Ten types of Innovation – Concluding notes

With article on Bigbasket, the ten part innovation series comes to an end. When I understood the innovation types (created by Doblin) way back in 2011, my idea was to apply it from Indian context and make case studies fitting various types. It took two long years for me to complete this series with decent satisfaction.

Innovation has gone beyond building a particular product or service. By building something different doesn’t guarantee a business success, whereas ensuring customer derives value will. India, unlike some of the developed countries, is in the cusp of transformation where we have both traditional old school thinking and new school of thinking co-existing with each other. This made my inquiry to innovation all the more interesting. As and when I observed some innovative way to serve customers, I started mapping them back to Doblin’s model and came up with this whole series spanning across industries.

Please find URLs to individual posts as follows:

Innovation – Type8 –Channel [Case: New Horizon Media]

In our ten part Innovation series, let us look New Horizon Media’s channel innovation as the eighth article.

The book publishing business has gone thru multiple changes in the recent years, which I have been covering in my part articles. India, with diversified set of languages offers significant opportunity for the publishing industry both in print and electronic formats. However, with infrastructure (physical & electronic) challenges, building channels and newer ways to reach customers is always a challenging task especially when it comes to books. New Horizon Media (NHM), a Chennai based publishing house has brought in significant change in terms of the way books are sold to consumers by building channels, similar to FMCG way. Sounds interesting? Read on.

NHM primarily publishes Tamil books, which are sold thru existing channels like — online shopping site, books fairs conduced in various cities and by building the resellers across the state. In spite of having all these channels, NHM found they are still not covering the bigger set of readers, who come from tier-2 and tier-3 cities. A different and innovative model needs to be thought for ensuring their reach. That’s they the idea of FMCG base model kicked in – What if books can be sold like a paste or soap? How about creating thousands of small outlets across the state by applying FMCG model into book publishing? What if books can be made available in Kirana shop in your street corner?

To implement this idea, NHM set up their own stockists (exactly like the FMCG industry) in each small town to whom they supply books. These stockists, in turn, supply NHM publications to a whole range of non-bookshop outlets in that town, such as stationary stores, pharmacies, supermarkets, and even restaurants and textile stores. Assume a case, where you are purchasing diabetic medicine for your aged parent from the medical shop, where you also find a book titled ‘How to control diabetes?’ Assume another case where your family members are busy shopping in a textile store, where they are going to spend next two hours and you are bored. Won’t you feel like picking up a book to kill time?

This is precisely what they have implemented by partnering with various shops across the state by leveraging the adjacency factor. As most of NHM books are priced in the range of 70-100 INR, customers won’t mind paying for it as it is slightly more than buying a magazine. Today NHM has about 2500 such outlets across the state, which has changed the way books are distributed in the state.

By identifying such retail outlets as a new channel for books distribution, NHM is able to transform the vernacular book publishing industry. Apart from the distribution channels, NHM has also created a niche market for translated books. Many of the latest best sellers (ex: India after Gandhi by Ramachandra Guha) is available in Tamil now which is addressing relatively high end customers. I will cover this aspect in a different article.

The Long Tail of book publishing

My previous post about Long Tail, primarily highlighted the concept behind this new model, based on the book written by Chris Anderson. The concept of Long Tail can be applied to any industry/business. This is mainly because any traditional setup today can go ‘digital’, thanks to the Internet. As a book lover, I thought of coving Long Tail aspects of book publishing industry in this post. In the lines of music, the publishing industry is primarily driven by ‘best sellers’ thanks to their sheer volume. For a niche writer getting an individual’s book published is not all the early, as publishers need to make upfront investment in terms of editing, printing and distributing books using traditional retail model. Since they are unsure of the success, niche writers and their content remained in backdoors for years together. Thanks to the Long Tail, niche writers can gain significant opportunity to get their books published by creating a viable business around. Want to know how details? Read on.

To start with, content creation is happening in the Internet at an alarming phase. For example, anybody can start writing by creating blog sites at free of cost (ex: Blogger, WordPress).  Over the years, such free services evolved big time by offering user friendly interface, advanced editing options, SEO optimization methods and interfacing with social media (Facebook, Twitter etc). All of them can be setup in minutes by doing simple ‘drag-and-drop’ approach. Such democratization of tools has resulted in billions of people flocking into blogosphere, as the blog setup is a ‘non-event’ today. As long as an individual is passionate about writing, he can create wonderful contents in no time. I have personally gone thru this experience by initially setting up Blogspot, followed by Jwritings. Such individual writers (including me) have a set of readers who regularly follow, comment and share the content. There are more than 100 million blog sites around the world, which is really a huge number.

Now comes making a book out of such contents. Thanks to the digitization, there are many of ‘Print on Demand’ (POD) solution providers who can take these contents and create a book out of it using the digital printing, even if it is a single copy. This is way different from traditional offset printing industry, as the printer need to print minimum number of copies in order to ensure business viability. For example, if you want to print wedding cards any offset printer today will not print anything less than a minimum number (say 100). In case of digital printing there are no such minimum or maximum numbers exist as things happen ‘on demand’.  In India, I have come across Pothi and Cinnamonteal who offer such POD services. Apart from POD, they also offer conversion, editing and formatting services where the author can design the complete book, which is ready for sale.

The whole distribution and sales can be done online using multiple options. POD service provider themselves offer online shopping cart where the books can be listed. Other options include the author creating a listing in his own blog (by integrating payment gateway) or list it in some of the popular online stores. In case the author has contacts with a retailer, it can be pushed via traditional channels as well. The most important point is, everything happens with button click on the Internet. From the POD provider’s perspective, he can create a community of writers from the Internet, group them and create ‘less number of more books’ ecosystem, which is what Long Tail is all about. Since there is no physical infrastructure required, bunch of existing overheads (supply chain management, demand vs. supply issues, stock management, retailer commission etc…) are automatically removed thanks to the ‘Long Tail’ digital Internet.

There is another dimension for digital publishing, which comes in the form of ‘e-books’. By creating the digital form of books (say in form of PDF document) plus associating Digital Rights Management (DRM), these books can be pushed to any possible device (PC, Tablet, Mobile phone), thereby opening up a new market. Amazon Kindle is already leveraging this model, but when it comes to emerging markets like India challenges are way different which I called out in my post about Aakash ecosystem.  When I wrote the Long Tail book review, couple of my seniors referred to few other (related) examples:

  • Krishnanum Radhayum – A Malayalam movie which became popular thanks to its marketing and release in YouTube. How can we compare this with getting a chance to direct a feature film?
  • BookPrep – POD service offered by Hewlett-Packard (HP) where readers can print some of the old classics which are not currently in print. MagCloud is another example where Magazines can be created using POD.

What other examples one can think of when it comes to Long Tail? How this digital transformation will alter other traditional industries like retail?