Expectation and Reality in Digital Publishing: Some Australian

Perspectives

Xuemei TianSchool of Business Information TechnologyELPUB2007 Conference – Vienna, Austria – June 2007

Introduction

• Background

• Methodology

• Digital publishing – definition and characteristics

• Ongoing supply chain

• Development of technologies

• Business models

• Initial findings

Background

• The publishing industry represents a highly significant manufacturing and distribution component of the content industry, which creates, transfers and stores knowledge.

• The publishing industry has changed dramatically. Main changes include:

– Changes in publishing markets– Increases in online business and digital content formats – Changes to distribution channels and supply chains– Increases in outsourcing, sub-contracting

Background• Business Challenges in Publishing

– Rapid development of technologies

– A turbulent business environment

– The growth of global concentrates

– Intense competition including that from new entrants and

Open Access publishers

– Stakeholders’ demands to improve financial performance

– More sophisticated customers’ requirements

– Changing customer relationships

– Content is king

Background

• To cope with the changes, publishers have been forced to: – Re-evaluate their resources and capabilities– Re-design business strategies– Re-engineer their business processes

• The development and emergence of new supply chains

• Seek new business models

Methodology• Focus groups

– Focus groups have been employed as forums for industry feedback and as monitoring mechanisms, providing analyses and recommendations, based on knowledge ascertained as the research progresses.

• Interviews– Ten formal interviews were conducted with major players

within Australia’s publishing industry.

• Survey– A national online survey of Australian publishers was

completed

• Case study– A series of eight case studies was conducted

Digital Pulbishing• Definition• Characteristics

CMSContent Management System

XML Transfer

Video

Web

Word, graphics etc.

Voice

Publishing Content

Mobile phone

Papers

Other leather materials

Cross Medias

Cross Media Publishing (Mao Lin Liu, 2003)

Ongoing changes to supply chain• An initial view of ongoing changes to the publishing supply

chain

Contracted Author

Author

Publisher Printer Distributor RetailerFinal Consumer

Physical supply chain and intermediaries

Wholesaler

Re-intermediation

Aggregator

Web Portal

Web Portal

Disintermediation

All with links to both the organisational and the technology literatures.

Developments of Publishing Technology

• Current use of e-commerce in Australia

– Asia Pacific’s B2B e-commerce is forecasted to grow rapidly at a Compound Annual Growth Rate (CAGR) of 59% percent (IDC, 2004).

– Australia’s e-commerce is estimated to be worth $11.3 billion dollars annually (Australian Government Information Management Office, 2005).

– Australia is among the leading nations in terms of measures of Internet infrastructure, penetration and activity. Australia is ranked second in the Asia Pacific region in terms of e-commerce infrastructure (eMarketer, 2005).

– However, in comparison with other countries, small and medium-sized enterprises (SMEs) have been relatively slow in adopting e-commerce (The Age, 2002; NOIE, 2002; Sensis, 2005).

Development in Publishing Technology

• Longevity of existing technologies: Electronic Data Interchange (EDI)

• Disruptive technologies: Internet and Web

• Disintermediation: Technology predicted to remove players from the value chain.

• Online/Web/Digital: Current trend including Re-intermediation.

• Future technology: Semantic Web

Business models

• Definition: this project adhered to Weill and Vitales’s (2001) approach to business models.

A description of the roles and relationships among a firm’s customers, allies and suppliers identifies the major flows of product, information and money and also the major benefits to participants.

• Survey results: subscription-based and content creation models maintain popularity, particularly in the context of niche markets.

• Three Business models: an educational book publisher’s current and future models, and a trade book publisher’s future model.

A current BM for an educational publisher

Book ShopsEducation/uni

Higher EducationAcademics

SchoolsTeachers

$

$ / o

/ i

Web Sales to Individual Students

$

Books & CD o

Books & CD o

Books & CD o

Content i

Discount

Pay or Return

Free sample

O/ i

Thomson Learning

Educational PublisherEditingSales/Marketing

OutsourcersPrinting

Authors

$

O/ i

o

Content

$

$

o

Licenses

Book Sellers

Technical Service Co.

Support

i

o$

Thomson Learning

Educational PublisherEditingSales/Marketing

OutsourcersWhole process Manuscript ot books (India)

Authors

$

O/ i

o

Content

$

$

o

Licenses

Book Sellers

Technical Service Co.

Support

i

o$

Book ShopsEducation/uni

Higher EducationAcademics

SchoolsTeachers

$

$ / o

/ i

Web Sales to Individuals

$

Books & CD o

Books & CD o

Books & CD o

Content i

Discount

Pay or Return

Free sample

O/ i

Re-assembling

e-book, video, audio summary, testing

A new BM for an educational publisher

Book stores

Book clubs

Library(Uni.State,School..)

Reader CIndividual or Org

or Co.

Reader DIndividual or Org

or Co.

$

Books o

Content i

Books o

Books o

Books o

$

$

$Print-on-Demand

Repository

Technical Support Co.

Branded

contentAuthorsContract

Physical & Electronic Distributor

Web Browser Web SitesYahoo/Google

o

$

Contract

Support

o

$

$

$i

Books o

$$

i

Reader A Individual or Org.

or Co.

Virtual C

omm

unity

o

o

Updates i

o

$

Reader B Individual or Org.

or Co.

Book Publisher

Rights Management

MarketingOutsourcing

PrintingOutsourcing

Editing Outsourcing

Authors

o

ii

i

$

$

$

i

Content

o

I $BookPublisher

Customer

Supplier

Ally

Electronic Relationship

Primary Relationship

Flow of Money$

Flow of Informationi

Flow of ProductoLegend:

For a trade book publisher

Project progress and initial findings

• The Australian publishing industry has adopted a somewhat conservative approach to the challenges and opportunities presented by digital publishing.

• The majority of publishers believe however, that in the foreseeable future, there could be major changes in the industry.

• As publishing businesses have varying objectives, the pace of change from traditional to digital publishing will also vary, depending on their market and client base, as well as the take-up of technology.

• It seems clear however, that any reluctance on the part of publishers to embrace technological change could prove detrimental to their future.

Project progress and initial findings

• Currently, book publishing models appear to be very familiar (i.e. largely traditional) with adding on digital elements.

• In the next decade book publishing models may appear as a different profile.

The future business models of publishing

• How do YOU think future publishing business models will change?