ECPA’s Executive Leadership Summit looks at ‘re-engineering’ needed to keep up with market

Only a major overhaul of not just what they do, but also how they go about it will see Christian publishers through the massive shifts occurring in the book world, they have been told.

More than 150 leaders from 50-plus publishers, ministries and service providers at the Evangelical Christian Publishers Association’s 2011 Executive Leadership Summit heard about the rapid growth of e-book sales, how that has implications for their publishing programs and learned of new trends in social media and marketing to digital readers.

“We don’t have time right now, because of the pace of change, to tweak the current business model,” consultant Tami Heim told attendees at the May 2-4 event in Colorado Springs, Colo. “You have to do something radically different. Tweaks give you incremental change and you can’t afford them. There’s a tidal wave of change coming our way.”

A former Borders and Thomas Nelson executive who now advises on branding and marketing, Heim added: “Making incremental change is only going to prolong the death. We are really talking about re-engineering the way you see your business and the way you do business.”

Heim was one of 10 speakers who addressed digital publishing issues, presenting a slew of statistics. Among them:

• total trade books sales were down 24% in the first two months of the year
• total digital book sales grew 169% last year 
• one leading general market publisher’s e-book sales grew from 3% to 20% of total revenues in the last year
• religion titles are one e-bookseller’s fourth-highest sales category.

Almost one third (32%) of summit participants who responded to an instant texting poll at the event agreed with a projection referenced by several speakers that half of their book sales would be digital within three years’ time. That trend required thinking about books differently, they were told.

“People don’t just want to look at words on a page any more,” said Jen Howver, a former marketing manager with NavPress who now runs VOD Communications. “It’s really about creating an experience that is more,” she added. That meant “really figuring out what the story you are trying to tell and what is the best way to tell that story.”

Using different media forms to do that would mean taking a more collaborative approach and developing partnerships with others, said Heim in her presentation. She cited several Christian publishers she said have made successful changes in response to changing consumer attitudes and behaviors.

They included NavPress, she said, who in recent years had refocused on its core commitment to discipleship, including creating a successful online community, and Thomas Nelson, whom she applauded for bringing “positive brand recognition and discipline” to a message, seeing Max Lucado’s sales grow from a total of 32 million in 2005 to 100 million last year.

“Whoever controls the community controls the sales,” she said, urging publishers to put time and effort into connecting with consumers through social and online media. She also cautioned that while digital sales grew last year, that increase accounted for only $141 million, while the lost print sales totaled around $500 million.

Heim’s co-presenter, Maurilio Amorim, president at The A Group where Heim is a partner, said that publishing was “in turmoil.” Margins were being squeezed, while readership was dropping—80% of Americans having not read a book in the previous year—and 70% of advances was never being recouped.

Presenters warned publishers against getting too fixed on any one platform for e-books, noting how technology was still changing and developing. Mark Nelson, strategic partner manager for Google, said that smartphone use was growing much faster than desktop Internet use and would outnumber personal 
computers in two to three years. “Targeting specific devices is limited,” he said. “That’s why we use the cloud.”

Some publishers get too fancy when it comes to developing applications, said Michel Kripalani, president of leading app company Oceanhouse Media, whose titles include those related to books by Dr. Seuss and Zondervan’s “Berenstain Bears” titles.

Children’s works often lend themselves better to development as apps rather than e-books, for their interactivity, he said. But moving into this sphere would require embracing a new pricing model, as apps were typically cheaper than e-books.

Michael Tamblyn—executive vice president of content, sales and merchandising for e-book retailer Kobo, the third-largest and sole digital-only e-books retailer—said that transition was happening “way faster than we thought.” The company referred to data only 90 days past because anything older was irrelevant due to “things changing so quickly,” he said. 

Tamblyn told how his company saw most sales between 10 p.m. and midnight—when people were reading at night, finishing a book and wanting perhaps to buy the next one in the series or another by the author. This showed the unique opportunities for e-books, he said.

In another session, Christian book marketing consultant Rob Eagar detailed how QR (quick reference) codes—enhanced bar codes—can be used to help promote books. Putting the codes on books or in-store displays that could take smartphone users to Web-based content was “an opportunity to have a conversation with consumers at their point of decision,” he said.

