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In about two weeks, I, along with a couple thousand or so of my closest friends, will be attending the 2013 Tools of Change for Publishing conference in New York. As you may have guessed, recently I’ve felt I haven’t had much to add to the digital publishing conversation. In many ways — while I know there has been exciting innovation — I’ve felt like we’ve been at a standstill.
(Or, to misquote my friend Eoin Purcell, publishers feel like they have this whole digital thing sorted. Done and done.)
Of course, if you’ve been paying attention (and I know you have), you know there is a lot of innovation happening outside the world of traditional publishing. And, to be honest, inside of traditional publishing, though I would characterize many of those experiments as baby steps instead of bold initiatives. Perhaps this is how it should be.
What I mean is that it is hard to run your core business while transforming part of it into an R&D operation. Particularly when “the future” is something nobody can define. Unless, ahem, you happened to spend a very long weekend with a 19-month old and her iPad. Then you have a clear picture of where the world of story is going, and the expectations that generation will have.
But that’s not what I want to talk about today. I am very excited to once again attend TOC (and the If Book Then conference in Milan in March). I am thrilled about participating in Kevin Smokler’s Books at the Block Party: The Economics and Outcomes of a Local Literary Economy panel, a panel that also features Dan Blank, Stephanie Anderson, and Rachel Fershleiser. We’ll be talking about the physical, face-to-face aspect of our bookish culture.
What excites me even more is the Startup Showcase on Wednesday, February 13, 2013. Every year, Kat Meyer and the rest of the TOC team bring us cutting edge companies doing amazing things in the world of publishing. These companies are the future.
And I’d like to highlight one company in particular: Paperight. I’ve spoken and written about Paperight more than a few times in the past couple of years because it still blows my mind.
We talk about publishing, particularly here in the United States, as if it is something we can take for granted. As Arthur Atwell, the brains behind Paperight demonstrated, in places like sub-Saharan Africa, there is a serious challenge in getting reading material to people who desperately want it. Local bookstores, much less Amazon, aren’t even potential solutions.
Atwell and his team instead utilize existing infrastructure to deliver reading material to readers. And by “existing infrastructure”, I mean telephone lines and copy shops. Customers purchase legal, low-cost books. Publishers and authors get paid. Information is shared. Goals are accomplished.
This is genius. This is important. This is innovation in publishing. I applaud every publisher and author who participates in Paperight. Nothing excites me more than the possibility to spread the joy of reading to people!
I know the TOC schedule is jam-packed with amazing sessions, but I hope you make the time to attend the Startup Showcase. More than a few friends are presenting their innovations (The Holocene and Valobox are two other standouts) and I think you’ll be as inspired as I am by their work.
And…I think you’ll have your entire perspective changed by what Paperight is doing.
The post Tools of Change 2013: What Excites Me Right Now appeared first on Booksquare.
Months of anticipation. Weeks of preparing. Days of thinking. Hours of wondering. And that’s before the annual Tools of Change for Publishing Conference begins. Once the action starts, the mental rush is indescribable. It takes me days just to organize my thoughts, an entire year to wonder at how what I heard is playing out in the real world.*
The container limits our imagination.
TOC 2011, like the previous iterations of the conference (oh, can we return to San Jose, where the weather is delightfully mild?), was jam-packed with people, enthusiasm, and ideas**. You gotta love an event where the hallway and lunch table conversations are as stimulating, creative, and informative as the planned sessions and workshops.
As with many conferences — intentional or not — themes emerged. The largest, and I’d posit most important, was best articulated by Brian O’Leary in his Context First keynote (link includes text and link to video, which cannot be missed). Brian (full disclosure and all that) posits that publishing is “…unduly governed by the physical containers we have used for centuries to transmit information.”
Or, the container limits our imagination.
This two-dimensional limitation is what lead keynoter Theodore Gray to take advantage of the multi-media functionality of the iPad to produce his bestselling The Elements: A Visual Exploration. Gray had already displayed the elements in true periodic table (and by table, I mean a wooden thing with legs), and had already published a print book featuring his collection of objects demonstrating the various elements.
Had he limited his vision to a container — a table with cubbies for items, or a book — his life would be okay. But Gray’s vision exceeded the container. And, let me tell you, if this app had been around when I was a kid, my relationship with chemistry would be very different. Already, I am looking forward to Gray’s book on the solar system, not to mention his version of T.S. Eliot’s “The Waste Land”, featuring a dramatic reading by Fiona Shaw (among others).
Ignoring containers and considering context was an underlying theme of the presentation given by Hugh McGuire, John Maxwell, and Kirk Biglione (double triple full disclosure). Each speaker introduced approaches that allow publishers to determine containers as context requires. It’s all about managing content in a way that allows it to be exploited (not a bad word) in the proper way.
As Kirk noted, current publisher processes resemble the duckbill platypus (duckbeaver, if you’re Canadian) — something that looks unwieldy but works. It makes sense: to accommodate digital media, publishers have grafted new tasks onto their current workflow. These workarounds allow staff to keep on keeping on while taking advantage of new markets. We’ll talk more about workflow in a moment.
At the end of the presentation, Hugh introduced PressBooks, an open source digital workflow/publishing tool (still in alpha or beta or one of those Greek situations). PressBooks allows a publisher to take a manuscript from author’s submission to file ready for output to EPUB, print-ready PDF, or InDesign. Your choice.
Awe. Some. Sauce.
This panel cemented the idea of the Sunday Afternoon Project — projects that move from “Hey, what if?” to “That’s done” (
As much as the idea of enhanced ebooks brings the sexy to publishing, it doesn’t really do much for most of the books published. Enhanced, enriched, transmedia, multimedia…these are ideas best applied to those properties that lend themselves to multimedia experience (or, ahem, the associated price tag). While many focus on the bright and shiny (and mostly unfulfilled) promised of apps and enhanced ebooks, the smart kids are looking at the power of social reading.
And with the reading comes the book discussion.
Social reading is normal reading. It’s how we already read in an offline world, and, yes, how we read in an online world. First, some historical context, all stuff that is well known. In the beginning, humans told stories around campfires*. The storytelling happened in group situations, with some stories passed from campfire to campfire, and eventually the woolly mammoth the hunter felled was a large as the Titanic. Some stories became institutionalized — myths, biblical stories, parables. Others, well, they never really gained market share.
Hmm, publishing, the early days.
Time passed. We developed alphabets, we coalesced around local language standards, we wrote stuff down, but the process was laborious (think rocks) or fragile (think parchment) or valuable (think illuminated manuscripts). These printed stories (using both words broadly), fiction and non-fiction, were not possessed in great numbers by common folk. Reading, or sharing of stories, was done in groups, except for those ancient-times-us who wrote stories in their heads (go ancient-times-us!).
Even after the invention of the Gutenberg press, the possession of books was outside the reach of most people. We moved from campfires to candlelight, while the act of reading remained a social activity. The tradition of people reading to each other remains alive and well. I cannot think of the stories of the knights of the Round Table without remembering my mother reading them aloud to four impressionable minds. Likewise, when I remember “reading” The Island of the Blue Dolphins for the first time, I remember my third grade teacher’s voice as she read it to us.
And with the reading, of course, comes the book discussion.
It wasn’t until mass market books became available that reading, as we know it, was identified as a (almost-solely) solitary activity (overall literacy rates had to catch up as well, but that’s another issue). By reading as we know it, I mean selfish reading: alone in the bathtub, alone under the covers, alone on the couch, alone in a restaurant, alone in a park, alone in the bathroom while the family argues about football. Solitary reading is my preferred style, but I also make my book club’s monthly meetings for literary discussion**.
(At this point, I really want to thank my dearest friends who, in all innocence, asked me “What? Social huh?”, thus leading to me writing them a very long email that ended up being the first draft of this crazy post.)
Transforming the Text: An Essential Part of the Reading Experience
Throughout all this, and focusing particularly on booky-books because they consist of ink and paper (which, for centuries, was a really important part of this whole phenomenon, or maybe behavior is a better word), marginalia or annotations or comments or whatever you want to call them flourished. People love making notes about what they’re reading, and, let’s be honest, they love writing in books, even though generations of librarians have discouraged this behavior.
For example, my notes, if I am reviewing a book, sometimes consistent of comments like, “You have got to be kidding me!” or “Seriously? She’s practically commuting to London from the north of England. In the winter. By carriage.” Since I mostly read digital these days, my Kindle notes are si
I, along with a hundred or so of my peers, spent last Thursday and Friday at a conference called Books in Browsers. As one who sat on the sidelines when the first iteration of this conference was held last year, I wasted no time in inviting myself to the event. I am still processing everything I heard and saw.
Much of it aligned with what I think about when I look five years down the road; some it — and this is always the best part of a conference — made me sit back and say “Whoa! I really need to consider that perspective”. I’ll be working out thoughts on both here. Of course, of course.
Let’s get the most stunning thing about Books in Browsers 2010 out of the way first: the dearth of big name publishers. Seriously. Where in the hell were they? Then came the realization that Amazon was in the room, at least for the first day. Finally, and this is actually first, but it flows better this way, Brian O’Leary’s “A Unified Field Theory of Publishing” (words only via the link). It wasn’t enough that he blew open the idea of containers, oh no, he had to accompany this presentation with the type of slideshow that makes the rest of us look like rank amateurs. I may never open Keynote again.
(Aside, I don’t include Bob’s Stein’s Proposing a Taxonomy of Social Reading in the above list because, well, I’m still mulling pieces big and small. Follow the link and read his ideas. Follow the link and participate in the discussion.)
(Second aside, this is the first conference I’ve attended that had German philosophers as running theme on a particular day. You cannot buy this kind of serendipity.)
So, you ask as you sip your coffee, what does that mean, books in browsers? Depends upon who you ask and when. For years, I’ve been ranting about the fact that publishers have ignored the web as a serious publishing platform. One speaker said, based on his conversations with most of the big houses, they see the web as a marketing tool, not a publishing tool. Talked about missing opportunities. I will humbly remind every publishing professional in this universe that the web is our one constant — if you want to reach readers on an international level, you must reach readers in the medium they use.
(Third aside, and this may be a record for asides before I even get to the topic, smart use of the web for publishing content may very well be an effective tool in combatting piracy in developing digital reader territories.)
So that’s my definition, but as the conference progressed, many other viewpoints emerged. Some speakers focused on the publishing platform idea, but coming from the perspective that the content management (CMS) tools we have for web publishing are also ideally suited for publishing bookish content. Plus they’re easy to use. Pay attention to this idea because smart people are making it happen, and it’s going to make things so much easier for publishers of a certain size.
(Fourth aside — and she breaks a record! — if there is one thing I know for certain, it is that there are no off-the-shelf tools for creating a true digital workflow for publishers. Many houses will build their own, and that’s fine, but really smart houses will look at existing tools like content management systems as the starting point for building easy-to-use, standards-based workflow tools.)
Others focused on the critical importance of user experience. Designing for how people really use text, devices, information. I know this will come as a shock to many of you, but real people rarely behave in the manner designers expect. As I look back at the launch of Blio, it is clear to me that the wrong kind of user testing was done. I base this on the fact
I think we all know what the publisher of today looks like. The hierarchy and positions have become comfortable, established. Sort of like really nice flannel pajamas. That’s not to say nothing ever evolves; I mean, who wears the same pair of pajamas forever? And, if you talk to publishing people, you know those flannel pajamas are threadbare in parts, have a few holes, yet remain too familiar to abandon.
Now the analogy falls apart, mostly because while, sure, I can talk about pajamas with great authority, I’d rather talk about new jobs and new skills for 21st century (and beyond!) publishing companies. It’s a mix of stuff I’ve discussed before (as have others), stuff I’ve been mulling over, and stuff I’m test driving.
Note: there are publishers out there already implementing and hiring and rethinking. Love them. Love them. Love them.
Second note: these are not single person positions. They are skills. They are woven into the job.
Project Development
Hands down, the coolest changes will happen in the editorial department. Editors will continue to acquire, develop, copyedit, and go to bat for great projects. No question there. You’re not going to get out of acquisitions meetings that easily.
However, acquisitions editors will change how they think about — and there’s no way around this word — projects. There will be booky-books. There will be multimedia extravaganzas. The type of project will drive the final product. Just as authors and agents are starting to think big picture when it comes to works they are shopping, so, more and more, will editors. Is it text, is it a web-based community, is it an application, is it a living, interactive experience? One or more of those?
The key difference between an enhanced/transmedia/fill-in-your-buzzword books and books with some additional marketing material is how it is approached in-house from day one. Enhancements must be planned, and they must be logical. This requires vision at the acquisition phase. The editor of the future will consider what serves the work rather than what serves a format, and that editor will be required to consider enhancements for every book published, deciding if they are truly transformative or merely marketing on a case-by-case basis.
Our thoroughly modern editor will sometimes go by the the name project developer. Rightly so. Even today, books are projects. Acquisition, editing, artwork, production, marketing…all of these are part of the final product that is known as a book. This project must be shepherded through the entire process, guided by a strong vision. Fragmentation of vision is a guarantee of failure.
Someone needs to be in charge of all aspects of the book — whatever form it takes — from beginning to end. This is particularly true if the book is slotted as a transmedia project. Nobody — nobody! — is better positioned to execute the vision than the acquiring editor. It’s a different kind of job. It’s a visionary kind of job.
Note: Marketing material, those author interviews and recipes and tacked-on content, is just that. Never confuse the two, because your readers won’t.
It will take a different set of skills, and not every editor will be suited to the job. This doesn’t make them less valuable. The new publishing house leverages all types of specialized and generalized skills. The coordination of a multimedia project requires the ability to see the finished project, to find the right in-house or third party talent to fulfill the vision, to keep the entire project on track, and, yep, drive the marketing machine. Editing a booky-book (which may be digital, print, or both) requires other skills.
As a booky-book type person, I appreciate that editor beyond words.
(In
I’ve been thinking about the topic of the value of books a lot. Not for days. Not for months. Years. However, recently I’ve been angered by the implication that readers are cheap, that they won’t pay a proper price for books, that they don’t get it. Whatever it is.
These assertions are not untrue.
They are also not entirely accurate. Perspective is everything, nuance matters, and I have thoughts. Of course.
What is a book worth? Well, there’s list price created by the publisher. That seems to be the value referenced by publishers. Then there’s the price consumers actually pay. That gets more complicated, of course. You have to break it down to various levels including the price for the first sale and the price for the second sale. Library patrons pay a different price; we call that “property tax”.
Oh, and then there are the books acquired for free.
This is what I think about when I hear publishers talking about this, that, or the other devaluing the price of content. And by devaluing content, they really mean consumers paying far less than publishers would like. This is absolutely a valid concern.
Once consumers get lower price points in their minds, they might expect to pay less all the time. As noted above, the way consumers acquire books means they pay varying amounts for the same product; I’d wager the number of full retail list price sales is greatly outnumbered by all other types of sales.
Resolution: the price I pay for a book has absolutely nothing to do with how I value the book. This leads me to an inescapable contention. When publishers talk about the value of books, what they really mean is the value they have assigned. Conclusion: publishers are as responsible for devaluing the content of books as anyone else in the food chain.
Recently, some friends and I discussed an author we love. Or loved. Two years ago, I realized I was wasting my money on her work (wasting: paying hardcover prices for not-so-great books). I thought it was me. A few months ago, a friend warned me against buying the author’s current release; I confessed I’d already made the decision not to do so. Very recently, the author confessed in a public forum that she’d been off her game with her recent releases. Health issues. I can sympathize, but I kinda want a refund.
The publisher sold readers a book they knew was not very good. Yes, the publisher had to know. Someone on the editorial staff (presumably) read the book. Someone with (presumably) enough discernment to realize the book was crap. Someone who should have had the guts to say to the author that the book didn’t pass muster. You know, instead of foisting bad stuff on readers.
This particular author writes hybrid genre fiction. She is contracted to produce, at minimum, a book a year (surmising here, I don’t know her particular deal). She’s reached that point in her career where her publisher has her slotted as a hardcover author. This means, quite often based on her track record alone, readers are paying big money for titles that, by her own admission, weren’t her best work.
So much for the gatekeeping function of publishers. Is it any wonder that readers are confused? How are we supposed to discern value when we cannot trust publishers to perform the most basic duty of vetting books for quality?
I was lucky. I bought my camel’s straw book by this author for my Kindle, meaning I paid a mere $9.99. I felt ripped off. Now, there are rumblings among this author’s core audience (my peer group included) that they aren’t going to buy her in hardcover, maybe even mass market paperback, anymore. Seriously, would you pay that kind of money for a book that reads like it’s been phoned in?
The publisher has entered into a contractual relationship with the author that pretty much dictates a certain price point for each book. Costs much r
Caldecott-Winning illustrator David Diaz spoke about perfect things that don't change over time. Like the chair. And a fork.
And how in music there have been 10 major format changes in 100 years.
He thinks that in books, we're right around where 8 tracks were.
But he doesn't see problems with this - he sees opportunities. In a world where publishing a picture book costs a publisher $100,000.- they're looking for something to sell enough copies to cover that risk. In a digital world where publishing a digital picture book costs five or ten thousand dollars - that's a much lower risk for the publisher.
"Opportunities will grow exponentially for us!"
And when a book comes out digitally, it already IS international, and the potential audience is enormous.
He cited how TV has changed where we went from 5 stations to hundreds in a few decades - and how each station is now targeted to a niche market.
We may not be sure exactly what the future will look like, but David says we need to
"hold on. Publishing will be HUGE. Bigger than it has ever been before!"
I’ve spent the past month listening and reading. I reminded myself of all the positive, cool, exciting projects happening in publishing today — and there are many (I’ve been asking those involved to post here to share what they are doing). I’ve considered what happens next, and focused a lot on what readers are saying, about books, digital and print.
Though everybody is writing about ebooks and the digital experience these days, I find I don’t have much new to add to the conversation; I’ve said it all before. Sometimes I was right, sometimes I was wrong, sometimes I evolved. I still absolutely believe that user experience is — after the content of the book — the most important place for publishing types to focus their attention.
I’ve given up on reading banal analysis and wild conjecture. I ignore anything with the word “killer” in the headline or lead. If there’s a question mark in the headline — Will the iPhone Destroy How We Cook Dinner? — I don’t even bother to click through. I presume it’s a question the writer is asking himself, not actually bothering to consider with any depth. It’s just vague punditry designed to fill the web equivalent of column inches.
That is not to say there isn’t smart analysis out there, but tea leaves from a moment in time do not predict the entire future. We spend far too much time worrying about who will “win” (what this means, nobody can say) and who will “lose” (again, what does this mean?) and what people really want. This final one annoys me the most because the pronouncements often come from those who have no idea how the technology they are praising — or dismissing — is used by real people.
Which leads me to an email I sent to my friend Melissa Klug, a book and paper aficionado. She thought she was asking for a few quick thoughts on the future of print. She got a medium-length essay (mostly reproduced below…mostly, because I cannot resist editing and revising and rethinking and updating). For those who prefer an abstract to reading long pieces, I’ll make it easy: print will remain important, but our relationship with print will change.
Print is not dead. It is not even dying, at least not yet. Think of print like an overweight beast, shedding excess weight. The result is a leaner, more defined, more beautiful experience. What we buy in print will be increasingly valuable as readers shift to the digital realm — and they are shifting so amazingly fast, it’s almost terrifying.
Print, for many types of information, will become far less important. It’s too slow for our world, too clunky for an increasing number of people. I read that a publisher is “crashing” a book on the Deepwater Horizon disaster. It’s due out in September. Given the volume of information already published and the way public interest flags, is this too long a delay? What will the book offer than other sources don’t? It’s the same relevance conundrum facing newsweeklies.
Major newspapers will continue to see diminishing print runs, but this mostly because the kind of information they provide is more easily consumed in the digital environment — it’s the old joke about reading yesterday’s news. Clay Shirky is giving newspapers fifty years. I think he is being generous.
With the Internet and television combining forces, “news” becomes more immediate. Newspapers/news publications did a horrible job of anticipating the future. They did a horrible job of understanding their own strengths. This doesn’t mean news is no longer important. It’s that these organizations seemed to miss what made them critical in the first place. We don&rsqu
Today is the final day for early registration for the Tools of Change for Publishing conference, to be held in New York, February 22 – 24, 2010. Recently, there have been a lot of conferences dedicated to the magical world of digital publishing, but this is the only conference focused on looking forward.
It may be the greatest of ironies that the problems facing publishers today have nothing to do with finding people who want to read. People are reading (and writing) like never before. They’re publishing like never before. The pace of publishing innovations tells me this trend will not decline for a long time; not surprisingly, these publishing innovations are not happening in traditional venues. Now, more than ever, publishers need to think about reading, engagement, usability, research, development, experiments.
It turns out that many of publishing visionaries I know today attended the first Tools of Change Conference in San Jose, way back in 2007. I met only a few these people then — if only we’d had Twitter, oh wait, we did! — but we’ve certainly found each other since. These are the people engaged in wild experiments, some highly successful, some noble endeavors. Out of the ashes and all that.
Fast forward. Last spring, I sat through the most disheartening (and disappointing) publishing industry presentation ever. It was during the South by Southwest Interactive Festival, an event that, in the past, has inspired me and let me see germs of the future of publishing (indeed, notions explored at SXSW three years ago are starting to filter through publishing today). At the time, I was appalled that traditional book publishers had nothing to say for themselves; in retrospect, I think the people who represented the establishment truly did not get their audience. Which means they did not get their competition.
You don’t explain how traditional publishing works to a room full of publishers working in the new paradigm. Everyone was a publisher, more than a few were running very successful publishing companies. Every single person in that audience — and audience eager to hear how book publishers were moving forward — was in direct competition with traditional publishing.
I’m a fan of Tools of Change because I know the publishing industry existing within a few buildings of New York (is it six?) is a small fragment of what publishing is and can be. So much is centered around publishing print books to established outlets in the same way it’s always been done, and part of your business isn’t going away tomorrow. You are balancing books as you know them against a rising tide of change — change in purchasing habits, change in reader engagement, change in format, change in competition.
I find the best ideas often come from the least likely places, and what may not seem relevant to your business as it is, well, it might be just the spark you need for tomorrow’s idea. Your competition is not another big publisher, it’s not in the building down the street. Your competition is already doing mobile apps, already telling stories online, already engaged in full-fledged digital publishing. Your competition is a technology company, it’s a start-up in Seattle focused on storytelling for children, it’s a group of laid-off journalists forming their own news syndicate. It’s the author with her own platform, her own social network. It’s the guy whose productivity app replaces a dozen how-to books.
Books aren’t going away. Today’s business is doing…okay…but talk to me about tomorrow. If the Unicorn is announced in two weeks, are you ready? What if it ships on February 1st? Are you ready? People will be clamoring for the new device, they’ll want the best reading experience. What company is best positioned to take advantage of new computin
Over the New Year holiday, Jonathan Galassi, president of Farrar, Straus & Giroux, published an Op-Ed piece in the New York Times titled “There’s More to Publishing Than Meets the Screen”. I think he started with the intent of justifying the cost of ebooks — something publishing has handled abysmally — but he took a wrong turn. Into some very interesting territory.
