A key theme of the recent FutureBook conference was ‘continuous innovation’, the need for companies to keep implementing new ideas, testing them and responding to what they have learned. Many publishing companies are doing this, but innovation is often focused more on content, product formats or small improvements, not the fundamental business models that deliver value to publishers, content creators and customers.
In my new research paper Curiouser & Curiouser: Novelty-centred Business Models and Value Creation in Established Publishing Firms I highlight the need for publishers to augment their incremental or efficiency-centred innovations with more radical exploratory, or novelty-centred, approaches. In the uncertain world of contemporary publishing, where spiralling ebook sales are reducing traditional revenue streams, developing new ways of conducting economic exchanges is of paramount importance – and is likely to be the best way to boost company performance.
So if you want to innovate your business model, what should you do? Here are the four different types of novelty-centred innovation my research identified being used within book publishing firms:
1. Develop new distribution and sales mechanisms
Whether it’s developing new ways to license content with limited rights administration (as the Pearson Developers Community does), harnessing analytics to prompt automatic sales (via patron-driven acquisition systems) or generating sales through in-app purchases (illustrated by Kogan-Page’s Bold), innovations like this all create additional value for the publisher or customer, without the need to develop new content.
2. Break down barriers between publishers
A growing number of publishers are building direct relationships with consumers. Examples include social reading networks such as HarperCollins’ Authonomy, Random House’s Dead Good or Simon & Schuster’s teen platform PulseIt. Other organisations (for instance Harlequin’s Carina Press imprint, Macmillan’s Tor Books or Wiley’s technology list) are selling DRM-free ebooks directly to consumers, leap-frogging the traditional intermediaries and creating a database of consumer interests and purchasing behaviour.
3. Create alternative revenue streams
Although it may be the traditional approach in newspaper or magazine publishing, not many book publishers have explored the option of funding free-to-the-end-user content via alternative revenue streams. A good example is Macmillan’s Scitable community, which provides academic and scholarly content to students, teachers and scientists, all funded by sponsors.
4. Become a service business
Initiatives like Faber Factory’s text digitisation, e-book conversion and distribution service, or Pearson’s purchase of the Author Solutions self-publishing company, transform the traditional role of the publisher from manufacturer to service provider. Instead of acquiring publishing rights, and exploiting these through the development of products or licensing subsidiary rights, these companies are creating new identities as ‘supply-side’ organisations
Of course adopting more than one of these strategies at the same time is a good way to help you balance the rising and falling revenue streams resulting from different initiatives.
Curiouser & Curiouser: Novelty-centred Business Models and Value Creation in Established Publishing Firms is published in Volume 11 of The International Journal of the Book. A brief overview of the research project was presented at the September 2013 International Conference of the Book and can be viewed here: