More than 150 book industry professionals gathered at the Yale Club in New York City on Friday, September 12, for the Book Industry Study Group (BISG) Annual Meeting of Members, which featured the organization's year-end financial and performance review, a discussion on the long tail theory, and an introduction to the new Industry Standard Text Code, among other business.
In opening remarks, BISG Co-chair Dominique Raccah, president and publisher of Sourcebooks, noted that the Book Industry Study Group had welcomed 26 new members this past year, and reported that 2007 - 2008 was "another successful and productive year for BISG. [It] continues to enhance its strong financial position." She added that innovation was a key theme over the past year, and the organization had begun to define and "extend its role into digital publishing" by addressing such supply chain issues as standards for searching and discovering online book content.
Michael Healy, BISG executive director, reported that 2007 - 2008 was financially "very successful." This past fiscal year, he said, total revenue grew by 23 percent year-on-year to $839,149, which was "the highest revenue we've ever had." The organization realized a surplus of more than $63,000, and assets grew by 11 percent.
Financials aside, Healy touted BISG's ability to bring in new members, and added: "It's been an extremely busy year as far as publications, as BISG published five reports during the year," most notably Environmental Trends and Climate Impacts: Findings From the U.S. Book Industry. In addition, BISG announced plans to hire an associate director sometime in the next year.
Following Healy, Anita Elberse, associate professor of business administration in the marketing unit at Harvard Business School, revisited Chris Anderson's "long tail theory," its implications for the book industry, and whether or not the "blockbuster strategy" is still the most effective marketing strategy in today's digital world.
According to Anderson's theory, as digital technology makes it easier for consumers to purchase products, companies will need to move from a blockbuster business strategy (where companies sell more of fewer titles, with these successes paying for the cost of the misses) to a long tail strategy (where companies sell less of more).
According to the long-tail theory, Elberse explained, digital technology should change market conditions: Publishers can easily and cheaply replicate books; retailers have infinite shelf space and new tools to drive and direct demand; and consumers can easily search through the many options, and better match choices to preferences. Publishers (and other companies) should then find the long tail getting longer and fatter, and the expected response would be a shift from blockbuster strategies to accommodate the change.
However, based on her research that looked at downloadable music sales, DVD sales, and book sales, Elberse said that there is "little evidence of this happening." For instance, in 2004, a mere 306 titles accounted for 50 percent of DVD sales. In 2005, 76 percent of titles (about 948,000) released accounted for only 2 percent of sales, according to Nielsen BookScan. And, she observed, while the long tail is getting longer, it is not getting fatter.
"Who consumes stuff in the tail? A small group of people," Elberse said. "Anderson believes we are entering a micro-culture era, but ... old laws of consumer behavior suggest otherwise." While online channels have significantly broadened customer access to niche products, in the end, "consumers will find out why these [long-tail products] were niche in the first place," Elberse said. "No customer solely exists in the tail. Hits are still dominant."
All told, Elberse recommended to publishers: "Don't radically alter your blockbuster strategy. For the online retailer, if you want to broaden your customer base, you need more niche products, but you need to strictly manage costs. Don't incur costs except at transaction. And resist the temptation to direct customers to the tail too often or you will risk their dissatisfaction."
Also at the BISG meeting, Andy Weissberg, general manager of identifier services for R.R. Bowker, announced that the new International Standard Text Code, a unique number for lining all versions of an individual title, is now available and offers publishers and booksellers opportunities to improve how they manage their titles and the experience of customers. "The ISTC identifies a textual work even though it may be published in different forms," such as a hardcover or paperback, for instance. "It's an attribute of a product, but not a product identifier." He reported that ISTC numbers will be free through May 2009, but after that the cost will be approximately $0.10 to $0.50 per ISTC. --David Grogan