He’s been dubbed the “oracle of Silicon Valley” by Inc. magazine for his uncanny ability to foretell what’s going to happen in publishing and technology. Founder and CEO of O’Reilly Media, a computer-book publisher and company that hosts tech conferences like Tools of Change, Tim O’Reilly launched the first web service for online book content in 2000 with Safari Books Online, well ahead of the digital bell curve. Here, O’Reilly took a few minutes to talk to us about obstacles to digital success, how authors can distinguish themselves online and what’s next in publishing.
What are the biggest mistakes traditional publishers are making right now in the e-book/mobile space?
Treating digital like incremental revenue rather than the main show…I don’t think many publishers have treated [digital] that way, and not thinking far enough out along the line of curve toward the future is failing, and other people’s business models will make you go away.
Amazon has been incredibly strategic. You have to admire how they’ve reshaped the publishing business...Publishing is at the tipping point. There’s not much of an outlook for traditional publishers, the retail channel is just gone. The question is will digital grow up fast enough to make up for that? …The [bookstore] chain[s] have put all the independents out of business, and now Amazon is putting the chains out of business. It’s certainly possible that Amazon is explicitly going after publishers, and I think they can survive, but publishers are going to have to find new channels.
They’re also still thinking too much about replicating the book in an online space. And that’s just wrong. We can see in category after category where the book has been replaced by a new focus…at Tools of Change, we like to make the distinction between form and format—the form is the novel, literary biography and so on—the forms we have are a few hundred years old, and a number of forms have become obsolete [in print], like the dictionary. It still exists, but the online version delivers that same job…Publishers aren’t drawing the right lines around the problem—they need to see that in a way, Zagat is considered a publisher but Yelp is not, but they very clearly both do the exact same job for the actual end user.
In digital publishing, who’s doing a good job?
Most of publishing, including O’Reilly Media, are far too timid. We’re not really saying, “How would you do this job in this medium?” And a good example of that is Apple and the Apple ecosystem. I think in many categories the app is going to replace the book. We’ve already built a significant channel in the O’Reilly store putting out books as apps.
The apps are a real reinvention. For example, think how would you do a birding guide if you were an app. iBird Pro is a very successful, multimillionaire-dollar app, and he [Mitch Waite] just kind of thought about how he would reinvent that category. It was originally on his website, but the [Apple] app store gave him a much better monetization model. Cookbooks could go that route, a whole lot of practical books that could be turned into apps.
Curation/aggregation of info, separating the wheat from the chaff, is a big part of success. Are there steps a publisher can take to ensure that they won’t get lost in the fray?
People are using Twitter and Facebook as the filter, but also Quora with people asking questions, getting answers. There are lots of different ways of curation, of finding the interesting people. Curation doesn’t mean being a gatekeeper anymore; you’re not a gatekeeper to publication, but maybe a gatekeeper to discovery. The constants remain—how do you build traction for authors?
Publishers, assuming they’re not the smartest guys who invent the cool new app or site but replicate functionality, need to focus on being good middlemen for the channel and developing marketing. If you think about what publishers did in the old days, they were sort of a two-way filter. On one hand, they were filtering authors not just for reads but for the channel; they were also then providing services to those authors that were hard to get on your own. You didn’t start out, as standalone author, getting your stuff all laid out at Barnes & Noble and getting a huge buy.
So publishers have to ask what’s the analogue to those roles in the digital era and how do we get noticed? What channels are there going to be? Hey can we sell directly to customers? Can we build a direct relationship to customers? Publishers used to be booksellers, printers, everything, and I think we’re going to see that again…
Publishers say they’re afraid to compete with Amazon, but if you don’t, you’re hosed. Then it’s all in the control of one player, and they’re not going to be that kind to you in the margin. You have to be competent and develop the channel, like “Hey, we can do a whole bunch of things for you, featuring you at conferences, publishing your book, develop apps, do video training.” You need to be looking at all the ways you can make them money.
Are we getting to an era where traditional publishing is unnecessary? Can self-published authors do it all on their own?
I think that can be true for some number of people, but that was also true in the print era, and while it was true for some number of people, it wasn’t true for all of them. Just look at myself, hey, I was a self-published author and I eventually became a publisher—you have to get good at a bunch of stuff besides writing your book. And you know, at the end of the day, it’s about how much money you make.
