1. Expectation and Reality in Digital Publishing: Some Australian Perspectives Xuemei Tian School of Business Information Technology ELPUB2007 Conference – Vienna, Austria – June 2007

2. Introduction Background Methodology Digital publishing – definition and characteristics Ongoing supply chain Development of technologies Business models Initial findings

3. Background The publishing industry represents a highly significant manufacturing and distribution component of the content industry, which creates, transfers and stores knowledge. The publishing industry has changed dramatically. Main changes include: –Changes in publishing markets –Increases in online business and digital content formats –Changes to distribution channels and supply chains –Increases in outsourcing, sub-contracting

4. Background Business Challenges in Publishing – Rapid development of technologies – A turbulent business environment – The growth of global concentrates – Intense competition including that from new entrants and Open Access publishers – Stakeholders’ demands to improve financial performance – More sophisticated customers’ requirements – Changing customer relationships – Content is king

5. Background To cope with the changes, publishers have been forced to: –Re-evaluate their resources and capabilities –Re-design business strategies –Re-engineer their business processes The development and emergence of new supply chains Seek new business models

6. Methodology Focus groups –Focus groups have been employed as forums for industry feedback and as monitoring mechanisms, providing analyses and recommendations, based on knowledge ascertained as the research progresses. Interviews –Ten formal interviews were conducted with major players within Australia’s publishing industry. Survey –A national online survey of Australian publishers was completed Case study –A series of eight case studies was conducted

7. Digital Pulbishing Definition Characteristics CMS Content Management System XML Transfer Video Web Word, graphics etc. Voice Publishing Content Mobile phone Papers Other leather materials Cross Medias Cross Media Publishing (Mao Lin Liu, 2003)

8. Ongoing changes to supply chain An initial view of ongoing changes to the publishing supply chain Contracted Author Author Publisher Printer DistributorRetailer Final Consumer Physical supply chain and intermediaries Wholesaler Re-intermediation Aggregator Web Portal Disintermediation All with links to both the organisational and the technology literatures.

9. Developments of Publishing Technology Current use of e-commerce in Australia –Asia Pacific’s B2B e-commerce is forecasted to grow rapidly at a Compound Annual Growth Rate (CAGR) of 59% percent (IDC, 2004). –Australia’s e-commerce is estimated to be worth $11.3 billion dollars annually (Australian Government Information Management Office, 2005). –Australia is among the leading nations in terms of measures of Internet infrastructure, penetration and activity. Australia is ranked second in the Asia Pacific region in terms of e-commerce infrastructure (eMarketer, 2005). –However, in comparison with other countries, small and medium- sized enterprises (SMEs) have been relatively slow in adopting e- commerce (The Age, 2002; NOIE, 2002; Sensis, 2005).

10. Development in Publishing Technology Longevity of existing technologies: Electronic Data Interchange (EDI) Disruptive technologies: Internet and Web Disintermediation: Technology predicted to remove players from the value chain. Online/Web/Digital: Current trend including Re-intermediation. Future technology: Semantic Web

11. Business models Definition: this project adhered to Weill and Vitales’s (2001) approach to business models. A description of the roles and relationships among a firm’s customers, allies and suppliers identifies the major flows of product, information and money and also the major benefits to participants. Survey results: subscription-based and content creation models maintain popularity, particularly in the context of niche markets. Three Business models: an educational book publisher’s current and future models, and a trade book publisher’s future model.

12. A current BM for an educational publisher Book Shops Education/uni Higher Education Academics Schools Teachers $ $ / o / i Web Sales to Individual Students $ Books & CD o Content i Discount Pay or Return Free sample O/ i Thomson Learning Educational Publisher Editing Sales/Marketing Outsourcers Printing Authors $ O/ i o Content $ $ o Licenses Book Sellers Technical Service Co. Support i o$

13. Thomson Learning Educational Publisher Editing Sales/Marketing Outsourcers Whole process Manuscript ot books (India) Authors $ O/ i o Content $ $ o Licenses Book Sellers Technical Service Co. Support i o$ Book Shops Education/uni Higher Education Academics Schools Teachers $ $ / o / i Web Sales to Individuals $ Books & CD o Content i Discount Pay or Return Free sample O/ i Re-assembling e-book, video, audio summary, testing A new BM for an educational publisher

14. Book stores Book clubs Library (Uni.State,School..) Reader C Individual or Org or Co. Reader D Individual or Org or Co. $ Books o Content i Books o $ $ $ Print-on-Demand Repository Technical Support Co. Branded content Authors Contract Physical & Electronic Distributor Web Browser Web Sites Yahoo/Google o $ Contract Support o $ $ $ i Books o $ $ i Reader A Individual or Org. or Co. Virtual Community o o Updates i o $ Reader B Individual or Org. or Co. Book Publisher Rights Management Marketing Outsourcing Printing Outsourcing Editing Outsourcing Authors o i i i $ $ $ i Content o I $ BookPublisher Customer Supplier Ally Electronic Relationship Primary Relationship Flow of Money $ Flow of Information i Flow of Product o Legend: For a trade book publisher

15. Project progress and initial findings The Australian publishing industry has adopted a somewhat conservative approach to the challenges and opportunities presented by digital publishing. The majority of publishers believe however, that in the foreseeable future, there could be major changes in the industry. As publishing businesses have varying objectives, the pace of change from traditional to digital publishing will also vary, depending on their market and client base, as well as the take-up of technology. It seems clear however, that any reluctance on the part of publishers to embrace technological change could prove detrimental to their future.

16. Project progress and initial findings Currently, book publishing models appear to be very familiar (i.e. largely traditional) with adding on digital elements. In the next decade book publishing models may appear as a different profile.

17. The future business models of publishing How do YOU think future publishing business models will change?