Let’s break it down. The first line of the article is “What is an e-book?” This is never answered because Galassi moves on to discuss the decision by William Styron’s heirs to move Styron’s digital rights from Random House, who originally published the author in 1951, to Open Road Integrated Media, a new digital publishing company headed by Jane Friedman, late of HarperCollins. Friedman’s new company, particularly the desire to reprint classic, in-copyright titles, interestingly, may have sparked what will be the most contentious of all issues facing publishing in the next few years.
(One hopes this was intentional.)
Rights of all sorts are under scrutiny. Just as we settled in for a long winter’s nap, Random House, never one to avoid an aggressive move, said their English-language Kindle titles will be available worldwide. Yay for readers, but you can imagine this didn’t make others happy. And, of course, Random House (again!) has asserted fairly broad digital rights. If you’re not caught in the crossfire, this is exciting stuff.
So, right, Galassi. He provides a little history lesson, talks about the careful attention paid to the editing of Styron’s work, the typesetting, the marketing. Yes! This is good stuff! It shows what a good publisher can be. If Random House actually has digital rights is a question that cannot be answered here. Galassi’s far more interesting point is that another publisher should not have the right to republish the Random House versions of these books. Let us set aside the notion that both the author and the editors (we can also set aside marketing) expected the fruits of their labors to be free to the world by now. It’s a good question: does Random House “own” the version they published?
Well, Styron (or his heirs) owns the copyright, the actual intellectual property. It is not shared with Random House or the editor who guided the work to perfection. Styron licensed certain rights to Random House, and in turn, the publisher performed certain duties. But at no point, did those duties constitute ownership of the actual text being published.
Galassi seems to be arguing that the editorial contribution is of comparable value to the creative contribution. Perhaps in this case, it’s a fair argument to be made. I am not sure it follows for every book published by every publisher. Is the publisher a creative partner or a service provider? Who owns the book at the end of the day?
I am of the mindset that the position advocated by Galassi will lead to deeper questions about the roles of publishers and how they serve authors. For seemingly perpetual rights, there will need to be more consideration. Galassi distinguishes between a publisher and a distributor, but fails to acknowledge that when it comes to digital
distribution the playing field is beyond level, and when it comes to backlist titles, traditional publishers need to step up their game.
In fact, these publishers need to understand they’ll be selling themselves to authors, not the other way around.
(This relates to the utterly fascinating — if only to me — assertion by Random House that licensing digital rights to anoth
For your reading enjoyment, I have compiled a list of about a dozen things that will not save publishing. I have also created a brief list of things that will save publishing. As always, neither list is comprehensive, and I reserve the right to add items if I think of something while I’m in the shower.
For what it’s worth, publishing is alive, well, and bigger than ever! It’s obvious we’re seeing more creativity, more innovation, more ways of connecting people and reading. When we talk about “saving publishing”, we need to be very clear. We are talking about book publishing as we know it, and we are talking about a specific element within the traditional publishing business model.
Things That Will Not Save Publishing
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The Mythical Apple Tablet, aka The Unicorn — So Apple will release a tablet in the coming year. Or not. If said tablet materializes and is priced at the current rumored $1,000, that turns it into a pricey ereader, so the number of hardcore readers who think, “Wow, this is the reading device I’ve been waiting for” will be limited. I’m not discounting the potential for visually beautiful books, but the Unicorn will not save publishing.
Apple is an aggressive company. Apple is a tech company. And publishing people don’t necessarily get Apple. Last week’s breathless rumor about a 70/30 split (70% to publishers) was the tip-off. 70/30 is the standard Apple split! What is missed in the fine print (what is it about fine print that makes us always overlook it?) is that this split is on sales price, cash receipts, whatever you want to call it. Apple will not (unless I seriously misjudge their business acumen) be less aggressive on pricing than Amazon and likely won’t subsidize prices. I suspect Apple will not get into bed with book publishers unless book publishers play along.
If anything, the Unicorn will be part of an interesting and diverse digital reading mix. Of course, we already have one of those — you’re using it right now — and very few publishers are exploiting the potential of what already exists. The Unicorn won’t be running an exotic new platform with magical capabilities.
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Ebooks — Even if ebooks become 50% or more of the market, they’re not going to fix the fundamental problems of the publishing industry. If ebooks can somehow increase the number of new-to-books readers by 50%, then we’re talking. I thought there would be potential here, but am not convinced because most publishers seem to see ebooks as the same thing as print books and/or competition for the existing business model. Which they are, sure, but I guess it’s easier to do business as usual.
So ebook customers are pretty much regular book customers, transitioning to a new format. Some of us are buying more books because of a mix of price and ease-of-purchase. But as long as ebooks are treated the same as every other book out there, I’m not feeling the love.
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Enhanced Ebooks — I’m not convinced the general reading world wants these as much as publishing people do. Some books can and should be enhanced. Others, not so much. I can assure publishers that there’s great potential for enhanced ebooks, but I worry my meaning is lost. Enhanced does no mean making a rough around the edges (and everywhere else) PDF scan of the print book and adding some extra and not really useful text.
Enhanced ebooks require thought, execution, and a plan. Right book, right audience, right approach. Win!
- Ebook Windows — Withholding ebook releases to protect, to preserve, to illuminate the hardcover window won’t do anything for hardcover sales and it won’t save publishing. It will, however, positively impact the bottom line of those books that are available w
Dear Mr. Sobel,
While I do not know you, I am impressed by your resume and the portrait of you with what appears to be a brown tabby. I generally cut cat lovers more slack — and brown tabby owners…they get a free pass, as a rule — but I cannot do so in this instance. You are wrong.
You have “challenged” publishers to hold back e-reprints (I presume you are making the case for the ebook as a secondary market of some sort), and you make no bones about, as Richard Curtis states, “giving hardcovers their moment in the sun”. This sounds like fetishism to me. We must worship the all-mighty hardcover, without worrying about the actual impact to overall sales. Without even considering the reader. Of course, why would publishing ever consider the reader?
You draw a correlation between the apparent increase of sales of Robert Jordan/Brandon Sanderson’s The Gathering Storm and withholding the ebook, though none exists. Is it possible that sales would be higher if the ebook had been released? Why, yes it is! Consumer awareness and publishing marketing efforts were at their peak in September. This was the rare event book. They don’t come around all that often.
There seems to be an assumption that the ebook customer will shift formats when their preferred format isn’t available. I suppose some will, but most will simply skip the purchase. I am not entirely sure lost sales are good for business, but then publishing does many things that make no sense in the real world.
Let us be frank here: when we talk about “saving” publishing and withholding ebook rights, we are talking about “saving” a subset of books. A way of life. An object of worship, instead of books, things people read. Your hardcover books can have all the moments in the sun they need, but we both know how many hardcover books have failed to truly shine, much less get a hint of a tan. You are trying to protect some books, not all books. You really want to pick and choose what gets “saved.”
There is an element of elitism to this approach: these books are so special they must be kept away from those people who prefer other formats. Nevermind that the book many underperform and never reach the mass market. Nevermind that people want to buy the books right now. Nevermind that the books being protected from consumers who want to read them.
I have read your letter several times, and while I appreciate the concern being expressed, I fail to see how your solution saves publishing, or, frankly, hardcover books. You know. I know it. And every person who reads both your post and mine knows it. Whatever publishing is — and it’s many things — holding back digital rights won’t save anything. It will likely mask the real problem a little bit longer, but it won’t save anything. Most especially not publishing as we know it.
Because publishing as we know it is sick. Very sick. And something’s got to give. You don’t have to like it, you don’t have to read a single ebook, but the truth of the matter is that ebook sales are increasing dramatically, physical retail space is decreasing, there are serious pricing pressures being exerted, and most of the hardcover books you seek to protect don’t really earn their money back, at least not in a way that makes the format, as it’s practiced today, sustainable.
Yet you say, as if this is a bad thing:
In just a few years we have seen electronic sales of bestsellers go from 2% to 12 to 15% of total sales. Next year, they may constitute 20%. Who knows where this will end, once bestsellers are on cell phones, blackberries and the like?
Yes, who knows where thi
For the past few weeks, we’ve been talking about Digital Rights Management (“DRM”), and the diversity of comments have been fascinating. I still do not believe DRM prevents or slows piracy*. Add to this fact that public perception of DRM, honed by years of abuse by the music industry, is negative…or rather, though most people do not know nor use the terms “digital rights management” or “DRM”, they hate it when they encounter it.
There are genuine concerns on both side of the DRM issue.
(Oh, and do they hate it! This is a serious challenge for the industry.)
Managing digital rights, however, is going to be an increasingly important issue as new publishing business models emerge. Smart digital rights management can and will create opportunity. It will become critical for the publishing industry to understand what they’re offering (to paraphrase Mike Shatzkin) and to articulate the rules and regulations surrounding commercial transactions. Any scenario where deciphering the “what” of a purchase becomes a consumer responsibility is fraught with danger.
I firmly believe people do not object to various DRM schemes as long as they understand them (case in point: iTunes). I also believe there’s a serious onus on the industry — publishers and retailers — to open up this conversation. Right now, the digital market share is small enough that the industry can get in front of the discussion (something the music industry never managed). Having these conversations outside the bubble will engender good will and, perhaps, help both sides understand and respond to genuine concerns**.
So here is my wrinkle in the DRM discussion. I recently attended the Publishers Association of the West conference (highly recommended, by the way, as the level of discussion on tough issues was intelligent and diverse), and during the DRM discussion, an industry consultant, instead of focusing the complexities of managing digital rights, including consumer experience, chose what I called a scare tactic approach…you must have DRM because, well, you must. The sky will open and ground will collapse.
He said (and I am paraphrasing, though the gist is accurate),
You must have DRM to guarantee that your content is used in the way you want. You retain control of use.
To which I replied:
What happens when your content becomes my content?
By the way, I know the answer to my question, and it’s the dirty little secret of digital media: I, the consumer, never really “own” what I buy. This colors my perception of the transaction, impacting everything from price to usage. I constantly weigh what I get against what I’m paying for it. I’m going to say it plain: this is not a bad thing as long it’s not forgotten.
In the traditional book transaction, author and publisher control over the book ends when I hand over my money for the book. All the hopes that content will be used in the manner the publisher and/or author envision are gone when I am handed a receipt by the cashier. I can do anything I want with the (print) book, including using it as a pillow (hat tip to Lawrence Lessig). I can lend it. Resell it. Make art from it. Rent it.
Digital is different. I know I say it a lot. I believe ebooks/digital are a wholly new market with new rules and regulations (maybe I should say markets?). This marketplace should not be treated nor expected to conform to business as usual. Yes, this poses challenges; it also creates opportunities. Porting the &ldq
If there are two truths we hold to be self-evident, they are these: 1) DRM does nothing to stop piracy, and 2) DRM, as used by many publishers today, frustrates legitimate purchasers of books. This leads many to conclude that DRM does not work, and that DRM is evil.
How do we get past “it’s good” or “it’s evil”?
Not true. And not true.
Consumers will happily accept the shackles of DRM if the trade-off is worth it to them. For example, while some Kindle users grumble about loss of rights, they express joy at the ease of purchase created by the Kindle system. On the flip side, some readers — I am one of them — hate Adobe Digital Editions. My first experience resulted in the server being unable to authenticate. Seriously, I bought books and couldn’t read them because the fracking server couldn’t authenticate.
Subsequent experiences have not made me happy. I avoid the ADE experience with everything I have. There’s something wrong with a system that continually makes a person forget why they opened an application in the first place.