The digital revolution is not only changing the format of books, but also could redefine their very nature, ECPA President Mark Kuyper observed in his closing comments at the end of the 
summit.

Technological developments will require the “right-sizing” of books, whose physical format has traditionally dictated they be a certain length to make printing and selling them viable, he suggested. But with many people now looking for content in bite-sized chunks available on smartphones as well as e-book e-readers, “we could actually consider content as short as a sentence or two to be something we could deliver and possibly monetize at some level,” he said.

Even after all that attendees heard—including how editorial processes and pricing will need to change to fit new digital publishing opportunities—they were warned by Kuyper: “We are at the very early stages of this revolution.” Companies would “have to think differently.”

 Pioneering designer honored for ‘continuing legacy’

Before looking to the future in presentations and discussions focused on digital formats, publishers at the ECPA conference paused to recognize a past contribution by the designer credited with changing the face of Christian books and as a result opening up new markets for them.

David Koechel (to the right of ECPA President Mark Kuyper) received the 2011 Jordon Lifetime Achievement Award—named after the later Charles “Kip” Jordon, former publisher of Word Publishing and a respected industry leader—at an eve-of-summit dinner. It was the first time in the award’s 28-year history that it was given to someone from the art and design field.

Attendees heard how Koechel was preparing for a life in the ministry when he was asked to help with some design work while in seminary. His first commissioned book cover was for David Wilkerson’s I Am Not Mad at God, published by Bethany House Publishers in 1967.

Since then, he has designed covers, magazines, logos and ads for every leading Christian publisher and many ministries. A copy of his first book cover along with others from his career—including titles such as The Kingdom of the Cults by Walter Martin; The Inspirational Bible, Max Lucado, general editor; and The Christmas Cross, also by Lucado—were on display at the ceremony.

The award noted Koechel’s “exceptional contribution to Christian publishing and his ... continuing legacy to impact lives for Christ through his marvelous creative gift of graphic design.”

 Response: Publishers debate rate of change 

Publishers at the conference were agreed that significant change is coming to their business, but less certain about its speed and  consequences.

For Tyndale House Publishers President and CEO Mark Taylor, the digital focus was “very helpful,” but “like drinking from a fire hydrant.” It reinforced his senses that electronic publishing will continue to grow in size and importance, “and we need to adapt our strategies to ride the wave and not be swamped by it.”

Taylor said he was not among the  attendees who predicted e-book sales would account for half of all sales within years, “but neither did I think our e-book sales this past year would be as high as 7%, which they were,” growing from 1.5% the previous year.

As part of its digital shift, Tyndale was “working fast to put backlist titles into e-book formats,” Taylor said, and had just accepted several titles for publication in e-book format only.

Bob Fryling, publisher at InterVarsity Press (IVP), was “stimulated, but at times overwhelmed, by the challenge of how to effectively publish significant Christian books in an increasingly digital world.” Different types of books, like fiction, lend themselves to digital publishing more than others, “like the kind of thoughtful nonfiction books published by IVP.

“Many of our books are best read slowly and carefully, which does not always fit the e-book experience.” Having said that, e-book sales for the company had doubled in the last year, he added, and IVP had established a distinct digital publishing group for the format.

“I was challenged to sort out how our books and e-books are being most effective in really helping people be conformed to the image of Christ and in serving His kingdom in the world,” Fryling added of the summit. “Technology can both help and hinder such goals, and I wrestled throughout the conference with how to use technology without being used by technology.”

David C. Cook’s Senior Vice President and Publisher Dan Rich thought the conference “timely for everyone in Christian publishing.” He also saw a slower growth in the Christian market. The 50% projection may be accurate for trade hardcover and paperback fiction, driven by the demand from fiction readers, he said. 

“However, I believe a larger percent of Christian book buyers are more interested in owning books, for their library, for reference, for personal and group study and to pass on to others,” Rich added. “Thus, I believe we will lag behind the general market a bit with 15% to 25% of our book sales coming from digital editions in three to four years.”

