Gilbane San Francisco May 19, 2010 Session P3: 2:40 p.m.-3:40 p.m. David R. Guenette

1. A Blueprint for Book Publishing Transformation: Content Management and Metadata Across Publishing Systems Gilbane San Francisco May 19, 2010 Session P3: 2:40 p.m.-3:40 p.m. David R. Guenette Senior Analyst The Gilbane Group, a Division of Outsell, Inc.

2. Overview of Session Introductions “Blueprint” study now underway Interesting preliminary findings Eric Freese, Aptara Corporation, on XML in the workflow Todd Tillinghast, Snowfall Press, on digital printing Q&A

3. About the Gilbane Group • Acquired by Outsell, Inc. in February 2010 • Long-time boutique analyst and consulting firm focused on content management technology • Practice areas include publishing, social media, search, and XML • Research has tended to be qualitative, such as case studies and best practices • Consulting has included long-term engagements with major publishers and associations

4. About our Research • Digital Magazine and Newspaper Editions - Growth, Trends, and Best Practices (2009) • Collaboration and Social Media (2009) • Beyond the eBook- Trends in Digital Book Publishing (2009) • Social Publishing with Drupal: Building Success with Content and Community (2010) • A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing (2010) • One of three eBook studies planned for this year

5. “Blueprint” Study BISG is a research sponsor, partnering with The Gilbane Group Six vendor sponsors support the research Publication date: June 2010 Freely distributed

6. What is “Blueprint” After? How book publishers are pursuing digital publishing such as ebooks What barriers are book publishers facing in moving toward digital publishing What the “state of art” is for digital book publishing

7. What are the seven essential processes? Planning Editorial and production Rights and Royalties Manufacturing Promotion and marketing Sales and licensing Distribution and fulfillment

8. These processes are recursive, complex… …and often not integrated

9. Many publishers are not “digital ready” Too caught up in legacy product models Not agile enough to respond to new opportunities Too busy bailing to navigate well

10. What happens if you are not “digital ready”? Based on our current research Interviews and case studies And client engagements

11. Planning… Print-centric planning model Doesn’t accurately or flexibly allow for digital products, their cost, or their revenue Mindset of “digital-after-the-fact” Blinds the publisher to significant digital opportunities, including digital-only products

12. Digital transformation in planning… Business intelligence becomes a key editorial planning tool Developing new content products from more efficient and granular content management expands product range and number Early meta-data capture supports the development of interoperating and transactional processes for publishers Will require systems and business analyst-type roles

13. Editorial and production … Content not optimized for digital delivery: Not “chunked” for easier product derivatives Trapped in proprietary and opaque file formats Content is overly expensive to produce in newer digital formats

14. Digital transformation in editorial and production … XML-First (theory) and XML-Early (the realistic probability) requires more taxonomy and DTD-type/schema content structure analysis efforts within editorial roles Copy-editing functions will grow more important as meta-data and structural tagging implementers and QA front-liners

15. Rights and royalties … Content not optimized for digital: Overly complex and time-consuming work to track, manage R&R, especially with backlist Hard to calculate and support newer digital business models Barriers to new business models, even as there is an urgent need to launch and test new business models

16. Digital transformation in rights and royalties … Contracts must change to conform to a wide range of alternative editions Contracts must include chunk-based remuneration conventions Integrate rights and royalty metadata with content Require system integration specialists to work with R&R processes “Product Manager” roles needed

17. Manufacturing process… Non-optimized manufacturing processes: Overly costly and complex steps to produce different formats, outputs, and custom products Challenges in fully adopting digital printing, on-demand printing, and other alternatives An inability to properly manage and curate digital assets

18. Digital transformation in manufacturing… Significantly supports the use of digital printing Digital asset distribution platforms and/or services will increasingly drive automated distribution to print vendors and out into the supply chain Improved automation will depend on the success of ERP and EDI systems integration within title information management platforms It remains unclear whether existing TIM platform vendors will take the lead

19. Promotion and marketing process… Non-optimized promotion and marketing processes: Overly complex and time-consuming steps in using and sharing title information and for distributing all types of promotion and marketing material to all relevant supply chain partners Inability to readily support critical social media outlets for product promotion or to easily expand discoverability Inability to properly control and manage marketing assets

20. Digital transformation in promotion and marketing … Digital asset management platforms will become more common Pertinent metadata and relevant title content information is captured earlier in the publishing processes Customer relationship management (CRM), supply chain management (SCM), and syndication-based distribution of marketing information will reduce marketing staff but require greater technology skill sets Social media and communities will require book publishers to retrain marketers as social community managers, who will need to interact with planning process-level product managers

21. Sales and licensing process… Non-optimized sales and licensing process: Inability to generate custom publishing products Inability to automate sales and management of subsidiary rights Higher costs and complexity in trying to expand sales channels, including direct sales through ecommerce

22. Digital transformation in sales and licensing… Supports title “discoverabilty” and automation of CRM systems with ecommerce platforms and direct sales Requires tight integration with promotions and marketing process Significant changes in sales models, however, must wait upon the integration of the various publishing processes, largely through the application of XML-early repositories and adequate business metadata Pressures on brick and mortar book stores—and print itself—will greatly increase .

23. Distribution and fulfillment processes… Non-optimized sales and licensing process: Cumbersome and expensive one-off mechanisms to pull and push content across an expanding number of supply chains Inability to automate transactional and distribution processes for digital products

24. Digital transformation in distribution and fulfillment… Book publishers will have to build up expertise for ERP and EDI process integration, as the content and titles themselves carry the intelligent meta-data to take automation to its next level Warehouse and fulfillment costs will be better constrained, and digital printing will prove to be a key element of these savings, through the use of DADs, just-in-inventory, returns reductions, and lower transportation and shipping costs, to name a few cost reduction areas

25. Digital Transformation and the Points of No Return Book Publishers: Start with what you know Digital Publishing Technology and Service Vendors: Start with what your customer—the book publisher—knows Plus ca change…Non!… The more digital publishing processes interoperate, the less publishing stays the same See what the innovators are doing Pilot, test, measure It’s not all or nothing

26. What We’re Finding Out XML-Early is well along Digital workflow is well understood Royalties are a problem, but not a deal-breaker Systems interoperability is more theory than practice Digital printing is a BIG DEAL to book publishers

27. And Take the Blueprint Survey! 10-minute survey seeks to gain detailed information about what is really happening among the full spectrum of book publishers related to ebook and digital publishing efforts, and the "pain points" and barriers encountered http://Publishing.questionpro.com

28. Questions David R. Guenette The Gilbane Group, a Division of Outsell, Inc. Cambridge, MA david@gilbane.com www.gilbane.com/xml www.twitter.com/billtrippe 617-497-9443, ext 219