Unlike the atmosphere at SXSW, the mood at the 2009 Publishing Business Conference & Expo was a bit subdued. It might have been the chilly New York weather or the beige Marriott Marquis carpeting—or maybe it was the panels reflecting the current state of the publishing industry, with titles like “Book Publishing and the New Financial Realities” and “Undertaking Environmental Improvements in Lean Times.” Nor was digital necessarily held out as the gleaming prize: In the aforementioned “Book Publishing and the New Financial Realities,” David Hetherington, Adjunct Professor at Pace and former CFO of Columbia University Press, said he doesn’t see eBooks generating enough revenue to support any major company any time soon, adding, “There’s a fine line between vision and hallucination.” He predicts that e-books will only really take off when today’s elementary school students enter college and begin using eTextbooks, citing CourseSmart as a site with lots of growth potential.
In “Successful Business Models for Digital Content,” Random House VP Digital Matt Shatz and President of Alexander Street Press Stephen Rhind-Tutt spoke about other ways that both large and small companies can earn revenue from digital initiatives. Shatz said there are three “buckets” for future revenue opportunities. The first is increased volume of core digital product, like e-books and downloadable audio; the digital format helps a company reach more buyers across the world. The second bucket is content enhancements, in which a company takes its underlying core content and generates revenue by enhancing them. Examples include personalized books, enhanced eBooks, subscriptions, and chunking. Shatz said that chunking, or selling books by the chapter, works particularly well for categories like business, self-help, and parenting; people may not want to buy an entire book but are happy to buy a chapter or two. The third bucket, ancillary revenues, includes any revenue streams not fundamentally generated by core content. An example would be a partnership with a gaming company, where the publisher gets benefits in return for helping to develop the narrative of a video game.
Alexander Street Press is an Alexandria, VA–based electronic publisher of online humanities, social sciences, performing arts, and music directories, which libraries and educational institutions can subscribe to or purchase. It’s important for publishers to be open to licensing and partnerships, Rhind-Tutt said: “No one site contains all information, so if our business is getting content to people, we have to work with other people.” (Alexander Street has over 1500 business partners.) Publishers also need to find ways to add value to their existing content. One way publishers they can do this is through semantic indexing. “People are asking new questions. They want to know who said what, when,” said Rhind- Tutt. Users of Alexander Street’s database of Counseling and Therapy Transcripts can, for example, search for all instances of male therapists mentioning the word “drink” to female clients. “If you can find additional ways of adding value,” Rhind-Tutt said, “the business model will sort itself out.”