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