At Cook, e-book sales had grown from nothing three years ago to “a quantifiable amount today, depending on the title and type of book,” totaling just under 5% of all revenues. The digital transition was a high priority, Rich said, with new processes and procedures from contracts to production and pricing.

 Dennis Hillman, publisher at Kregel Publications, found the focus of the event “not only timely but crucial for the future of our industry” and was reminded that “planning has to have a very short window, and it has to be adaptive and nimble.”

Hillman was not sure if e-book sales would reach 50% in the Christian market, he told Christian Retailing, “although there has been some research that indicates older readers are more likely to use dedicate e-readers than younger people, who are more likely to use mobile devices. 

“The demographic should play well for Christian fiction publishers,” he said. Kregel had launched its own digital site this year and from mid-year, on all releases will be in print and digital formats. Digital publishing affected all areas of business, requiring “a new learning curve from authors, editors and marketers,” he said.

The conference offered a helpful benchmark for measuring progress, said Dwight Baker, president of Baker Publishing Group. 

The company’s e-book sales had grown to 8.5% last year and doubled in the first six months of this year, he said, though print sales had increased as well. Baker’s future e-book emphasis was going to driven by consumer behavior, which “informs everything for us,” he said.

 Response: Retailers see opportunities in shift

Retail representatives at the conference left optimistic, despite the emphasis on how e-books are threatening traditional print sales.

“I go away quite encouraged,” said Steve Potratz, president of the Parable Group and a longtime independent retailer. He cited the comment by consultant Tami Heim that “whoever controls the community controls sales.”

“That’s what a retailer does,” said Potratz. “That’s who a retailer is. At Parable, this especially has been our strategy in working with our stores, to help them know their customers. This is right where we live and so I am very excited about the opportunity that we retailers have going forward.”

The publishing landscape was changing, Potratz added, “but there are opportunities in all change.”

Glenn Bailey, president of STL Distribution North America, was also cautiously upbeat, despite hearing “about more and more ways that publishers are learning to get written content to their markets without the assistance of the traditional Christian supply chain.”

“There will always be an opportunity to move physical products, but the prediction that half of all content will be distributed electronically by 2016 is really important to those of us who have based our ministry and made our living in the physical supply chain for Christian content,” Bailey told Christian Retailing. “Rather than burying our heads in the sand, we have to adapt to projected trends and find ways to provide value to consumers that can’t be provided by the electronic channel.

“I think there are a number of ways retailers and wholesalers can work together to do that,” he added. “No computer program knows our customers like we do. There are some products that will always be nondigital that retailers will always provide. At STL, our number-one-selling product is communion cups. Nothing I have heard here will replace the current supply chain for gifts, church supplies and other non-book products.”

CBA Executive Director Curtis Riskey was concerned that the electronic and digital focus of the event did not have “a little more balance,” taking into account other channels. Publishers who did not do that and allowed “this information to drive future directions could be making a big mistake.”

Riskey said that there were lessons to be learned from how the music industry had fared with the advent of digital. “I realize that there are differences, but there are also a lot of similarities. What we as an industry need to think about is how do we protect outlets in this transition? When the music industry lost outlets, their business model collapsed.”

CBA Business Development Manager Eric Grimm, said that a recent report had found that while digital music sales had increased 940% in the last four years, total music sales had shrunk by 35%. “The reason is that the specialist retailers closed because of how they handled the business model.”

The conference underscored that retailers “need to do what they do well,” said Riskey. “They need to be the place where community happens.

 They need to build relationships both with their customers and the churches they serve. If they do things well, they will be successful even in a technological shift.”

Spring Arbor Director of Sales Chris Smith said that while e-books were reducing traditional print runs, “print and digital are complementary formats and will co-exist for a long time to come, so we are not discouraged at all.” Parent company Ingram Content Group’s new print-on-demand and digital distribution services were “in response to anticipating these market shifts.”

In addition, Spring Arbor was responding to retailers’ requests for “more items that don’t have a digital counterpart as they look for a hedge against the expected growth of e-books,” Smith said. “In response, we’ve more than doubled the number of gift and game items we stock and we’ll continue to add more items.”

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