Shortly after the Internet ran a knife through the publishing process, I began thinking about how it would be like to work in a publishing company of the future. A ‘digital publishing house’, if you will. I must admit that I have been working on a idea for a digital publishing house over the past couple of years, and while a launch is imminent, I cannot talk about things that I have not yet done. But what of it? There are certain trends in publishing today, and I think it would be really cool to follow each of them to their logical conclusions. (See also: Dispatches from a Digital Publishing House)

Trend #1: Writers In Control

Say you’re an author and that you want to get published. A couple years back, this would mean the usual gamut of things new authors all over the world have come to know and dread: you find an agent, the agent finds a publisher, and depending on the circumstances – the quality of book and nature of the market, say – a protracted game of cat-and-mouse begins. We all know this, of course. If you survive the initial negotiations, the publisher signs you on, wins himself a whole damn chunk of your book’s profits; and you in turn gain access to a global distribution network the publisher readily provides all its authors with.

Thing is, that’s not how it works today. Publishers used to have complete control over the distribution network, and the only way for writers to reach readers would be through a contract with a major publishing house. This was the value proposition that the publishers brought to the table – they connected writers with readers. It was a good value proposition. A fair one. It was also, however, the value proposition that the publishers no longer have today. New writers don’t need a publisher to reach readers; they may simply take their writing online. Publishers, on the other hand, have no easy way out of a low-margin business, and as such are beginning to do certain things that reflect this shift in power.

Three quick examples? Harper Collins hopes to capture new material from online writers with Authonomy; Harlequinn gets yelled at for releasing titles under a self-publishing model (never a good idea with an old-boy network); and – earlier this week – an editor hires a publisher to do his dirty work for him.

Trend #2: Separation of Bits from Atoms

Trick question: which business is a publisher engaged in? The business of atoms (bound books) or the business of bits (content)?

I used to believe that publishers dealt in both, but the problem with this idea is that the economics of the two are worlds apart from each other. Businesses that deal with atoms aren’t nearly as affected by the Internet as businesses that deal with bits. Conversely, businesses that ship bits (e.g: ebooks) are able to keep their costs down, while businesses dealing in atoms (paper books) need to pay for the logistics of handling merchandise – be it bicycle or warehouse or plane or ship. These two paradoxes come to a spectacular clash in today’s publishing world, where many publishers seem trapped between the costly bloat of their atoms and the low prices of their bits. This is probably why you hear so many of them arguing for higher ebook prices. They are eager for a new revenue stream, but they do not realize that they may need to jettison the bloat to focus on one or the other, but not both.

Trend #3: Alternative Value Propositions

So the publishers have lost their status as the only gateway to the readers. But really – when you think about it, that isn’t as bad as it sounds. There are other value propositions that publishers may bring to the table. Existing publishing houses have been designing and promoting books for a far longer time than writers ever have. So yes, the Internet has gone out and made things easier for writers to reach readers. But when it comes down to actual marketing, fact remains that writers are not particularly good at it. And when you’re talking about artwork, and getting good book covers for your book, publishers are particularly experienced in finding people to do just that. (At the very least, they know who to go to for artwork/typography, and unlike writers, they don’t settle for vomit-flavoured book covers).

Trend #4 Loyal Audiences

Seth Godin argued recently that book publishers needed to start thinking like magazine publishers. In simple terms: that publishers needed to create passionate audiences for themselves, in the sense that when readers buy books, they do so because the publisher logo on the spine tells them something about that book. I think Godin’s on to something with this idea. To back it up, the two book publishers who already are thinking like magazine publishers seem to be doing well for themselves – I’m talking, of course, about publishing houses McSweeneys’ and O’Reilly, both of whom have loyal audiences built around their brand. Compare this with most other publishing houses: you may come across a J, K. Rowling fan, but it’s unlikely to find a member of the Cult of Bloomsbury (who was first to publish the Harry Potter books). If publishers want to prevent themselves from being commodity businesses, this is one way to do it, even if it’s terribly difficult in today’s level of imprint-shrimprint saturation.