Because consumers have grown wary of DRM — publishers, it’s not your fault alone; the music industry did you a bad this past decade — it’s hard to talk reasonably about DRM. I really liked it when Adam Hodgkin reframed the issue, noting it’s about Managing Digital Rights (”MDR”). Because that’s what we all need to be talking about.
Once we get past the “we have to have it to stop piracy”, a fallacy if ever one were uttered, and into the “how can we better manage the consumer experience” discussion, the better. I’m going to start right now. Join me. Please.
The most obvious, and most logical, reason for placing access restrictions on content is to limit the amount of time a person can utilize the content. Access to library books is controlled via software that automatically activates and expires a book, a video, a piece of music. This same technology can be extended to allow the reader to purchase or re-up the rental period on the media. The rules are clear to both the consumer and the library. That’s nice.
I won’t be surprised if we start seeing serious, robust ebook rental schemes. I’d already been thinking about them when I had two completely unrelated conversations about the idea. By serious, I mean a true Netflix-type model where ongoing revenue to the publisher and author is part of the program. Again, everyone knows the rules, and there is potential for purchases galore.
In the purchasing realm, I am convinced the smart way to manage digital rights is to allow people to buy books and let them choose the format. I am not opposed to rules where the book can only be downloaded a total of, oh, 10 times or activated on x-number of devices…as long as that access is clearly stated, upfront, to the consumer. Make it reasonable (we all know how technology evolves). Again, everyone knows the rules.
Discerning readers saw the thread throughout this post. Now let’s talk about how to move forward. As you might imagine, the first step is for publishers (and authors) to listen to what their customers (readers) are saying about DRM. Let me reiterate: people don’t mind restrictions as long as they know what they’re getting and what the limits are. I fully understand that the books I “purchase” for my Kindle are not owned by me — this is why I refuse to spend over $10 for an ebook. I lose rights.
(You knew pricing was a huge part of this topic; DRM and prices go together like “ramma lamma lamma ka dinga da dinga dong“. In fact, the various rights lost by consumers are all factors in how they perceive the value of a book.)
As you can imagine, a lot of the burden for moving this conversation forward is, necessarily, on publishers. Readers have spoken quite clearly. They’ve engaged in discussions, put forth points of compromise, and — this is a tough one — are extremely well-informed about the issue. They may not know DRM by name, but they know what it is.
Now it’s time for the industry to have a similar discussion. A real discussion. A conversation that starts with ideas about communication and smart management of digital rights. This conversation should not take place in the industry bubble (it’s fun in there, sure, but the echo could drive you batty). Involve everyone, listen to everyone, but give a lot of weight to what the people who pay you money have to say.
Every barrier between a reader and her book is an opportunity for someone else to capture that reader’s attention. This is the challenge the industry faces. The books I bought the day ADE thwarted me were never read. Never talked about. And I’ve never purchased via that channel again. In this case, the publisher, who had me on the direct sales channel, has lost me to a larger retailer. This is less revenue for the publisher and more opportunity for me to be distracted by other bright and shiny things.
Managing digital rights is the best conversation the industry can have right now. Goodwill is flowing toward publishers, but the grumbling is growing louder. So how do we move this conversation forward?
Like so many others, I am bemused by some of the coverage of the Tools of Change Frankfurt conference (bemused=not sure people interviewed were at same conference I attended)*. Everyone is entitled to an opinion, but when your industry is undergoing what can generously be described as upheaval, it is imperative that you listen to other viewpoints. You do not have to agree, but if you’re not hearing what the other side is saying, you are making a huge mistake.
DRM — Digital Rights Management — has effective and useful applications.
I heard representatives from major European publishers say (and I’m barely paraphrasing), “Piracy is bad. Stop piracy.” Um, okay. What’s the plan? I mean, we’re talking about putting an end to a practice that’s as old as humanity; most of our species gets that piracy bad, most don’t do it. Given the history of eradication when it comes to piracy, given the fact that legal markets generally win, and given the nuanced issues of digital piracy, doesn’t it make sense for publishing industry to move beyond the catch phrase?
Likewise with DRM. The Bookseller article linked above also noted concern from UK publishers about a DRM-free agenda. Well, yeah, what did you think Cory Doctorow was going to address in his keynote? The weather? No seriously, what did you expect, and did you really think he’d be anything less than provocative? It was supposed to make you think. Did you?
(And where were you, publishers, on this issue? You had 350-odd souls ready to hear your perspective. Talk about missed opportunities. You were on the agenda too. It would have been a perfect opportunity to engage in the dialogue.)
DRM — Digital Rights Management — has effective and useful applications, and I believe we’ll see smart DRM use in the near future. The problem, of course, is that the good of DRM is lost due to the very legitimate concerns about the bad of DRM. Doctorow — though an author and publisher (Boing Boing is a massive publishing effort) — speaks for readers when he expresses frustration about DRM. I’ll be blunt: the way most of you are implementing DRM is anti-reader.
I know people who, as a matter of course, crack DRM on their legally purchased books. Not because they wish to engage in piracy. Not because they have nothing better to do. No, it’s because they want the flexibility read in the manner that suits them best. The problem is that DRM stymies legitimate purchasers of books. So maybe what you perceive as an anti-DRM agenda is actually a pro-reader agenda. You can get behind that, right?
I mention these topics because I think they point to the elephant in the publishing house: accessibility. While this word is generally applied to the disabled community — a topic of another post — I am broadening it to include the bigger issue of growing the reading market. In his wrap-up of the event, Kirk Biglione called out two sessions that focused on connecting books and readers in underserved markets: sessions lead by Ramy Habeeb and Arthur Atwell.
When the international Kindle was announced, it brought the territorial rights issue back into the discussion (we missed you, territorial rights!), and, as I’ve, ahem, been saying for some time, rethinking how rights are granted can have a big impact on worldwide book sales. Consider this: you, dear publishers, are on the threshold of opening up new markets for your books. All you have to do is Get It Right.
(I am not downplaying the inevitable pain that will come from changing approaches to territorial rights; there will be shifts on the publishing side — so do you sit back and wait or do you seize opportunity?)
If you provide legal access to books in regions where none exists, you take away one impetus for piracy (piracy cannot be eliminated, it must be managed, don’t fool yourself into thinking otherwise). If you use Digital Rights Management to effectively manage user (reader!) rights to content — instead of as an ineffective tool to stave off piracy — you can offer access in ways that confront the realities of reader budgets. Think short-term rentals, subscriptions, chunked content.
You’ll notice I used the word books instead of ebooks throughout this article. That is because I’m thinking about readers. I am a privileged reader: I have so much choice when it comes to format and selection. I have access to all the books I want, far more than I’ll ever read (heck, Penguin sent me duplicates of free books while I was I gone; sometimes I’ll get the same title two or three times — if they sent me digi-arcs, I’d probably read some of them).
Of course, I am already a book buying and book reading customer. You aren’t going to Save Publishing through me. I’m contributing at my maximum already. But those new readers, those new markets, those new possibilities? Ah, kind of makes your heart flutter, doesn’t it?
* – Yeah, I know, it looks like I’m pointing you to the article simply because one of the comments mentions my session. You get what you pay for around here.
Welcome back from whatever you did this summer. Me, I spent my time building a digital publishing company. It went mostly okay, though, in the end, there was no company to show for it. That has nothing to do with the work and talent of the people involved. Talk about amazing, smart, and creative.
Four terrifying words: high-resolution Word file.
When we started Quartet Press, one of the guiding principles was openness. It’s an uncomfortable thing. Publishing people like to pretend that the business different and secret. Not so. It’s good to talk about stuff. I believed then, and I believe now, that it doesn’t help an industry to move forward if people don’t talk about what they’ve learned from experiences.
The first thing you need to know is that there are very few industry best practices. They are developing rapidly. Don’t expect today’s rules to apply to tomorrow’s business, so plan for change, failure, and unexpected success (with a little expected success to make you feel good). I would not, however, suggest, for anyone starting in the digital first or digital only realm, to look to traditional publishers for guidance. Okay, maybe a few, but only in the instances where those publishers are doing it differently and taking real chances. Anyone who isn’t engaged in a level of messy experimentation, they’re not worth using as a role model.
(And based on the lovely conversation we had at BEA with a sales rep for a major service provider, the smart solutions are not necessarily coming from legacy service providers; on the other hand, the idea of providing “high-resolution Word files” lead to many hours of amusement.)
Here are some pain points to consider as you try to build a digital publishing business — this is an incomplete list, of course: ISBN madness (really, one ISBN for every format? the mind continues to boggle) and alternate product identifiers; formats, formats everywhere and not a hint of resolution; third party distributors, or, how do you get your books to retailers in the most efficient manner?; customer service (see: formats, devices, and all-around confusion); the challenges of getting your book to show up in retail outlets before release, particularly when you don’t have a corresponding print product; the imposition of DRM despite your stated preferences (really, who are the retailers protecting when they force DRM on the publisher?); pricing and consumer savvy.
It’s this last one that continues to fascinate me because there is a real struggle between people who make books and people who buy books. The former haven’t worked out the logistics of the digital business. In their defense, ebook sales remain at the blip level on the financials. But they are growing, faster than any other segment of the book market.
The latter group, however, consists of savvy early adopters and newcomers who are developing expectations about pricing and quality. These new-to-ebook people are also learning about DRM, portability, and the loss of reader rights. As I’ve said before, it’s never a good thing for an industry when your customers are savvier and moving faster than you are. Publishers need to experiment, but they need to listen to customers.
Last week, Arnoud Nourry of Hachette Livre made waves when he suggested that publishers are “very hostile” to Amazon’s ebook pricing policy. There was, of course, the inevitable “oh no we’re not” from other publishers, but Nourry’s worries are legitimate. The ebook marketplace isn’t geared toward the traditional publisher/distributor/bookseller arrangement. This is a problem. Publishers cannot expect the digital marketplace to conform to their business as usual.
(Oh, and authors? You need to realize this is going to impact you. I’m sorry, it will. Shifting economics impact everyone.)
Nourry’s problem — and his company is not alone — is that he is viewing ebooks and digital distribution through a physical lens. It did not come as a surprise to us that companies like Amazon take a huge chunk of receipts (50 to 65% of every dollar, depending on the program you’re in), and as we built financial models, we had to consider — which in some ways means guess — the volume of sales that would come from third party sources. For a digital publisher of any size, the best returns come from direct sales. In the romance ebook world, readers are accustomed to buying direct; many are aware that this practice puts more money in the pocket of authors, and make the effort to “buy local”.
This is consumer education done right, but most customers shop at Amazon or the Sony Reader store or Fictionwise or Books on Board because these entities aggregate ebooks from many publishers. Oh, and by tying hardware to the store, this means the retailers own these customers, lock, stock, and proprietary format. This cuts into the share of cash received by the publisher, and there is no expectation that retailers will become less aggressive. During Apple’s recent presentation, Steve Jobs noted that the company has 100 million active credit card numbers on account. Consider how much negotiating clout the music industry has with Apple right now. Extrapolate.
Nourry’s problem, as echoed by many, is that the $9.99 price point initially established by Amazon and quickly adopted by all other major retailers will kill the publishing business. It won’t, but it’s going to severely impact a segment of the business, unless publishers treat digital distribution differently. I cannot stress this enough. Every model we built focused on how the money flows in the ebook world, not how it flows in the traditional publishing world.
Yes, I believe there are ebooks for which customers will pay more. We have seen this to be true. But no rational analysis of, oh, Kindle bestsellers can demonstrate that a higher price point, especially when it comes to fiction, is being widely adopted by consumers. As noted many times, publishers aren’t helping themselves with inferior quality control standards while making claims about the value of their product. It’s hard to take these arguments seriously.
