The Publishing Value Chain in the Age of Covid.
Hello.
My name is Tiffany Watson, and I am a recent graduate from the Portland State University master’s program in book publishing. I began working at Hederis in July as our team’s first marketing intern. I believe in the Hederis mission and the team behind the groundbreaking Hederis app, and I am looking forward to sharing insights about the publishing industry and how we are all working to create solutions for publishing workflows.
This week, I want to talk about something that has been on my mind for some time now: the publishing value chain in the age of Covid. I hope you will find it as interesting as I do!
The concept of a publishing value chain is not to be confused with the book supply chain, which has in recent months been a singular focus of the industry due in large part to tariff disputes in the latter half of 2019 and the disruption caused by overseas printers closing due to the global Covid-19 pandemic.
The publishing value chain was introduced to me by the ideas sketched out in the introduction of John B. Thompson’s Merchants of Culture.
Essentially the value chain is what we all commonly call the publishing process, as shown in the diagram below.
Why do you call it the value chain when you can simply call it the publishing process like everyone else? you mutter to your screen. Good question!
The name comes from the belief that each step in the publishing process exists to cumulatively add value to the book throughout said process.
Prior to a manuscript being acquired by a publisher, the press does a rough estimation of the costs and earnings the project will likely accumulate in being published. This estimation is often done in a document called “profit and loss” or P&L sheet (there are wonderful tales of publishers ripping up P&Ls and throwing them into the air when a book fails to meet the expected profit but exceeds the losses). Publishers, like any industry that prefers to not go bankrupt, like to make a profit, and these P&Ls are intended to give us an idea of the absolute value of a book, on the individual and total level.
This means that when a book enters production it has a set price value, and calculated into that value is the cost of printing and distribution, as well as editing, formatting, design, and marketing — all components of the value chain. Therefore this chain at every stop must be adding value to the book in a way that justifies the price the book will carry at the end of its production.
How Covid has changed the value chain
If you are like me, spending all your valuable free reads for The New York Times on Elizabeth A. Harris’ coverage of the publishing industry, you have some anecdotal knowledge of the disruption to the value chain caused by the pandemic: literary agents struggling to build connections with authors, young editors trying to seek out advice from co-workers outside the confines of Zoom meetings, and art directors attempting to view page proofs at home without the industrial printing and lighting equipment available at the office.
At first glance, these might seem like minor tweaks to the publishing process. But if you take the last example, about viewing page proofs at home you can see how remote working has added additional processes to the value chain:
What would be a 15-minute print job and walk over to the desk of your co-worker now requires outsourcing the print and distribution of proofs, which adds an additional cost to the book budget and additional time to the production schedule.
The uncertain future of publishing
When you look at the gains of the second quarter for Simon & Schuster, you see not a publisher in recovery, but one cutting costs. Jim Milliot’s article in Publishers Weekly puts this financial increase into perspective: “Lower production and distribution costs were enough to give the company a 9% increase in earnings.”
In the starkest terms possible, this translates to job losses and work hours cut.
The need for publishers to consider many cost-saving options to make up for the past two slow quarters has brought both layoffs and a diminished work week into public discourse. For example, in a more recent article in Publishers Weekly, a representative from Houghton Mifflin Harcourt talked about cost-saving measures in the short term — reducing their employees work week to 4 days — and the long term — early retirement for “about 625 employees, or 18% of their workforce.”
So not only does the current remote workflow gum up the production process, creating a more tedious and indirect route through the publishing value chain, but at the same time, industry professionals are working fewer hours and some employees are facing early retirement.
Is it all uphill from here?
We need to ask ourselves: how can publishers cut production costs without letting go of staff or compromising quality?
Perhaps publishers can learn from the solutions implemented by one of the main book distributors, Ingram Book Group. Ingram has leveraged new technologies in print-on-demand and partnered with their distribution channels to help make up for the breaks in the supply chain caused by Covid.
Presses can do the same by adopting new technologies that increase automation (our expertise, wink, wink, nudge, nudge) and cloud collaboration (another thing we like to do) to keep workers connected throughout the publishing process and avoid unnecessary outsourcing. While these solutions require adaptation by staff and some potential shuffling of daily tasks, it makes for a cheaper way of cutting costs while avoiding layoffs and early retirement.
There are many providers offering these types of technologies to publishers, and it is important to find the best fit for each press. The Hederis team has developed a cloud-based tool that gives publishers a level of control over their book designs comparable to Adobe InDesign while also offering the kind of easy-to-use, template-based designs that PressBooks is known for. While some major new players, such as Apex Covantange’s PubHub, are offering to automate the entire value chain process, Hederis is emerging as a lightweight, intuitive tool devoted to tackling a few key production issues well while remaining accessible, even for small presses and self-publishers with limited production budgets.
Automation and Cloud-based technologies have the potential in the long term to make publishing more adaptable to remote working, and that element alone has the potential to make a career in publishing much more accessible. When those technologies are affordable and easy to use, they can also alleviate the pressure on production budgets in the age of Covid. Hederis has been developed to be just such a technology, and here on this blog, we’ll be talking more about how our app can preserve and enhance the publishing value chain in the face of industry uncertainty and disruption.