Lots Of Profitable, Small Publishers

So what do these trends mean? I believe they all point to a future of many small, profitable publishers, most of them operating online. My belief is that it’s no longer particularly difficult to create and run a digital publishing house. If you start small, and keep your costs low, you should be able to do fine even as the publishing industry behemoths crumble around you. Keep your business model light and centered on bits. Printing presses expensive? Outsource them to POD companies. Don’t know who to go to for cover art? Scour deviantArt and build relationships with the artists your writers like. Want to find and publish new, original fiction? Last time I checked, there’s a heck lot of web fiction out there. You only have to reach out to find them.

But those are the benefits to the publishers; the business owners. What of the writers? What benefits would they have of signing up, voluntarily, with a digital publishing house? Just off the top of my head – the digital publishers would have to show writers that they’re good sources of readers; that they provide invaluable support in editing; that they know a thing or two about design, and who to find and what to do when a book is dealing with a specific genre or audience. If I were to sum up the publisher value-proposition today, I would call it the Publisher Support Layer.

The Publisher Support Layer

The Publisher Support Layer is this idea of mine that publishers exist to enable writers. I must admit that this is a rather stunning reversal from how writers have been thinking about publishers, say, from just ten years ago. But let’s be realistic about it. The first thing a small publisher can do – particularly so if the publisher is a digital one – is to recognize that it is the writers who now hold the power. If the writers don’t like you, there’s nothing to prevent them from packing up their bags and leaving the building. With this kind of power, we have no choice but to rethink the writer-publisher relationship. Publishers exist to enable writers. Publishing a book is a tough thing; and so it is within the publishers’ best interest, once they have some good writers to work with, to do everything possible to make it easy for the writers to do the one thing they’re good at – write.

Because you know what? Writers like to write. They don’t like to promote. They don’t like spamming writing forums every couple of weeks to post links to their fiction. They don’t enjoy surfing webcomics to decide on ads, and they don’t enjoy cross-promoting their work through Twitter. (Okay maybe some do, but that’s beside the point.) The point is this – given a choice, I’m pretty sure any web fiction writer will tell you that the most enjoyable bits about writing web fiction is a) the writing, and b) the interaction with the readers. And that’s all that matters. My contention is that a digital publishing house will succeed if it recognizes this fact, that if it goes out of its way to act as a support layer for the writers; taking care of everything else but the writing and the interaction, the writers would be happy, and the publishing house would be able to exchange this value for a slice of the writer’s profits.

Here’s another way of looking at it: I’ve shown you four trends that are shaping the publishing industry as we know it. Taken to their extremes, we may conclude that:

1. The writers have power; publishers will need to compete with choice
2. Publishers should deal with atoms or bits, but not both
3. Publishers should offer writers things they cannot readily find on their own
4. Publishers – digital publishers in particular – must find their own readers

The unifying idea here is that, if you’re a digital publisher, you are only good for the things that the writers cannot themselves get, easily, online. Writers don’t have good designers; publishing houses do. Writers don’t really know how to market their work; publishing houses should do this for them. If you want to take the idea of indie-publishing a step further, you may even say that publishers should exist to connect writers with readers and designers, for a fee.

Now I’m not sure if this idea – this publisher support layer – makes sense when seen from the birds-eye view of the publishers in London and New York. I doubt it will. But if you’re talking about independent publishers – small, net-based publishers with little history and no traditions, then yes, this should be something that makes sense.

And of course that isn’t easy. In fact, there is absolutely no empirical evidence to show that this is even possible. I haven’t talked about finding readers, and I’ve absolutely no idea how the business model would look like. But the truth is that I’ve been thinking about these things for close to two years now, and I’m coming close to launching a digital publishing house as a proof of concept, early in 2010. I hope to prove it to you, the same way that I hope this idea won’t crash and burn. Till then, these are some of the ideas that I’ve had about digital publishing houses. I hope you’ve found something useful in them.