Direct or Not? Developing Your Publishing Distribution Strategy

This is the second in a series of blog posts based on our recent webcast, "10 Factors to Consider when Developing your Digital Publishing Strategy." If you weren't able to attend, you can still watch it in its entirety, including the interactive question and answer session here. 

In the first post of  this series, we talked about the importance of understanding your audience. Today, we turn our attention to another of the most important decisions a digital publisher can make: whether or not to sell direct. As you may have recently read, many large publishers such as HarperCollins, Sourcebooks, and F+W Media, have begun selling digital content direct to consumers through dedicated websites, such as Narnia.com and Pottermore.com, or branded mobile applications. Others are waiting in the wings, but starting to establish direct relationships with consumers through direct marketing and social media.

Of course there are trade-offs to be made, do you cede control and give up a chunk of dwindling profit margins for the reach, scale and time-to-market gained through a channel partner? Before you decide on your digital strategy, let's weigh the pros and cons:

Direct-to-Consumer Digital Sales

• Relationships -- by selling direct you are able to build a one-to-one relationship with your audience, better understanding their interests, motivations, and preferences.

• Direct Marketing -- having a direct commercial relationship also enables you to market directly to consumers through email marketing opt-in lists, but also using the storefront to promote new offerings or related content. On the downside, you need to invest more heavily into marketing in the beginning to build these relationships if they are not already established.

• Profit Retention -- By selling direct, you retain your profits, allowing you to invest in content creation.

• Control -- when you sell direct, not only do you control the pricing, you also have control over the buying experience and content presentation to support your brand.

• Flexibility -- there has not yet emerged one clear pricing strategy for digital content sales. By selling direct, you have the flexibility to experiment with pricing, offering options like member pricing, subscriptions, bundling, sampling, promotional codes, and remixing of content, until you find the pricing mix that works best for your audience.

• Platform Reach -- by offering online content, you can sidestep the limitations of a specific e-reader platform, instead making your content available across desktops, laptops, tablets, e-readers and smartphones.

• In-house Skills --  if you decide to sell direct, you will need a strong marketing and sales team in-house, and they will need to work closely with your editorial and production teams.  However, it does NOT mean you need to invest heavily in software development or IT infrastructure.  By partnering with a digital publishing platform provider like Tizra, you can focus on strategic tasks like marketing and product development, without reinventing the technology required to sell and deliver your content.

Channel Sales

• Audience Reach -- the key benefit to channel sales is immediate access to their broad audience reach. That is, if you can pay to rise above the noise in their massive libraries. Presumably, they know their audience well and can suggest your content to targeted audiences. However, you don't get a chance to establish direct relationships with this audience.

• Revenue Loss -- in return for that reach, big channel players like Amazon and Apple's iBooks keep up to 30 percent of revenue. With falling ebook prices, that is a difficult pill to swallow for many publishers.

• Limited Control -- working through the channel, you have limited control over the pricing or presentation of your content, limiting your ability to offer different consumption options or promotions to what is supported within the partner's ecosystem.

• Hands Off -- the purpose of the channel is to provide the reach and the fulfillment, which means you have a hands off approach to commerce, content management, scalability, and customer support. The channel partner "owns" the customer relationship.

Whether you decide to focus on direct sales or continue to prioritize channels it is becoming abundantly clear that all publishers need to find ways to build direct relationships with consumers or risk being disintermediated by powerful retailers who increasingly have designs on publishing themselves. To start, publishers can create opt-in email lists, conduct direct marketing campaigns and build relationships via social media to build a brand beyond a single title or author.

Even the Little Guys Can Sell Direct

While smaller publishers may feel they need to hang back and play follow the leader to watch and learn from larger publishers, it is possible for them to be very successful selling direct if they make the right partnership arrangements. These publishers tend to know their audiences well, and can leverage that knowledge by using pre-established technical infrastructure from a company like Tizra, which lets them go live quickly, and maintain control over their products and promotions.

When, for example, family-owned publisher OEM Health Information, Inc. decided to go digital, they knew they wanted to continue marketing to the audience they had cultivated over thirty years in business. Publisher and President Curtis R. Vouwie turned to Tizra because, "Not only did Tizra's software give us the capabilities and control we were after, but their business model was appealing because it let us retain our profits."

To learn how you can sell direct with the flexibility, control and features you need, contact Tizra today. To learn more about how OEM Health went digital, read the case study.