A report to show the changes in the publishing industry due to digitalisation

A Report To Show The
Changes In The Publishing
Industry Due To
Digitalisation: Comprising of
the Past, Present and Future
Written by: Amy Lynch, Robert Pedley, Ekene Patience,
Dani Ivanov and Saadiyo Burre
Contents
1.0 Introduction
2.0 Histrory of the Publishing Industry
2.1 Structure of the Industry
2.2 Marketing and Promotion
2.3 Trends
3.0 Publishing Industry in the Present
3.1 Industry Structure
3.2 Market Leaders
3.3 Current Trends
3.4 Technology
4.0 Future of the Publishing industry
4.1 Industry Overview
4.2 Technology
4.3 Future Trends
5.0 Conclusion
6.0 Appendices
7.0 Refences

1.0 Introduction
The publishing industry has been completely revolutionized
over the past fifteen years and has moved in a completely new
direction from where it once began. The industry has adapted
with the digital age and brought publications to brand new
mediums, tablets and smartphones.
2.0 The History of the Publishing Industry
The industrial revolution of the late eighteenth century and
nineteenth century significantly influenced the methods of
Western papermaking and the characteristics of handmake
book paper. (Munn and Wallis et al., 1996, pp. 19-23) The
original publishing industries required large capital investments,
long print runs and large warehousing facilities. Increased
means of communication lead to an increase in book
production and thirst for personal development in the olden
days lead to increased readership. (Unwin, 2013)
The codex was the early form of what we know as a book--that
is, pages bound together (the term codex is Latin for "block of
wood.") The codex form became more refined as papermaking
and bookbinding and book case-making became more
sophisticated. In the past, books required a tremendous
amount of effort to produce. Each copy was transcribed by
hand and sometimes "illuminated" (that is, decorated with gold
and silver paint and illustrations) and it took months--or years--
of labour to complete a single volume. (Valerie, 2014)
2.1 Structure of the Industry
In the past, publishers added value to authors’ manuscripts by
employing editors, designers, layout artists, illustrators and
indexers to polish and package the books. The whole process
was used as a marketing tool to capture the attention of the

public and increase potential sales of their literature. Paper
manufacturers provided the materials and machinery which
would produce the finished books, where they were ready to
allow the product to be sold to the public. Distributors used to
act as intermediaries between the publisher and retailer, and
would deliver the books to trade wholesalers and retail
bookstores. (WIPO, 2014, pp.30-32).
In the past, publishers and companies would help one another
to facilitate shipments of bulk orders for events and corporate
training. Bulk orders are different than single copies, and the
service surrounding those types of orders can be complex with
intense deadlines. (Micah, 2013)
Literary agents were very important for book publishers in the
past, they make their earnings by charging percentages on the
amount of each book sold by writers. Literary agents are
probably the most knowledgeable of the industry as a whole as
they have the right contacts and often assist writers in
negotiating contracts. A good literary agent also assists the
publisher in arranging better dates for book tours, or fighting for
improved deals when needed. Formerly, a strong agent/author
relationship can be incredibly beneficial for a writer as it means
having someone who’s always ‘on your side’, who is
enthusiastic about your writing, and whose desire for the best
deal is for both your benefits. (Downing, 2014)
The copyright law underwent considerable development in the
publishing industry. The United States first enacted copyright
legislation in 1790, France in 1793, and Germany in 1839. The
United States continued to protect its domestic printing industry
and joined the Universal Copyright Convention, UNESCO, in
1952. The customary term of copyright protection is the
author’s lifetime plus 50 years. The copyright legislation serves
as a treaty between countries that recognize copyright.
(Samuels, 2000)

2.2 Marketing and Promotion
Newspaper and periodical advertising is the publisher’s
principal means of reaching the public, and standards here
have also risen considerably since World War II. Broadcasting
and television services, too, can sometimes be interested in
books and their authors, and the resultant publicity may then be
extremely effective. For many books, a prospectus may be
issued, both for the use of booksellers and for direct mailing by
the publisher. The paperbacks were being found not only in
bookshops but also in drugstores, street kiosks, and
newsstands. The publishing industry had to market their books
to a variety of audiences, based on their age, demographic and
income. Marketing their books incorrectly could be detrimental
to the potential sales of the book.
Every publishing house has manufacturing, marketing, and
accounts departments, but the editorial department is the most
important. The editorial department is responsible for the
detailed preparation of the typescript before it is printed. Facts,
figures, and references are checked, and elegancies of style
are polished where necessary. The paperback publisher makes
an offer to buy the paperback rights from the publisher of the
hardcover edition, and the paperback royalties are shared
between the author and the hardcover publisher. During the
Golden Age, publishers and editors viewed their work as
intellectual work, they viewed authors as artists, and they were
willing to focus on the long-term social and financial benefits of
publishing valuable works, at least occasionally, rather than
obsessing over the instant gratification of a best-sellers.
(Tucker, 2013)
But the publisher’s efforts — most of the time — were limited to
the launch. Then the marketing team could move on. This was
not a way of doing business that was appealing to authors, but
it was consistent with the realities of the marketplace. The big
book chains wouldn’t keep a title in stock if its sales appeal
wasn’t evident at the cash register within 90 days. Without

