Financial crisis hits the publishing industry

Received that yesterday:

The industry is searching for orientation - Frankfurt Book Fair's industry survey in co-operation with buchreport and Publishers Weekly

Frankfurt, 24/03/2010 - The book industry is taking an active approach to the digitisation of its content, but it is still in the midst of orientation. This is revealed in a recent survey of 840 international industry representatives, predominantly managers and executives from the publishing industry, which was carried out in September by the Frankfurt Book Fair and the trade magazine buchreport in co-operation with Publishers Weekly.

The majority of participants hail from continental Europe, followed by the USA, Asia, Great Britain and Latin America. ”Now is the time to seek out new strategies, to scour the market, to engage in international benchmarking”, said Juergen Boos, Director of the Frankfurt Book Fair. The one true business model is still a long way off and investments are also still being held in check - at the same time, however, the fear that content will only be distributed free of charge on the Web in the future seems to have been averted for the time being.

Search for strategies and partners

80 per cent of those polled embrace the radical change in the media industry associated with digitisation as an opportunity, rather than as a crisis. Behind the ostensible spirit of optimism, however, there continue to be many question marks. “The industry continues to search for strategies for creating business with digital products. The focus is on business models that can supplement, and eventually eliminate, the accepted model of exchanging money for printed paper”, said buchreport Editor-in-Chief Thomas Wilking in summarising the numerous individual findings of the survey.

The development of new business models, new multimedia products and suitable marketing strategies is cited as the greatest challenge of the industry (607 responses). 38 per cent of those polled also see their companies’ greatest need for catching up in the areas of knowledge and strategy. In 2008, only 26 per cent of those polled rated knowledge and strategy as a priority in their companies. The desire to connect with other creative industries like film, games and music is at the very top of the list of business priorities for 19 per cent of those polled. New forms of e-Marketing are in demand – 27 per cent cited digital reading samples as the most important new marketing activities, followed by viral marketing using social media (22 per cent) and multimedia advertising (19 per cent). However, it seems the time is not yet ripe to commit to one business model - only 12 per cent of those polled feel that there is an urgent need to make investments now.

The second biggest challenge for the media industry is the uncertainty about the changes in media use and reading habits of customers (425 responses). Landing in third place is price competition in the form of countless free digital offerings (354 responses) and the illegal dissemination of protected content through piracy (322 responses). Surprising findings: The current financial crisis (with 79 responses), as well as the strengthened position of authors through their ability to engage in direct marketing in a Web 2.0 world (142 responses) - and the consequential weakened position of publishers and book retailers - are not perceived as considerable challenges for the industry. Around 41 per cent of those polled believe that the financial crisis generally has no influence on the development of new digital business models; only around 33 per cent are of the opinion that the financial crisis is having an impeding effect.