It’s certainly true, there are folks out there offering a bigger percentage, but a percentage of what? So, like what’s the total revenue that comes to the author? It’s easy to be wowed by individual stories, but those are like, “Gosh, Barry won the lottery and that’s a business model. I’m going to buy lottery tickets now.” Some [authors] being successful doesn’t translate to everyone being successful. Early adopters are easier to get noticed, and it gets harder as the market matures…When you get there first, the real estate is cheap. Get there later, it’s more expensive.
Rules change as time goes on. Will there be a need for publishers when markets mature? Oh, yeah, if they say, “I can help you get noticed. I can work the hard part of this business.”
In terms of marketing strategies, the role of Facebook, Twitter and Tumblr are crucial to promoting titles. What’s next for social media landscape?
One of hottest things right now is Quora. Also, I mention things like GoodReads, which is moving along quite nicely, but there are social networks specifically around books. I myself buy books based on recommendations from GoodReads more often than books recommended, say, on Twitter.
You can’t do this paint-by-numbers. I suppose in the old days, if you can get a review in the New York Times or the New York Review of Books that really helps. But it’s always been a game of getting lots of different people to pay attention. Part of why some publishers, why some self-published authors, are really successful is that they learn how to do this all themselves. And some discover that, wow, this is really a lot of work and wouldn’t it be great if someone else could do it? And if someone can figure that out, hey, I got this nifty engine that can do all these things that are hard, bingo they’re a publisher. I guarantee that some of those starting out as self-publishers on Kindle will become full-scale publishers in coming years.
You’re called an oracle who can predict the future…What do you think commercial book publishing is going to be like two, three, five years out?
The big publishers are going to go through a world of hurt because the economics of the industry are shifting radically. But if you’re doing a job that consumers really want, someone will come along and say, “I can work with those economics. That looks pretty good to me.” Someone who’s got a lower cost structure will fill the need.
That was true back in the print days as well. When my business got started, I was like, “Wow, I sold 3,000 copies of that, we made $20,000.” At the time, that was a lot of money for a publisher who said if it doesn’t make $200K it’s a loss. I never saw a lot of the topics we published coming, and I thought, “Wow, this is a good business for me.” One thing as the company has gotten bigger, I remind my editors, my marketers, my team is that you gotta stick with stuff. There are always little guys who will grow up and fill the need.
I’m not worried about the long-term health of publishing as activity. It’s going to change a lot, there are going to be new kinds of intermediaries, not just Amazon, and Apple will replace all kinds of categories of books as a new form.
Tools of Change’s co-chair, Kat Meyer, made the following recommendations for can’t-miss sessions at TOC for independent authors:
1. Publisher CTO Panel: The Future of eBooks Technology featuring Google’s Abe Murray. Conference description: “If 2010 was the year of e-books, then 2011 is the year of e-reading. As reader preferences change, and the number of people buying and reading e-books grows rapidly, systems and interfaces must adapt. The very definition of ‘a book’ is in flux. Hear from a panel of publisher CTOs as they share their thoughts on evolving e-books technologies and what e-reading might look like in the future.” Tuesday, Feb. 15, at 10:45 a.m.
2. Bookselling in the 21st Century featuring Kassia Krozser of Booksquare.com, Lori James of All Romance/OmniLit/ARe Café, Jenn Northington of WORD, Kevin Smokler of Booktour.com, Jessica Stockton-Bagnulo of Greenlight Bookstore and Malle Vallik at Harlequin. Conference description: “The digital reading revolution impacts every aspect of the publishing ecosystem, and booksellers face challenges from every direction. Yet today’s booksellers are energized, engaged and eager to meet new challenges. This panel of booksellers discusses today’s retail climate, providing valuable service to customers, and dealing with digital headaches.” Tuesday, Feb. 15, at 1:40 p.m.
3. eReading Survey Findings and Research: A Look Behind the Numbers featuring Sarah Weinman of DailyFinance, Matthew Bernius of Open Publishing Lab at the Rochester Institute of Technology, Kelly Gallagher at RR Bower, Peter Hildick-Smith at Codex-Group LLC and Jennifer Manning from Nielsen. Conference description: “Wondering what’s behind the numbers of the most recent e-reading research reports? Join Sarah Weinman as she moderates a panel of e-reading study authors for an in-depth discussion of their methodologies, respondents, data sources and, of course, results.” Tuesday, Feb. 15, 2:30 p.m.
4. Lonely Planet’s Gus Balbontin’s keynote on Tuesday afternoon, Feb. 15, at 5:05 p.m.