Wednesday, January 25, 2012

Who cares about the digital supply chain?

It may seem a strange question to ask, but it reared its head at a meeting of our digital supply chain group this week. There's little doubt that, despite digitisation, extensive licensing of content and the resulting massive increases in digital sales, our industry still hasn't begun to concentrate on how it can be made more profitable. Why do we take the supply chain so much for granted, when with a bit of attention it can deliver substantial business efficiencies and cost savings?

The best opportunity for realising those savings, we were all agreed, was in embedding standardised sales reporting in the way we do business. It's something we've been talking about for a long time; and good progress has been made towards making available the tools to do it. Implementation, however, by publishers has been patchy to say the least. They continue to accept reports from the growing number of resellers in a huge variety of non-standard formats which have to be unpicked manually in order to be input (manually) into business systems. It's hard to quantify the cost of this activity, but it is clearly very high. It's also dangerous commercially because the correct payment of author royalties depends on it.

The publication of the Book Industry Study Group's policy statement on identification of digital products last month, endorsing the advice given by BIC and the International ISBN Agency that granular identification of digital products is essential to the proper operation of the supply chain, is a big step forward towards an industry-agreed strategy. Nevertheless, it comes late for those publishers who have already adopted differing policies, in the US certainly but here too. One has to wonder how many of them will be willing to change their existing practices to come into line with these recommendations. It's another case where the supply chain implications have not been properly thought through.

As we have remarked many times before, standards are usually a response to commercial pressures from trading partners. If it isn't clear - as in these cases - where the benefits lie from implementation of standards, they don't generally get adopted. If we had resellers among those trading partners who had the vision to see beyond short-term proprietary workarounds and were prepared to put pressure on publishers to work with them, there would be benefits all round.

It will probably happen, but it may be long haul.    

Posted by BIC