What we learned was that any financial model one builds for the ebook world must throw away traditional assumptions. Yeah, if you build everything around the belief that that those crazy customers will embrace your internal $26.99 price point model, then, yes, when Amazon and others start demanding better terms — and they will, they will — it’s going to kill some of your business. So it’s easier to start from the bottom, figure out what it’s going to cost, and then build the model.
Our model changed over time. A lot. As new information came in, new numbers were plugged into the model. Sometimes it came from rethinking front-end and back-end dollars, and how that impacts business relationships and cash flow. Sometimes it came from learning that processes we estimated to be very high were actually ridiculously affordable. Sometimes it came from knowing average unit sales would be a moving target until we’d been in business for a while.
One thing I took away from my summer of digital publishing — other than the fact that you can’t take a few classes and learn this stuff, no, in this case, doing was everything — is independent publishers, small press, has so much opportunity in the digital marketplace. The model is viable, and, most amazing of all, there are many people who are willing to experiment, iterate, revise, and rethink.
The ability to move fast and change with the business is key. The ability to think beyond “that’s how we’ve always done it” is essential. The importance of focusing on talent and creativity is critical. But the most important thing of all is this: your customers are talking to you. Listen.
If you are a regular reader of Shelf Awareness (and if you’re not, you should be!), you know about the steady drumbeat of bookstores closing. You also know about the rising chorus from booksellers who are changing, adapting, growing, and understanding their place in the larger community.
I am really lucky: I have two branches of an independent bookstore within comfortable distance of my house (the venerable Vromans). Sprinkled throughout my neighborhood are specialist bookstores. One is devoted to theology, one is devoted to cookbooks. Once upon a time, we had two stores focused on mystery and crime fiction, they merged into one. I don’t know what happened to them — they disappeared during our remodel, something we didn’t realize until we moved back into the house.
What all these bookstores have in common is community. Vromans, of course, serves the larger Pasadena (and beyond) community. It sucks us in with a mix of books, events, gifts, and location. The main store is part of a vibrant neighborhood, appealing to different audiences in different ways. The niche stores appeal to very specific audiences (note: walking by a cookbook store when hungry frequently has the unintended consequence of a meal at the Lebanese restaurant next. It’s like they planned it!).
Last week, Bowker released what was billed as a first consumer-focused research report for the book industry. Did your eyebrows go up when you read that? The first? Like, uh, has anybody ever thought to figure out what the people want before this? The mind boggles.
In addition to noting such things as women buying the majority of books, the survey notes that men account for 55% of ebook purchases (this makes sense once you factor in non-fiction). The survey also notes that ebooks and ereaders are growing trends, “bright spots” in the industry.
Following that report (a mere $999!) came a Forrester study on the changing demographics of ebook readers. While I take offense at the “less tech optimistic” notion (mostly because I Have No Idea What That Means!), it points to something I’ve been saying, well, forever: the digital customer is female.
So let’s put these two things together: women buy a whopping 65% of the books sold in the United States (according to Bowker), and women are a rising force in the ebook market, where they already comprise 45% of purchases (Bowker and Forrester). These two trends will have a huge impact on bookstores. Especially independent bookstores.
Let me explain this a bit more. A good portion of that 65% encompasses genre fiction, yet independent bookstores have not traditionally embraced genre fiction, particularly romance. I’ve been impressed recently by those booksellers who have listened to readers and are working to accommodate a large book-buying audience. Think about it: doesn’t it make sense to entice these customers.
(If Vromans were ever to ask me, I’d note that their romance section is, to use a technical term, “meh”. Just enough to say they have the books, not enough to make the average consumer go out of her way to make a purchase.)
But appealing to this customer is more than increasing shelf space. It’s about giving the customer the format they want. Ebook sales are rising. Ereader adoption is rising. The bricks-and-mortar booksellers of the world may not realize it, but they have the potential to grab this market in a unique way: by offering serious and real competition to Amazon and Barnes & Noble.
Let’s take the former first. As an online only store, Amazon loses on the customer contact perspective. As a retailer who has tied its ebook market to a single device, they lose on the flexibility issue. They win on price.
Barnes & Noble has the physical retail presence that Amazon doesn’t have, but it also loses on the device point. While the Plastic Logic reader is nice, it’s not a competitor for either the Kindle or the Sony Reader. B&N also doesn’t have the direct customer service feel you get at an independent bookstore. Like Amazon, though, they win on price.
Independent booksellers can come from behind in a few ways. But they’re going to need the book publishers to step up to the plate. In his recent article “A Fix on Anything” , Brian O’Leary notes that publishers have been weak when it comes to technical and managerial innovation, failing to own or promote changes in the marketplace. Right now is the time to affect serious change.
Where can booksellers lead? Customer service — there is a huge difference between poking around the Amazon website, hoping to stumble across something interesting, and behind hand-sold books by smart people. Adding digital to the mix just increases the possibility for sales (along with access to reasonably rapid, reasonably priced print-to-order capability — if the book needs to be mailed, the customer has shown he or she can wait a day or two). Portable formats are key here: the bookstores need to offer formats that can be loaded on a variety of devices.
Whether my purchase is made in-store via a kiosk/download/email or via the store’s website, I need to be able to read it. On my Kindle. On my Sony Reader. On my iPhone. On one of the devices I am sure to purchase in the near future, especially if the Apple tablet really happens and the husband falls prey to my (anticipated-to-be) endless whining until I get one.
And yes, booksellers are going to need a way to compete on the price. I’m sorry, but the competition is not the store down the street. The competition is global and easily accessible. I realize there is a fantasy in the industry about prices going up, but I’m not sure how this can be accomplished. So far, it’s not working, and unless the trend toward heavy discounts for print books suddenly abates, it’s going to be ever-harder to spin higher ebook prices.
Our collective move toward consuming digital media does not necessarily mean physical spaces will disappear. Even some stores who fail to innovate with the times (I’m thinking my local used cookbook store won’t be a digital leader!) will survive, if only because they serve a specific type of customer. Those who thrive and grow, however, will be the retailers who understand how to serve a customer who, increasingly, includes digital shopping, digital discovery, and digital consumption in their lives.
I’ve been thinking a lot about change this year, and one thing is clear: it’s never good for an industry when the customer changes faster than the business model. Yet that’s what we’re seeing. Five years from now is not a reasonable timeline for change. Yesterday? Far better, especially if you’re one who believes that bookstores are important to our future!
I am honored to bring you the following post from Dominique Raccah, Publisher and CEO of Sourcebooks. The other day, I wrote an article in response to Sourcebooks’ decision to delay the ebook release of their upcoming title Bran Hambric. Behind the scenes, there was much debate on this topic, and Dominique offered her thoughts behind this decision. I am so pleased that she chose to make them public here.
In this time of change, there is nothing more important than open dialogue between stakeholders: publishers, agents, authors, readers, booksellers, distributors. It’s easy to think one side is right, the other is wrong, and while I still believe my own position has merit, I believe even more in listening and understanding how Sourcebooks came to make this decision. It’s okay to disagree; it’s more important to understand the perspective of others.
After you read, let’s talk. Let’s debate. Let’s have a real dialogue. I know I want to hear from all sides, and I know Dominique is open to all points of view.
What are words worth, I wonder?
by Dominique Raccah, Publisher and CEO of Sourcebooks
Given responses to the Wall Street Journal article on Monday, I thought it might be useful to explain some of the thinking that went into the decision to delay the ebook release of our very hot upcoming children’s book, Bran Hambric.
And that includes this background: We need a sustainable author/publisher model, and it’s probably not the model of old. But the new music model of low-priced content and sales of concerts and ancillaries is probably not a viable model for book publishing. Authors, unlike musicians, don’t typically have paid live performances (and t-shirt sales are usually few). They have words. And we need to have a real conversation about what those words are worth (and that’s what the pricing issue is actually about) and how do we keep them worth enough to support authors, authorship and publishers. And yes, we can (and I suspect will) have a conversation about whether that last piece is worth supporting and at what level.
But here’s the thinking:
- I agree wholeheartedly that digital formats should be readily available, immediately (you can see from other decisions we’ve made how important digital is to us).
- We are being told (repeatedly) that ebooks are inherently less valuable—they are not physical; they are not easily ported; they can disappear at any time; etc. The value issues of ebooks are not issues that can be solved by a single publisher.
- Eretailers are suggesting that the “right” price point for an ebook is maximally $9.99. And they are proselytizing the price $9.99.
- We can’t control what retailers charge for books or ebooks. The choices book publishers have are:
- To make the product available, and when
- To have a relationship with that retailer
- So that’s the fundamental decision we get to make. It’s not, what’s the right price for this author…or for a book that he’s worked 10 years on (yes, Michael Malone’s new hardcover The Four Corners of the Sky is also not available as an ebook)…it’s just do we make it available and when?
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- Formats have windows. We know when we (book publishers) put out different formats in the lifecycle of a book. So we shouldn’t be releasing ebooks at the same time that we release a hardcover book. We should be releasing ebooks when we release the trade paper or mass market of the hardcover and can then price appropriately to that. To me the decision is analogous to a new release in movie theatres; we don’t expect that movie to be immediately available on DVD.
- There are some who say, digital and print don’t cannibalize and you’re going to miss sales. But isn’t this the same as people (myself included) who say I’ll wait until it comes out in paperback or I’ll wait to see the DVD? And don’t those people sometimes forget and not buy or rent? So yes, there’s a risk that sales will be missed, but isn’t that a risk that has always existed in format choices?
- If you continue with the lifecycle concept, the vast majority of the books we (Sourcebooks) publish will release in e-formats at the same time as p-formats because we are primarily a trade and mass paperback publisher. And in fact our xml workflow structures towards simultaneous release in multiple ebook/ereader formats.
I would also argue that music is absolutely not the right model to compare books and book publishing to. And newspapers are even less appropriate. However, that’s a really long conversation, and I’m a publisher not a pundit. We should make the choices that are right for our authors and their readers.
We are at the beginning of model building. If hot frontlist titles are to be available in e-formats, they need to be priced by the publisher, at a reasonable discount from the hardcover retail price (to take into account the devaluation of eformats). I am totally open to that. But that’s not an option currently available. I think people may be willing to pay the premium to have the new new thing, or they may want to wait until the price falls with the trade paper edition, at which point the e-book price should be adjusted and $9.99 may make perfect sense.
I agree with Kassia that it’s dangerous to expect consumers to play by the rules of last year’s business model. I’ve taken action in this one situation and I certainly wonder if there are other options that are neither mine nor the $9.99 option. And I also agree that we need to experiment, and I see our industry beginning to do that. But this pricing and release-date situation doesn’t feel like an experiment. This actually seems more like a dictate that could have enormous ramifications, perhaps not today, perhaps not tomorrow, but certainly long-term on the future of authors and books. And I think all I’m saying is, let’s think about this. It’s too important. As a publisher, we have to be strategic, book by book (and it’s important to remember that we’re talking about 1 book; Sourcebooks has 850 ebooks available). These are big decisions for our authors and ourselves. So in situations where the e-format release could hurt the author’s launch, what if we were to wait?
One of the worst-kept secrets in my household is the fact that I buy multiple copies of the same book. For myself. I am not alone in this habit, but I’ve noticed a new twist on an old concept. Last week, I observed a discussion among readers: the importance of purchasing comfort reads to store on digital readers.
Make the reader happy, and that reader will buy more books.
These readers weren’t looking for free digital copies of books they’d already purchased. No, they were discussing second or third purchases of favorite books. This time, the discussion focused on the quest to build a digital library of old favorites. To paraphrase: “I can have all my comfort reads with me all the time.”
