Publishing in the Digital Market

By Catherine Jewell, Communications Division, WIPO

Penguin Random House (PRH) is the world’s largest trade publisher. The company employs over 12,000 people globally, owns 250 imprints around the world and publishes 15,000 new titles every year for readers of all ages. Company chairman John Makinson shares his views on the impact that digital technologies are having on his industry.

Is the publisher’s role changing in the digital context?

The role of the publisher has not changed significantly; the means of distribution have changed. The impact of digital technology on our content has not been too significant. It does not greatly matter to publishers whether the work is produced digitally or physically, but the shift to digital channels of distribution – especially to Amazon – has been highly significant, as has the opportunity to improve publishing processes through the application of digital technology.

Copyright is the foundation of publishing. Copyright allows our authors to own and protect their works.

What new trends or opportunities are digital technologies creating?

The emergence of self-publishing has been an interesting phenomenon and probably the biggest trend of note, giving many authors a non-traditional route to reach consumers. But it has not seriously disrupted the traditional publishing business. Penguin Random House is committed to serving readers with books curated by our 250 imprints and their experienced editors and marketers. The biggest opportunity of digital is reflected in our reader-centric approach and direct-to-consumer marketing. We monitor very closely new digital business models – such as subscription and sales of micro-content – but their impact has been much less pronounced in the case of books than with music or movies.

And what impact are digital technologies having on creativity?

Some people use new technologies in very creative, positive ways; some, unfortunately, use them to steal others’ work. So it’s a mix.

You mentioned subscriptions. Is there a place for the subscription model in publishing?

We are very open to all kinds of different publishing models and we are constantly exploring and evaluating a variety of models. Thus far, we haven’t seen a proposed subscription model that we believe can be viable for our constituencies.

You also mentioned the growth of self-publishing. Does that not pose a threat to the industry?

People are finding that it is not so easy to write, edit, publish, market and distribute a book on their own. Self-publishing, in this respect, reinforces the role and value of curated publishing. The market that the self-publishing industry serves is different from our market, so there is some overlap but we have not witnessed material cannibalization of curated content from self-publishing. The market has expanded to accommodate both models.

And how about Amazon? How does the relationship work with them?

We actively work with and foster our relationship with all booksellers of every size and stripe. We have a good working relationship with Amazon and they have done a lot to increase both print and e-book sales, and foster discoverability. 

Has the Internet generally been a good thing for the publishing industry?

Yes, it has. People are engaged, people are reading. Social media allows for increased discoverability. The Internet, and social media in particular, also provides a platform for readers to meet each other and for authors to connect with readers. 

Is the paperback dead? Do you foresee e-books overtaking physical books any time soon?

No, the trade paperback format is alive and well. Demand for physical books is strong, particularly for children’s and cookbook titles. The area of paperback publishing that has been most affected is what we call “mass-market” paperbacks – high-volume, low-cost books in specific genres such as romance and science fiction – where the level of substitution of physical by digital books has been high. The adoption of e-books continues, though its growth in many markets has been stable or even declined. Physical books have recently staged something of a comeback in the US and UK markets.

What about audiobooks? What effect are e-books having on them?

We see a product mix. Readers are reading different books in different formats – it’s not one or the other. But the audiobook market has benefited enormously from the transition from physical product (cassettes or CDs) to downloads.

Are all physical books also available as e-books?

The author, together with their publisher, determines the publishing formats for their work. Generally, all books we publish will be made available in an e-book format.

Some publishers have said that discoverability is one of the key problems facing the publishing industry today. Do you agree?

Some discoverability is definitely lost when most sales are done via the Internet rather than through browsing in a book store. On the other hand, many e-book sellers do create a different kind of discoverability based on previous buying history, and social media also allow for increased discoverability.

Why is copyright important to the publishing industry?

Copyright is the foundation of publishing. Copyright allows our authors to own and protect their works. In many ways, it enables publishers to support writers and give them the time and resources they need to create. Publishers help writers make writing a full-time job. One of the most important issues facing publishing is preventing piracy. And one of the most important responsibilities we have as publishers is to work assiduously on behalf of our authors to protect their copyrighted works.

Is there a need to adapt the existing copyright system to the digital market?

No, we should all be playing by the same rules that have long represented the balance necessary to encourage and support creation and creativity. As far as exceptions have been made to allow for e-commerce of various sorts, the holes that those exceptions have created for pirates need to be plugged.

What role does licensing play in PRH’s business?

Licensing is very important. Through the license we acquire the rights to publish our books. Beyond that, we have a thriving licensing business, in which we create books based on such world-class brands as Lego, Star Wars, Sesame Street, Disney, which are enjoyed by millions of readers of all ages, especially kids, and are a significant revenue stream for us and for the licensor.

What is PRH’s policy on accessible publishing?

Penguin Random House is proud to partner with Bookshare, the world’s largest accessible online library for people with print disabilities. Along with 500 other international publishers, we contribute to Bookshare’s mission by donating our digital files so that content is made available to people with print disabilities around the world at the same time as it is for their sighted peers.

Are you optimistic about the future of publishing? What is the next big thing in the industry?

Yes! The next big thing is the next big book. Publishing continues to be all about the stories our authors write. Our job is to bring these stories to the widest audiences.

Lastly, what are you currently reading?

Books that are relevant to IP and copyright: Free Ride by Rob Levine, Googled by Ken Auletta and The Circle by Dave Eggers. All of these books touch on topics we addressed at the recent WIPO Conference on the Global Digital Content Market in April 2016, with The Circle providing a cautionary tale.