In the world of classical music sales two companies top the charts—Universal Music Group and far smaller X5 Music Group. But it is tiny X5 that is trailblazing a new path in the music business as reported by Ethan Smith this week in the Wall Street Journal.
X5 does not sell CDs, does not own a music catalog, sells only online, and so far, sells only classical music. They have been profitable each of their five years in business and are projecting a 50% increase in sales for this year.
In the struggling and piracy-prone world of music X5 has figured out a strategy worth studying for it’s applicability to eBooks.
Listening to music is clearly not the same as reading a book. One does not read a book over and over again (unless they are five years old). Nevertheless here are several of X5’s key tactics and some thoughts about how they apply to the book publishing business.
License, not own. X5 licenses music from scores of companies which their producers then curate into carefully researched compilations. That’s not entirely new to the book world but as a strategy it lowers risk by reducing capital requirements.
Taking it a step further, why limit our thinking to whole books and reliance on an editor? Bookriff is one example of a new approach in this area.
Stand-out covers. We all know how important covers are. But what looks good on the shelf may never work in iTunes as a thumbnail. Design for the thumbnail.
Study search and leverage metadata. How about using a search engine to develop the title of your next book, or series or collection? It doesn’t matter what the publisher thinks the title should be if the audience is using different search terms. I often use the example of looking at search results for e-book vs. ebook (proper vs. more popular). X5 researches to understand what their audience is looking for.
Value pricing is a hallmark of X5’s model. As hard as it is to imagine “The 99 Greatest Short Stories of All Time” selling for $1.29 the concept works because people gravitate to “value”, i.e. lots of “stuff” for a cheap price. It matters little that collections may have overlapping lists. The key is how you package and position it in the market.
Helping book product curators (as well as readers) in that regard will be sites like BookLamp, home of the Book Genome Project, a Pandora-like approach to book characteristics, and book discovery websites like Goodreads and Shelfari.
Stay lean. This seems obvious but in fact it’s a business imperative. The key takeaway here is that X5 built their business around all these tactics, not just one or a few.
They don’t have the equivalent of a POD division—they are digital-only. They don’t own a catalog that they mix with licensed works. They focus as much, perhaps even more so on the backlist (i.e. “old hits”).
No, they combine all these tactics into a unified strategy. That’s what sets them apart from other publishers. And that’s what businesses need to be thinking about when it comes to reading.
The not-rhetorical question is who do you see doing this in book publishing?