If I understand industry parlance, these are “additive sales”.
And for authors and publishers, they are very good indeed.
So a couple things. First, of course, is availability. Authors and publishers surely know what books fall into the comfort read/multiple purchase category. They know what catalog titles continue to sell, year after year, decade after decade. They know what books readers love so much, they take the time to write and gush. They know (I hope!) what books are being discussed on blogs, forums, and listservs (hint: this would be a lovely book to have with me as I wander the world…alas, it is not available).
Here’s another indicator, though it falls into the unscientific category. A few weeks ago, the New York Times did an article on digital piracy, opening with the fact that author Ursula LeGuin had discovered that a book of hers, published in 1969, had been pirated. Rather than noting that this indicated a level of reader demand. Wouldn’t it be fascinating to know how often this book was downloaded and why? Were the “pirates” fans of the book, owners of another copy? Or were they just random scavengers on the Internet, grabbing all the free stuff they can…with no intent to read?
My guess is there’s a mix of reasons, but the first, the fans who had no ability to purchase a legal copy of the book, is the most compelling to me. There is much anecdotal evidence of readers doing this. It’s a book from 1969. Weeks later, there is still no Kindle edition of The Left Hand of Darkness (but if you look even a little, oh, those pirated versions are there!).
Nothing is more frustrating for a reader than making the effort to buy a book, only to discover the book is not available. It’s frustrating when you go to a physical bookstore, it’s frustrating when you discover the book you want is out-of-print (or “temporarily unavailable”), it’s frustrating when you go to buy the book, but a digital edition doesn’t exist. Especially when you just want to get your hands on a comfort read.
A second thought. Just as we move our physical libraries from home to home (to garage!) over the course of our lifetimes, maybe moving once, twice, five, a dozen times, we are moving our digital libraries from device to device. It is not inconceivable to estimate at least a dozen device moves for some people.
As with paper books, some books will be archived or even deleted (the digital equivalent of donating a book to charity — since we have no other way to pass on ebooks when we’re done with them). But those comfort reads? They will shift from reader to reader, taking up a relatively small amount of space. They will be there during waits in the emergency room. When a plane is stuck on the tarmac. In the middle of the night when a baby decides sleep is optional. When days are just too much and that old favorite read is what gets you through.
Of course, this means the consumer must be capable of porting her books from device to device without hassle. It means that publishers need to be proactive about ensuring readers know any and all limitations imposed on their purchases (Amazon says these limitations rest squarely on the shoulders of publishers; if these limitations are imposed, the consumer needs to know what they are). It doesn’t preclude the idea that this consumer, over time, will purchase additional copies of the same ebook, for many reasons. Unlimited portability of a legal purchase and additive purchases are not mutually exclusive concepts.
Or, it’s about the reader. It’s all about the reader. Make the reader happy, and that reader will buy more books. Make the reader unhappy…
Yay New York Times, you have discovered book piracy! And it is everything your dreamed and more. Oh and look: it’s authors who have never authorized their books for the digital marketplace who are being pirated.
Piracy has been a fact of our lives for as long as we’ve had marketplaces.
The NYT starts with a wide-eyed description of author Ursula Le Guin discovering a digital copy of her 1969 novel The Left Hand of Darkness on Scribd.com. To date, there is no legal electronic version of this book. I’m surprised by the lack of analytical thought accompanying this revelation. If the posting and accessing of books on pirate sites (Scribd is not a pirate site, though people misuse the service) tells us anything, it’s that there is consumer demand for books that aren’t available digitally.
So do you respond by wringing your hands or by meeting this demand?
That was a rhetorical question.
Research shows that piracy exists but isn’t conclusive on the negative impacts. There is some evidence of increased sales, increased awareness. Just because a consumer accesses an illegal digital copy, it doesn’t mean it’s a lost sale. It could be a supplemental sale (a digital version to complement an already purchased physical book), it could be a new reader sampling an author, or, yes, it could be someone sticking it to the man by going for the pirated version, viruses be damned!
This is something publishers — like the music companies and motion picture studios before them — need to address honestly.
Publishers will need to be vigilant in the pirate world. They will need to develop and utilize tools that protect their copyrights. At the same time, now more than ever, publishers must also engage in practices that reach readers where they live. It’s going to be a delicate balance, one that will never work as long as publishers continue to view digital books as “cannibalizing” print.
There is strong evidence (Exhibit A: iTunes) that consumers are happy to pay for digital product…as long as certain conditions are met: price, selection, and convenience. The book world, in some ways, is managing to fail on these three things. Yesterday, Dan Gillmor talked about Kindle price hikes and how he wasn’t going to play along (aka voting with his dollars). Prices are a huge topic of discussion among consumers and they have done an excellent job of articulating their position.
Publishers? Not so much. Or maybe that’s “not at all”.
If you follow digital topics on Twitter (and you should!), you’ll hear endless complaints about staggered releases — how does it serve the consumer to hold back the digital release of a book? How does it serve the author and publisher to create a vacuum in the marketplace that a pirated book can fill? Guess what? These customers are not going to shrug and say, “Guess I’ll just go ahead and the print version”. No, they’re going to wait for the digital book if it’s a book they must have. Or they’re going to buy something else.
You’ll discover total frustration surrounding purchases. Anger over DRM. You want to hear screams and curses? Listen to the reader who can’t read the book she purchased because the Adobe Digital Editions authentication server is down. Spend some time with a reader who, due to extreme confusion, bought the wrong format of a book and has to deal with the bureaucracy of rectifying an error that shouldn’t have to happen.
Piracy is and has been a fact of our lives for as long as we’ve created marketplaces. Books are as subject to thievery as any other product. Same thing, different realm. How you deal with piracy is changing, even as it stays the same (physical piracy still exists). It’s going to be an ongoing battle for the entertainment industries, but unlike your predecessors, book publishers have the chance to get so much right while the market is young.
Right now, more than ever, it’s time to listen to your customers.
(Didn’t the NYT write this same story years ago?)
Looking back, the worst part about the New Think panel at South by Southwest was not the lack of new thinking. It was the sense that the panelists didn’t have a plan for executing on the audience comments. There was no discussion, no follow-up questions, no suggestion that something would come from the audience-as-focus-group approach.
So with a bit of my eternal “once more with feeling” optimism, I’m going to lay out some of the issues and my thoughts on them. This is in no way an all-encompassing list, so feel free to add your own ideas. You may be helping to build the publishing company of the future.
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Think Customer Service: From this moment forward, make every business decision with your end customers in mind. Every decision. Pricing. Format. DRM. Release strategy. Windows. Ask yourselves if what you’re doing is going to make it harder on people who buy and read books. When we talk about the competition, one thing you’ll note is that they are always innovating with the end customer in mind.
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Understand the Competition: In this instance, I am going to focus narrowly on your online competition. You’ve noticed, I’m sure, that the companies giving you the biggest headaches are not your fellow publishers. No, you’re grinding your teeth over businesses like Google and Amazon and Apple. Heck, probably even Twitter.
These technology companies understand something basic: it’s all about the end user. They do crazy little things like open up their APIs to allow other businesses to add their own innovations, create better ways to use data, combine efforts rather than zealously guarding doors that would be better left wide open.
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Stop Making It So Hard to Help You: You want my theory about why Apple didn’t move into the book business? Because they didn’t want the hassle of working with publishers. Trying to provide services that benefit the publishing business is hard work. You create enough hoops, and you’ll be bypassed in favor of companies and industries that embrace new ideas. Companies and industries that understand the importance of working with smart technologies. Companies and industries that see the benefit of working together rather than in silos.
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Online Marketing Strategy: There are some great minds in publishing houses big and small, and those minds understand how marketing works in today’s media. Let that staff lead the way when it comes to interacting online. Banish anyone with the title of VP or above from room (unless three people can vouch for that person’s savvy). Kick out anyone who says “No”, “But that’s not how we do things”, or “That sounds like a lot of work.”
Make bold moves. Instead of sending press releases, create actionable information. Embrace digital ARCs and make them portable enough that reviewers can actually read the things (one of those lovely service companies I mentioned above, NetGalley) already exists and wants to make a system like this usable for everyone. I figure you all could buy everyone on your reviewer lists an ereader, drop the endless shipments of papers books, and still save money.
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Research. Development.: Start it, do it, come up with something beautiful.
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Throw It All Out, Start From Scratch: In some ways the institution that is the publishing business is too entrenched to change. You’re fighting history, and history is kicking it. I think everybody in the food chain is going to have to accept change. It will be painful. But I don’t see how you can position for an even rockier, more uncertain future if you remain locked into past practices.
It is a given that what we know today — from the bestselling authors to how bookstores are run to devices like the Kindle — will be different a few years from now. And different again a few years from then. Predicting the next hundred years is near-impossible. Those best positioned to change and innovate will survive. Those who aren’t will likely find themselves cut up and sold or limping along the fringes.
It won’t always be pretty and the things you try may not always work. But if you do the business of the future with the mindset of the past, well, we all know what happened to the dinosaurs.
Used to be that working the d-book (digital book) beat was an easy gig. You could go years without any news of note. Lately, you can’t go to bed for fear of missing a story. Digital books might not be a major revenue item on the P&L, but they’re the hottest story in Pub Town.
Competition is good for books, devices, retailers…and readers.
(Benefit: the press, blogosphere, Twittersphere, and other spheres are talking about books. A lot.)
Hot on the heels of the Kindle 2 and its (silly, pointless, and, frankly, reader-unfriendly) controversy came the long-rumored Amazon Kindle iPhone app. Just as we wrapped our minds around that development, we hear word that Barnes & Noble has purchased Fictionwise for $15.7 million. And, of course, we have Amazon demurring, politely of course, when asked about the possibility that they’ll sell one million Kindle units by Thanksgiving.
So what does all this craziness mean? I’m going to go out on a limb and make a major (ha!) prediction: lower ebook prices from all retailers. Amazon has built a marketing talking point around the $9.99 price point (the fact that many books exceed this amount is irrelevant). Barnes & Noble is no shrinking violet when it comes to the price discounting game. If they don’t use their awesome leverage to lower prices from Fictionwise, I will lose all faith in capitalism.
(Yeah, yeah, yeah, but without cock-eyed optimism, what do we have?)
Let us start somewhere around the middle. While B&N has made noises about getting involved with the (not-ready-for-production) Plastic Logic Reader, Amazon went ahead and knit together the retailer/device/mobile/daddy experience, much like Apple did with the iPhone/iPod. It’s still a possibility that Apple with get itself into the digital book space, but right now Amazon has some serious mojo going on while Barnes & Noble has potential on its side.
Pieces of the puzzle:
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Ecosystem: Amazon has created a book-to-reader ecosystem that is painless, portable, and now Kindle-free. I can read on my Kindle, I can read on my iPhone, I can sync between devices via the vaguely dirty-sounding “Whispersync”. That is nifty. I’m sorry, it is. Mr. Andrew Jackson book, we do not ever need part (until I am finished with you!).
But wait, there’s more! Anyone with an Amazon account and an iPhone/Touch can make use of this free application. It’s not just for Kindle owners. It took Carolyn Kellogg of the Los Angeles Times Jacket Copy about one second, probably less, to grok this. It took the Booksquare test kitchen approximately five minutes to play out this experiment in real life (Kindle app downloaded at 12:15 a.m. on day of release, test title downloaded at 12:20 a.m., but, in defense of our test kitchen, other features were also being explored.).