copies of a title in the stores, there was no point to the
publisher pushing the sales. (Shatzkin, 2012)
According to Gene Taft, Vice President and Director of Publicity
for Public Affairs Books, “the industry used to be run by bookish
people who liked to read. But there are not enough book people
who are good business people. Now, with the large
conglomerates having taken over so many houses, a different
kind of executive is involved in the industry” (Hill and Power
2005, 54).
Editors who discuss literary issues with authors, who help them
develop their characters and resolve plot holes, were among
the “inefficiencies” that were greatly eliminated during the Age
of Acquisitions.
2.3 Trends
The 1920s also saw the establishment of book clubs as a new
way to market books. The Book-Of-The- Month-Club was the
first, started in 1926, and was followed by the Literary Guild in
1927. The nearly instant success of these mail-order ventures
surprised the publishing industry and alarmed the vested
interests. The “book dividend” offered by the Book-of-the-Month
Club caused some anxiety. Public libraries feared a decline in
circulation, the bookshops spoke of unfair competition;; but
publishers eventually came to appreciate and even count on
the rewards in residual rights. Public libraries have not gone out
of business as a results of the clubs.(Harlan, Robert D and
Johnson, Bruce L 1978)
Two other trends in the publishing scene since 1950 also had
their beginnings before the war: the microform and the
paperback. In the late 1930s, Eugene B. Powers of University
Microfilms initiated the first commercial program of microfilm
publication of original hardcover books. Unfortunately, the war
curtailed development of this medium for the publishing
industry. During this same period, the paperback book
reemerged.

Reprint publishing was ideally suited to the needs of the
expanding scholarly and educational fields in the 1960s. New
libraries were being created, and existing libraries were
growing. Both paperback and microform publishers took part of
the reprint market. (Harlan, Robert D and Johnson, Bruce L
1978)
3.0 Publishing Industry in the Present
3.1 Industry Structure
According to Michael Porter, industries are affected by a five
fundamental ‘forces’ known more commonly as Porters Five
Forces. The forces are known as; the bargaining power of
buyers, the bargaining power of suppliers, the threat of new
entrants, the threat of substitute products or services and rivalry
amongst existing firms. (Renko and Sustic et al., 2011) These
forces have a major effect upon the publishing industry
currently and have impacted the industry significantly over time.
For example, if an industry has many companies selling more
or less the same product, competition between the companies
will be intense and the profit will be low. Related to the current
publishing industry, there are many small publishers across the
world that are competing for a market share. However, due to
the competitive nature of the industry, it is extremely difficult to
get the publicity and sales without the help of larger companies,
who are already established within this concentrated market.
For the modern day author, it is very important to have a
community surrounding your work in order to advertise and
network effectively . Through social media, authors can now
take advantage of the opportunities which are presented by the
internet interact with one another and their fan base, whilst also
promoting their work. (Petronzio, 2012), Authors can interact
and sustain a community by posting updates about the book’s
development status every week. This is an inexpensive way of
marketing books in order to attract sales: one that has largely

