"What Ingram's acquisition of Perseus's distribution business signals is the change of Ingram's center of gravity," said John Ingram, chairman and CEO of Ingram Content Group, at Digital Book World yesterday in New York City. Ingram was in conversation with Mike Shatzkin, founder and chief executive of the Idea Logical Company, about how Ingram Content Group has transformed over the years in response to the digital revolution.
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| John Ingram | |
The first topic of discussion was Ingram's purchase of Perseus's distribution business, announced last week. The most exciting thing about having Perseus's distribution operations, Ingram continued, "is their orientation more on sales and marketing." The acquisition gives Ingram enough scale, he said, that the company can now help publishers be more aggressive with marketing and discoverability in existing channels. As to why Ingram Publisher Services acquired Perseus's distribution operations, Ingram noted the changing realities in the business. With Amazon's increasing number of warehouses, the company doesn't "need people like us as much as they once did," while publishers have also gotten better at logistics and are "more aggressively going after direct business." Ingram said he could "howl at the moon and say that's not fair," but it was better for himself and his company to look for new opportunities.
Shatzkin noted that as of 2015, 56% of Ingram's gross profit comes from new business rather than book wholesaling, a transformation that began 20 years ago with the creation of Ingram's print-on-demand service, Lightning Print (now Lightning Source). Asked if starting Lightning was difficult, Ingram said that despite lacking a background in the printing business, it wasn't in and of itself particularly challenging. The difficulty came in 2000, with the Rocket eBook and Stephen King's digital exclusive novella Riding the Bullet. Adding the ability to do full e-book downloads through Lightning was extremely expensive, recalled Ingram, but he "didn't see how you couldn't do it, and just give up on what seemed like a very material part of the future." Digital did not take off at that time, which led to several difficult years. It wasn't until about 2005, Ingram added, that it became fairly clear that Lightning would be a success.
Asked about how incumbents in established businesses respond to entrepreneurship and innovation, Ingram acknowledged that there is "always a tension between control and innovation." Transformation, he said, is not just a slogan--"it is really about cultural change within an organization." Part of the cultural change that has gone on at Ingram, he continued, is a conscious effort to be willing to give up some control to take advantage of innovation. Looking to the future, Ingram said he would like to expand options in existing channels to the point where publishers would have more control over what happens in a given channel.
"We believe in win-win," said Ingram. "Our success comes with others being successful." --Alex Mutter