You can buy a Kindle edition from the Amazon website — at their price — and have it on your iPhone in moments; you can also, if you’re brave enough, buy a Kindle book on your iPhone through the Safari browser. The process isn’t Kindle-seamless, but, well, it’s close enough for government work. Setting aside our next point, one of the biggest challenges facing Amazon’s competition is the creation of a smooth-as-silk consumer experience. If Barnes & Noble can, at least, fix the Fictionwise purchasing process, get rid of all those steps and additional effort, that’s a huge win for everyone.
Those who speculate that the new iPhone app will impact Kindle sales exhibit a serious misunderstanding of the customer and the market. Reading on the iPhone and reading on the Kindle are two entirely different (but pleasurable in their own ways) experiences. It’s possible that someone who is on the fence about the Kindle will say, “Well, now that I can read on the iPhone, I’m not shelling out that $350.” It’s far more likely that the iPhone app will serve as a gateway drug that will lead to heavier Kindle usage.
(This is why the Authors Guild claims about text-to-speech cannibalizing the audiobook market were ludicrous — do they honestly think Mama Amazon raised stupid employees?)
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The Fragmented Fictionwise Customer Base: While the Kindle consumer is neatly integrated into the Amazon Ecosystem, the Fictionwise consumer is fragmented. They use a wide range of devices and platforms to read. Check out this FAQ page to get a sense of the insanity that is digital publishing today. Format stuff is invisible to the average Kindle customer; however, our recent survey clearly showed that the average reader of digital books juggles formats like crazy.
This is a real challenge for Barnes & Noble, but it’s also full of potential. The Fictionwise customer is not necessarily the Kindle customer. There is some overlap (there’s always some overlap), but if B&N wants to form the loyal opposition, they need to retain the unique customers while offering them a device that — at the very least, offers the same level of functionality of the Kindle (not an easy prospect, to be sure, what with the wireless problem) — and something more…yep, a standards-based system that invites portability.
Tough order. Personally, I’d partner with Sony right now, settle on a standard format (voting EPUB), and implement some of the necessary portability right now. Use that awesome physical store presence to engage customers (funny thing: people who are skeptical about ereaders are less so when they touch and engage them). Fictionwise already has a relationship with Stanza, so no need to go crazy with the iPhone, etc. apps. Go with the application that already has over a million downloads — clearly, they have a head start on the customer base, and they’re confident about their ability to compete.
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Pricing: Amazon is porting its under-$10 philosophy to the Apple world. As noted above, anyone can use this app. All it takes is a purchase from Amazon (you cannot read your non-Kindle DRM content via the iPhone app, at least not that I’ve heard). Already, this puts companies like Scrollmotion/Iceberg, Fictionwise/eReader, and (our fave!) Lexcycle/Stanza at a disadvantage. They can’t compete with Amazon’s price points.
Meaning, um, hello, dominant player on another platform. Pricing was one of the keys to iPod success. Readers price shop. They price shop among online book retailers and they’ll price shop when it comes to iPhone choices. These are early adopters living in tough economic times. Give them choices, they price shop. And you, publishing business, have created a sort of false economy where you pretend Amazon is subsidizing the difference between your discount and their prices, but let’s be frank: your approach to pricing is going to kill competition, though the Barnes & Noble deal obviously gives hope to Fictionwise and Stanza.
Here’s the problem: because publishers insist on a Digital Price List that equates the digital book with the print book rather than, oh I have to say it!, thinking outside the book, they’re killing competition to Amazon. Without competition, we don’t have innovation. Without competition, consumers lose. Without competition, publishers are at the mercy of one very demanding customer.
Consider for a moment the example I used a while back in my post about the Iceberg Applications by Scrollmotion. Brisingr is available as a stand-alone application for the iPhone for the low, low price of (and I’m still not kidding!) $27.99. It is available in a Kindle edition for $9.99. Same book. Maybe the Scrollmotion technology is just that awesome and I’m missing the magic, but I’m not going to spend close to $30 to do a side-by-side comparison.
The question becomes: how does a new company even begin to compete?
Why not make the shift now, while the business is nascent rather than waiting for things to get ugly?
On this topic, we frequently encounter the strawman-esque argument “why should the author get paid less just because it’s an ebook?” To which I’d reply, “Why should the consumer pay more for the privilege of giving up rights, quality, and flexibility?” The bigger point, of course, is that authors are not really getting paid less. The correct way to look at this is to see ebooks as a different format (just as trade paperback and mass market are different formats) with a different price point.
You could — if you wanted to stretch it…and I do — argue that authors are being paid more for ebooks. They get paid for every book sold. After all, there is no after-market for electronic books. Consumers cannot legally resell them nor can they share them with family and friends. The ebook customer must pay for her books. Plus, if Amazon’s statements are to be believed, Kindle customers are buying more ebooks than print customers. Gotta be worth something, right?
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Content: Amazon has the biggest library of digital content right now. That’s probably going to change, but right now, they’re getting just about everything that can be got. If you listen to your customers, you will discover a lot of frustration at your digital release patterns. A. Lot.
Drives them batty.
As long as you persist in making licensing and distribution and process as hard as possible, you’re killing competition. Two words that might help: day, date. Get over the funny notions about “cannibalizing” sales.
But when it comes to customers, I’m not just talking about books. I can buy a tankless water heater and few d-books from Amazon. One gets delivered to my front porch, the other to my Kindle/iPhone. So okay, most d-book companies can’t compete there; at least give them a fighting chance on price.
While I always root for the underdog*, I see serious obstacles ahead for Barnes & Noble. They face the challenge to be at least as good as Amazon in the digital book arena while dealing with the prospect that success requires differentiating their product and service from Amazon. The Fictionwise purchase gives them customers and an entré into the exploding (finally?) mobile market.
Competition is necessary in this market. It’s good for the books, it’s good for the devices, it’s good for the retailers, but most of all, it’s good for the readers. Remember: your job — everyone — is to make us happy. And when we’re happy, you’ll know it!
* - With the notable exception of the Yankees, but we all have our weaknesses.
I have been thinking for days, weeks, months, heck, years about ebook pricing and traditional publishers. Just for fun last week, I ran some numbers using the general figures from Bob Miller in the comments on his ebook pricing post*, plus a guesstimate of 12% general overhead (high or low, doesn’t really change the bottom line on a per unit basis), and they’re not pretty if you’re a publisher. After modeling various scenarios, two words come to mind: creek and paddle.
Amazon isn’t setting a table for one, they’re throwing a dinner party.
Especially if you are trying to port traditional publishing practices to the digital market. You can’t win if you persist in applying the same old, same old to today’s digital marketplace. In some cases, it’s arguable if that same old approach will work in the physical marketplace.
Stop the madness now!
Wow, that felt good.
There are two major forces in this game: Amazon and readers. Amazon has a device, a marketplace, and a robust business model based on the iTunes store. Readers have a whole lot of WTF? in their corner, and that’s without factoring DRM into the mix.
At this moment in time, an increasing number of people are investing good sums of money in electronic reading devices. As early adopters, we know things will change, our technology will be rendered obsolete, the next lust item is just around the corner. We buy now because we believe that we’re investing in a better future, better devices, better reading experiences. Prices will drop, functionality will increase. As we make our investment in this future, your investment must necessarily come in another form.
Get over your (silly) fear that the digital customer is a lost print customer, especially in hardcover. Yes, there is a customer migration to electronic, for many reasons, but if you’re worried that one format is going to cannibalize another, you are truly focusing on the wrong problem. Consider a marketplace where customers get to choose the format that best suits their needs. Don’t protect your windows and get over your territorial squabbles.
Amazon is creating a $9.99 high end price point expectation for readers. Other retailers, retailers you need in this game because competition is good for everyone involved, are less able to subsidize the difference in your price and theirs — your “price”, I think it a better way to frame it — are going to force you to allow them to be competitive with Amazon. They can’t sell ebooks for $26.99 while Amazon plays in the shallow end of the pool.
Amazon isn’t setting a table for one, they’re throwing a dinner party.
My recent survey indicated that $10 is the top price most readers are willing to pay, less being preferable (logic: they can buy more books, and buying more is always a good thing for them and you). Readers are also dealing with the lack of tangible goods (digital versus paper), DRM and lack of portability, and a general loss of rights associated with a print book. Those are the essential elements of the WTF? Factor.
Once upon a time, you had the power to decide pricing in the marketplace. Now it’s the customer, and the customer has all the power. Free content is bountiful and readily accessible. In many ways, it can and does replace the content of print books. People will pay for content as long as it meets some basic needs. Digital books offer as much pleasure as print books, but digital books are also viewed as something slightly different.
In the digital marketplace, books have to remain competitive with other media. It’s not so much your opinion of the value of your product that matters; it’s all about how the customer values your product. And, lordy, if you think they’re fired up by ebooks that cross the $10 threshold, you are not talking to real people who live real lives and buy stuff with real money.
You can trot out your business model and your profit-and-loss statements, but your customers don’t really care. They’ve grown accustomed to this power, and if they can’t get what they want from you, they’ll get it from someone else, Including, yes, non-legal sources if that’s the only alternative you provide. Your competition has changed, and you must change. Yep, it’s a variation on the publish or perish model.
Now is the time to pick up the model and shake it around some. You, dear publishers, are right. You can’t make the $9.99 price point work in this current environment. But you’ve run the same scenarios I have, you’d played with the numbers in the same way, you’ve even used (ahem!) real facts and figures. I’m guessing that you even, as I did, turned the model around and realized that interesting things happen when you build from the bottom up. You know full well that you can grow this market, maybe even increasing your customer base in the process, by re-imagining the way you manage this aspect of the business. You’ve been staring the iTunes model — let’s call it the 30% model — in the face since late 2003.
I look at pure-play (or reasonably pure) digital publishers who base their royalties on variations of net receipts. They are better positioned to bob and weave with market changes and expectations because they approach the business from a different perspective. These new publishers are offering higher royalties to authors, the same broad distribution, and, ahem, more timely royalty reporting. We’re moving into the third wave of digital publishers, and with the mainstreaming of ereaders and a growing market, authors will be shopping around more.
Think about it: in the world of digital distribution, the traditional publisher has lost a key advantage. Two key advantages. On the plus side, you still have more marketing dollars.
Since I’m guessing most current releases were acquired before ebooks were as much as a blip on the financial projections, it’s hard for me to fathom why you don’t just go for and sell the books at the price point people want. You weren’t really looking to recover much of your expenses, nor the advance, from ebook sales. Let them be the gravy. You might surprise yourselves by picking up unanticipated sales from customers who balk at paying hardcover prices while shrugging at paying Kindle (now being used in the broadest possible sense) prices.
Think about all of these things as you endure yet another pricing meeting. Plus one more factor. We get to pay for your learning curve as you create digital editions of your bound-for-print product. Including your crappy conversion process. Give us a break.
I mean, I’m buying books with double-spaced paragraphs (cannot begin to describe how annoying this is, especially when one is reading on the treadmill). Missing paragraph breaks. Weird line breaks. I can assure you that if I had paid full list price for these books, I would be an unhappy-and-vocal-about-it customer. Seriously. Get your quality control process down before you even begin to think about charging ridiculous prices.
Then, as an early adopter of the Kindle, I have to worry about such things as future upgrades to the Kindle DRM rendering my current books inoperable. Weird notion, huh?, the inoperability of books? My concern is rooted in history. This ain’t my first digital rodeo.
The lines are drawn in this battle, and I don’t see the traditional publisher pricing model winning. Right here, right now, you have a chance to grow this market in a way that makes everyone happy.
(By the way, this post and associated comments nearly made me abandon this one, but I figure the more voices, the better. Plus I’d already written it. No point in wasting perfectly good bits and bites.)
* - Acknowledging that there are other models, I’m guessing that the thinking outlined by Bob Miller represents something close to the industry standard.