impacted the industry with a forceful injection of opportunities
provided by the internet.
The customer base surrounding the publishing industry has
drastically changed with the development of the internet
compared to the Nineteenth century. Authors and publishers
can now interact with readers from around the world, as well as
using the internet to keep up to date with trends amongst
customers, in order to gain competitive advantage. One threat
brought to individual publishers through the internet is its
accessibility meaning that competing authors and publishers
can survey the actions of each other, calling for an advanced
skill set surrounding the use of the internet and technology
which would not have been required in the publishing industry
before the introduction of the internet.
Features of the internet allow the user to personally review
books and suggest more books for fellow readership
(Goodreads, 2014) There are, however, negatives to the use of
online publications as there is are studies suggesting that
“users often leave web pages in 10-20 seconds” (Nielsen,
2011) Online publications can link to other articles “offering
related content and strengthening their interest in your
publication”. (Lutz, 2013)
3.2 Market Leaders
The publishing industry is a highly concentrated industry: for
instance in France there is an oligopolistic publishing market
with some fringe competition: 4.3% of French publishing firms
bring in 65.3% of the revenues, 12 publishers account for 80%
in Italy, the 5 largest groups are covering 63% of the total sales
(De Prato, 2013). Companies once described until recently as
media giants (e.g. Bertelsmann, Hachette), often critically
because of the concentration they brought are now competing
with the world’s largest market cap companies: Apple and
Google. Companies which have optimised early on the
introduction of the internet and have remained current with

trends and technologies (later developed throughout this report)
in the modern age, in order to gain an uphold their status as
media giants within the digital age.
3.3 Current Trends
''The fat years of printed word are over”, says John
Sutherland, an academic and author of several books on the
history of publishing. Nowadays when books are very
affordable, yet readers are not motivated to buy them. The rise
of e-books is part of the reason readership has shifted from
printed to digital material. (Guardian, 2009).
The biggest trend within the publishing industry are
currently eBooks, the electronic versions of books introduced at
the beginning of the 21st century when the internet was
becoming more and more popular in households across the
world. The growth continues, due to the benefits of the internet.
Many companies, such as H.B. Fenn and Company have not
altered their business plans to adapt to the growing trend of
eBooks and modernisation of the industry which as a result,
has caused the companies to become bankrupt due to their
resistance in adapting to digitalization. (Medley, 2011)
Jeff Bezos, CEO of Amazon, says that the owners of
eReaders are purchasing more books now than ever before
due to the simplicity and accessibility of eBooks (Pressman,
2014). Amazon, who own the brand Kindle, have 90% of the e-
reader market share within the UK (BBC, 2013) and have one
of the largest selection of eBooks for their consumer,. In 2008,
eBook sales accounted for 1.1% of the US market, however in
2012, that figure rose to nearly 30% (Campbell, 2013). This
shows that there has been a huge growth in demand for the
product, within the past five years and that the publishing
industry has grown with eReaders and eBooks into the
technological age of the internet.

The past few years have seen a growth in the provision of
electronic resources in both academic and public libraries.
Many of the initial threats regarding the introduction of
ejournals, such as raising user awareness, bundling,
proliferation of passwords and consortia purchase (Ashcroft,
2002), have been resolved and they have become a firm
provision in academic libraries in many countries. However,
while there is much activity in the eBook market, the situation
regarding eBook provision is less stable. eBooks issues
regarding licensing, costs and platform continue to erupt. While
librarians identified some key attraction of eBooks, they also
voiced concern about the bewildering variety of licensing and
business models which is time-consuming and not geared to
user needs (Ashcroft, 2011).
The cost of eBooks have caused a lot of controversy
within the industry, due to their high prices when compared to
hardback copies of the same book. According to consumers,
the prices of eBooks should be significantly less than hardback
copies as there are no printing or distribution costs incurred to
the company. (Bentley, 2012) In some cases, it has been seen
to be more expensive to purchase an eBook than the printed
counterpart. (Hannah, 2013) Consumers also do not get the
same experience with the electronic versions as they do with
the paperbacks. For example, consumers prefer the smell and
feel of a new book, which they cannot get from their eReaders.
These changes within the industry have caused audiences to
make a conscious decision of whether they should stay with
their preferred medium instead of adapting and advancing with
the industry. This could be seen as a threat towards the
publishing industry as the customers preferences are what will
produce the final sales in the industry.
3.4 Technology
Two things have driven the explosion of activity on the internet
in the last couple of years: it allows existing activities to be
carried out at lower cost; and it creates new business

