:28:01.286,0:28:10.161 But I also urge you to be able to step back and think about the business you're in, 0:28:10.161,0:28:14.432 so that you can make choices about which of these tools to use 0:28:14.432,0:28:19.605 because otherwise you're just throwing a bunch of tools against the wall and seeing what sticks 0:28:19.605,0:28:23.901 and that's not going to work any better than throwing all the books against the wall to see what sticks. 0:28:26.007,0:28:31.250 So Print-On-Demand can mean two very different things to very different publishers. 0:28:32.819,0:28:37.225 The trick is: who am I selling the book to? 0:28:37.856,0:28:43.533 Who am I connecting this writer I represent with? 0:28:44.087,0:28:49.068 [Q: Do you consider this a marketing or a publishing strategy?] 0:28:49.699,0:28:52.938 It's a complete business strategy. 0:28:52.938,0:28:56.075 It is the business you're in. 0:29:03.805,0:29:10.188 It always used to bug me when people announced they had open online marketing departments 0:29:10.188,0:29:14.326 because I was wondering what the offline marketing department was doing. 0:29:14.326,0:29:18.130 It couldn't be anything terribly useful, 0:29:18.130,0:29:23.604 if it was going to be separated from how people spend half their lives. 0:29:23.604,0:29:30.031 Most of their reading life, our text-processing life. 0:29:31.323,0:29:35.542 I think you have to think about it in profoundly integrated ways. 0:29:36.280,0:29:41.968 In other words, your act of publishing is an act of marketing. 0:29:43.491,0:29:50.930 My business is perceived -to some degree by outsiders- as a digital-only business, let's say, this Cursor model 0:29:50.930,0:29:54.966 and it takes a while to point out to people why I'm being distributed by Publishers Group West 0:29:54.966,0:29:57.436 and Publishers Group Canada 0:29:57.436,0:30:00.986 These communities are going to produce books that are going to go through the supply chain 0:30:00.986,0:30:04.460 why am I doing that? I'm not doing that to make money. 0:30:04.460,0:30:06.878 One of the ways in which I tested my business plan was 0:30:06.878,0:30:13.953 I took all the non-publishing-supply-chain revenues out of it, and costs out of it 0:30:13.953,0:30:17.861 and I discovered I had in the business plan operating margins of 3%, 0:30:17.861,0:30:25.030 so I'm like, ok, this model clearly works, because we know that's true. 0:30:25.030,0:30:36.826 I'm doing it because 500 heavily-trafficked-by-book-reading-people bricks-and-mortar retail locations 0:30:36.826,0:30:43.081 around the country, where I can put a 6 by 9 inch ad about the book and the community for free 0:30:43.081,0:30:46.883 is not something I intend to give up very likely. 0:30:46.883,0:30:52.630 Publishing is a marketing strategy for an owner of a community. 0:30:55.076,0:30:58.664 Publishing is a marketing strategy for the Daily Beast, 0:30:58.664,0:31:02.068 this website that Tina Brown has set up in the United States. 0:31:02.068,0:31:05.336 She's going to do publishing. She's not going to make money publishing, 0:31:05.336,0:31:08.905 but she's going to build brand equity for the Daily Beast publishing. 0:31:11.443,0:31:15.848 A lot of people who own communities, knitting, fly-fishing, 0:31:15.848,0:31:18.386 paranormal romance, whatever the community is, 0:31:18.386,0:31:24.354 they're going to start publishing, because that's a way for them to build brand equity, 0:31:24.646,0:31:28.193 and for them publishing is marketing, 0:31:28.655,0:31:32.298 That's the kind of conceptual challenge that we face. 0:31:32.298,0:31:37.970 You're not going to face it tomorrow, or the day after, but that is the challenge we face, 0:31:37.970,0:31:42.741 and I know this sounds very abstract, but when we think of this topic, 0:31:42.741,0:31:45.778 this "Calculated Risk", effectively what we are saying is that 0:31:45.778,0:31:51.906 it is too risky not to completely reconceive our business. 0:31:52.468,0:31:56.988 That's where the risk lies, it's in remaining siloed, 0:31:56.988,0:32:01.293 remaining in the manufacturing business. 0:32:01.293,0:32:06.965 We are in an intellectual property business where almost our entire cost basis is based in manufacturing. 0:32:07.642,0:32:15.106 if you look at the markup on shoes, farmaceuticals, anything, 0:32:15.106,0:32:20.088 the markup that everybody else gets to put over the manufacturing bit of the business 0:32:20.088,0:32:23.902 is so much greater than what we do in publishing 0:32:23.902,0:32:26.122 and we are in the pure intellectual property business. 0:32:26.860,0:32:32.496 When I say content isn't king, culture is, that's what I'm trying to get at, 0:32:32.496,0:32:38.713 that the container, the cultural artifact, the object itself, isn't what we are doing 0:32:38.713,0:32:42.568 it's the connection between people that that object enables, 0:32:42.568,0:32:48.373 whether that person is a writer or a reader, or a reader and a reader, or a writer and a writer. 0:32:48.788,0:32:52.580 [Q: Does asking writers to start selling something other than their writing 0:32:52.580,0:32:55.225 undermine our commodity (writing as culture)?] 0:32:55.240,0:33:06.560 Pulped-wood bound in cardboard isn't culture, the words in it are the culture. 0:33:07.606,0:33:11.552 It's no more cultural than a t-shirt. 0:33:20.383,0:33:23.637 I'm not suggesting the we abandon it, 0:33:24.591,0:33:31.193 but I've been chatting with a number of writers... 0:33:31.193,0:33:33.910 I mean, I get what you are trying to get at, 0:33:33.910,0:33:40.663 are we distracting writers from the pure process of creativity 0:33:40.663,0:33:47.493 and turning them into product shells?, the cruder way of summarizing that. 0:33:47.493,0:33:49.531 And I have two observations about that 0:33:49.531,0:33:55.375 one is that there is no writer happier than the writer who is not writing. 0:33:57.360,0:34:03.648 Beckett, the greatest sort of allegedly antisocial curmudgeon of all time, 0:34:03.648,0:34:12.023 wrote plays and TV scenarios and radio stuff so that he could get out of the house. 0:34:12.023,0:34:18.898 Writers actually want to connect, they don't like spending three years stuck in the attic, 0:34:18.898,0:34:21.766 they like getting out, they like connecting, 0:34:21.766,0:34:26.442 they may be erratic about doing it or may be scared because they're not used to it 0:34:26.442,0:34:30.517 but engaging with the readers is what writers want, 0:34:30.517,0:34:34.913 so we're not forcing them to do something that is absolutely alien to them 0:34:34.913,0:34:38.902 and it is also the case that, prior to Gutenberg, 0:34:38.902,0:34:47.326 culture thrived, poets were allowed to run around and sing for their supper, 0:34:47.326,0:34:51.496 and that worked reasonably well, 0:34:51.496,0:34:56.735 so assuming that the physical book is the only conceivable incarnation 0:34:56.735,0:35:03.403 for the writer-reader connection is, I think, a mistake. 0:35:04.679,0:35:07.546 They want to connect. 0:35:08.715,0:35:13.551 I'm... Time. Thank you very much.