I’d like to note that Digital Rights Management has won the “Big Bad” title at the O’Reilly Tools of Change Conference for three years in a row! In today’s market and economy, that’s a major accomplishment. Congratulations to DRM for being the most hated aspect of digital publishing in 2009!
You’d think the DRM folks out there would be feeling some shame by now. They’re not, and maybe it’s because there is a lot more fun in playing the DRM Blame Game than in tackling the problem (acknowledging here that players in the Blame Game have legitimate points). Here’s the funny thing: consumers don’t hate DRM as much as they hate what DRM does. In other words, they get that you need to protect your rights. They’re cool with that.
They just wish you wouldn’t do it in a way that turns a mother of two with a full-time non-tech industry job and a rich social life into a hacker just so she can read her legally purchased books. That is all.
I have yet to see solid evidence that DRM prevents piracy. Complex DRM is cracked with relative ease. If someone wants to create a pirated edition of a book, they’re going to put on their eye patches, buy a parrot, and drink a lot of rum. If someone wants an ebook — and there’s no legal alternative — they’re going to get the free, pirated version. Finally, if a reader is bound and determined not to pay for a book, they’re going to find that free copy if it kills them.
DRM, as implemented now, does not deter piracy. It does deter reading. I am going to take as a matter of fact that the last thing the publishing business wants to do is alienate readers. I also have to take as a matter of fact that there is already a mess of DRM and formats in the marketplace. There is a dangerous curve right in front of you.
Okay, so how do we get out of this mess? Education, I say, education. It’s gotten us this far as a society, surely it can help the DRM problem. So let’s think about this…yep, it’s “throw out the smart ideas time”. Below are mine, what are yours?
- Readers: As noted (and I have hundreds and hundreds of comments to support this), readers get why digital books have DRM, they just hate the fact that these locks come between them and books. And I think — based on careful observation over the years — that there is a real sense on the part of the readers that publishers don’t care about them. Malle Vallik says that publishers care very much, and I believe her. So there’s a disconnect. It’s time to fix that.
It’s important to remember that readers of ebooks are early adopters of this technology. Many of them survived the decade-long Music Wars, yet leapt into digital books. Some lost music as services folded or changed. They dealt with locks and incompatibility. They, poor souls, suffered hardware malfunctions due to DRM gone awry. They give you money and can’t open files. Overdrive takes all of its toys away from Fictionwise and goes home. They fight their way through compatibility issues.
Is it any wonder that they don’t trust easily?
All is not lost. But it’s going to require that publishers do something a little different. It’s going to require talking to readers and addressing their concerns now. Today. Before you turn into the music industry. In print book world, your customers aren’t the end user. In ebook world, the customer understands the difference between the service provider and the publisher. They don’t blame Amazon, they blame you.
I think a great first step is engaging in activist reader outreach. You know who the real influencers are in the readersphere, and it’s time to engage them to help you talk about the problems of piracy. Call it a type of social DRM. Call it talking to your customers. Give some, take some, learn some. Stop telling us that piracy is bad — we know that stealing is wrong — and talking about what it means.
- Authors: Authors are scared of this digital world. Think about it. For years, they’ve been hearing about rampant digital piracy and how it’s stealing sales from the mouths of their babes. Is it any wonder that they are asking for more protection from these evil pirates?
We have all seen that authors don’t win by withholding their digital rights. If there’s a desire to create an electronic edition, it will be done. People are just that crazy. They will stand at a copy machine or scanner and do the work page-by-page if that’s what it takes. See above about using reader outreach as an educational tool. Some authors advocate for more DRM. Some authors think the smart approach is keeping their work in print only. They are understandably nervous and confused.
The time has come for better author education, and, sorry, publishers, that one is on you, too.
- Publishers: Angela James of Samhain Publishing summed it up best: let them buy the book, not the format. In those hundreds and hundreds of comments I mentioned above, it was made more than obvious that your customers (again: the ones who give you money) don’t read on one device, on one operating system, in one location. As you move forward with your digital initiatives, think about how real people read books.
Saying that creating a morass of competing devices and formats is not the best way forward is to understate the problem. There’s a reason the EPUB standard was developed. And a reason why it should be used. Religiously. And why you should demand (stamp your feet, hold your breath) that Amazon add EPUB to its list of supported file formats. If you want to succeed in this market, embracing standards is your best choice. Only choice. If you don’t fight for this one thing on the part of your customers, you run the risk of losing them.
How many years did the music industry put into fighting MP3? Rather than picking up the banner for the one format that worked everywhere and was commonly used, they tried this, that, and the other to force their customers to change. It’s not about diluting your power or brand, it’s about creating a common platform. As this market grows and evolves — and it will — starting from common ground helps us all navigate growing pains.
Oh, and it reduces the risk you and your readers being locked into hardware and software choices.
There were books purchased in the writing of this article. Angela James noted during our ToC panel that her house provides customers who buy directly from the publisher a variety of file formats. I think she’d be one of the first to agree that managing so many choices is a pain for both the publisher and the consumer (especially those who don’t know what they’re supposed to do), but that’s how the market has developed to date. Her company offers lots of choices, but they don’t lock customers in. This allowed me to buy books (up to four so far this weekend, pretty good for someone who hasn’t left the couch!) and get them onto my Kindle.
It wasn’t an elegant process, though I did find my USB cable (needed for file transfers). But the fact that the publisher made that option available to me, along with other options, saved time and effort. It’s nice to know that I can reacquire my books in other formats, if necessary.
- Booksellers: DRM keeps booksellers out of the game. Let’s be realistic: the average bookstore cannot compete in terms of online sales and fulfillment. And it shouldn’t have to. I believe that local booksellers should play to their strengths…and those depend upon the store.
But no bookseller should have to be in a position to let a customer walk out of the store, shopping list in hand, and positioned to buy from someone else (thanks to Ann Kingman of Books on the Nightstand and Random House for putting this idea in my head and making it stick). Booksellers are curators, and we need curators now more than ever. There is so much information, so much stuff.
As we talk about devices and services, we need to remember that closed systems shut out the people on the front lines of books. I’m going to get all fuzzy with thoughts here, but booksellers should, at the very least, be in a position to fulfill digital book orders onsite, in some manner (while, yes, taking a cut because business is business). While there are customers who must have a book right then and there — and given the relative ration of retail space to actual books in print, you can see the complexity — delayed gratification is becoming the norm. If booksellers can better participate in other fulfillment channels, more the better, right?
I’m not naively calling for the death of DRM (a girl can hope, though), but I am trying to find ways to lessen its negative impact. People who buy books hate DRM. They may not know what to call it, but they harbor ill will toward the concept. We’re seeing incremental increases in ebook sales each quarter. It’s small potatoes now (which is why the next post will about pricing. Again.), but it’s a growing market.
The advantage of this slow-but-steady growth is that the book industry has a chance to get it right from a customer point of view. There are a lot of interests to balance, a lot of needs to consider, many perspectives to view. You can’t please everyone and you’re going to get some stuff wrong.
Some people go to Disneyland, Booksquare goes to New York for the Tools of Change conference. This year, I’m especially excited because I’m moderating the best panel of the conference: Smart Women Read eBooks, featuring the fabulous Angela James from Samhain Publishing, Malle Vallik of Harlequin, and Sarah Wendell from Smart Bitches, Trashy Books. I’m just going to sit back and let them roll.
(Before we get into the good stuff, I’d like to congratulate Teel McClanahan III of Modern Evil Pres on winning our ToC conference guest pass. And a special thank you to Fran Toolan and Doug Lessing of Firebrand/NetGalley for sponsoring last night’s bash, with an extra-special shout-out going to Kat Meyer of the Bookish Dilettante for putting it all — and I mean it all together.)
For those of you who cannot join us in our cozy conference room, I’d like to offer up an outline of what we’re going to discuss. In preparation for this panel, we surveyed approximately 750 female readers about everything from their ages to how many books they read a month to what they’d say to the publishing industry about ebooks, if they could get publishers in a room to talk. We received hundreds of well-considered comments on just about every question. My favorite was in response to the “Anything else?” question…to which one reader responded, “I think I’ve said more than enough.”
She did. And we appreciate her time and candor. We appreciate everyone’s time and candor. So to give you an idea of what real female ebook readers are thinking, read on.
- Prices, Prices, Prices: According to the NEA, literary reading is up, with an increased number of adults saying they’ve read a single work of literature in the past year. Our readers buy and read two to five books per month. That means they’re spending fifty dollars (at Kindle prices) per month on ebooks alone. These same readers report comparable print book reading and purchase rates.
Something’s gotta give. If you want this market to thrive, you have to understand your customers. If you understand your customers, you get the fact that they’re happy to pay for your product…as long as you price it reasonably. They understand what they’re buying, quite possibly too well. They get the impermanence of the technology, they often see their purchases as “rentals”, they feel like, in some cases, they’re getting less book for their money.
Oh, and while they’re buying books, they’re also dealing with family budgets, kids, and dozens of other pressures on their purses. You want to sell more books, they want to buy more books.
- b: The vast majority of respondents read romance and erotica when it comes to ebooks. This is not a surprise. For over ten years, these genres have been building a dedicated readership, largely outside of mainstream publishing (Harlequin being one publisher who entered this market in a huge way). They also read widely in other genres, and as selection increases, so will their reading happiness.
There were some really interesting common threads regarding selection that I’d like to highlight. One was a strong desire for age appropriate reading material for children. Kids are both reading one their parents’ devices and parents are looking for ways to read to their children. I’m seeing a lot of interesting challenges — meaning there is potential for creative solutions — when it comes to picture books and content presentation, but that’s what keeps life interesting.
There was also a strong desire for series to be published digitally in their entirety. These readers noted that publishing book two or three in a series electronically was great, but without book one, it made no sense. Older backlist and out-of-print books were also on the “we want more” list. There’s a market for those books that fall into the “in copyright, out-of-print” bucket, but it does raise questions about return on investment for publishers.
- b: My first comment to the panel was that readers are downright hostile to DRM, but as I read more closely, I realized it wasn’t hostility toward DRM, per se, it’s the fact that managing DRM is so difficult that angers these readers. They get that publishers need to protect their product, but when means that they can’t access the books they’ve purchased — or that someone might take those books away at any moment — it doesn’t engender warm fuzzies.
It is said that DRM doesn’t work. I think it’s better to say that it doesn’t work the way you think it does. It’s not keeping piracy at bay. It’s locking you into platforms and devices and systems that are outside of your immediate control. It’s creating ill will with your customers. I don’t have a magic solution for you on this, but strongly suggest that if you love the people who buy your books, you might want to rethink your DRM strategy.
- A World Without Boundaries: I am going to say something shocking. Readers do not understand how and why territorial rights are negotiated, and they’re not thrilled about the fact that ebooks are subject to these restrictions. All they know is they get a whole big bucket o’ frustration when it comes to living (or traveling) outside the United States and buying ebooks.
Oh, and yeah, of course, they’d like these ebooks translated into their native languages. That should go without saying.
I’m sure we’ll be saying more, much more, than the above. I’ll be uploading the slides after our presentation so you can read some of those hundreds of comments for yourselves.
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Kindle books equalize big Eastern publishers and small presses. For example, my SciFi series "America's Galactic Foreign Legion" is experiencing sustained daily multiple sales, even though AGFL was published by a small press.
How am I successfully competeing with the big dogs? Because many readers now will only buy and read Kindle books, and Kindle sales are growing. Even if a shopper sees a book at a book store, they are apt to still buy it for less on Kindle.
This Christmas there will be an explosion of Kindle ownership. We are living through the beginning of a great change in publishing and book distribution.