opportunities such as worldwide publication. The publishing
industry has not ignored these opportunities, the vast
technological development and advances from the early 19th
century to the fast paced production techniques of today have
contributed to the industries surge into the 21st century. The
need to maintain turnover and profit has meant that publishers
are being forced to seek revenue outside the traditional areas
(Hibbert, 1999). The main source of revenue currently being
developed is electronic commerce. This prediction made in
1999- over 10 years ago- demonstrates the development of the
publishing industry.
The development of computers and eBooks now allows the
author to edit and alter their published texts which could never
have been done without the use of the internet. Before,
authors had to edit, then re-publish their books and magazines
in order for the reader to receive the most up to date
information. For educational purposes, this is a brilliant new
way of having up to date textbooks for students without having
to spend more money for the newest editions. However, this
could cause a problem in the future with referencing texts in
academic work as the texts could simply be altered, removing
quotes that could already have been used and referenced.
According to a Bain survey (Béhar and Colombani et al., 2011,
p. 7), more than 42% of all book readers are reading more
eBooks than the traditional paperback. This vast increase
shows that the market is heading towards digital products.
There are currently three transmission technologies which are
and will continue to be of importance to the publishing industry:
Digital interactive TV (DITV) which make it possible to access
books, journals and magazine articles through television and
broadband, meaning that the publishing industry will be more
accessible to customers from the comfort of their home,
broadening the demographic, however this does not
necessarily mean profits for the publishing industry as book

prices in digital form are infamously lower than the price of the
‘old fashioned’ printed books.
 Advanced telecoms such as ISDN. ISDN (Integrated Services
Digital Network) is a set of CCITT/ITU standards for digital
transmission over ordinary telephone copper wire as well as
over other media (Rouse, 2012)
Interactive mobile services.
Companies who withhold from developing their technologies, “If
publishers (and authors) continue to take a wary stance, they
will significantly hold back the development of digital books,
creating a real risk that major international retailers will not
actively target the Dutch market” (Poort et al, 2012, p. 86).
4.0 Future of the Publishing Industry
4.1 Industry Overview
The future of publishing and more specifically book publishing
is full of uncertainties. One of the biggest uncertainties lies in
the digitization of printed media and whether they will face the
same issues as the music industry – piracy, alienating people
that are not tech-savvy, and whether people who read once in a
while will want to buy an eReader or will they only be
purchased by a small group of consumers that read a lot.
(Ballhaus, 2010) One thing is for sure, the digitization of printed
media is like a train, going down a track at top-speed whilst
having no brakes.
This digitalization trend will also change the structure of the
whole industry. Predictions are that by 2020 50% of eBooks will
be published by indie (self-publishing) authors that are
sometimes better than the New York’s best sellers. (Coker,
2014) Is this the end of publishing houses? Even with Today’s
technology you can publish an eBook online and have it printed
on demand for people who like the feel and smell of a physical
paper book. I would imagine that as years go by this process

will only become easier, cheaper, and more convenient.
(CompletelyNovel, 2013)
4.2 Technology
In the past, if you wanted to purchase and read any book you
had but one option – go to the store and purchase a physical
book. Nowadays, you have Amazon and the internet where you
can purchase physical and digital books and pay electronically.
However, that’s been so for a while now. What is the future of
publishing technology?
Near field communications or NFC for short. (Machaalani,
2013) With NFCs you can go to any physical store, browse
through their selection, and hold your phone or tablet over any
product to purchase it online and have it delivered to your
doorsteps the very next day. This allows you to see and feel the
actual product before you commit to purchasing it which is a
huge drawback of online shopping.
Nowadays almost everybody has a 2D printer in their homes.
However, the future of printing is in 3D. (Lumb, 2013). The
technology is there but it cannot currently “print” in fine
materials required for printing an actual physical book. Perhaps
one day we’ll be able to purchase a book online and, shall we
chose a physical copy, print it in our homes on our 3D printers.
4.3 Future Trends
Traditional publishers know next to nothing about the
consumer. Their primary focus up till now has been to work with
the authors and, market and distribute books. In contrast,
Amazon knows everything about the consumer and even goes
as far as to inform their customer-base when a new book
comes out by their favorite author. Traditional publishers must
learn to build a bond with the modern consumer or parish and
give way to new technology. (Morgan, 2012)

