• by Karen Holt , September 5, 2008

The key changes: Books will be defined not by format (paper vs. electronic), but by content; publishers will focus more on building and targeting specific audiences; and the notion of how books are written will expand to include collaborations between authors and readers. As Bob Stein, founder and codirector of the Institute for the Future of the Book, puts it, “Publishers need to stop thinking they are in the business of manufacturing books and start thinking that they are fundamentally in the business of creating communities of inquiry and interest.”

Last year 3.13 billion books were sold in the U.S., according to a report from the Book Industry Study Group. That’s a hefty number, but a mere 0.9 percent increase over 2006. And the BISG’s report projects that unit sales will remain about flat through at least 2012. Meanwhile, the U.S. Census Bureau says the amount of time the average adult spends reading a book has held steady at 107 hours a year since 2000 and shows no sign of increasing in the future.

But there is one area of growth in the book industry: supply.

From 2006 to 2007, the number of books published jumped 39 percent to 411,422. The increase was almost entirely due to a spike in print-on-demand, or short-run, publishing. POD is used to produce small quantities of books that don’t merit an offset print run, including many small press, deep backlist and self-published books. While one year does not make a trend, now that books have become so cheap and easy to produce, it’s likely the number will continue to grow, creating even more competition for a pool of sales that isn’t getting any bigger. “Each one of these books has a very tiny market, but in the aggregate they have a substantial market,” says publishing industry consultant Mike Shatzkin.

Veteran publishing executive Robert Miller, who recently began a new venture at HarperCollins called HarperStudio, says, “Consumers are reading in new ways; they’re listening, they’re reading online,” Miller says. “Basically, we need to get back to the idea that we’re selling a story.”

Equally important is getting a grip on who is buying the story. Companies that thrive over the next five to 10 years won’t publish books in isolation, Shatzkin says. Instead, successful publishers will use the Internet to build relationships with groups of readers who share a common interest — whether it’s baseball, knitting or investing in green companies — that they can return to again and again. The result: store shelves filled with more niche titles and fewer general interest books.

For readers who grew up blogging and posting videos on YouTube, the best book may be one they get to help write. Enter the “networked book” (Stein’s Institute appears to have coined the phrase); an online community of readers can comment, make corrections, suggest changes or add to the text. The author becomes less an ultimate authority or independent artist than a project manager.

Even the most traditional companies will be catering to an audience immersed in technology. “We’ve got to be thinking about new media and the way people actually think,” says Michael Hyatt, CEO of the 210-year-old Christian publishing company Thomas Nelson. “I don’t think people are going to put up with sitting down and reading through 250 pages unless we make it a lot more compelling.”