FIBy: Arto Forstén, Guest Writer on AtoZ Oy’s Blog
At the latest event in Business Tampere’s "Smarter Organization" series, the topic was the transformation of traditional industries in the age of artificial intelligence. I was one of the speakers and opened the discussion from the perspective of the book industry. Mikko Leinonen conducted a quick poll during his presentation, asking the audience when the origins of their industry dated back to. For many, the mid-20th century seemed to be the answer. Given that my industry’s roots in Finland trace back to the 1500s, during Mikael Agricola’s time with the ABC book, I feel well-positioned to speak about this traditional sector and the transformation that is both emerging and already taking place.
The book industry is one of the most traditional sectors in Finland, with its origins stretching back to the 16th century. The first publishing house, the Finnish Literature Society (SKS), was established in 1834. The industry developed strongly, supported by cultural journalism and the library system, and domestic fiction has held a significant market presence. It would be fair to call it a conventional industry, where any disruptions or innovations have been few and far between. Ownership structures have changed, though… especially in recent years.
2017–2023: The Digital Revolution Changes Everything
Over the past five years, the book industry’s traditional business model has radically transformed due to the rise of digital formats and changes in consumer behavior. This shift is primarily driven by the strong emergence of subscription-based reading services. In a very short time, publishers’ business models have undergone an irreversible change, with direct consequences for authors and their revenue models, a topic that has been widely discussed recently. So, what has happened? The situation is best illustrated by charts, the first of which shows the financial growth of digital sales (audiobooks + e-books) in recent years.
A Few Key Observations on the Digital Transformation:
- The market share of audiobooks has exploded.
- The publishing process has become multichannel: physical books, e-books, and audiobooks all require different production methods.
- Book discoverability now relies increasingly on metadata and recommendation algorithms.
- The logic of authors’ royalties has changed with the rise of digital formats, leading to critical discussions on income sustainability. Some have benefited from this shift, while many have not.
- While the emphasis on printed book sales has shifted, digital publications’ sales have grown and now account for nearly half of publishers’ total revenue.
Challenges for Publishers and New Business Models
With the significant changes in the book industry, publishers’ business models have undergone a complete overhaul. A variety of new roles have emerged within the industry, which now require attention in addition to traditional tasks. These include audiobook production (narration instructions, voice actor selection, studio collaboration), enriching metadata (richer metadata brings more revenue, especially in digital sales, alongside challenges posed by EU directives), and optimizing subscription-based business models (contracts, renewals, and strategic decisions about release timing).
Beyond these new tasks, digital revolution has had other effects on publishing, such as:
- Production Processes: In addition to physical books, publishers must now produce audiobooks and e-books.
- Focus: The selection of publications has shifted, as different works succeed on digital platforms compared to traditional printed formats.
- Consumer Behavior: Listeners and readers now consume content in different ways, and the lifecycle of books has changed—shorter for printed editions, but longer for audiobooks and e-books.
Publishertools – A Solution to Digital Challenges
At Siltala Publishing, the need for a tool to automate many processes and improve a book’s visibility, especially in digital spaces, was recognized. Initially developed as an internal solution, it quickly became clear that the tool had the potential to transform the entire book industry. The digital transformation has altered revenue models, with digital publications now representing a significant portion of sales. This shift has put publishers under new pressures, as book sales are no longer based solely on the traditional sales of physical copies but are driven by hours of content consumed and the workings of algorithms.
Publishertools Oy was established to address this need, offering solutions that help publishers adapt to the digital shift and streamline their production processes.
Publishertools’ Services for Publishers:
- Metadata Optimization: Automatic Thema codes and keyword suggestions can enhance a book’s discoverability and increase sales by up to 40%.
- Automating Audiobook Narration Instructions: Speeds up the creation of narration instructions by up to 90% while ensuring quality.
- Accelerating Processes: Frees up resources from routine tasks, enabling faster production.
Looking Ahead
The book industry is undergoing a transformation, and technological solutions like Publishertools are helping publishers adapt to the new era. As artificial intelligence and automation play an increasing role, publishing can explore new ways to better serve readers and listeners.
In the future, Publishertools plans to expand its services and develop new AI solutions that will further optimize the publishing process and extend the lifecycle of books in the digital environment. The prospects are excellent, and the challenges are ready to be tackled. High goals have been set, and plans for international markets are already in place.