As books go digital, authors can now tap into something called
"Networked Books". (Berinstein, 2014) A Networked Book is a
concept where authors can choose to post part of the book, the
whole book, or a draft online and allow people to comment,
challenge ideas, correct facts, and lively and intelligently build a
conversation with the aim of creating a perfect final product. A
digital book can become a social network of itself where fans of
the author can gather and interact with one another. Not just
this, say that since the the publication of the book and the time
its read something important happens, why not add an new
chapter to the book or perhaps a new paragraph? It is all
possible now that changes can be made quickly and easily.
The new companies in the eBook publishing business are in
many ways similar to Spotify for music and Netflix for video.
They have leveraged the internet and provided the possibility
for unlimited streaming of both music and video through
utilizing modern technology such as cloud computing which
provides these services to the end consumer for a flat rate of
$10 per month. Similarly the publishing industry will utilise this
technology in the future to provide unlimited eBook streaming
for a fixed monthly subscription price.
The future of the subscription services with eBooks still
have to adapt in a way that is profitable to authors and their
publishing agents. Many of the NY bestselling publishers are
currently not willing to work together with subscription services
because of how much they are devaluing books. (Coker, 2014).
This is something that will eventually exist due to the success
of video and music streaming services.
5.0 Conclusion
The twenty first century is an exciting period to develop a
career in publishing. Publishing industries do not require hand
written books, printing, distributors nor literary agents which are
often used in the past. Internet and developed technologies
have made it possible for individuals to be at the core of

publishing and increase in sales of eBooks. These processes
have changed the whole process of publishing in terms of
storage, communication, demand and supply of books.
In the eighteenth and nineteenth century, newspapers and
periodical advertising is the publisher’s principal means of
reaching and promoting to the public. Publishers nowadays
follow few steps, due to the internet era which makes
publishing much more affordable. For example, in the
nineteenth century, the establishment of book clubs was used
as a way to market books. Authors now take the opportunities
offered by social media to promote and consequently sell their
books as the digital era has allowed published books sell
internationally.
The simplicity and ease of accessibility has led to readers
purchasing more eBooks. Consumers can now access eBooks
at the comfort of their home instead of going to the library by
the means of the internet. The innovation of computers,
technology and the internet now enables authors to edit and
update their published texts which could never have been done
without the use of internet.
The future of book publishing seems very bright for
consumers. Companies such as Scribd and Oyster provides
access to their library with thousands of downloadable eBooks
at a very affordable rate. Publishers can use these companies
such as Scribd to gain exposure to their millions of readers and
potential customers. The companies satisfy the customer’s
’need for speed’, instant availability and quick reads. With
today’s technology, authors can publish an eBook online and
have it printed on demand for people who like the feel and
smell of a physical paper book. Digitalization has come to stay,
there is predictions that in five decades from now, 50% of
books would be published by individuals.
All in all, the publishing industry has improved
substantially due to the digitalisation of the industry. Publishing

has become more affordable for the authors and consumers.
Physical books might never disappear, however it might
become more common for books to be printed on demand in
the future. Publishers would prefer this practise as it will reduce
their storage costs.
6.0 Appendices
Pearson’s PLC
Pearson is the world's leading learning company, operating the
famed Penguin and Puffin publishing houses as well as offering
educational materials and services. But the publishing industry
isn't what it used to be, and so in 2011 Pearson decided to
move towards a more digital distribution model for its multi
platform business. (Stepner, 2014)
Pearson is the world’s leading learning company, with 48,000
employees in 70 countries and a strong consumer publishing
division led by Penguin, which publishes over 4,000 fiction and
non-fiction books each year, as well as the Financial Times
newspaper (not included in this ranking). Pearson has seen
organic growth and made continuous investments over the past
decade, overcoming the economic crisis of 2008 with total
revenues of 4.4 billion GBP in 2007 to 6.1 billion GBP in 2012,
and with profits rising from 600 million GBP to 950 million GBP.
(Publishers Weekly, 2013)
The Bankruptcy of H.B. Fenn and Company

Owned by entrepreneur Harold Fenn,the company was
founded in 1977 and has been one of the largest Canadian
book distributor and publishers.
In 2011, however, the company went into bankruptcy blaming
“the loss of distribution lines, shrinking margins and the
significant shift to e-books” for their financial difficulties.
(Medley, 2011) The ‘significant shift to ebooks’ is a factor which
affect the industry as a whole, and therefore it is evident looking
at the publishing industry today that the successful companies
were able to adapt in order to keep up with market trends.The
business plan is not a static document, it is a dynamic planning
instrument that should be updated regularly (Hisrich, R. and
Peters, M. 1998). Failing this, H.B. Fenn have illustrated the
implications of recycling a tired business plan.
From the bankruptcy of H.B. Fenn, alongside many companies
which failed to develop their business plan to accommodate for
the vast impact which the internet had and continues to have.
One thing is clear: The demise of H.B. Fenn, which put upward
of 125 employees out of work, marks the end of a business
model in which Canadian publishers were able to support
domestic programs with revenue derived from the distribution of
foreign titles. (Barber, 2011)
7.0 References
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